ILNews

Third-party settlement ends fund liability

Jennifer Nelson
January 1, 2008
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The Indiana Supreme Court held in a case of first impression in worker's compensation that when a settlement with a third-party ends an employer's liability, the liability of the Second Injury Fund will also be terminated. However, when the Indiana Worker's Compensation Board approves an agreement by the employer to continue paying worker's comp benefits after the settlement, the injured employee may make a claim to the Second Injury Fund.

In Ronald Mayes v. Second Injury Fund, No. 93S02-0802-EX-0107, Ronald Mayes appealed the Indiana Worker's Compensation Board's decision to deny his claim for entry into the Second Injury Fund on the basis of his confidential settlement with Federal Express, a third-party, after he was injured while working for Main Tech Corporation while on site at Fed Ex.

The Indiana Court of Appeals affirmed the board's decision, which ruled the settlement alleviated Main Tech from having to pay any further compensation and alleviated the Second Injury Fund from the need to pay. The fact Main Tech voluntarily agreed to continue to pay Mayes is outside the purview of the Indiana Worker's Compensation Act.

The Supreme Court overturned the board's decision because in the settlement between Mayes and Fed Ex, Main Tech voluntarily maintained its liability even though it would have been terminated under Indiana statute. The board approved this agreement and therefore approved a continuation of liability, wrote Chief Justice Randall T. Shepard.

"... (T)he Second Injury Fund's liability is derivative of the employer's liability. If the Board approves an agreement continuing an employer's liability despite third party settlement, it follows that the Second Injury Fund should also remain liable," he wrote.

If Main Tech and Mayes hadn't sought approval by the board, then Main Tech's payments to Mayes would have been outside the purview of the Indiana Worker's Compensation Act. The board could have refused to approve the agreement, but since it did not, Mayes' settlement with Fed Ex didn't terminate the Second Injury Fund's liability.

"In the future, if the Board is concerned about double recovery, it should refuse approval of agreements involving confidential settlements or insist that the agreement contain a provision releasing the Second Injury Fund from liability," the chief justice wrote.

The high court determined in general, under Indiana statute, the Second Injury Fund's liability is a derivative of the employer's liability, and as such, settlements with third parties preclude Second Injury Fund eligibility.

The Indiana General Assembly's decision to make explicit reference to Second Injury Fund benefits in its enactment on termination after a third-party settlement led the court to rule the legislators intended for the liability of the Second Injury Fund to be a derivative of the employer's liability.

The policy of Indiana Code Section 22-3-2-13 is to bar any worker's compensation, regardless of who pays it, in the event the employee gets money from a third-party settlement that is as much or more than the total amount of recoverable compensation, he wrote.
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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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