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New Supreme Court Ruling

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Jimmie C. Smith v. Champion Trucking Company, Inc.

Indiana Supreme Court
April 15, 2010

Paul Brizendine:  Plaintiff counsel
Timothy Wiseman:  Defense counsel

Boehm, Jutice.

Facts & Procedural History:

Smith was a truck driver for Champion and was injured in a motor vehicle accident with a third-party motorist.  Smith’s initial medical expenses were paid by Champion’s worker’s compensation insurance carrier.  Smith later filed an Application for Adjustment of Claim with the Board seeking compensation for a PPI and payment of additional medical expenses.

Smith retained counsel to look into a third party claim against the motorist.  Champion notified Smith’s third party counsel of its lien.  On July 22, 2005, Smith settled with the third party motorist for $10,342.  The settlement agreement released the third party from any further liability for the accident.  Smith did not obtain Champion’s consent prior to settling.  In August 2005, Smith was assigned a 19% PPI rating, which had a value of $26,500.

Champion moved to dismiss Smith’s Application for Adjustment of Claim due to his settlement with a third party.  The Board dismissed the Application pursuant to Ind. Code § 22-3-2-13.  The Court of Appeals reversed the Board’s dismissal holding that the provision in question did not apply because Smith’s worker’s compensation claim had not yet been resolved.  The Supreme Court granted transfer.

Judgment:  Affirmed Board’s dismissal of Application for Adjustment of Claim.

Issue:  Whether the Board properly dismissed Smith’s Application pursuant to Ind. Code § 22-3-2-13

Holding & Rationale:

Under the Act, an employer’s worker’s compensation liability for an employee’s benefits terminates if the employee settles a claim against a third party for the same injury without first obtaining the employer’s consent to settlement.  Smith argued that the absolute bar provisions of the Act only apply when the amount received in the third party claim exceeds the total value of the worker’s compensation claim.  However, the Court finds that the statute provides no such qualification.  The absolute bar is in place to try to prevent employees from settling third party cases without the consent of their employers.  The twin purposes of this statute are to protect an employer by providing it with subrogation rights and to prevent double recovery by an employee.  This is a bright line rule.

Concur:  Shepard, C.J., and Sullivan and Rucker, J.J.  Dickson, J., concurs in result.

 


Posted on 5/21/2010

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