Future medical payments not subject to employer's subrogation claimPosted On: Jan. 17, 2013 12:00 AM CST
Third-party liability settlements can be used to reimburse employers for a claimant's workers compensation benefits, but companies cannot collect payments for future medical expenses as part of their subrogation claim, the Tennessee Supreme Court said Wednesday.
In Joshua Cooper et al. v. Logistics Insight Corp. et al., Mr. Cooper worked for Smyrna, Tenn.-based staffing agency MasterStaff Inc. and was assigned as a tow motor operator for either ProLogistics Inc. or Logistics Insight, according to court records.
In 2008, a ProLogistics employee drove a truck away from a loading dock as Mr. Cooper was attempting to back a tow motor out of the truck's trailer. The fall caused “significant, permanent injuries” to Mr. Coopers back, court records show.
MasterStaff paid workers comp benefits for Mr. Cooper's injury. Mr. Cooper and his wife also sued ProLogistics, Logistics Insight and the ProLogistics truck driver for alleged negligence, records show.
MasterStaff intervened in Mr. Cooper's suit, seeking to recover nearly $45,000 in medical expenses paid on his behalf, as well as future medical expenses that could be repaid to him. Mr. Cooper ultimately settled his lawsuit for an undisclosed amount and reimbursed MasterStaff for previously paid workers comp benefits.
However, MasterStaff contested the settlement, saying the company did not receive notice of Mr. Cooper's settlement agreement and that the settlement did not address the employer's future medical benefit claim.
In a 4-1 decision Wednesday, the Tennessee Supreme Court said that MasterStaff's subrogation lien against Mr. Cooper's settlement could not include future medical expenses to be paid on Mr. Cooper's behalf.
Citing two previous decisions from the state's high court, the majority opinion noted that Tennessee workers comp law does not have a time limit for medical benefits. As such, the majority opinion says, subrogation liens for future medical expenses would burden injured workers, because settlement “proceeds would be held hostage for an indefinite period to reimburse the employer when the employee sought medical benefits in the future.”
“If the employer held a lien for the cost of future medical benefits against an employee's recovery from a third party, the employee would be unable to benefit from the proceeds of the recovery,” the opinion reads.
In his dissent, Justice William C. Koch Jr. said Mr. Cooper's settlement should be used to pay his future medical expenses related to his work injury, and that MasterStaff should recommence paying benefits after Mr. Cooper's settlement would be exhausted.