Injured taxi driver’s unapproved third-party settlement bars comp claim

The Supreme Court of Alaska on Friday affirmed an Alaska Workers' Compensation Appeals Commission’s ruling that dismissed a workers comp claim filed by an injured taxi driver who accepted a third-party settlement from the at-fault driver without approval of his employer.

Tracy Atkins, a former driver for Inlet Transportation & Taxi Service Inc., was seriously injured when a car crossed a center divide just after midnight on Sept. 6, 2009. The taxi driver later filed a report of injury with the Alaska Workers' Compensation Board and also retained an attorney for a tort suit against the other driver, settling that claim with the driver's insurance company without the taxi company's approval, according to documents in Tracy O. Atkins v. Inlet Transportation & Taxi Service Inc. and the State of Alaska, Workers’ Compensation Benefits Guaranty Fund, set before a three-judge panel in Anchorage, Alaska.

Because the taxi company did not have workers compensation insurance, the Alaska Workers' Compensation Benefits Guaranty Fund assumed responsibility for adjusting the comp claim. The fund asked the board to dismiss the taxi driver's claim because of the unapproved settlement, as required in state law on workers compensation and third-party claims, according to court records detailing the statute.   

The board dismissed the claim, and the Alaska Workers' Compensation Appeals Commission ultimately affirmed the board's decision. On appeal, the state Supreme Court affirmed the earlier ruling, finding that the commission “correctly decided that Inlet Taxi was not estopped from using the employer-approval defense,” per state law.