eNotes: Workers’ Compensation – August 2021
August 18, 2021
SIGNIFICANT CASE SUMMARIES
PA CASE SUMMARIES
Alpini v. WCAB (Tinicum Township)
Commonwealth Court of Pennsylvania
No. 92 C.D. 2020
Decided: July 19, 2021
The Motor Vehicle Financial Responsibility Law does not preclude an employer who paid Heart and Lung benefits from subrogation against a claimant’s third-party settlement for alleged liability under the Dram Shop Act, even where the injury arises out of a motor vehicle accident.
Background
Claimant, a police officer, was involved in a work-related accident when a drunk driver crashed into Claimant’s patrol car. The Employer paid Claimant pursuant to the Heart and Lung Act. Employer also accepted the injury under workers’ compensation, and Claimant signed his workers’ compensation checks over to Employer as required by the Heart and Lung Act. Claimant also sued the drunk driver for negligence under the Motor Vehicle Financial Responsibility Law (MVFRL), as well as two tavern owners under the Dram Shop Act. Claimant settled the third party claim for a total of $1,325,000.00, apportioned $25,000.00 from the driver, and a combined $1,300,000.00 from the two tavern owners.
Employer filed a Modification Petition asserting a lien of $364,024.60, representing indemnity and medical benefits paid. The workers’ compensation judge (WCJ) granted Employer’s petition, allowing a net recovery of $341,319.93 and an appropriate grace period pro rata offset against future total disability benefits. Claimant appealed to the Workers’ Compensation Appeal Board, which affirmed Employer’s right of subrogation against the Dram Shop Act portion of the settlement, but reversed the WCJ’s decision to the extent it reduced Employer’s weekly payments to account for future medical costs. Claimant appealed to the Commonwealth Court.
Holding
The Commonwealth Court affirmed the Board. Under Section 319 of the Workers’ Compensation Act, Employers are entitled to subrogation of compensation payments from third party settlements. However, under Sections 1720 and 1722 of the MVFRL, there is no right of subrogation from a claimant’s third-party recovery in an action arising out of the maintenance or use of a motor vehicle. Though these provisions were repealed as they apply to workers’ compensation benefits, the legislature did not repeal the prohibition against Heart and Lung benefit subrogation.
Although the claim involved a motor vehicle accident, the Court rejected Claimant’s argument that the MVFRL precluded Heart and Lung subrogation because liability under the Dram Shop Act involves negligently serving a visibly intoxicated person, rather than the “maintenance or use of a motor vehicle.” Because the settlement payments were specifically allocated among the tortfeasors, and the Employer did not seek subrogation from the portion of the settlement attributable to the driver, the Court held that Employer’s subrogation of Heart and Lung payments from Claimant’s third-party Dram Shop Act settlement was proper.
Takeaway
Subrogation of third-party recovery is one of the most important tools a workers’ compensation carrier has to reduce exposure. It is important to understand the idiosyncrasies of subrogation law in assessing the risk and value of claims and to maximize recovery of a lien. This case shows that the structure of a third party settlement and the manner in which benefits are paid can affect the right of subrogation.
Any questions regarding this case can be addressed to John T. Morgan, Esquire, at jmorgan@tthlaw.com or (267) 861-7595.
VA CASE SUMMARY
Shereen Turner v. Allied Universal
Virginia Workers’ Compensation Commission
VA02000034949 / VA02000034769
Decided: August 6, 2021
When a Claimant contracted tinnitus and lost consciousness which resulted in a fall down stairs, the Full Commission held the accident was compensable even when she did not remember falling.
Background
Claimant developed tinnitus at work after repeated exposures to a loud door alarm. Her symptoms included pain in her ear ears, headache, nausea, and disorientation. Those symptoms worsened until the date of the accident, when she felt like she was underwater with noise in her ears. As she approached a stairway, she reported shocking waves of pain an elevated heartbeat, and trouble breathing. Claimant lost consciousness, only waking up at the bottom of the stairs. The Deputy Commissioner found that Claimant proved tinnitus as an occupational disease, but denied the fall down the stairs, because the cause of the accident was “not entirely clear.”
Holding
The Full Commission affirmed the tinnitus, but reversed on the fall, finding that Claimant proved a compensable injury by accident. The Full Commission found that the evidence preponderated to show that the workplace conditions caused or contributed to the fall. Specifically, the Commission found that the repeated alarms caused the anxiety and pain, and agreed that the symptoms were a direct response to the alarm system. The Full Commission discarded a medical history indicating that Claimant “slipped,” which they felt was not consistent with Claimant’s testimony.
Takeaway
Often times, claims such as this will be denied when the claimant cannot say with 100% certainty how an accident occurred (just as the Deputy Commissioner reasoned). This is a fringe case, and the Full Commission could have easily affirmed, and likely would have if the facts were slightly different. If there are circumstances where the claimant does not precisely know how a fall occurred, it is likely worth denying.
Any questions regarding this case can be addressed to Michael S. Bliley, Esquire, at mbliley@tthlaw.com or (571) 464-0435.
NJ CASE SUMMARY
Wilhelm v. Ryder Logistics, et al.
Superior Court of New Jersey, Appellate Division
Nos. A-3770-18; A-3792-18; A-3797-18; A-3798-18
Decided: June 21, 2021
When determining the amount to which a respondent is entitled to offset Social Security Disability payments, a petitioner is not entitled to a triennial redetermination of their average current earnings.
Background
Four petitioners were awarded permanent total disability benefits, and later Social Security Disability (SSD) benefits. After the petitioners were approved for SSD, the Second Injury Fund moved for reimbursement of the excess benefits paid prior to application of the statutory offset pursuant to N.J.S.A. 34:15-95.5. The petitioners opposed reimbursement, and sought a recalculation of their benefit rates to include a triennial redetermination of their average current monthly earnings (ACE) under 42 U.S.C. § 424a.
The four cases were consolidated and tried before a Judge of Compensation. Consistent with testimony from the Administrator of Special Compensation Funds for the New Jersey Department of Labor a former Social Security Administration Office of Hearing and Appeals staff attorney, the Judge found that New Jersey did not compel a triennial redetermination of ACE for persons collecting permanent disability and SSD. The petitioners appealed to the Appellate Division.
Holding
Noting that this appeal presented an issue of first impression, the Appellate Division affirmed in a published decision. Under 42 U.S.C. § 424a, a petitioner is limited in the amount they can simultaneously collect from workers’ compensation and SSD. The purpose of this limit is to prevent totally disabled petitioners from earning more than they did pre-injury. The sum of a petitioner’s weekly workers’ compensation benefits and SSD cannot exceed 80% of the petitioner’s pre-injury ACE. Ordinarily, the Social Security Administration is entitled to reduce SSD payments to the extent the petitioner is receiving more than 80% of their ACE. However, New Jersey is a “reverse offset” state, which allows state workers’ compensation carriers to receive the benefit of the offset rather than the Social Security Administration until the petitioner reaches age sixty-two. Importantly, the Court noted that the offset statute, N.J.S.A. 34:15-95.5, did not provide for any periodic reassessment of a petitioner’s ACE. 42 U.S.C. § 424a contains a provision requiring triennial redetermination, raising the 80% cap every three years using a formula established by the Commission of Social Security. However, 42 U.S.C. § 424a(d) specifically exempts reverse offset states, like New Jersey, from performing a triennial redetermination. Accordingly, based on the plain language of New Jersey and federal law, the Court held that the petitioners were not entitled to a redetermination of benefits for reimbursement of overpayment of benefits.
Takeaway
This decision confirms what is clear from a plain reading of New Jersey statutory law – petitioners receiving both Social Security Disability and workers’ compensation are not entitled to a regular reassessment of their average current earnings or a cost-of-living adjustment.
Any questions regarding this case can be addressed to John T. Morgan, Esquire, at jmorgan@tthlaw.com or (267) 861-7595.