Insurance Dispute Lawyer Blog
Suppose you are considering settling a lawsuit related to injuries on the job. In that case, it is essential to understand how a potential settlement of a related claim could affect your workers’ compensation benefits. What happens to your workers’ compensation benefits if you settle a related lawsuit without written approval from your employer and their workers’ compensation insurer? The following case helps answer that question.
While working at Mouton Plumbing, Terrell Talbot was involved in a car accident. Mouton Plumbing and its workers’ compensation insurer accepted Talbot’s claim under La. R.S. 23:1021. He received $69,265.02, consisting of workers’ compensation indemnity benefits of $23,487.86 and medical expenses of $45,777.16. Talbot filed a lawsuit against the other individual involved in the car accident and her insurer. Pursuant to La. R.S. 23:1102(A), Talbot notified Mouton Plumbing and its insurer in writing about the lawsuit. They intervened in Talbot’s case. Talbot settled the lawsuit for $107,389,73 but did not obtain written approval from Mouton Plumbing or its insurer. As a result, the insurer ended Talbot’s workers’ compensation benefits.
Under La. R.S. 23:1102(B), a worker is not entitled to workers’ compensation benefits if he does not obtain the employee or insurer’s approval to settle a related lawsuit. However, an employee can reclaim his workers’ compensation benefits through a “buy-back provision.” When Talbot’s benefits were terminated, a lien from Mouton Plumbing’s insurer was not satisfied. As a result, the $28,730.84 due to Talbot from the settlement, after deducing attorney’s fees and costs, was paid directly to the insurer to satisfy the lien.
Talbot claimed that payment satisfied the buy-back provision. Mouton Plumbing and its insurer claimed this payment did not fully “buy back” Talbot’s workers’ compensation benefits. All the parties filed summary judgment motions. The workers’ compensation judge held the $28,730.84 payment restored Talbot’s workers’ compensation benefits. However, Mouton Plumbing and its insurer were entitled to additional credits against Talbot’s future benefits. Mouton Plumbing and its insurer appealed, arguing that the trial court erred in calculating the “buy back” amount and finding the “buy back” was satisfied.
Because the appellate court had to interpret applicable statutes, it reviewed the trial court’s conclusions to see if they were legally correct. Here, the trial court correctly applied La. R.S. 23:1102(B) in subtracting Talbot’s attorney fee from the lien amount paid to Moulton Plumbing’s insurer. However, the trial court erred in the amount of attorney fees it deducted. Because of this error, the trial court adjusted Talbot’s award to reflect a credit of $2,421.71. Otherwise, the appellate court agreed with the trial court’s award.
The appellate court explained the trial court correctly determined Talbot’s buy-back payment would not exceed the 50% statutory cap. The appellate court refused to consider other new arguments the parties raised on appeal related to the trial court’s calculation of the buyback amount.
Talbot argued the trial court erred by not including the amounts of medical bills paid by his attorney that he claims Moulton Plumbing should have paid. The appellate court found this was a genuine issue of material fact about whether these bills were incurred due to Talbot’s injury. Therefore, the appellate court remanded the case back to the workers’ compensation court to determine that issue.
Settling a lawsuit related to work-related injuries without obtaining written approval from your employer and their workers’ compensation insurer can result in the termination of your benefits. This case serves as a reminder of the importance of seeking legal advice to navigate the complexities of settlement and protect your rights. Consulting with an experienced attorney is essential to ensure compliance with legal requirements and maximize the potential benefits from your workers’ compensation claim.
Additional Sources: Terrell Talbot v. Mouton Plumbing and Hauling, lnc. and Liberty Mutual Ins. Co.
Additional Berniard Law Firm Article on Settlements involving Workers’ Compensation Claims: Louisiana First Court of Appeal Illustrates How Settlement of Claims is Res Judicata Between Litigants in Tangipahoa Workers Compensation Lawsuit