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Smith v. Champion Trucking Co., Inc.
Citations: 901 N.E.2d 620; 2009 Ind. App. LEXIS 332; 2009 WL 485166Docket: 93A02-0808-EX-701
Court: Indiana Court of Appeals; February 25, 2009; Indiana; State Appellate Court
Jimmie C. Smith appeals the dismissal of his Application for Adjustment of Claim by the Indiana Worker's Compensation Board, contesting whether the dismissal was valid under the subrogation provisions of the Indiana Worker's Compensation Act. Smith, employed by Champion Trucking Co. Inc., sustained injuries from a third-party accident but continued to work without claiming temporary total disability benefits. After filing a worker's compensation claim and settling a civil lawsuit against the third-party tortfeasor, Bittner, Champion asserted a lien for medical benefits paid, which was addressed in the settlement. Champion moved to dismiss Smith's claim, arguing that the settlement terminated his entitlement to further benefits. The Single Hearing Member granted the dismissal, which was later affirmed by the Full Board. The appellate court undertakes a de novo review, emphasizing the Act's intent to alleviate the economic burden of work-related injuries and to be interpreted liberally in favor of employees. The key legal question revolves around the applicability of Indiana Code Section 22-3-2-13, which addresses the rights of injured employees to pursue claims against third parties while receiving worker's compensation benefits. If an injured employee or their dependents successfully obtain a judgment or settlement from a third party, they must reimburse the employer or the employer's compensation carrier for the compensation and medical expenses paid. This reimbursement applies regardless of whether all dependents are involved in the settlement. Smith argues that this rule does not apply to him because his settlement occurred before a worker's compensation award was finalized and was for less than the expected benefits. He cites a Supreme Court case, DePuy, which allows an employee to retain worker's compensation benefits even after receiving a judgment against a third party for less than the employer's liability, provided they repay the employer or assign the judgment rights to the employer. The court noted that the specific issue of whether a third-party settlement obtained before the resolution of a worker's compensation claim bars those benefits remains unresolved. Smith's situation indicates that there could be grounds for the employer to provide additional compensation if the third-party recovery is insufficient before the worker's compensation claim is settled. Champion, the employer, claimed that Smith forfeited his right to worker's compensation by settling before receiving a 19% impairment rating; however, Smith had an ongoing worker's compensation claim at the time of settlement, meaning his claim was not resolved. Champion also argued that it was not a party to the third-party settlement and would be harmed if Smith could later claim additional benefits. Nevertheless, according to the Indiana Supreme Court's interpretation in DePuy, if an employee settles without the employer's approval, the employer can challenge the settlement amount. Champion did not dispute the settlement's adequacy despite being aware of the claim and accepting payment from the settlement proceeds, and thus cannot now object. The court concluded that Smith should be allowed to continue his pending worker's compensation claim, reversing and remanding the case for further proceedings.