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Timestamp: 2019-04-20 13:01:00+00:00

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This entry was posted by Robert M. Caplan on November 7, 2014 .
In a decision handed down yesterday, the Appeals Court of Massachusetts upheld the vitality of Curry v. Great Am. Ins. Co., 954 N.E.2d 580 (Mass. App. Ct. 2011), which limits workers’ compensation insurers’ lien recovery rights. Under Curry, damages for conscious pain and suffering as well as for loss of consortium are not reimbursable to the insurer under G.L. c. 152, § 15.
Such injuries, according to the Curry court, “are not compensable injuries,” and “entirely independent and distinct from the personal injury claims of the employee.” For the court in Curry, “the primary goal of the workers’ compensation statute is wage replacement,” which would obviously prevent an insurer’s lien from attaching to an employee’s damages for pain and suffering, among other injuries.
In DiCarlo, the injured worker suffered serious personal injuries as a result of an accident while working as an electrician at a construction site. He was out of work for two and one-half years and collected workers’ compensation benefits for his medical expenses ($48,431.16) and lost wages ($233,387.95) from his employer’s insurer. In March, 2007, pursuant to G.L. c. 152, § 15, the worker filed a third party action against the general contractor and owner of the property where the injury occurred.
The worker amended his complaint to add a loss of consortium claim on behalf of his wife. The parties participated in mediation and settled the worker’s lawsuit for $100,000, which was to be paid by the insurer of the defendants and third party defendant. Since the parties in DiCarlo reached a settlement, the lower court judge conducted an evidentiary hearing in which she allowed counsel to inquire of the worker and his spouse, as to their claims for pain and suffering and loss of consortium, respectively.
The worker’s settlement proposal requested that approximately 35 % of the settlement be awarded to him for his pain and suffering, approximately 35 % be awarded to his wife for her loss of consortium, and approximately 30 % to the insurer to satisfy its lien, with each portion again assigned a pro rata share of the attorney’s fees and costs. By contrast, the insurer proposed that it should receive no less than 90 % of the settlement and that no more than 10 % be awarded to the worker’s wife if the court found her claim for loss of consortium supported by the evidence. The lower court judge in DiCarlo made detailed findings of fact in which she found the worker and his wife “to be credible in every particular,” and sided with the worker’s proposed allocation of the third party settlement proceeds.
For the time being, Curry remains the law of Massachusetts. In the context of a settlement, this means that workers’ compensation insurers must move for a Superior Court judge to conduct an evidentiary hearing, just like in DiCarlo, to determine the merits of an injured worker’s proposed allocation limiting the pool of funds to which an insurer’s lien may attach.
Still, a rift in the Massachusetts court system appears to be growing increasingly wider, manifest in the impassioned concurrence in DiCarlo. Agreeing with the majority’s opinion in DiCarlo, “based solely on the doctrine of stare decisis,” Judge Peter W. Agnes Jr. expressed concerns about whether Curry was decided correctly. To support his position that “the entire recovery is for the insurer,” Judge Agnes directed to the DiCarlo majority’s attention a slew of Massachusetts Supreme Judicial Court opinions decidedly inconsistent with Curry.
 DiCarlo v. Suffolk Const. Co., 2013 WL 9854065 (Mass. App. Ct. Nov. 6, 2014).
 Id. at 583-84 (citation and internal quotation omitted).
 Id. at 584 (citation omitted).
 2013 WL 9854065 at *3.
 2013 WL 9854065 at *2.
 The doctrine of stare decisis means that courts should follow their own precedent.
 2013 WL 9854065 at *4 (Agnes, J., concurring in result only) (citing Rhode v. Beacon Sales Co., 616 N.E.2d 103, 106 (Mass. 1993) (emphasis in original).
This entry was posted in Massachusetts, Workers' Compensation and tagged Liens.
This entry was posted by Robert M. Caplan on October 7, 2014 .
The first layer of analysis for the judge is determining the lien amount, “whether based on accrued or prospective workers’ compensation benefits[.]” If any benefits have been paid at the time of the settlement or judgment, the judge takes a snapshot to determine the lien amount.10 An insurer’s future exposure for purposes of this first layer of analysis is, therefore irrelevant, unless at the time of the settlement or judgment, for whatever reason, benefits have not yet been paid.
If a workers’ compensation insurer has only paid minimal benefits, but has tremendous future exposure, it would stand to reason that the insurer should be able to secure full reimbursement of its lien.16 This is only fair since the insurer’s future exposure will go, as a matter of law, unreimbursed. But if the worker’s injuries are catastrophic, and the worker has to self-fund a decades-long life-care program, for example, one would be hard-pressed to find a North Carolina judge willing to exalt an insurer’s lien over the worker’s personal, financial obligations.
Thus while there is no future credit in North Carolina, the court’s obligation to consider a workers’ compensation insurer’s future exposure may, depending on the factual circumstances, serve as a safeguard against unfair lien reduction or outright elimination.
1 N.C. GEN. STAT. § 97-10.2.
2 See, e.g., Bailey v. Reliance Ins. Co., 94 Cal.Rptr.2d 149, 153 (Cal. Ct. App. 2000) (observing that under CAL. LABOR CODE §§ 3858 and 3861 subrogated workers’ compensation insurer was “entitled to a credit against future benefits based on the amount the third parties paid” to injured worker).
3 See N.C. GEN. STAT. § 97-10.2(j) (“The judge shall consider the anticipated amount of prospective compensation the employer or workers’ compensation carrier is likely to pay to the employee in the future, . . .”).
4 See id. at 97-10.2(j) (listing lien reimbursement factors).
5 See Leggett v. AAA Cooper Transp., Inc., 678 S.E.2d 757, 760 (N.C. Ct. App. 2009) (“[Section 97-10.2(j)] grants limited jurisdiction to the superior court to determine the amount of the employer’s lien in the event the employee receives compensation from a third-party judgment or settlement.”).
6 N.C. GEN. STAT. § 97-10.2(h).
7 Id. at § 97-10.2(j). Curiously, as one federal district court reviewing the North Carolina Workers’ Compensation Act has observed: “There is no provision in § 97-10.2(j) recognizing a separate cause of action by an employer to determine the subrogation amount, and no North Carolina state court cases have addressed the ability of an employer to bring a separate cause of action in state court pursuant to this provision. Thus, there appears to be an unresolved question of state law. . . .” Safety Nat. Cas. Ins. Corp. v. City of Burlington, 2006 WL 399675, *5 (M.D.N.C. 2006).
8 See id. (“After notice to the employer and the insurance carrier, after an opportunity to be heard by all interested parties, and with or without the consent of the employer, the judge shall determine, in his discretion, the amount, if any, of the employer’s lien. . . .”) (emphasis added).
9 Id. at § 97-10.2(j).
10 Compare Johnson v. Southern Indus. Constructors, Inc., 495 S.E.2d 356, 359 (N.C. 1998) (Lake, J., for the majority) (“[The] wording [of N.C. GEN. STAT. § 97-10.2(j)] clearly indicates that the comparison between the compensation benefits paid and the judgment is to be made at the precise time the “judgment is obtained.”), with id. at 362 (Frye, dissenting) (“The carrier’s right to subrogation does not cease to accrue at the precise moment that the judgment is obtained. Rather, it continues as to all benefits to be paid in the future by the employer under award of the Industrial Commission. It is therefore inequitable to deny the existence of that component of the subrogation claim. . . .”) (emphasis in original).
11 See, e.g., Wynter v. County of Wake, 2011 WL 2462669, *5 (N.C. Ct. App. 2011) (concluding that Superior Court properly considered workers’ compensation insurer’s future exposure to determine that such insurer was entitled to full reimbursement of its subrogation lien).
12 See N.C. GEN. STAT. § 97-10.2(j) (providing Superior Court judges catch-all “just and reasonable” discretion when determining lien reimbursement). See also Leggett v. AAA Cooper Transp., Inc., 678 S.E.2d 757, 761 (N.C. Ct. App. 2009) (citation omitted) (“The trial court may reduce or completely eliminate a workers’ compensation lien if warranted by the facts, and this Court may not interfere absent an abuse of discretion.”).
13 Estate of Bullock v. C.C. Mangum Co., 655 S.E.2d 869, 874 (N.C. Ct. App. 2008) (citation omitted).
14 In re Biddix, 530 S.E.2d 70, 71 (N.C. Ct. App. 2000).
15 Cook v. Lowe’s Home Centers, Inc., 704 S.E.2d 567, 570 (N.C. Ct. App. 2011) (quoting Allen v. Rupard, 397 S.E.2d 330, 333 (N.C. Ct. App. 1990)).
16 See generally Wynter v. County of Wake, 2011 WL 2462669 (N.C. Ct. App. 2011).
This entry was posted in North Carolina, Workers' Compensation.
This entry was posted by Robert M. Caplan on May 15, 2014 .
New York’s “no-fault” legislation reflects a public policy designed to make the insurer of first-party benefits absorb the economic impact of loss without resort to reimbursement from its insured or, by subrogation, from the tortfeasor. Country Wide Ins. Co. v. Osathanugrah, 94 A.D.2d 513, 515 (N.Y. 1st Dept. 1983). The no-fault concept embodied in New York’s Insurance Law modifies the common law system of reparation for personal injuries under tort law. Safeco Ins. Co. of Am. v. Jamaica Water Supply Co., 83 A.D.2d 427, 431 (N.Y. 2nd Dept. 1981). “[F]irst party benefits are a form of compensation unknown at common law, resting on predicates independent of the fault or negligence of the injured party.” Id. at 431. The purpose of New York’s no-fault scheme is “to promote prompt resolution of injury claims, limit cost to consumers and alleviate unnecessary burdens on the courts.” Byrne v. Oester Trucking, Inc., 386 F. Supp. 2d 386, 391 (S.D.N.Y. 2005).
New York’s no-fault scheme—contained in Article 51 of its Consolidated Laws (“Comprehensive Motor Vehicle Insurance Reparations”)—requires owners of vehicles to carry insurance with $50,000 minimum limits which covers basic economic loss, i.e., first-party benefits, on account of personal injury arising from the use or operation of a motor vehicle. Basic economic loss includes, among other things: (1) medical expenses; (2) lost earnings up to $2,000 per month for three years; and (3) out-of-pocket expenses up to $25 per day for one year. N.Y. INS. LAW § 5102(a).
Where workers’ compensation insurance coverage exists for an injured motorist— i.e., where the motorist is operating a vehicle while in the course and scope of her employment—the workers’ compensation insurer must pay the injured motorist’s basic economic loss up to $50,000. N.Y. INS. LAW § 5102(b)(2). The compensation insurer in this scenario is said to become “primary.” And since first-party benefits are guaranteed regardless of fault, there is no corresponding right of subrogation for the carrier reimbursing an injured motorist for items of basic economic loss. Condon v. Hathaway, 740 N.Y.S.2d 600, 603 (N.Y. Sup. Ct. 2002).
Instead, New York provides a compensation insurer with what is referred to as “loss transfer.” Loss transfer is simply an opportunity to recover from the negligent motorist’s vehicle insurer the first-party benefits the compensation insurer became obligated to pay as a result of the accident. But the right of a compensation insurer to recover under the loss transfer exception depends on the existence of either of two conditions: At least one of the motor vehicles involved (1) weighs more than 6,500 lbs. unloaded, or (2) is used principally for the transportation of persons (e.g., taxi, bus) or property for hire (e.g., FedEx, delivery truck)1. N.Y. INS. LAW § 5105(a). If one of these two conditions is met, a compensation insurer is free to pursue a loss transfer against the negligent motorist’s vehicle insurer for the recovery of the $50,000 first-party benefits it became obligated to pay under Section 5102(b)(2).
It is important to remember that loss transfer is only applicable to the $50,000 first-party benefits a compensation insurer becomes obligated to pay under Section 5102(b)(2) of New York’s Insurance Law. Recovery of “APIP” 3 —or, additional benefits paid over and above the $50,000 no-fault threshold—can be had through conventional workers’ compensation subrogation provided under N.Y. WORKERS’ COMP LAW § 29.
New York’s loss transfer scheme is fraught with nuance and hidden exceptions, found not only in Article 51 itself, but also in the Insurance Department’s extensive regulations and in the rules promulgated by Arbitration Forums pursuant to its authority given by the Insurance Department. It is critical that counsel be sought as soon as practicable in a potential loss transfer case to not only preserve a loss transfer opportunity but to develop a comprehensive strategy for a successful recovery.
This entry was posted in New York, Subrogation, Workers' Compensation and tagged No-Fault Subrogation.

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