Workers Comp and Tort Settlement: GREENE V. PASCHALL TRUCK LINES (COA 10/26/2007)

GREENE V. PASCHALL TRUCK LINES
WORKERS COMP:  ALJ REVIEW OF SETTLEMENT AGREEMENT; SUBROGATION AND TORT RECOVERY PROCEEDS
2006-CA-001974
PUBLISHED: AFFIRMING IN PART, VACATING IN PART, REMANDING
PANEL:  NICKELL PRESIDING; TAYLOR, PAISLEY CONCUR
WORKERS COMP BOARD
DATE RENDERED: 10/26/2007

The ALJ’s opinion dismissed claimant Greene’s claim for permanent disability income benefits and granted partial future medical benefits for injuries arising from a work-related collision. The ALJ also declined to review, citing a lack of jurisdiction, an agreement reached between Greene and his former employer, Paschall Truck Lines (hereinafter “PTL”), pertaining to payment of a subrogation lien. A petition for reconsideration filed by Greene was summarily dismissed by the ALJ, and the WCB then affirmed the ALJ’s decision in all respects and this appeal ensued.

Although the COA agreed with the Board’s opening premise that tort damages paid by a tortfeasor to an employee, employer or employer’s carrier are paid outside the Workers’ Compensation Act and only a court may review them, COA did NOT agree that the use of tort recovery funds to pay an employer’s subrogation lien somehow converts questions about the amount of subrogation due the employer into part and parcel of the tort claim. Nor did the COA agree that an employee and his employer’s workers’ compensation carrier, simply by reaching a settlement, can transform a subrogation issue that would normally be within the jurisdiction of an ALJ into a tort issue that can only be reviewed by a trial court  and thus the COA did not agree that the use of tort recovery funds to pay an employer’s subrogation lien somehow converted questions about the amount of subrogation due the employer into part and parcel of the tort claim.  In light of Kentucky’s statutory scheme, it is wholly appropriate that the ALJ review the terms of the (settlement) agreement between the claimant Greene and his former employer PTL’s carrier.

Since the ALJ is the ultimate arbiter when it comes to resolving workers’ compensation subrogation issues, he erred in declining to exercise jurisdiction and the Board erroneously affirmed that decision.  The ALJ can and should disapprove any agreement submitted for review that does not comport with the beneficent purpose of the Workers’ Compensation Act.  COA further found nothing to prohibit an ALJ from granting future medical expenses for a specific work-related injury to the exclusion of others.

COA affirmed that portion of the Board’s opinion dismissing Greene’s claim for permanent disability income benefits and the Board’s opinion limiting PTL’s responsibility for future medical expenses to the ongoing removal of glass as it works its way to the surface of Greene’s skin.  However, because COA held the ALJ had jurisdiction to review the settlement agreement reached between Greene and PTL, but declined to exercise it, that portion of the opinion was vacated and remanded.

Peter Naake
Priddy, Cutler, Miller & Meade