Bureau's rejection of worker's claim undermines subsequent recovery

If at the time a worker reaches a settlement with a third party her workers' compensation claim was rejected, the bureau is not entitled to subrogation from the worker and third party.

Case name: State of Ohio Bureau of Workers' Compensation v. Dernier, No. L-10-1126 (Ohio Ct. App. 01/14/11).

Ruling: The Ohio Court of Appeals held that the Bureau of Workers' Compensation was not entitled to subrogation from a worker or a third-party insurer.

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What it means: If at the time a worker reaches a settlement with a third party her workers' compensation claim was rejected, the bureau is not entitled to subrogation from the worker and third party.

Summary: A worker for a charity worked principally out of her home since the charity was closing its local office. The worker was driving to the office to acquire some needed materials when she was struck broadside by a truck. The worker made a claim against the truck driver's insurance policy, which was settled. The worker also sought and was awarded workers' compensation benefits although her claim was first denied. The bureau sought to recover sums the worker received from the bureau and the insurer for her injuries. The Ohio Court of Appeals held that the bureau was not entitled to subrogation.

The bureau argued that the worker was a "claimant" who was required to notify it of her claim with the insurer. After analyzing the state law, the court concluded that a claimant is a person presently eligible to receive compensation. The court said that at the time the worker settled with the insurer, her workers' compensation claim had been rejected. As a result, she had no right to compensation, so she was not a "claimant."

The bureau also argued that the purpose of subrogation law was to prevent a worker from enjoying a double recovery. The court explained that the worker had no duty to inform the bureau about her settlement with the insurer since she was not a "claimant." The court noted that the bureau may have recourse against the worker under another theory of recovery.

Read more at the WorkersComp Forum homepage.

March 7, 2011

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