Proceeds of a Third Party Settlement Compensating a Massachusetts Employee for Pain and Suffering Were Not Subject to a Worker’s Compensation Lien – DiCarlo v. Suffock Construction Company

Although some workers’ compensation cases are fairly straightforward with the employee as the claimant and the employer as the defendant, work injury claims can sometimes be very complex and involve multiple defendants and even multiple lawsuits. In situations in which an injured worker is successful in a case against a third party, the employer’s insurance company may be entitled to repayment for monies it has paid out to the worker.

In the case of DiCarlo v. Suffolk Construction Company, the issue before the court involved a workers’ compensation insurer’s lien under Mass. Gen. Laws ch. 152, § 15. In 2004, the plaintiff employee had an accident while working as an electrician for the defendant employer, a construction company. He was unable to work for two and a half years, during which he collected worker’s compensation benefits from the defendant’s insurer in the form of medical expenses and lost wages. In 2007, the employee filed a third-party lawsuit against the owner of the property on which the accident occurred and the general contractor of the project on which the employee was working at the time of the injury.

The employee amended his complaint to add a loss of consortium claim on behalf of his wife, and the parties proceeded to mediation. After a settlement was reached, the trial court conducted an evidentiary hearing. After hearing testimony from the worker and his wife and reviewing the worker’s medical records, the trial court found that the evidence supported the settlement’s proposed allocation of funds concerning the employee’s pain and suffering and the wife’s loss of consortium claim but ruled that the portion of the settlement allocated for the employee’s pain and suffering was subject to the employer’s insurer’s lien under Mass. Gen. Law ch. 152, § 1. Approval of the settlement was thus denied.

The Issue to be Decided on Appeal

In a case in which an injured employee receives workers’ compensation benefits and then sues and successfully negotiates the allocation of noneconomic damages for the employee in a lawsuit against a third-party tortfeasor, does a Mass. Gen. Law ch. 152, § 1 lien attach to noneconomic damages recovery, such as compensation for pain and suffering?

The Appellate Court’s Holding

On appeal, the court reversed the trial court’s order refusing to approve the settlement. According to the appellate court, the proceeds of the settlement that were compensation for the employee’s pain and suffering were not subject to the Mass. Gen. Laws ch. 152, § 15 insurer’s lien.

The Rationale

The court found that the issue was controlled by Curry v. Great Am. Ins. Co., 80 Mass. App. Ct. 592 (2011), which held that an insurer’s lien under Mass. Gen. Laws ch. 152, § 15 did not reach the settlement proceeds of an employee’s third-party action allocated to the worker for pain and suffering or to the worker’s spouse for loss of consortium. The fact that Curry was a wrongful death action brought by the estate of a deceased worker and that the current case was a tort action brought by the worker did not provide any meaningful basis upon which to distinguish Curry. In so holding, the court noted that a deceased worker’s legal representative “stands in the shoes” of the deceased worker for purposes of Mass. Gen. Laws ch. 152, § 15.

If You or a Family Member Has Been Hurt on the Job

The attorneys of the Law Offices of John C. Manoog, III, handle both simple and complex work injury cases. We will be glad to review your case to see if you could have a possible third party claim in addition to the case against your employer. Call us a (888) 262-6664 or contact us online to schedule a free initial consultation.

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