Effect of Personal Injury Lawsuit on North Carolina Workers’ Compensation

manhole coverIn a recent North Carolina appellate decision, the plaintiff was awarded workers’ compensation benefits after a car accident. The appellate court reversed on the basis that the plaintiff had chosen to settle his personal injury lawsuit against a third party without the defendant’s consent and had gotten a disbursement of settlement proceeds. According to the appellate court, this meant he was barred from obtaining workers’ compensation under the Workers’ Compensation Act. The plaintiff asked the North Carolina Supreme Court to review.

The case arose when the plaintiff slipped while working with a manhole cover as a utility technician. He hurt his shoulder and neck. The city, his self-insured employer, accepted his claim for workers’ compensation. The city authorized his treatment with a particular doctor, who restricted him from working for a certain period. When that period concluded, the plaintiff asked for a note to stay out of work because he continued to be in pain.

While going to an office to get the note, the plaintiff got into a car crash and experienced a traumatic brain injury. He was taken to the hospital and asked his wife to call his supervisor and let him know about the accident. The wife contacted the supervisor and told him the plaintiff was in a car crash while going to get a note to stay out of work, and he wouldn’t come into work. The plaintiff also had a conversation with his supervisor, his safety manager, and other coworkers about his car crash.

He had a shoulder surgery and was subsequently assigned a 10% permanent partial disability rating. This resulted in permanent work restrictions, and the city continued to pay him temporary total disability benefits.

He also got care for his traumatic brain injury from a neuropsychologist. He was diagnosed with a concussion and post-concussion syndrome, and he was referred to a psychologist. He got different attorneys for his personal injury claim and his workers’ compensation claim. His personal injury attorney told his health insurance carrier he wasn’t working when he was injured in the car crash, so the medical bills had to be covered by his insurance. His third-party claim settled for over $45,000, and he received the proceeds.

The plaintiff and the city agreed to mediate the workers’ compensation claim, and it was at the mediation that the plaintiff’s workers’ compensation lawyer found out he’d been traveling to his authorized doctor to obtain a note for work when the crash happened. The mediation was suspended, and the attorney added a claim for the closed head and brain injury based on the crash.

The city said it didn’t know about the car accident or that he was claiming the crash was related to his workers’ compensation claim. It argued he shouldn’t claim compensation for his traumatic brain injury because he’d gotten a settlement with a third party without preserving the city’s lien.

The Deputy Commissioner entered an order denying his claim for benefits. He concluded N.C.G.S. § 97-10.2 set forth the only way in which the employer’s lien could be satisfied from a third-party settlement. He found that when a worker settles and receives funds from a third-party settlement without preserving a lien or asking for a reduction in the lien, he’s barred from recovering Workers’ Compensation Act benefits. The Full Commission reversed, finding he’d given actual notice of the car crash to the city. It found he wasn’t prevented from pursuing benefits and awarded benefits arising from the car accident. It also ordered reimbursement to the defendant for its statutory lien against the third-party settlement.

The city appealed, and the Commission was reversed. It found that the settlement had required the employer’s written consent to be valid.

Asking the North Carolina Supreme Court to review, the plaintiff argued that the cases the appellate court used had been superseded by a statute. The Court agreed with him. It found that, under N.C.G.S. § 97-10.2, instituting proceedings with a third party shouldn’t be construed as an election of remedies in order to bar the other potential remedy of workers’ compensation. Consent isn’t required for a valid settlement. The employer’s lien interest in third-party proceeds is mandatory, and the defendant could recover the amount of the lien through a credit against the ongoing workers’ compensation benefits.

If you suffered injuries due to a careless driver, the experienced Charlotte car accident lawyers at Maurer Law may be able to help you recover compensation. We represent clients in the Charlotte, NC metro area and also Greensboro, NC and Winston-Salem, NC. Contact us at 919-229-8359 or via our online form.

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