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Easter-Rozzelle v. City of Charlotte – Subrogation of Personal Injury Awards in Workers’ Compensation Cases

Workers’ compensation is the exclusive remedy for employees injured on-the-job. That rule is applicable only insofar as employers and workers’ compensation insurance companies are concerned. When a work injury is due in full or in part to the negligent actions of a third party, the worker may pursue a personal injury lawsuit against that party – in addition to collecting workers’ compensation benefits. brakelights

However, it is crucial for employees to understand that if they do pursue a third party action, their employer and/or insurance company may be entitled to something called “subrogration.” In this scenario, it would mean the entity that paid workers’ compensation benefits would have a right to reimbursement from the third-party litigation damage award. That hold that an employer has on the third-party damage award is called a “subrogration lien.” The statute under which this is permitted is O.C.G.A. 34-9-11.1.

This does not mean a worker will get nothing by pursuing third-party action. The reality is, personal injury lawsuits tend to glean higher damage awards than workers’ compensation, and they also reimburse for losses such as pain and suffering – which workers’ compensation does not. It is imperative that injured workers in this situation employ an experienced attorney because failure to do so could mean a loss of critical benefits.

Recently, in the North Carolina Appeals Court case of Easter-Rozzelle v. City of Charlotte, plaintiff lost his opportunity to pursue worker’s compensation benefits from his employer after he pursued and settled a third-party claim without involving the employer or allowing for subrogation.

According to court records, plaintiff worked as a utility commissioner for the defendant city. He suffered injury in June 2009 to his neck and shoulder while lifting a manhole cover in an attempt to access a sewer line. The city admitted liability for his workers’ compensation claim and agreed to pay his medical expenses.

Worker’s doctor put him on restrictions, indicating he was unable to perform his job duties in the weeks after the accident. When worker contacted his employer, he was instructed to get a work restriction note from the doctor and produce it to the employer. Staff at the doctor’s office told worker he could come pick it up. While worker was driving to the doctor’s office to pickup the note, another vehicle crashed into him, causing him to sustain a traumatic brain injury.

Plaintiff later underwent surgery for his shoulder and was assigned a 10 percent disability rating with permanent physical restrictions for that injury. He also received treatment for his traumatic brain injury, which included post-concussion syndrome, post-traumatic stress disorder, memory loss and cognitive deficits.

Plaintiff was represented by one law firm on his personal injury claim and another for his workers’ compensation claim, and it does not appear these attorneys were communicating. Plaintiff settled the personal injury lawsuit for $45,500. After attorney fees and medical expenses, he received a net proceed of $16,000.

During his workers’ compensation negotiations, his attorney learned that the crash had occurred in the course and scope of employment. He abruptly halted negotiations and filed a request for workers’ compensation coverage. But with the personal injury case already settled – and no subrogation lien in place – defendants argued plaintiff was not entitled to workers’ compensation.

Plaintiff argued the amount received in the personal injury settlement was actually less than what he would have been entitled to in workers’ compensation benefits, the court ultimately ruled this did not matter. What mattered as the employer was not given the right to be a party to the personal injury action, despite the fact that it had a right to subrogation. The North Carolina Court of Appeals ultimately affirmed the trial court’s decision to deny workers’ compensation benefits to the injured worker on this basis.

For information on Atlanta work injury compensation, contact J. Franklin Burns, P.C., at 1-404-303-7770.

Additional Resources:

Easter-Rozzelle v. City of Charlotte, Dec. 1, 2015, North Carolina Court of Appeals

More Blog Entries:

Kelly v. Blue Ribbon Linen & Supply – Injury Returning From Workers’ Comp Exam Compensable, Nov. 29, 2015, Atlanta Workers’ Compensation Lawyer Blog