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In Curry v. Great American Ins. Co., 80 Mass. App. Ct.592 (October 2011) the Appeals Court has held that a workers’ compensation insurer cannot recover money allocated for loss of consortium or for conscious pain and suffering in a third party action arising from a workers’ compensation case.

In Curry, the employee was involved in a work related automobile accident and died 5 days later allegedly from medical malpractice.  A wrongful death action was filed and the spouse recovered $300,000 following a binding mediation with no allocations.  Her attorney, when seeking approval of the petition under Section 15, allocated the award as follows:  1/3 loss income, 1/3 pain and suffering and 1/3 loss of consortium.  The workers’ compensation insurer disputed the allocations seeking the entire amount less attorney fees.

The trial court ruled that allocations for loss of consortium and conscious pain and suffering are not recoverable by a workers’ compensation insurer under Section 15 because they are not monies received under the Workers’ Compensation Act.  The court further held that if the allocation proposed by the plaintiff is fair and reasonable and has a “sound basis in law” it must be approved and approved the allocations over the objections raised by the insurer.  The findings of the judge were upheld on appeal.  The Appeals Court also held that a judge cannot impose their own allocations.  The workers’ compensation insurer must establish they are not fair or reasonable and seek to have a new proposal submitted.  The allocations reduced their lien by two thirds.

Therefore, based on this decision, the workers’ compensation insurer must:

(1) Retain counsel in a third party subrogation action to get involved in the case prior to the presentation of the Section 15 petition to engage in the process of establishing a fair and reasonable allocation of monies to be recovered by the workers’ compensation insurer under Section 15;

(2) The workers’ compensation insurer should consider retaining counsel and filing the third party action early in the case to maintain control of the case after the 7 month statutory waiting period from the date of injury has passed.  The workers’ compensation insurer can file the third party action in the employee’s name to protect their lien.

(3) If presented at the last moment with a Section 15 petition filed in court or at the Department of Industrial Accidents, the workers’ compensation insurer must contact our office as soon as possible as a timely appeal must be filed to dispute the allocations or they will be approved as submitted by the  plaintiff with little or no recovery of their workers’ compensation lien.

TKCK handles workers’ compensation subrogation recovery in Massachusetts, Rhode Island and New Hampshire as well as second injury recovery in Massachusetts and New Hampshire.

Please call or email Vincent Tentindo with any questions.  Preserve your right to recovery.  Plaintiff attorneys will be seeking to limit lien recovery by maximizing allocations in third party cases that are not recoverable by the workers’ compensation insurer.  Judges will be required to approve the allocations if not adequately contested.

Thank you.