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Court Denies Employee Workers' Compensation Benefits who Settled Third Party Claim

In an opinion filed December 1, 2015, the North Carolina Court of Appeals held that a plaintiff is barred from later claiming compensation under the Workers' Compensation Act after settling his claim with the third party tortfeasor without written consent of the employer or an order from the superior court or the Commission prior to disbursement of proceeds. 

In Easter-Rozzelle v. City of Charlotte, the Plaintiff was injured while working for the City of Charlotte. Defendant, City of Charlotte, admitted liability and compensability for the injury. While Easter-Rozzelle was driving to his doctor's office to pick up a work restriction notice at his employer's instruction, Easter-Rozzelle was involved in a car accident and sustained a traumatic brain injury

Easter-Rozzelle retained counsel to represent him in his workers' compensation claim and retained a different attorney to represent him for his personal injury claim arising out of the automobile accident. The plaintiff and his personal injury attorney proceeded with settlement of his case. Settlement proceeds were disbursed to the plaintiff without any reimbursement being paid to the defendant for its workers' compensation lien, without obtaining a superior court order reducing the lien, and without an Industrial Commission order allowing distribution of the funds. The plaintiff's personal injury attorney proceeded with settlement on the theory that the Plaintiff was not "at work" at the time of the automobile accident.

After the settlement, the Plaintiff's workers' compensation attorney became aware that the automobile accident occurred on the way to pick up the work restriction note and filed a request for a hearing. At the hearing, the Deputy Commissioner concluded that the Plaintiff did not have a right to recover compensation for injuries arising out of the automobile accident and that the Plaintiff was estopped from asserting benefits under the Workers' Compensation Act. On the Plaintiff's appeal to the Full Commission, the Commission found the automobile injuries were causally related to, and compensable as part of, the original injury claim, so Defendant is entitled to a statutory lien on recovery from settlement proceeds.

Where the employee pursues a remedy against the employer and the third party, a determination of benefits due under the Act must be made prior to the payment of funds recovered from the third party. N.C. Gen. Stat. § 97-10.2 prohibits either party from entering into a settlement or accepting payment from the third party without written consent of the other. Ultimately, the plaintiff's claims were denied for violating N.C. Gen. Stat § 97-10.2.

If you have been involved in a work related accident and have questions about receiving workers' compensation benefits please contact Miller Law Firm for a free consultation.

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