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Tuesday, June 24, 2008

Ind. Decisions - Supreme Court issues two today

In Kirk Reuille v. E.E. Brandenberger Construction, Inc., a 5-page, 5-0 opinion, in a case argued 4/24/08, Chief Justice Shepard writes, in affirming the judgment of the trial court:

The parties in this case entered into a construction contract providing that in the event of a legal dispute, the prevailing party would be entitled to reasonable costs and expenses, including attorney fees. The term “prevailing party” was not defined. We hold that in the absence of further definition, such a contract produces fees only when one party or the other wins a judgment.
In Ronald Mayes v. Second Injury Fund, a 9-page, 5-0 opinion, in a case argued 2/27/08, Chief Justice Shepard writes:
This case presents a question of first impression in Worker’s Compensation: whether third party settlement terminates Second Injury Fund liability. We conclude that the statutory scheme makes Second Injury Fund liability a derivative of employer liability, and, accordingly, where settlement terminates an employer’s liability, Second Injury Fund liability will also be terminated. * * *

Few states have addressed the question of whether third party settlement terminates Second Injury Fund liability, and the jurisdictions that have done so are split. * * *

Whereas the Board is correct in concluding that a risk of double recovery exists, the Board should have evaluated this risk before approving the agreement between Mayes and Main Tech and insisted that the settlement amount received from Fed Ex be disclosed prior to giving its approval for a continuation of benefits. The Board has the right to withhold approval of agreements involving confidential settlements. If disclosure violates the terms of a settlement between an employee and a third party, then the employee will have to choose whether to accept a confidential settlement with a third party or to pursue worker’s compensation benefits.

Accordingly, because the Board approved the agreement between Mayes and Main Tech, the Second Injury Fund has waived the right to now claim that the risk of double recovery should prohibit Second Injury Fund liability. In the future, if the Board is concerned about double recovery, it should refuse approval of agreements involving confidential settlements or insist that the agreement contain a provision releasing the Second Injury Fund from liability.

Conclusion. For the above reasons, we reverse the Board’s decision.

Posted by Marcia Oddi on June 24, 2008 02:27 PM
Posted to Ind. Sup.Ct. Decisions