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New Wrinkle Added to Workers Compensation Subrogation Interest in Third-Party Personal Injury Claims in Tennessee

The Tennessee Court of Appeals added a layer of complexity to workers' compensation subrogation in third-party personal injury matters. In Cooper v. Logistics Insight, Corp., et al. the injured employee, Mr. Cooper, filed suit to recover for personal injuries suffered while working as a tow motor operator for MasterStaff, Inc. Mr. Cooper had received benefits through his employer, MasterStaff, under the workers' compensation laws of Tennessee. MasterStaff intervened in Mr. Cooper's lawsuit against Logistics to protect its subrogation right pursuant to Tennessee Code Annotated section 50-6-114.

On January 22, 2010, a Notice and Order of Voluntary Dismissal with prejudice was entered as to the Defendant, but on February 19, 2010, the intervenor filed a Motion to Set Trial asserting that Mr. Cooper and Logistics settled the case without the consent of the intervenor due to a lack of protection or consideration for the intervenor's subrogation for "reasonable future medical expenses anticipated" for Mr. Cooper. The trial court eventually dismissed the intervenor's petition and an appeal ensued.

The Tennessee Court of Appeals reviewed the statutory right of the employer/insurer to intervene to protect and enforce its lien pursuant to Tennessee Code Annotated section 50-6-112(c)(1) and previous case law dealing with future medical expenses. In Graves v. Cocke County and Hickman v. Continental Baking Company the Tennessee Supreme Court did not allow a credit or consideration for future medical expenses because they were "by their very nature, unpredictable and incapable of being calculated."

However, the Court of Appeals in the Cooper case stated:

We do not believe that Graves and Hickman stand for the proposition that, as a matter of law, future medical expenses are in all circumstances too speculative to be included in the credit available to an employer under Tenn. Code Ann. § 50-6-112(c)(2). Rather, the language in Hickman that an employer "is not entitled to a credit against future liability for medical expenses that are unknown or incalculable at the time of the trial" indicates that such a determination is a factual inquiry, not a question of law.

And with that, the Court of Appeals reversed the case and remanded it back to the trial court. Ultimately, the lesson learned from this will be to communicate openly with all parties involved in a case like this and be aware from this point forward that future medical expenses are not automatically exempt for the subrogation interest of the workers' compensation insurer/employer.

If you need more information about a personal injury matter (car wreck, boating accident, slip and fall, etc.), SSD/SSI matter, or a workers compensation matter, please contact the Law Offices of Tony Farmer and John Dreiser for a free case evaluation. We can be reached at (865) 584-1211 or (800) 806-4611 or through our website at www.farmerdreiser.com.

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