Monday, August 4, 2014

Pain and Suffering Award Not Excluded from Workers’ Compensation Lien

In George Tenley v. Manufacturers Alliance Co., et al., 2013 No. 0089 (Md. Ct. Spec. App. March 31, 2014), an unreported decision from the Court of Special Appeals of Maryland, a dispute arose between parties over the extent of the employer’s subrogation lien, specifically, whether the employer could recover money awarded for pain and suffering.
            The employee was injured while at work due to a car accident.  Through his employer, the employee was paid total compensation benefits of $2,338.30, of which $1,198.30 of those benefits were for medical expenses.  He then received a $10,000.00 award in his personal injury case against the at-fault driver.  The district court award was specific in that it awarded $2,449.00 in medical bills, and $7,551.00 in pain and suffering. 
            The employee’s position was that the employer was not entitled to recover money awarded for pain and suffering because it was not “compensation.”  According to Section 9-902(e) of the Labor and Employment Article of the Maryland Code addressing the “Distribution of Damages,” first costs and expenses of the covered employee’s action are deducted from his recovery, then the employer is reimbursed for:

          [T]he compensation already paid or awarded […] and any amounts paid for      
          medical services, funeral expenses, or any other purpose under Subtitle 6 of
          this title […] and […] finally, may keep the balance of the damages recovered.

Md. Code Ann., Lab & Empl. § 9-902(e)(2)-(3) (emphasis added).

            The Court of Special Appeals, decided to uphold the underlying Workers’ Compensation Commission (“WCC”) and circuit court rulings to allow recovery by the employer of the claimant’s net recovery, which included the money awarded to him for pain and suffering in his personal injury case.            

            The Court relied mainly on the unambiguous statutory language in Section 9-902(e), which demonstrated the legislative intent to ensure that an employer is not responsible for damages caused by an at-fault party. 

            In Tenley, the intermediate appellate court demonstrated an intent to limit the liability of employers in workers’ compensation cases when the underlying injury was caused by a third party tortfeasor. The ruling in Tenley is in line with the legislature, which the Court found intended to narrow the scope of the employer’s liability for money damages in these types of cases, thus avoiding the capability of a claimant to “double dip.”