High Court Says BWC Has Subrogation Interest in Spite of Denial of Claim
In a decision that should impact settlement procedures in virtually all personal injury cases within the state of Ohio, the Supreme Court of Ohio recently held that the subrogation rights of the state’s Bureau of Workers’ Compensation (“BWC”) arise at the time a claim is filed, not when the claim is allowed and payments made thereunder [Bureau of Workers’ Comp. v. Verlinger, 2018-Ohio-1481, 2018 Ohio LEXIS 868 (Apr. 19, 2018)]. Accordingly, where an injured worker sustained injuries in a vehicular crash, applied for workers’ compensation benefits from the BWC, and appealed the BWC’s denial to the state’s Industrial Commission, it was incumbent upon the worker — and two insurers on the risk via their automobile liability policies — to notify the BWC that a settlement had been reached in the separate tort claim, in spite of the fact that the BWC had expended no payments of benefits. Failure to do so meant the worker and the carriers were jointly and severally liable to the BWC for the full amount of its subrogation interest under Ohio Rev. Code § 4123.931.
Was the Injured Worker “Eligible” to Receive Benefits?
The carriers argued that, for purposes of the statute, the worker was not “a person who is eligible to receive compensation, medical benefits, or death benefits under this chapter.” How could she be, they contended. At the time she settled with the carriers, her comp claim had been denied by the BWC. Moreover, at the time of settlement, the BWC had paid no benefits. The insurers argued the BWC could hardly be a subrogee since it had paid out no benefits to the injured worker.
The Supreme Court disagreed, saying the worker was “qualified to be chosen for benefits” [Opinion, ¶ 10]. The Court noted that eight days after the settlement the Commission allowed the claim and ordered the BWC to begin paying necessary benefits. The Court stressed that the worker’s “qualifications” did not change between the time of her injury and the Commission’s decision. The Court added that the BWC’s decision to deny the claim had been based upon a lack of evidence as to eligibility. Because the worker timely appealed that decision, there had not been a final determination that the worker was ineligible. The Court also concluded that it made no difference that BWC had made no payments at the time the settlement was accomplished.