Workers’ Compensation Client – Closed File Review – Lien Recovery

The Challenge:

The underlying WC claim arose out of two separate accidents which both occurred in February of 2006.  The first loss occurred on the 10th and the second on the 19th.  In both accidents the claimant’s vehicle was rear-ended and she sustained neck-related injuries as well as thoracic strain and a litany of low back problems which ultimately led to a lumbar fusion.   While liability was not in dispute for either loss, the wage loss damages were the subject of significant dispute.  At the time of the losses, the Claimant was working a low paying job as a bus driver but had previously worked for the postal service where she earned roughly twice that amount before voluntarily leaving that position.  The fundamental issue was adverse case law Tobin v Dept of Labor and Industries, 2010 169 Wn.2d 396 which opposing counsel argued invalidated the wage loss portion of the subrogation lien. In Tobin, the court ruled that the indemnity portion of a WC lien did not need to be repaid in cases where the settlement award/judgment did not specifically allocate funds to wage loss.  The claimant’s settlement consisted to two lump sum awards which were paid “inclusive of all special damages”.  The claimant’s wage loss claim was judged to be largely speculative by the arbitrator involved and he later added that any wage loss component of his award was “nominal” at best.  Opposing counsel therefore offered $0 funds toward the indemnity portion of the lien.  However, it was successfully argued that the narrow circumstances at issue in Tobin did not apply to the claimant’s case and that another decision, Gersema v Allstate (2005) 127 WnApp. 687, was in fact the proper precedent.  In Gersema, the court found that the failure to differentiate between separate amounts for special and general damages permitted an insurer to a distribution of the entire amount of its claim subject to RCV 51.24.060.

The Outcome:

Spartan Recoveries was successful in obtaining a $74,822 recovery on a difficult WC subrogation claim.  Total lien value was $179,981.29 and settlement proceeds were limited to $550,000.  Among issues in that the arbitrator did not agree that an award for wage loss was appropriate and hence did not award any specific dollars for wage loss in his final decision.  Plaintiff counsel took the position that we were therefore not entitled to recover any portion of the Indemnity payments made and cited Tobin v. Dept of Labor and Industries, 169 Wn.2d 296 (2010) in support of her position.  Nevertheless, through persistent negotiation and interpretation of case law Spartan recovered the full amount of medical benefits paid ($64,004.73) and one-half of the indemnity payments ($52,624.50) at the time of the settlement of the third party case in December 2010.

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