Workers’ compensation in every state is different, but a recent verdict in Arizona may have national implications for how much compensation the families of victims secure in the future. Twin City Fire Insurance Company v. Graciela Leija reached the Court of Appeals of Arizona recently, which upheld for the first time that a defendant may challenge the amount that a carrier can claim against a workers’ compensation settlement.
Phoenix personal injury law firm the Millea Law Firm reports the landmark case will provide wrongful death lawyers, personal injury attorneys and the victims they represent with more leverage for what they can obtain in a serious injury or fatal accident. Here are more details about the case and the implications it has for worker’s compensation.
What Workers’ Compensation Was Like Before the Case
Previously in Arizona, on-the-job injuries made workers eligible for the workers’ compensation system, which paid all medical expenses caused by the work injury, in addition to disability benefits. This agreement meant workers, or the family of the injured worker were not able to sue the employer or any co-worker of the victim of the same employer.
However, if the injury was caused by another company – not the employer – the victim or victim’s family may bring a lawsuit against the at-fault parties. When the claim was successful against the other company, the workers’ compensation carrier had a lien, which meant the injured worker’s attorney must repay the carrier for the medical and disability benefits the carrier paid out of the settlement received. Additionally, the carrier would not have to pay future payments if the victim received cash from the settlement.
In cases where the employer has some fault for the injuries that were sustained, but the victim successfully gets a settlement from other parties, the amount of payment the victim or victim’s family may have received altogether may have been far less than a total payment from all at-fault payments. The Twin City Fire Insurance v. Graciela Leija case is one such instance.
Details of Twin City Fire Insurance v. Graciela Leija
Graciela Leija is the widow of Victor Leija, who was a window washer in Glendale, Arizona, who perished after a scaffold collapsed while he was working, and he fell three stories. Graciela sued the property manager, the company that manufactured the scaffolding, the company that provided the scaffolding and the building owner. Because the Occupational Safety and Health Administration (OSHA) cited Victor’s employer as at fault for various unsafe acts, the other parties were ruled as not having to pay.
The case settled for $1.6 million. The settlement amount caused Twin City Fire Insurance, the workers’ compensation carrier for Victor’s work, to ask for compensation for the full lien amount and to opt out of paying future benefits to Graciela, which would amount to about $575,000. Because Graciela would have received significantly more if all the defendants would have had to pay, she brought a new lawsuit against Twin City Fire Insurance. The new lawsuit asked for a determination for the lien she would be subject to.
For the first time, the Arizona Court of Appeals stated this was a proper procedure for challenging a carrier and ruled that when an employee or a victim’s family settles a third-party case for less than the limits of third-party liability insurance, the employee or victim’s family may seek a ruling that the lien is reduced based on the percentage of fault by the employer. Graciela’s team will now be able to support how much fault should be attributed to the employer.
This allows Graciela to recover more damages for the loss of her husband due to on-the-job conditions. Both the amount she will have to pay back for the lien may be reduced, and she may also receive future compensation depending on the court’s decision.
How This Affects Future Workers’ Compensation Cases
Now, in the future, instead of an all-or-nothing blame on the employer versus all the other parties involved in creating a situation where serious injury or death occurs on the job, victims and their families still can file a lawsuit against other parties – but the employer may still be responsible, as well. This enables victims and their legal teams to bring justice for unsafe conditions, however they were caused, by whoever.
Victims in Arizona can be confident that if they believe the negligence of parties like manufacturers or building managers contributed to an accident, they can bring up a lawsuit and not be subject to a significant lien on behalf of the workers’ compensation carrier. This gives victims and their teams peace of mind that they can be able to identify all the offending parties and still receive the full compensation they deserve.
Like all ground-breaking decisions, Twin City Fire Insurance v. Graciela Leija may have legal implications for other workers’ compensation policies throughout the country or even world. At the least, it increases the pressure for employers to provide safe work environments for their employees.
