Five Recent Cases You Should Know About (2/11/2011)

Five Recent Cases You Should Know About (2/11/2011)

Larson's Spotlight on Collateral Source Rule, Insurance Agent Liability, Tribal Land, Causal Connection, and Notice of Injury. Larson's surveys the latest case developments that you need to know about. Thomas A. Robinson, the staff writer for Larson's Workers' Compensation Law, has compiled the list below.

IL: Collateral Source Rule Does Not Apply—Injured Worker May Recover Out-of-Pocket Medical Expenses from Employer, But Not Total Amount Billed By Medical Care Providers

In a split decision, and in a case of first impression, the Appellate Court of Illinois (First District) reversed that portion of the circuit court's judgment which confirmed the Workers' Compensation Commission's award to the claimant of $165,289.16 for reasonable and necessary medical expenses and remanded the matter to the Commission with directions to award the claimant the amount actually paid to the providers of medical services rendered to him as a result of his injuries.  Finding that the collateral source rule was not applicable in the case, the court observed that some $53,000 of the medical charges had been paid by the health care plan maintained by the employer of the worker's spouse, that approximately $1,200 had been paid by the worker himself, and that the remainder of the medical bills had been written off by the care providers.  Under these circumstances, the worker could not be paid the total billed by the medical care providers, only the amount he had actually paid.

FREE VERSION: Access the case on lexisONE free case law. Click on tab for Free Case Law. Click on the radio button for Search by Citation. Enter this citation: 2011 Ill. App. LEXIS 45. Then click on the red button Search for Free. Note: If you haven’t registered for free at lexisONE, you will be prompted to do so in order to access the free case law.

FULLY FEATURED VERSION: Lexis.com subscribers can read the fully featured case here. See generally Larson's Workers' Compensation Law, § 94.02.

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IA: Agent Was Not Liable for Failure to Advise Self-Employed Truck Driver of His Need For Workers' Compensation Insurance

The Supreme Court of Iowa recently affirmed the dismissal of a negligence claim filed by a self-employed, over-the-road truck driver against an insurance agent and the insurance companies represented by the agent.  The driver, who severely injured his arm in a work-related accident, claimed the agent had failed to exercise ordinary care in advising him about his insurance needs and that the agent was negligent in not advising him that he needed to procure self-employed workers' compensation insurance to cover the risks associated with potential injury.  The court noted that the relationship between the agent and the driver had begun just prior to their meeting to discuss property insurance matters, that the driver had multiple policies of insurance with other companies, and that the driver and his wife did not request a broad quote of insurance from the agent.

FREE VERSION: Access the case on lexisONE free case law. Click on tab for Free Case Law. Click on the radio button for Search by Citation. Enter this citation: 2011 Iowa Sup. LEXIS 3. Then click on the red button Search for Free. Note: If you haven’t registered for free at lexisONE, you will be prompted to do so in order to access the free case law.

FULLY FEATURED VERSION: Lexis.com subscribers can read the fully featured case here. See generally Larson's Workers' Compensation Law, § 150.01.

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MN: Injury to Nontribal Employee That Occurred on Tribal Land is Within Purview of State Workers' Compensation Act

The Office of Administrative Hearings, Workers' Compensation Section has authority under the Minnesota Workers' Compensation Act to hear a claim arising out of an injury to a nontribal employee occurring on land held by the federal government in trust for the Mille Lacs Band of Ojibwe; that land is not "outside" Minnesota for the purposes of the workers' compensation statute, held the Supreme Court of Minnesota recently.

FREE VERSION: Access the case on lexisONE free case law. Click on tab for Free Case Law. Click on the radio button for Search by Citation. Enter this citation: 2011 Minn. LEXIS 38. Then click on the red button Search for Free. Note: If you haven’t registered for free at lexisONE, you will be prompted to do so in order to access the free case law.

FULLY FEATURED VERSION: Lexis.com subscribers can read the fully featured case here. See generally Larson's Workers' Compensation Law, § 143.02.

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AR: Bank Employee's Injury While Fleeing From a Masked Assailant Was Not Compensable In Spite of Evidence Linking the Incident to Another "Bank Job"

In one of the more unusual cases in some time, an Arkansas appellate court recently affirmed the denial of a workers' compensation claim filed by a bank teller who sustained a broken wrist as she fled from a masked assailant that had slipped into the teller's house and who was waiting on her to return home at the end of the day.  The court observed that DNA evidence obtained from a mask found near the teller's house matched that of a man named Huddleston, who was in a Texas jail for bank robbery and that Texas law-enforcement officers indicated that Huddleston and an accomplice had allegedly surveilled a Texas bank, followed a bank teller home, and held her and her husband at gunpoint, threatening to kill both of them unless the teller opened the bank. The court also acknowledged that Huddleston or his accomplice allegedly stole an unregistered, older model, nine-millimeter Beretta from the Texas victims and that the gun was very similar to that found at the Arkansas bank teller's house after the incident in which she was injured.  Nevertheless, the court indicated such evidence was hearsay and that substantial evidence supported the Board's finding that the teller had failed to show a causal connection between her injuries and her work. 

FREE VERSION: Access the case on lexisONE free case law. Click on tab for Free Case Law. Click on the radio button for Search by Citation. Enter this citation: 2011 Ark. App. LEXIS 90. Then click on the red button Search for Free. Note: If you haven’t registered for free at lexisONE, you will be prompted to do so in order to access the free case law.

FULLY FEATURED VERSION: Lexis.com subscribers can read the fully featured case here. See generally Larson's Workers' Compensation Law, § 8.01.

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US: 5th Circuit Finds That ERISA Preempts Texas's Notice-Prejudice Rule Where Benefit Plan is Self-Funded

In a complex case dealing with the intersection of Texas's non-compulsory workers' compensation law and the federal Employee Retirement Income Security Act (ERISA) that is used by some non-electing Texas employers to provide what amounts to a private plan of workers' compensation benefits, the Fifth Circuit Court of Appeals recently ruled that the state's "notice-prejudice" rule, under which an injured employee's late notice of injury to an employer may be excused if the employer's interest was not prejudiced by the delay, does not apply to self-funded ERISA plans.  The injured employee's claim was accordingly barred since his notice to the employer was defective because it was late.

Practitioners should recall generally that ERISA supersedes any and all State laws insofar as they relate to any employee benefit plan [29 U.S.C.A. § 1144(a)].  ERISA’s so-called savings clause allows state laws "which regulate insurance, banking, or securities" to survive ERISA preemption. In UNUM Life Insurance Company v. Ward, 526 U.S. 358, 119 S. Ct. 1380, 143 L. Ed. 2d 462 (1999), the Supreme Court determined that California’s notice-prejudice rule is a law that regulates insurance; it was, therefore, saved from preemption by ERISA. The Fifth Circuit indicated that the district court properly determined that Texas's notice-prejudice rule was not substantially different from California's and properly concluded that Texas's rule regulated insurance under the savings clause.

If the discussion ended at this point, the employee would have prevailed, but the Fifth Circuit observed that additional analysis was required.  It observed that the "deemer clause" [29 U.S.C. § 1144(b)(2)(B)] provided an important limitation to the savings clause. It exempted self-funded ERISA plans from state laws that "regulate insurance" within the meaning of the saving clause.  In other words, state laws that directly regulate insurance are "saved" but they do not reach self-funded employee benefit plans because the plans may not be deemed to be "insurance companies, other insurers, or engaged in the business of insurance" for purposes of such state laws.  Since, in the instant case, it was undisputed that the employer's plan was self-funded, state law could not affect it.  The injured employee could not, therefore, take advantage of Texas's notice-prejudice rule.

FREE VERSION: Access the case on lexisONE free case law. Click on tab for Free Case Law. Click on the radio button for Search by Citation. Enter this citation: 2011 U.S. App. LEXIS 2218. Then click on the red button Search for Free. Note: If you haven’t registered for free at lexisONE, you will be prompted to do so in order to access the free case law.

FULLY FEATURED VERSION: Lexis.com subscribers can read the fully featured case here. See generally Larson's Workers' Compensation Law, § 102.01.

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Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law.