State Office of Risk Mgmt. v. Carty – Workers’ Compensation Death Benefits

Workers’ compensation laws in South Carolina as well as in many other states hold that such benefits serve as the “exclusive remedy” to work-related injuries. The same applies when a worker dies as a result of injuries. That means you can’t sue the employer when you are receiving workers’ compensation benefits (and it’s usually not a choice if the employer is appropriately covered).
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However, Spartanburg workers’ compensation lawyers would clarify that the remedy is exclusive to the employer. There is nothing stopping injured workers and/or their dependents from suing a third-party in cases where negligence by that entity may have played a role in what happened.

One such case was recently weighed by the Texas Supreme Court, which after a verdict in favor of a widow and three children was tasked with deciding how the judgment should be apportioned with regard to the workers’ compensation insurer, which is entitled to reimbursement. In the case of State Office of Risk Mgmt. v. Carty,the court determined that when multiple beneficiaries recover compensation benefits for injuries sustained by the same worker, the carrier is to treat a third-party settlement as a single recovery, rather than separate recoveries by each beneficiary.

The employee in question died in an accident while undergoing training put on by the state’s public safety academy. His wife and their three minor children survived him. Per the state’s workers’ compensation law, medial and funeral expenses were covered, and the family began receiving death benefits.

In that state, surviving spouses with minor children receive half of all death benefits for life or until remarriage, while the children receive half until they are 18 or until age 25 if they are a student.

The widow subsequently filed a wrongful death lawsuit for product liability against two defendants. While those lawsuit were pending, the widow remarried, and thus was no longer eligible to continue receiving benefits.

She later settled with one of the defendants for $100,000 and another for $800,000. On the $100,000 claim, she agreed to pay $20,000 reimbursement to the state’s workers’ compensation insurer.

Ultimately, the gross total to the insurer was $154,000, while $290,000 went to legal expenses and $351,000 to the wife and another $80,100 to the children. The district court determined with regard to the children, as soon as the suspended benefits amount equaled $80,100 the state insurer was to resume payment of death benefits until they had reached 18 or 25.

The state insurer challenged this ruling. A question was certified to the state supreme court regarding whether a state workers’ compensation insurer’s right to treat third-party recovery as an advance against future benefits in cases involving multiple beneficiaries should be treated as a collective recovery or on a beneficiary-to-beneficiary ratio recovery.

In other words, should the workers’ compensation benefits resume for the children once the total has reached $80,000 or $431,000, which is the total amount the family collectively received, mother’s benefits included?

The court determined the third-party award should be treated as a collective recovery, meaning the children wouldn’t be eligible to receive benefits again until such time that $431,000 would have been paid to the family. The court indicated this is crucial to avoiding double compensation.

Laws regarding matters like this vary greatly from state-to-state. It’s important to consult with an experienced attorney regarding your claim before moving forward.

In South Carolina, death benefits may be paid for up to 500 weeks and is based on the rate of pay the worker received. Families are also entitled to $2,500 in burial expenses. All claims must be filed within two years of the worker’s death, or else be forever barred.

If you have been injured at work in Spartanburg, contact the Lee Law Offices at 800-887-1965.

Additional Resources:
State Office of Risk Mgmt. v. Carty, June 20, 2014, Texas Suprem Court

More Blog Entries
Louie v. BP Exploration (Alaska), Inc.: On New Law and Ongoing Workers’ Compensation Cases, June 23, 2014, Spartanburg Workers’ Compensation Lawyer Blog

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