Supreme Court Re-Affirms Some Limits On Employer’s Reimbursement In Workers' Comp Cases

Wednesday, January 16, 2013

In Joshua Cooper v. Logistics Insight Corp., the Tennessee Supreme Court affirmed two prior rulings in which it held that an employer’s subrogation right against an employee’s recovery from a third party in a negligence case does not include the amount of future medical benefits to be provided to the employee.

Mr. Cooper was an employee of MasterStaff, Inc., which assigned him to work at ProLogistics, Inc. Mr. Cooper was using a towmotor to move pallets from a trailer parked at a loading dock into the ProLogistics warehouse. An employee of ProLogistics moved the truck away from the dock as Mr. Cooper was backing out of the truck, and the towmotor fell out of the trailer. Mr. Cooper sustained “significant, permanent injuries” to his back and spine.

Mr. Cooper sought workers’ compensation benefits from MasterStaff and also filed a negligence claim in Rutherford County Chancery Court against ProLogistics and Logistics Insight Corp. MasterStaff intervened in the negligence action, asserting a statutory subrogation claim, including recovery of the amount of future medical benefits that it may be required to provide under the Workers’ Compensation Law.

Mr. Cooper settled his negligence claim against the defendants in Chancery Court and reimbursed MasterStaff for medical expenses paid on his behalf. MasterStaff asserted that the settlement did not dispose of all the claims regarding future medical expenses. The trial court disagreed and granted a motion to dismiss.  The Court of Appeals held that future medical expenses could be proven by MasterStaff and remanded to the trial court for a determination of the amount of future medical benefits.

Today, the Supreme Court reverses the Court of Appeals and affirms the trial court, holding that an employer’s lien against an employee’s recovery from a third party provided by Tennessee Code Annotated §50-6-112 does not extend to the amount of future medical benefits to be provided by the employer.  In so doing, the Supreme Court reaffirms two prior decisions in which it held that the employer’s subrogation rights do not extend to the amount of future medical benefits.

In a dissenting opinion, Justice William C. Koch, Jr., suggests that the Court’s opinion is inconsistent with the plain language of the workers’ compensation statute that permits employees to recover directly from the persons who injure them. Justice Koch concludes that the two cases upon which the Court relies should be overruled for three reasons. First, they conflict with the purpose of the statute, which is to place the full financial burden on the person who injures the employee. Second, they are inconsistent with prior decisions interpreting the statute. And third, they incorrectly assume that future medical expenses cannot be calculated.

To read the Joshua Cooper v. Logistics Insight Corp. opinion authored by Justice Janice M. Holder and the dissent by Justice William C. Koch Jr. visit the opinions sections of

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