Kentucky Employment Law Blog

Kentucky Workers Compensation Exclusive Remedy Doctrine Bars Injury Suit

The exclusive remedy doctrine in Kentucky workers compensation law limits the circumstances in which an injured employee may recover anything other than workers compensation benefits. The scope and application of the exclusive remedy doctrine was illustrated in the recent Kentucky Court of Appeals decision, Helton v. Tri-County Cycles Barbourville, No. 2009-CA-000049-MR.

Helton was a salesman for Myers Chevrolet, which was owned by Gregory Wilcheck. Myers Chevrolet owned a 50% interest in Tri-County Cycles. The weekend before Tri-County was to formally open for business Helton was riding on the back of an ATV driven by Wilcheck during a sales demonstration for a customer. Helton had signed a sales representative contract with Tri-County; he and other Myers Chevrolet employees had been working to get Tri-County ready to open for business. Wilcheck began "jacking around" while operating the ATV, doing doughnuts and eventually causing it to tip over and badly injure Helton's leg. Helton filed for and received workers compensation benefits.

Helton then filed suit in circuit court for damages against Tri-County, Myers Chevrolet and Wilcheck. The court ruled that those claims were barred by the exclusive remedy doctrine, which "shall be exclusive and in place of all of the reliability of such employer to the employee [.]" First, the court noted that Helton held business licenses to act for both Myers Chevrolet and Tri-County, which made them his joint employer. Second, the claim against Wilcheck was barred, because an injured worker may sue a co-employee for damages on account of injuries sustained in the course of employment only where the injuries are caused by a willful and unprovoked act of physical aggression, not by reckless horseplay.

Robert L. Abell
www.RobertAbellLaw.com

Recovery Workers Compensation Benefits Not Barred by Recovery of Damages From Third-Party In Personal Injury Suit

The recovery of workers compensation benefits is not barred where a worker also has recovered damages from third parties whose actions most directly caused the injuries. Workers compensation benefits, however, will be reduced to the extent and amount that they duplicate damages already recovered, so as to prevent a double recovery. This scenario is illustrated in the recent decision by the Kentucky Court of Appeals,Wal-Mart Stores, Inc. v. Wells, No. 2009-CA-001682-WC.

Donald Wells, a Wal-Mart employee, was injured by carbon monoxide exposure caused by employees of Atlas and Unarco, who were repairing a freezer. Wells received $500,000 in settlement from Atlas and 400,000 from Unarco for his personal injuries. He then pursued a workers compensation claim against Wal-Mart and was awarded $440,659.21 in income benefits in past and future medical benefits.

Wal-Mart's contention that Wells was completely barred from any recovery of workers compensation benefits was rejected as contrary to numerous prior decisions including Cincinnati Ins. Co. v. Samples, 192 SW3d 311 (Ky. 2006); AIK Selective Self Ins. Fund v. Bush, 74 SW3d 251 (Ky. 2002); and Hillman v. American Mut. Liability Ins. Co., 631 SW2d 848 (Ky. 1982).  The court explained Kentucky law as follows:

...if you collect on a workers' compesnaiton claim, you cannot collect the awards in the civil action that mirror workers' compensation benefits; i.e., money for past and future medical expenses, lost wages, and the impairment of power to earn money.  If an employee does pursue both claims, then the employer has a right to subrogation against the proceeds recovered in the civil action that duplicate the workers' compensation benefits. This prevents the employee from receiving a double recovery. 

The court then explained that Wal-Mart's workers compensation liability would be calculated as follows: first, a total of $444,080.36 of the damages recovered from Atlas and Unarco duplicated workers compensation benefits and therefore were subject of a subrogation lien by Wal-Mart. Second, the fees and expenses incurred by Wells in prosecuting his claims against Atlas and Unarco must be deducted; these totaled $317,268.76.  Therefore, Wal-Mart had a subrogation credit of $126,811.60 ($444,080.36 minus $317,268.76).

Robert L. Abell
www.RobertAbellLaw.com