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In re Claim of Arena3/21/2002
This opinion is uncorrected and subject to revision before publication in the Official Reports.
MEMORANDUM AND ORDER
Calendar Date: November 9, 2001
Appeal from a decision of the Workers' Compensation Board, filed March 1, 2000, as amended by decision filed February 5, 2001, which, inter alia, ruled that the workers' compensation carrier could not take an offset credit against the proceeds (*2)received by claimant from the settlement of a third-party action.
In July 1980, Thomas Arena (hereinafter decedent) sustained a left foot injury in the course of his employment with Crown Asphalt Company Inc. (hereinafter the employer). Thereafter, a Workers' Compensation Law Judge (hereinafter WCLJ) awarded decedent workers' compensation benefits. In the course of his treatment and hospitalization for his injury, decedent suffered renal failure. Decedent's original claim was subsequently amended to include consequential renal failure.
Decedent and claimant, his wife, thereafter commenced a third- party medical malpractice action against decedent's treating physicians and hospital as a result of the consequential renal failure. Decedent sought damages for his disability, lost wages, medical expenses and pain and suffering. Claimant, derivatively, sought damages for loss of consortium and services. Initially, the employer's workers' compensation carrier refused to consent to a settlement, however, after decedent brought a petition seeking to compel consent, decedent and the carrier entered into a stipulation to which claimant was not a signatory. The stipulation, dated September 23, 1988, covered the carrier's use of the pending third-party recovery as a credit against its liability in decedent's workers' compensation claim. It also contained a provision limiting its offset credit for decedent's claim to the net recovery of $650,000 in the contemplated structured settlement. The stipulation also contained a provision indicating that the carrier was not waiving its right to take credit against any future claim by claimant for death benefits. Another provision indicated that the $650,000 credit for decedent's claim did not include the sum of $109,960, "which represents [claimant's] share of the malpractice settlement".
On September 27, 1988, the structured settlement was finalized wherein, inter alia, decedent and claimant received a joint payment of $133,484.76 and the carrier received $19,000 in satisfaction of its lien (reduced from the original amount of $115,000 by consent of the carrier). The settlement also included payments solely to decedent in the amount of $5,000 per month for life with guaranteed monthly payments to his estate until September 1, 1998 in the event of his death prior to that date. Decedent and claimant agreed that neither of them would bring any additional past, present or future claims, known or unknown, with respect to the third-party action, including a potential wrongful death action. In the general release form, also dated September 27, 1988, both decedent and claimant noted (*3)that the carrier reserved its rights for offset claims as set forth in the stipulation between the carrier and decedent. Subsequently, on February 17, 1989, the terms of the settlement and related stipulation were confirmed in decedent's workers' compensation matter. Based upon the stipulation, the WCLJ closed decedent's case on March 6, 1989. Claimant was not a party to that proceeding.
Decedent died on May 6, 1993, and claimant, in a separate proceeding, filed a claim for death benefits under Workers' Compensation Law ยง 16. The carrier, during the processing of that claim, raised the issue of credit against claimant's death benef
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