Published on:

City of Danville v. Tate: Workers’ Compensation Double Recovery

City of Danville v. Tate, a workers’ compensation case from the Supreme Court of Virginia, involved claimant who was employed by the city as a firefighter for 39 years. In March of 2009, claimant suffered a major heart attack and did not return to work. He retired six months after his heart attack.

emergency-269548-m.jpgPrior to becoming ill, claimant had accrued around 6,000 hours of paid sick leave. His employer paid out his sick leave prior to retirement in the amount of approximately $40,000. This sick leave payout was roughly equivalent to his annual salary. He used the balance of his sick leave, as permitted, to earn another year of employment credit with respect to his retirement plan.

However, before he retired, he filed a workers’ compensation claim seeking a rating of two-thirds impairment from the heart attack-related disability. The city first denied his claim, but it accepted liability the following year. He was paid for his six months of disability prior to retirement. The city did not ask to be given an offset credit with respect to money it had already paid out in sick leave.

At this point, city filed a claim against claimant seeking recovery of the money it had paid him in sick leave. In this case, the court found it did not have jurisdiction to hear the claim. It would have had jurisdiction during the prior action if city had availed itself of its right for an offset credit, but since it had failed to do so for unknown reasons, it could not be done at this time. The court then dismissed city’s claim for reimbursement.

City appealed this ruling, citing local rules, and argued court did have proper jurisdiction under the code, and it was entitled to reimbursement of benefits for sick leave already paid. While the court agreed lower court did have jurisdiction to hear the case, the court did not agree insurance company was entitled to reimbursement.

If employer had paid claimant for his final year of work, employer would have been entitled to recover for double payment. However, because it was sick leave involved in this case, it was a payment that triggered double recovery prohibitions, according to the state supreme court.

As our Boston on-the-job injury lawyers can explain, workers compensation benefits are designed to compensate workers for time missed from work (lost wages), reimburse employees for medical bills, pay for rehabilitation, and, in the case of a fatal workplace accident, also pay funeral expenses. Workers benefits are not designed to put claimant in a better financial situation than he or she had been in prior to the accident. For this reason, if an insurance company pays claimant’s medical bills, insurance company has a right to be reimbursed for any money spent prior to an award of benefits. The reimbursement will be taken from any disability award given to plaintiff. While some situations require reimbursement to be made, not every situation does, so you should speak your attorney about the facts of your particular case.

If you are injured on the job in Massachusetts, call the Law Offices of Jeffrey S. Glassman for a free and confidential consultation to discuss your workers’ compensation claim: 1-888-367-2900.

More Blog Entries:

Increased Fines for Employers Who Do Not Maintain Workers’ Compensation Coverage, July 22, 2014.