Monday, March 12, 2007

Superior Court Case on Standard of Review of Allocation of Third Party Settlement

In Urmann V. Rockwood Casualty, the Claimant and his wife received a third party settlement. The Common Pleas Court held a hearing and approved a proposed allocation of $50,000.00 to the Claimant and $250,000.00 to his wife for loss of consortium. The Superior Court affirmed the decision of the Common Pleas Judge. The Court held substantial evidence supported the Common Pleas Judge’s findings and conclusions.

The Employer was a "full participant" in the hearing, according to the Court. However, it is difficult for the Employer to develop a rebuttal case to the family’s claims of loss of consortium. Even if such a case is presented, the fact finder is a common pleas judge who is actually deciding either to approve the settlement or to put the case back on the county’s trial list.

Possibly for these reasons, the Employer reserved its argument on the fairness of the allocation for the Superior Court. However, the Court deferred to the fact finder. The Employer is left with the unsatisfactory remedy at the common pleas level.

If the allocation of settlement will be evaluated on substantial evidence rather than fundamental fairness, the workers’ compensation judge should be the fact finder on the allocation of the settlement. The workers’ compensation judge can hold a hearing in which the Employer is actually a party to the proceedings. Also, the workers’ compensation judge does not have an interest in whether the case settles or goes back on the county trial list.

Employer’s Counsel who wants a ruling on the allocation of a proposed settlement should file a Petition to Review Compensation Payable and advise the common pleas court that the Employer is pursuing its administrative remedy. Claimant’s Counsel should point out Urmann v. Rockwood Casualty and request a hearing from the common pleas court.

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