Thursday, March 4, 2010

Case remanded to determine if employer is entitled to subrogation when beneficiary settles with third party for identical expenses

GARY HARRIS v. ALCOA, INC., ET AL. (Tenn. Ct. App. May 27, 2009).

The plaintiff, Gary Harris, was injured in a work-related accident. As a result of the accident, his right arm was amputated below the elbow. His employer, the defendant Alcoa, Inc., paid workers' compensation benefits to and for the plaintiff, including a payment of $33,776.83 to the co-defendant, Hanger Prosthetics & Orthotics, Inc., for a prosthetic arm known as a "myoelectric arm." Following a jury trial in federal court, the plaintiff entered into a confidential settlement of his claim against a third party which arose out of the accident. Thereafter, he filed a complaint, as amended, against the two defendants, averring that, out of the settlement proceeds, he had escrowed with his attorney the sum of $33,776.83. He claims that he did not receive the prosthetic arm for which Alcoa paid. He seeks a declaratory judgment that the escrowed funds rightfully belong to him and not his employer. Alcoa filed a motion for judgment on the pleadings. The trial court granted the motion. The plaintiff appeals. We vacate the trial court's judgment and remand for further proceedings.

Full text of this opinion is available at the TBA website.

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