Haynes v. UPS, 05-2378, 933 So. 2d 765 (La. 7/6/06).
When a subsequent accident aggravates an employee’s work-related injury, the employee must obtain written approval of the employer and its insurer to settle a claim arising out of the subsequent accident. If the employee settles without proper approval, the employee forfeits the right to additional benefits under the Louisiana Workers’ Compensation Act.
On August 28, 2001, Frank Haynes injured his head, neck and back in a work related accident while working for UPS. Several boxes fell on him while he was unloading his truck. UPS’s workers’ compensation insurer, Liberty Mutual began paying medical and indemnity benefits soon after the accident.
On November 16, 2001, while receiving workers’ compensation benefits as a result of his August 28, 2001, job accident, Haynes was involved in a non-work-related automobile accident. The automobile accident aggravated Haynes’ job injuries. On January 22, 2002, Haynes settled his personal injury claim arising out of the automobile accident for $3,140.00. Haynes was not represented by an attorney for his automobile accident claim. Haynes did not advise Liberty Mutual or UPS of his automobile accident or the settlement.
On May 6, 2002, Haynes was involved in a second non-work-related motor vehicle accident. This accident also aggravated Haynes’ job injuries. Haynes subsequently settled this claim for $5,340.00. He did not advise Liberty Mutual or UPS of his second automobile accident and settlement.
When Liberty Mutual learned of the accidents and the settlements, it terminated Haynes benefits based on La. R.S. 23:1102(B). (La. R. S. 23:1102(B) provides that, if the employee fails to notify the employer or insurer of a suit against a third person, or fails to obtain the employer and insurer’s written approval of a third party settlement, the employee forfeits the right to compensation). Haynes then filed a 1008 alleging that Liberty Mutual was not justified in terminating his benefits. Haynes argued that La. R.S. 23:1102 did not apply because the automobile accidents were not job accidents.
Decisions of the Lower Courts
The trial court agreed with Liberty Mutual that Haynes had settled his third party claims without proper approval and, therefore, dismissed Haynes 1008 on summary judgment. The Second Circuit Court of Appeal reversed. The appellate court agreed with Haynes that, because the automobile accidents were not job accident, La. R.S. 23:1102 did not apply. Therefore, the appellate court reinstated Haynes’ 1008 and remanded the case to the trial court for further proceedings.
Decision of the Louisiana Supreme Court
The Louisiana Supreme Court reversed the appellate court and held that Haynes forfeited his right to compensation by settling his third party claims without proper approval. La. R.S. 23:1101(C), which was added by the legislature effective January 1, 1990, provides that a “third person” for the purposes of La. R.S. 23:1101, et seq, includes “any party who causes injury to an employee at the time of his employment or at any time thereafter provided the employer is obligated to pay benefits under this Chapter because the injury by the third party has aggravated the employment related injury.” Because Haynes admitted in his deposition that the two automobile accidents aggravated his job injuries, Haynes settled his claims without the approval of Liberty Mutual and UPS, he forfeited his right to additional benefits under the Louisiana Workers’ Compensation Act.