Certain Elements of Workers’ Comp. Offset in Claim for UIM Benefits

June 9, 2006

The Kentucky Supreme Court recently published Cincinnati Ins. Co. v. Samples addressing whether a plaintiff is entitled to recover damages duplicative of workers’ compensation benefits against a UIM carrier. Samples was operating a motor vehicle owned by his employer, (“BGM”), and insured by (“Cincinnati”) . Samples received the underlying liability limits of $25,000 and sued Cincinnati for UIM benefits. Samples also filed a workers’ compensation claim and was awarded benefits, including medical expenses, lost wages, and impairment, paid or payable by BGM.

At conclusion of the trial Samples was awarded over $300,000.00 in damages. The trial court set off against the verdict those work comp. benefits paid or payable by BGM. Samples contested the deductions. The court of appeals reversed.

The Supreme Court found that Samples right to damages against Cincinnati was no greater than his rights against Howton. Since Samples could not recover damages duplicating workers’ compensation benefits against Howton, he could not recover those damages against Cincinnati.

However, the Supreme Court noted the trial court had erred in calculating deductions in at least two respects. First, while PPD (impairment) benefits are deducted, it was error to deduct the full amount, including amounts not yet paid. This amount should be limited to the credit of PPD benefits actually received and the present value of entitlement to future benefits if commuted to a present lump sum. Second, future medical expenses are not to be deducted in the absence of proof that any part of that sum has been paid either to Samples or on his behalf. The Court remanded the case to the trial court and if there was proof that BGM paid additional medical bills to credit those against the future medical expenses.

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