Callaghan v. Car Parts International, LLC

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At issue was the extent of an employer’s right to a credit against its obligation to pay workers’ compensation benefits for an injured employee who has recovered damages from a third-party tortfeasor that caused the employee’s injuries.Under an amendment to Conn. Stat. 31-293(a), even if the employer is owed more than is recovered in the third-party action, the employee retains one-third of the proceeds for her sole benefit. In dispute was whether the employer has a right to a setoff against its obligation to pay for post-judgment workers’ compensation benefits until those benefits exceed the one-third portion that the employee received from the proceeds of the third-party action.The Compensation Review Board affirmed the decision of the workers’ compensation commissioner that the defendant employer was entitled to a “moratorium,” or the credit afforded the employer against any later arising benefits in the amount of any proceeds the employee received in the third-party action. The Supreme Court reversed, holding that the employee’s one-third portion is not subject to the moratorium because the application of the moratorium to the one-third reduction would conflict with and undermine the purpose of P.A. 11-205, which amended section 31-293(a). Moreover, the legislature intended for the employee alone to retain the benefit of the one-third reduction. View "Callaghan v. Car Parts International, LLC" on Justia Law