Court can Compel Employee to Accept Settlement Offer under Worker’s Comp Law

In a 5-2 decision authored by Justice Roggensack, joined by Justices Crooks, Prosser, Ziegler, and Gableman, the Wisconsin Supreme Court held that a circuit court may compel an employee to accept a settlement offer under Wisconsin’s worker’s compensation law (Wis. Stat. § 102.29(1)).

Justice Bradley authored a dissenting opinion and was joined by Chief Justice Abrahamson. The case is Adams v. Northland Equipment Co., Inc., 2014 WI 79.

Background

The case involved personal injuries sustained by Russell Adams during the course of employment with the Village of Fontana. As Adams was plowing the driveway to the Village Hall, the blade of his plow struck the lip of a sidewalk. According to Adams, when the plow made contact with the sidewalk, the truck stopped suddenly and threw him into the ceiling of the cab of the truck. The force caused injuries to his spine and back. Adams was not wearing a seatbelt.

Adams alleged that the plow was defective. Before the accident, the Village had experienced problems with the plow and took it back to Northland Equipment Company to have two springs replaced. Northland explained that the plow’s springs were worn out and needed to be replaced. Northland did not have the exact brand replacement on hand and could not obtain them before the next snow. Northland and the Village decided to replace the springs with another brand. The plow worked well for a year and a half before the incident in this case.

The League of Wisconsin Municipalities Mutual Insurance Company was the worker’s compensation insurer for the Village and had paid Adams $148,332 in worker’s compensation benefits for medical expenses and disability.

Northland and its insurer (Cincinnati Insurance) moved for summary judgment arguing that Adams could not prove negligence or causation. The court denied the motion. Four days later the League of Wisconsin Municipalities Mutual Insurance Company (the “League Insurance”) received a settlement offer of $200,000 from Northland and Cincinnati Insurance. However, Adams refused to accept the offer.

The League Insurance then attempted to negotiate a resolution with Adams, to no avail. The League Insurance unilaterally accepted the settlement offer and moved the circuit court to compel Adams to accept it.

Circuit Court and Court of Appeals Decisions

The Circuit Court granted the League Insurance’s motion to compel settlement. The Court of Appeals affirmed.

Wisconsin Supreme Court Decision

On appeal, Adams argued that a worker’s compensation insurer cannot compel an employee to accept settlement of a third party tort claim. In addition, Adams argued that the Worker’s Compensation law cannot be interpreted to permit the circuit court to compel settlement because such an interpretation would violate his right to a jury trial under Art. I, Section 5 of the Wisconsin Constitution.  Adams also argued that the Circuit Court’s order violates procedural due process.

The Wisconsin Supreme Court affirmed the Circuit Court’s decision and held that the court can compel an employee to accept settlement of the claim under the Worker’s Compensation statute (Wis. Stat. § 102.29(1)) created by the legislature.

The Court explained that the statute provides both the employee and the worker’s compensation insurer an “equal voice in the prosecution of the claim.” In addition, the Court noted that the Worker’s Compensation statute (Wis. Stat. § 102.29(1)(b)) prescribes how recovery from the claim is apportioned and that the circuit court is empowered to resolve any disputes arising between the employee and the worker’s compensation insurer during the prosecution of their claim, including disputes involving settlement.

The Supreme Court also dismissed Adams’s argument that the Circuit Court’s decision violated his right to a jury trial under the Wisconsin Constitution. The Court explained that it has interpreted Section 5 to mean that the right to jury trial is preserved for a statutory claim if: 1) the statute codified a cause of action that existed in 1848 when Wisconsin’s Constitution was adopted; and 2) the cause of action was an action at law rather than in equity. The Supreme Court determined that Worker’s Compensation did not fit under these two tests.

The Supreme Court similarly dismissed Adams’ argument that the Circuit Court’s decision violated due process.

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