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Case Update: Employer Has No Subrogation Claim Against Settlement Paid By Negligent Provider

In Baltimore County v. Charles Ulrich, the Claimant, the Claimant, Charles Ulrich, suffered an accidental injury to his elbow while lifting a heavy trash can as a maintenance specialist in 2011. He sought treatment at Concentra, which diagnosed him with a strain and permitted him to return to work with lifting restrictions. He continued to suffer pain and eventually sought care from a hand specialist five weeks after the injury. The hand specialist diagnosed him with a complete tear of his biceps tendon. He stopped working and underwent surgery to repair the tendon.

He then filed a claim with the Commission. Self-insured Baltimore County paid for the surgery and related medical services, as well as temporary total disability benefits. Claimant eventually returned to work but was unable to perform his job duties even while avoiding heavy lifting. Unable to work, Claimant sought and received disability retirement benefits. Pursuant to LE § 9-610, the disability retirement benefits offset the Employer's obligation to pay further disability benefits.

He then filed a malpractice action alleging that Concentra failed to diagnose the ruptured tendon. The malpractice action was settled. Claimant did not recover any medical expenses as part of the settlement. Upon learning of the settlement, Baltimore County demanded reimbursement out of the settlement proceeds for all medical expenses that it had paid for his workers' compensation claim.

The Commission and the Circuit Court for Baltimore County determined that the County was not entitled to reimbursement. Recovery was inappropriate because the incurred medical expenses would have been paid, even if no malpractice had occurred. (The accident, not the malpractice, caused the ruptured tendon. The accident, therefore, for which no other person was responsible, is what required the surgery.)

The Court of Special Appeals affirmed, stating that when an employer pays for medical services to treat the part of an injury for which no third party other than the employer is liable, and where the employee recovers no sums for those medical expenses, the employer is not entitled to be reimbursed for those expenses out of the employee's recovery from a third party under LE § 9-902.

A copy of the Opinion can be found at:

Categories: Employer Defense, Case Law
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