Considered on Briefs January 12, 2015.
APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT HUGHES COUNTY, SOUTH DAKOTA. THE HONORABLE MARK BARNETT, Judge.
GLENN J. BOOMSMA of Breit Law Office, PC, Sioux Falls, South Dakota, Attorneys for appellee.
CHARLES A. LARSON of Boyce, Greenfield, Pashby & Welk, LLP, Sioux Falls, South Dakota, Attorneys for appellants.
SEVERSON, Justice. GILBERTSON, Chief Justice, ZINTER and WILBUR, Justices, and KONENKAMP, Retired Justice, concur. KERN, Justice, not having been a member of the Court at the time this action was assigned to the Court, did not participate.
[¶1] Milbrandt was injured in an automobile accident during his course of employment for Bibbs, Inc. (Employer). Milbrandt settled a claim against the other driver involved in the accident. Milbrandt used part of the settlement proceeds to repay workers' compensation benefits already paid bye Employer. The remaining amount of his settlement, after costs, was determined to be " like damages" for which Employer would receive an offset against future medical expenses related to the work injury. After the settlement, Milbrandt submitted bills for ongoing care related to the work injury to other insurers, which paid most of the bills. Employer denies that the amounts paid by insurance can be used to reduce the offset against future medical expenses. An administrative law judge and the circuit court held that those amounts are properly used to reduce the offset. Employer and its Insurer appeal. We affirm.
[¶2] On May 30, 2007, Milbrandt was involved in an automobile accident during the course of his employment. He was employed as a truck driver and was forced off the road by another driver, sustaining injuries to his head, chest, neck, left shoulder, and right hip. Employer and Dakota Truck Underwriters (Insurer) accepted the injuries as compensable and paid workers' compensation benefits. In 2009, Milbrandt negotiated a settlement with the third-party tortfeasor who forced him off the road in 2007. The gross settlement equaled $160,000. From that settlement, Milbrandt reimbursed Insurer for the workers' compensation benefits already paid out at the time of the settlement. He also deducted attorney's fees, sales tax, and costs, which resulted in a net recovery of $73,541.32. The parties agree that this amount constitutes " like damages" for which Employer and Insurer are entitled to a future offset, under SDCL 62-4-38, against amounts they would otherwise pay to cover Milbrandt's medical expenses related to the work accident.
[¶3] Since his settlement, Milbrandt's right hip needed replacement, and he incurred $64,123.12 in medical expenses as a result of the work injury. Most of those costs were paid for by Medicare and Blue Cross Blue Shield supplemental insurance carried independently by Milbrandt. Although initially denied by Employer and Insurer, the costs of the surgery and care were ultimately accepted by them as compensable after an independent medical examination.
[¶4] On June 21, 2012, Milbrandt filed a petition requesting workers' compensation benefits. Employer and Insurer denied benefits, alleging that Milbrandt must personally pay any otherwise compensable
expenses up to $73,541.32. Milbrandt's costs have been largely covered by collateral sources including Medicare and health insurance; therefore, Employer asserts that those amounts do not count toward reducing the offset and that Employer is not yet liable for benefits. Both an administrative law judge and the circuit court held that medical expenses paid by his insurance reduce the statutory offset even though Milbrandt is not ...