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What's Hot in Workers' Comp

The Delaware Superior Court affirms a decision of the Industrial Accident Board that denied the employer’s motion to enforce a commutation.

Randstad Staffing v. Stansbury, 2023 WL 4553878 (Del. Super. Ct. Jul. 14, 2023)

July 1, 2023

by Benjamin K. Durstein

Ms. Stansbury was injured in a work accident on February 25, 2020. The employer acknowledged a left shoulder injury, but disputed injuries to the cervical and lumbar spines. The claimant retained an attorney and filed a petition for recognition of the alleged cervical spine injury and permanent impairment benefits. According to the claimant’s attorney at the time, Ms. Stansbury agreed to settle her case for $22,000 minus an expert witness reimbursement of $2,000. About a half hour before a deposition of the employer’s medical expert, the claimant told her attorney she did not want to proceed with the settlement. The attorney advised that he would withdraw as counsel if she did not proceed with the settlement. He testified that Ms. Stansbury agreed to settle the case. The claimant testified that she did not agree to move forward with the settlement.

The deposition did not proceed, and two days later, the claimant’s attorney accepted a commutation offer within authority. Ms. Stansbury subsequently saw Dr. Rastogi, who advised she needed surgery for her neck and that it was related to the work accident. When the claimant again raised concerns about the settlement, her attorney withdrew as counsel. 

The surgery was performed. Ms. Stansbury retained a new attorney and informed the employer that she did not want to proceed with the agreement. The employer filed a Motion to Enforce the Written Settlement Agreement. The Board denied the motion and concluded that the global settlement did not appear to be in the claimant’s best interest, as required by Section 2358(a).

The employer appealed the determination and attempted to argue that the “best interest” concept of Section 2358 was vague and that the Board’s authority to “veto” agreements violates freedom of contract. The Superior Court immediately dismissed the freedom of contract argument and advised that the Board’s statutory discretion under the Workers’ Compensation Act clearly permitted it to render decisions on settlements of the parties. The court did not believe there was a legitimate question of law raised by the appeal. The court opined that there was substantial evidence to support the Board’s conclusion that the global agreement was not in the best interest of Ms. Stansbury. Specifically, the court accepted Ms. Stansbury’s testimony about her own “best interest,” emphasized that the settlement did not contemplate compensation for the neck injury, and suggested that she may have been inadequately represented by counsel when the attorney threatened to withdraw representation if she did not proceed with the settlement. The Board’s decision was affirmed.
 

 

What’s Hot in Workers’ Comp, Vol. 27, No. 7, July 2023 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2023 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

Firm Highlights

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Marshall Dennehey Again Earns Recognition in Distinguished Chambers USA

Event

29th Annual FDLA Florida Liability Claims Conference

Jim and Erica will team up to present, "Supporting the Next Generation: Connecting with Associates." This panel-style presentation will explore communication best practices from the perspective of a senior shareholder and newer associate. The discussion will focus on the communication styles of different generations and effective strategies to avoid communication breakdowns. Topics to be discussed include the hiring process, perceptions of defense work among newer lawyers, work-life balance issues after hiring, and mentoring.

Thought Leadership

U.S. Supreme Court Decides Key Issue Regarding Interstate Freight Broker Liability

Freight brokers are intermediaries.  They connect shippers of goods with trucking companies that transport those goods.  Freight brokers match a load of freight with a trucking company and oversee the logistics of the transportation. For a number of years there has been a division among the Federal Circuits regarding the potential liability of freight brokers when the trucking companies that they retain for interstate loads are involved in accidents.  At the center of this division was the Federal Aviation Administration Authorization Act of 1994 (FAAAA).  Some Federal Circuit Courts have held that state law negligent hiring claims against freight brokers were preempted by the FAAAA .  Other Federal Circuits Courts have held that even if preemption applied, the “safety exception” in the FAAAA saved state law negligent hiring claims from federal preemption.  On May 14, 2026, the U.S. Supreme Court addressed the conflict in Montgomery v. Caribe Transport II, LLC, et al, No24-1238. In that case freight broker C.H. Robinson selected Caribe Transport to haul an interstate load. The commercial truck driver employed by Caribe Transport allegedly caused an accident and the plaintiff, Montgomery, was seriously injured. Montgomery brought an action against the driver, Caribe Transport and C.H. Robinson. The allegation against C.H. Robinson was that it negligently retained Caribe Transport when it knew, or should have known, that it was an unsafe company. The Seventh Circuit Court of Appeals held that Montgomery’s claims against C.H. Robinson were preempted by the FAAAA. The plaintiff appealed to the U.S. Supreme Court.  The U.S. Supreme Court’s decision focused primarily on the safety exception in the FAAAA.  That provision provides that the FAAAA preemption “…shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” C.H. Robinson argued, as freight brokers historically have, that their function was not “with respect to motor vehicles” because they do not own trucks or employ drivers. They are merely intermediaries, connecting entities who need freight moved with entities who can do that job. Therefore, C.H. Robinson argued that preemption applied, not the safety exception. The U.S. Supreme Court did not accept that argument. The Court focused on the meaning of the phrase “with respect to” in the safety exception. The Court held that it means “referring to”, “concerning” or “regarding”. Therefore, writing for a unanimous Court, Justice Barrett concluded that “[r]equiring C.H. Robinson to exercise ordinary care in selecting a carrier therefore “concerns” motor vehicles—most obviously, the trucks that will transport the goods. So, Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception, which saves it from preemption.” Justice Kavanaugh, in his concurring opinion, noted the effect this ruling may have on freight brokers and their insurers throughout the country: Importantly, the Court's decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents. As even plaintiff's counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies. Tr. of Oral Arg. 27-29. In plaintiff's counsel's words, the brokers "just have to hire carriers that actually have a reasonable policy," and "the broker is not going to have a problem if it's asking the hard questions of the carrier." Id., at 42, 45. In addition, the proximate-cause requirement in typical state tort law should help protect brokers from excessive liability. Id., at 25. That said, the brokers rightly caution against naivete. In the real world, as the brokers forcefully respond, state tort law can be unpredictable, and the costs to brokers of litigation and insurance may be significant even when brokers prevail in lawsuits. Moreover, the costs of litigation and insurance, as well as the costs of brokers' conducting more substantial inquiries into trucking companies, will cascade through the economy and be paid in part by American consumers in the form of higher prices. The concerns expressed by the brokers are legitimate and weighty. The key point here is that freight brokers can no longer claim they are protected from negligent retention claims by the FAAAA (in cases involving interstate transportation). The challenge will be to determine what is considered ”reasonable efforts” used by brokers when retaining transportation companies. 

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Result

Defense Verdict in Complex Medical Malpractice Trial

Result

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Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

Thought Leadership

Marijuana Legalization and Workplace Risk: What New Jersey Employers Need to Know

While the legalization of recreational marijuana usage poses a risk of increased work-related accidents for younger workers, employers can work to curb this increase by investing in education, effective drug policies, and employee assistance programs.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

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Thought Leadership

PA Middle District Dismisses Claims Against School District and its Superintendent, Principal, Special Education Director, and Classroom Teacher

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