                                                                                    FILED
                                                                                  June 12, 2018

                                                                                   TN IC OURTOF
                                                                             Vi ORKERS' COM:PENSATION
                                                                                     ,C LAIMS

                                                                                   Tim.e ll:24MI

           TENNESSEE BUREAU OF WORKERS' COMPENSATION
          IN THE COURT OF WORKERS' COMPENSATION CLAIMS
                           AT MEMPHIS

JOSEPH PEPPERS,                                  )    Docket No. 2016-08-0769
         Employee,                               )
v.                                               )
THYSSENKRUPP ELEVATOR CORP.,                     )    State File No. 86391-2014
         Employer,                               )
and                                              )
INDEMNITY INSURANCE CO. OF                       )    Judge Deana Seymour
NORTH AMERICA,                                   )
         Insurance Carrier.                      )


                        COMPENSATION HEARING ORDER


        This matter came before the undersigned Workers' Compensation Judge on May
9, 2018, for a Compensation Hearing. The central legal issues are: (1) whether the parties
reached a binding settlement of all claims; (2) the extent of Mr. Peppers' permanent
disability; and (3) Thyssenkrupp' s entitlement to a credit or subrogation lien for its
payment of workers' compensation benefits. For the reasons below, the Court holds: the
parties did not reach a binding settlement of this claim; Mr. Peppers sustained a
permanent impairment of nine percent to the body as a whole; and Thyssenkrupp is
entitled to a credit for the amount of permanent partial disability (PPD) paid, limited to
Mr. Peppers' net recovery collected in his personal injury claim.

                                    History of Claim

                                       Stipulations

      The parties stipulated to the following:

          •   Mr. Peppers' workers' compensation claim arose from a motor vehicle
              accident (MVA) on October 15, 2014.
          •   Thyssenkrupp paid $43,407.77 in medical expenses and $13,325.71 in
              temporary disability benefits.
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           •   Mr. Peppers returned to work for Thyssenkrupp at the same wage as before
               the accident, but his employment was later terminated.
           •   Mr. Peppers reached maximum medical improvement (MMI) on April 5,
               2016.
           •   Mr. Peppers' authorized treating physician, Dr. Samuel Schoerlucke,
               assigned nine-percent impairment to the body.
           •   The compensation rate is $848.00.
           •   Mr. Peppers settled a third-party personal injury claim from the MVA for
               $100,000.00.

                                         Contested Issues

        The parties engaged in unsuccessful mediation, and the mediator issued a dispute
certification notice identifying permanent disability benefits and the subrogation lien as
disputed issues. Specifically, the parties deadlocked when Mr. Peppers refused to
reimburse Thyssenkrupp the amount of any workers' compensation benefits from his
third-party settlement recovery. Mr. Peppers claimed Thyssenkrupp waived its right of
recovery for those benefits. Thus, Mr. Peppers' attorney disbursed the third-party
settlement proceeds to Mr. Peppers without repaying Thyssenkrupp.

        Thyssenkrupp contended the workers' compensation claim never settled and the
parties never presented a written settlement agreement to the Court for approval. It filed a
Petition for Benefit Determination demanding repayment of a subrogation lien under
Tennessee Code Annotated section 50-6-112 from proceeds Mr. Peppers received from
the third-party settlement.

                        Findings of Fact and Conclusions of Law

                                     Standard Applied

      Mr. Peppers must establish all elements of his claim by a preponderance of the
evidence. Tenn. Code Ann. § 50-6-239(c)(6) (2017).

                                         Settlement

       Although the parties negotiated, they never settled this claim. Tennessee Code
Annotated section 50-6-240 provides, "all settlements shall be reduced to writing and
shall be approved by a judge of the Court of Workers' Compensation Claims before they
are binding on either party." Tennessee Compilation Rules and Regulations 0800-02-21-
.19(1) (20 16) further confirms this requirement: "In any case where the parties reach a
full and final settlement, the settlement shall not become effective until it has been signed
by both parties and approved by a workers' compensation judge."


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            The parties did not agree on the terms of a settlement, reduce it to writing, sign, or
    present a settlement agreement to the Court for approval. Therefore, the Court holds the
    parties did not settle this claim.

                                 Permanent Disability Benefits/Credit

        The Court next turns to Mr. Peppers' entitlement to PPD. Mr. Peppers did not
testify at the hearing. Rather, he stipulated to the essential elements of his claim for the
Court to determine the extent of his entitlement to PPD.

       The Court finds that Dr. Schoerlucke placed Mr. Peppers at MMI on April 5,
2016, and assigned a permanent impairment rating of nine percent to the body as a whole.
Therefore, Mr. Peppers is entitled to 40.5 weeks of PPD at his weekly compensation rate
of $848.00, which totals $34,344.00. (450 weeks x 9% x $848.00). Mr. Peppers' initial
compensation period expired January 13, 2017. 1

       By statute, Thyssenkrupp is entitled to a credit against the unpaid PPD benefits
from Mr. Peppers' net recovery in his third party personal injury claim. Tenn. Code Ann.
§ 50-6-112(c)(2).

                                         Lien and Attorney Fees

       Thyssenkrupp asserted it was entitled to a subrogation lien against Mr. Peppers'
third-party claim. Mr. Peppers argued Thyssenkrupp waived its subrogation rights during
settlement negotiations. Proposals during settlement negotiations are neither admissible
in this hearing nor do they bind either party. However, this Court cannot enforce any
subrogation lien against Mr. Peppers' recovery from his personal injury claim or establish
the amount of employee's attorney fee from the lien proceeds. These determinations are
beyond the jurisdiction of this Court, and a "court of competent jurisdiction" over the
personal injury claim must address them. Tenn. Code Ann. § 50-6-112(b ).

IT IS, THEREFORE, ORDERED:

       1. Mr. Peppers is entitled to PPD benefits equaling nine percent to the body as a
          whole, which, at his stipulated compensation rate of $848.00 per week, equals
          $34,344.00.

       2. Thyssenkrupp is entitled to a credit against the unpaid PPD benefits from Mr.
          Peppers' net recovery in his third-party personal injury claim.



1
    Mr. Peppers did not pursue enhanced benefits.

                                                    3
  3. Mr. Peppers is entitled to future medical benefits for his injury under Tennessee
     Code Annotated section 50-6-204(a)(l)(A). Dr. Schoerlucke shall remain the
     authorized treating physician.

  4. Thyssenkrupp shall pay the $150.00 filing fee under Tennessee Compilation Rules
     and Regulations 0800-02-21-07 (20 16) directly to the Clerk within five business
     days ofthe date of entry ofthis order, for which execution may issue ifnecessary.

  5. Thyssenkrupp shall file a Statistical Data form (SD-2) within ten business days of
     entry of this order.

  6. Absent appeal, this order shall become final thirty days after entry.

ENTERED JUNE 12, 2018.




                                ""'~S---~
                                 JUDGE DE     A SEYMOUR
                                 Court of Workers' Compensation Claims




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                                   APPENDIX

Exhibits:
       1) Employee's Responses to Employer and Insurance Carrier's Request for
      Admissions
      2) Affidavit of Hailey H. David, with attachments

Technical Record:
      1) Petition for Benefit Determination
      2) Dispute Certification Notice
      3) Request for Scheduling Hearing
      4) Scheduling Hearing Order
      5) Joint Motion to Continue
      6) Order Granting Joint Motion to Continue
      7) Motion to Revise ADR Date
      8) Order Granting Joint Motion to Continue
     9) Dispute Certification Notice
      10) Employer's Pre-Compensation Hearing Statement
      11) Employee's Pre-Compensation Hearing Statement
      12) Pre-Trial Brief of Employer and Insurance Carrier
      13) Motion in Limine
      14) Notice of Appearance
      15) Motion to Exclude R. Sadler Bailey as Attorney for Employee
      16) Order on Motion in Limine and Motion to Exclude R. Sadler Bailey as
     Attorney for Employee




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                           CERTIFICATE OF SERVICE

       I hereby certify that a true and correct copy of the foregoing was sent to the
following recipients by the following methods of service on this the 12th day of June,
2018.

Name                                Via Email     Service sent to:
Baker Yates, Esq.,                      X         b~ates@b ai leyg!;eer.com
Employee's Attorney                               sbailey@baileygreer.com
Hailey David, Esq.,                     X         davidh@waldrophall.com
Employer's Attorney




                                                  , Court Clerk
                                       Court of orkers' Compensation Claims
                                       WC.CourtClerk@tn.gov




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