What Do You Think: Did Lump Sum Payout Leave Bartender without Medical Compensation?

Frank Ferreri

Papillion, NE (WorkersCompensation.com) – Accepting money in a settlement agreement can leave a worker with less dry powder to get other claims paid for.

However, can language in the agreement show a “bargain” that the worker negotiated when the employer thought it was just boilerplate? A Nebraska court recently faced that question.

A bartender experienced a back injury on the job in 2001. He eventually secured a job providing financial advice but, due to his back pain and the effect of narcotic medications he took, he was groggy and sleepy and stopped working in 2008.

Two years later, a doctor reexamined the bartender and diagnosed him with “failed back syndrome” and determined that the bartender’s condition had deteriorated to the point where he was totally disabled. The compensation court initially found that the bartender lost all earning power and was entitled to weekly compensation at the rate of $508 per week.

Later, after an appeals process, the bar and the bartender agreed to a lump sum payment of $310,000. The settlement indicated that it was not intended to settle the medical portion of the bartender’s claim. In particular, the agreement released the bar “from all further liability” from the at-work injury “with the exception of medical expenses.” It also indicated that the bar would continue to be liable for the bartender’s “reasonable hospital, medical, and miscellaneous expenses related to the September 5, 2001, incident.”

When the bartender sought repayment for medical bills, the bar notified him that it would no longer authorize benefits or payments to him.

The compensation court ultimately ordered the bar to pay the bartender’s medical bills and reasoned that there was “absolutely no reason why [the bar] did not pay these expenses.” The bar appealed to court, arguing that the compensation court made a mistake when it determined that the bartender’s injury was compensable under the settlement agreement.

In Nebraska, compensability is denied when an employer denies that the employee is entitled to compensation for personal injury from the employer.

Did the settlement mean that the bartender’s injury was not compensable?

A. Yes. The language about medical expenses was boilerplate, and the bar wouldn’t have to cover expenses because the injury wasn’t compensable under the agreement.

B. No. The language in the settlement showed that the bar and bartender bargained for an arrangement that would allow him to receive medical expenses after the lump sum payment.

If you went with B, you were on the same page as the court in Liljestrand v. Dell Enterprises, No. A-20-695 (Neb. Ct. App. 05/25/21), which found that the agreement stipulated that the injury was compensable. The court rejected the bar’s argument that the language about medical expenses was boilerplate because the settlement referred to the injuries of “September 5, 2001” in acknowledging that the bartender was entitled to reimbursement from the workplace incident.

“While there may be disputes as to whether specific expenses are reasonable and related to the workplace injury, there is no dispute contained within the agreement as to whether [the bartender] is entitled to compensation for expenses which are in fact related to the incident on September 5, 2001,” the court explained.

As a result, it upheld the compensation court’s decision in the bartender’s favor.

This feature does not provide legal advice.

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