Editor:Angela Alvarez Simmons, Esquire
Insurer is entitled to a setoff of wage-loss payments
received by Claimant in workers' compensation settlement from benefits
paid under disability policy. Grubbs, Jr., v. Standard Insurance Company, No. 94568 (Mo. App. E.D., November 30, 2010), Odenwald, J.
Gerald Grubbs, Jr. ("Claimant") was insured by a group long-term
disability policy issued by Standard. Claimant was receiving
disability benefits under his Standard policy when he filed a permanent
partial disability claim under the Missouri Workers' Compensation Act. He settled his workers' compensation claim. Standard then deducted
the amount of the Claimant's workers' compensation settlement from the
monthly disability benefits it was paying to Claimant. Claimant filed
a motion for declaratory judgment to prohibit the setoff and both
Standard and Claimant filed cross motions for summary judgment. The
trial court granted Claimant's motion. Standard appealed.
On appeal, the main issues were whether Standard's policy language
regarding the setoff was ambiguous and whether Claimant's workers'
compensation settlement was a recovery of lost wages or settlement for
something other than lost wages. The court examined Standard's policy
language and found that "lost wages" was not defined and applied the
ordinary meaning, which it found was consistent with the term as it was
used in the policy. The court also examined the terms of Claimant's
compromise settlement, in which the parties had expressly stipulated
that no portion of the settlement was attributable to rehabilitation
expenses, death benefits, burial expenses, or medical expenses.
Held: Under Sheldon v. Bd. Of Trs. Of the Police Ret. Sys.,
779 S.W.2d 553, 556 (Mo. banc 1989) workers' compensation payments are
divided into two categories: 1) wage loss payments based on the
concept of disability; and 2) payments of hospital and medical expenses
occasioned by any work-connected injury, regardless of wage loss or
disability. The court found that under the terms of the Claimant's
workers' compensation settlement agreement his settlement payment was
for lost wages and therefore deductible from the monthly disability
benefits Standard paid Claimant under its unambiguous policy.
The Missouri Bar Courts Bulletin, Jan-11