Safety and OSHA News

Employee settled comp claim then died; can his widow collect benefits?

An employee settled a workers’ comp claim with his employer for a lump sum and waived all future claims. Not long afterward he died from his injury, and his widow filed to collect death benefits, which the employer refused to pay. How did a court rule? 

Steven Baytos worked for Family Dollar Stores in Kentucky when he suffered a torn thoracic aorta on the job in 2006. He filed for workers’ comp benefits, and a judge approved a settlement in 2008.

Baytos received a lump-sum payment from Family Dollar in exchange for waiving any future claims he may have against his employer, including medical expenses, and “full and final waiver of any and all rights he may have to reopen this claim.”

In 2009, Baytos died as a result of his work-related injury. His wife, Mamie Baytos, who wasn’t mentioned in the final settlement agreement, sought death benefits.

An administrative law judge ruled Mamie should receive death benefits. Family Dollar appealed, arguing the death benefit claim was barred by the settlement.

The Kentucky Workers’ Compensation Board reversed the ALJ’s ruling and denied Mamie benefits. She appealed to a state court.

The Court of Appeals reversed the Board’s decision. Family Dollar took the case to the Kentucky Supreme Court.

Did settlement prohibit death benefits?

According to Family Dollar, Steven settled his workers’ comp claim, and that barred Mamie from seeking death benefits which would amount to 50% of Steven’s average weekly wage.

The Kentucky Supreme Court noted the state’s workers’ comp law makes no reference about how to treat income benefits after death when the injured worker settled his claim with the employer before dying from the injury. It also said there was no question Mamie wasn’t a party to the settlement.

The Court of Appeals relied on a Kentucky case from 1930 in making its ruling that Mamie should be able to collect death benefits. The state’s top court noted that Kentucky passed a revision of its workers’ comp law in 1972.

But when it came to the issue of widow benefits, the two laws were basically the same, according to the high court.

Family Dollar also argued that in its 87-year history, the previous case had never been cited by another Kentucky court. The Supreme Court said that is a possible concern, except that most other states have taken the stance that the Court of Appeals did – that “the dependent’s right to death benefits is an independent right derived from statute, not from the right of the decedent.”

Family Dollar sought to use another previous Kentucky ruling in which surviving spouses of former coal miners who filed for workers’ comp benefits under state law sought to have those benefits continue after their spouse’s death from a non-work injury.

But the Kentucky Supreme Court pointed out the difference between the two cases. In Mamie Baytos’s case, she sought death benefits because her husband died of his workplace injury. In the case of the coal miners, their surviving spouses sought continuation of workers’ comp benefits after deaths from non-work-related causes.

The state’s highest court noted:

“It must be exceedingly rare for a series of events to culminate in a claim like this – an employee living just long enough to settle his claim before succumbing to the effects of his injury … while this result doubling the exposure to employers under the Act may be rare, we cannot say it is an absurd one.”

For that reason, the Kentucky Supreme Court upheld the Court of Appeals decision and said Mamie Baytos could collect death benefits. Noting again that Kentucky’s workers’ comp law doesn’t directly address this type of situation, the justices said it wasn’t up to the courts to make that call, rather it should depend upon an act of the state legislature if they want to prevent this type of double exposure.

(Family Dollar v. Mamie Baytos, Supreme Court of Kentucky, Nos. 2015-SC-00194-WC, 2015-SC-000208-WC, 8/24/17)

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