7/22/2020 | This week in Business Insurance Workers Compensation… – Editor
By Angela Childers
A firefighter’s widow can pursue death benefits despite her husband’s earlier workers compensation settlement agreement releasing the insurer from all future claims made by his dependents.
In the case, In the Matter of Collins, the Maryland Court of Appeals in Annapolis unanimously held Tuesday that the firefighter’s dependents were not bound by the contract that he — not his dependents — signed.
Bernard Collins worked for the Huntingtown Volunteer Fire Department. In 2012, he filed a claim for disability benefits for heart disease and hypertension that was presumed to be compensable under Maryland law. The insurers, Chesapeake Employers Insurance Co. and Selective Insurance Co. of America, contested the claim, but eventually agreed to a settlement in 2015. The settlement agreement provided Mr. Collins with a lump sum payment of $150,000, a Medicare set-aside annuity and annual payments of about $4,000, with the stipulation that Mr. Collins and his dependents would release the insurers from any and all future claims that may arise under the Maryland Workers Compensation Act. The settlement was approved by the Maryland Workers Compensation Commission. His wife was not party to the settlement.
In 2017, Mr. Collins died from cardiac arrest and his widow, Peggy Collins, filed a dependent’s claim for death befits under the Act. The commission denied her claim based on the terms of the settlement agreement, and she appealed to the Calvert County Circuit Court, which upheld the denial.
The Maryland Court of Special Appeals, however, reversed the decision and remanded the case back to the commission, holding that Mrs. Collins was not a party to the settlement and therefore her husband’s settlement “does not extinguish the independent claim for death benefits that a surviving dependent may bring if the employee dies of the same compensable injury or disease.”
The insurers appealed, but the appellate court affirmed the Court of Special Appeals decision that Mr. Collins’ settlement did not bar his widow from asserting her independent claim for death benefits under the Act.
The insurers argued that Mr. Collins “unambiguously” agreed to release the insurers from future claims, but the appellate court found that the release was ambiguous and devoid of language specific to death benefits, and that the settlement agreement is unenforceable against any person who is not party to the agreement.
The court held that the Act permits dependents to release their current or future death benefit claims, but that employees do not have the power to release their dependents’ independent claims for them.
Although the insurers argued that a decision in Mrs. Collins’ favor would “largely end” the settlement for workers compensation cases by removing “any finality,” the court said insures may choose to provide payments to dependents in exchange for their death benefits release in future settlements.