Background

• Cooper sustained permanent work injuries from a third-party tortfeasor while employed by MasterStaff, which paid workers’ compensation benefits and medical expenses.
• MasterStaff intervened in Cooper’s lawsuit against the third parties to protect a subrogation lien under Tenn. Code Ann. § 50-6-112(c)(1).
• Coopers settled with the third-party defendants and dismissed their chancery court action, while MasterStaff sought to recover the cost of future medical benefits as part of its lien.
• The trial court dismissed MasterStaff’s claims, concluding the settlement resolved all claims; the Court of Appeals remanded, holding future medical expenses could be included in the credit in Graves and Hickman.
• The Tennessee Supreme Court reaffirmed Graves v. Cocke County and Hickman v. Continental Baking Co., holding that the employer’s subrogation lien under § 50-6-112 does not extend to future medical benefits, and remanded for calculation of the lien and related responsibilities.

Issues

Key Cases Cited

• Graves v. Cocke County, 24 S.W.3d 285 (Tenn. 2000) (credit for future medical expenses not included in a lump-sum settlement.)
• Hickman v. Continental Baking Co., 143 S.W.3d 72 (Tenn. 2004) (credit for unknown future medical expenses not allowed; Graves rationale applied.)
• Reece v. York, 199 Tenn. 592, 288 S.W.2d 448 (Tenn. 1956) (timing of credits against future liability; net recovery concept.)
• Millican v. Home Stores, Inc., 270 S.W.2d 872 (Tenn. 1954) (early interpretation of employer subrogation and credits.)
• Beam v. Maryland Cas. Co., 477 S.W.2d 510 (Tenn. 1972) (credit against future liability consistent with statutory scheme.)
• Cross v. Pan Am World Servs., Inc., 749 S.W.2d 29 (Tenn. 1987) (definition and calculation of net recovery under §50-6-112.)
• Aetna Cas. & Sur. Co. v. Gilreath, 625 S.W.2d 269 (Tenn. 1981) (early consideration of subrogation and credits.)