Name

Jennifer Marrone v. H. Lake & Co., LLC

Insurance Company

The Hartford

Date Decided

September 26, 2025

Panel Members

Cara Biddings

David Hirtle

Donald Murphy

Categories

Tags

File Size

236 KB

Summary from the Troubh Heisler Attorneys

Marrone v. H. Lake & Co., LLC- Where following the employee's third-party settlement recovery the dollar amount of the employer's future benefit obligation relieved by third-party liability settlement was unknown, and the employer unilaterally reduced ongoing weekly benefits paid under board decree in order to recoup its lien under 39-A MRSA sec. 107, the Appellate Division affirmed the ALJ's decision denying a petition for penalties under sec. 324(2) because sec. 107 does not require a board order before unilateral reduction.

In Marrone, the employee sustained work-related injuries when her car was struck by a drunk driver on 8/22/21. Following a period of voluntary payment, the board granted the employee's petition for award and ordered ongoing weekly partial incapacity benefits. The employee then received a substantial settlement recovery from the third-party drunk driver. Sec. 107 provides that the employer may recover from the third-party settlement or judgment the amount of workers' compensation benefits paid to date, less the employer's proportionate share of the costs of recovering the settlement or judgment from the third-party. The proportionate share or percentage ratio is determined by comparing the total amount of the workers' compensation benefit obligation relieved to the total amount of the settlement or judgment. Under the Law Court decision in McKeeman, the amount of the workers' compensation benefit relieved includes past benefits paid plus the value of future benefits which may be owed. The future benefit amount must be agreed to by the parties or determined by the board. In this case, there was no agreement or determination of the future benefits relieved. Under this circumstance Marrone maintained the employer could not act unilaterally.

Further, if the employee's net recovery from the settlement or judgment exceeds the past benefit lien repayment amount, the employer may be allowed a credit or "holiday" against future workers' compensation benefits until the full amount of the lien is exhausted. After notifying the employee of the amount of its prior workers' compensation payments and a suggested sec. 107 recovery payment plan, to which the employee did not fully agree, the employer unilaterally reduced its ongoing weekly partial incapacity payment to begin recovery of its lien. The employee filed a petition for penalties under sec. 324(2), which imposes penalties for an employer's failure to make payment of benefits ordered under a board decree. The Appellate Division accepted the ALJ's analysis which looked to the Law Court decisions in Jordan and Foley addressing the employer's right to unilaterally coordinate retirement benefit offsets under sec. 221. Sec. 107, like sec. 221, uses the mandatory language of "shall" in describing the employer's right to act. For this reason, the Appellate Division held that sec. 107 permits unilateral reduction to recover a lien against a third-party settlement or judgment. If following this unilateral action the employee disputes the calculations and methods chosen by the employer, the employee may petition an ALJ to determine his or her rights under sec. 107.