Spouse awarded $450,000 in Workers' Compensation case

On March 2, 2016, Pothitakis Law Firm received a Decision in a partial commutation case. The Decision resulted in an award to the client of $450,000.

 

In 2013, our client was a truck driver who was fatally injured in a tragic auto accident. He was married at the time and as a result his wife was entitled to Workers' Compensation benefits. Those benefits would end upon her death or shortly after she were to remarry. The surviving spouse was finding it difficult to live on the weekly Workers' Compensation benefits and for other reasons wanted to have the money paid in a lump sum.

 

Under the Iowa Workers' Compensation laws, benefits are always awarded on a weekly basis. There are a few situations where the benefits can be awarded in a lump sum and one of those is when one seeks a partial commutation. A partial commutation is a request to have all benefits paid in a lump sum after reducing them to present value.

 

In this case, the surviving spouse had a life expectancy of an additional 29 years. Reducing the payments over her lifetime after reducing to present value would total $450,000. In order to obtain a partial commutation, the spouse was required to show that it would be in her best interests to obtain the funds in a lump sum as opposed to receiving around $400 a week. The question of whether it is in the best interest of the spouse is based upon the balance between the benefits to the spouse in comparison to the detriments to the spouse.

 

The Defendants argued that she would waste the money and that she would be better off having the money on a weekly basis for the remainder of her life.

 

The arguments that we make for the spouse included the following:

 

1. Interest rates are at an all-time low and therefore the interest rate used to reduce the amount to present value resulted in a significantly higher lump sum at this time as opposed to other times in history.

 

2. The spouse wanted to make sure to have something left for her children if she were to die. If she was paid weekly, the benefits would end upon her death. If they were paid in a lump sum, as we requested in the petition for commutation, she would have an estate to leave to her children.

 

3. The spouse wanted to buy a home so that she no longer had to rent.

 

4. The spouse intended to purchase an annuity that would pay her a monthly income.

 

In support of the application for commutation, Pothitakis Law Firm hired an expert to give an opinion and options for the surviving spouse on how the money could be used. This expert was a Certified Public Accountant and he provided an opinion that it would be in her best interest to obtain the funds in a lump sum at this time. The Defendants hired their own expert, an economist, who said that she was better off receiving the money on a weekly basis.

 

A hearing was held in January 2016. A Decision was received recently which found in favor of the Pothitakis Law Firm client and awarded the Defendants to pay the Claimant the benefits in a lump sum for an approximate total of $450,000.

 

Pothitakis Law Firm is very happy with the Decision as was the spouse. Still grieving from the death of her husband, the surviving spouse was happy to be able to secure for her and her family based upon the Decision.   

 

The Defendants do have an opportunity to appeal the Decision and it’s unclear whether an appeal will be filed.

 

 

$450,000