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HomeMy WebLinkAbout1993-01-25 93-129 ORDER1-25-93W Date Item No. 93-129 hamlSubjed: Authorizing Acceptance of Third -Party Settlement in Workers' Compensation Case (John A. Rice) Responsible Department Legal Department commentary: This item was addressed at length before the Finance Committee on January 7, 1993, and is further described in the City Solicitor's memo to the Finance Committee dated December 23, 1992, attached. Essentially, the City has a fee dispute with Mr. Rice's attorney, Barbara A. Brown, which we have been unable to satisfactorily resolve. On January 7th, staff recommended that the City accept the proposed $7,500 net settlement of the City's subrogation/lien claim, subject to later arbitration of Ms. Brown 'a $3,388.17 fee. By a 2-1 vote, the Committee declined to adopt this recommendation, voting instead to recommend that the proposed settlement not be accepted until the fee issues are resolved. The City's refusal to accept the settlement would prevent a release of the entire settlement proceeds, including the $9,121.83 share payable to Mr. Rice. Ms. Brown will be present to discuss her aide of this issue on January 25th. D,NmV,119 Marl �ana9er•aDpmm.ma:�, �,�.e� l� �s�r�tcn,,�,p,J,��c«.QO �1 GQ.w.utde�A tin £c< aPaa,<.Lcrl �el Fra -fib.'._' K oor s nape, Associated Informadon:al Yp4+tb Budge Approval: Finance ➢hear Legal Approval: " sol iso Introduced For ED Passage First Reading page_ of ❑ Referral 93-129 Lumped to Councfor Sax1 January 25, 1993 CITY OF BANGOR ryp Authorising Acceptance of Th11 ird-Party Settlement in Workers Compensation Case (John A. Rice) am VW Cay Cowmil of W CRY NBa*Oa: :UaUdNdp SUIT The City Finance Director is hereby authorized to accept the sum of $7,500 from Commercial Union Insurance Company a afull settlement of the City of Bangor's subrogation claim against Katherine A. Trickey, under 39 MRSA S 68, arising out of a motor vehicle accident on August 23, 1991, between Mrs. Trickey and City employee John A. Rice. The City Finance Director shall execute any necessary releases, in a form approved by the City Solicitor, such releases to include a release of the City's statutory lien under 39 MRSA S 68. Statement of Fact. This item represents a settlement of the City's statutory lien claim in the amount of $10,888.17 for costs incurred as a result of a workers' compensation claim filed in connection with Mrs. Trickey's 1991 collision with City employee John A. Rice. The $7,500.00 proposed payment to the City represents a net payment following deduction of $3,388.17 in attorney's fees paid to Mr. Rice's attorney for her efforts in securing a settlement from Mrs. Trickey's insurer. IN CITY COUNCIL January 25, 1993 Tabled by the following yea and no votes. Councilors voting yes: Blanchette, Bragg, Cohen, Saucy and Stone. Councilors voting no: Frankel, Saxl and Sullivan.. Councilor absent: Shubert. �/F�e+F_GJI4Z4I Note City's share is $1.766.66 In City Council July 26, 1993 Passed as Amended Amended as follows Change $7,500 to $9,121.51 NRF✓*re✓ City Clerk 93-129 ORDER Title, Authorizing Acce tance of Third -Part Settlement& in WorkersCompensation Case John A. Rice - / / nvcflmen 129 December 23, 1992 TO: Finance Committee FROM: Erik Stumpfel, City Solicitor RE: City of Bangor v. Katherine W. Trickey lJ h A i W k Comoensfltion Claiml As the Committee may recall, in October, 1991, the City Council approved a compromise and settlement of the City of Bangor's 'claim against Ratherine W. Trickey of Hampden, Maine, for damages done to a City vehicle on August 23, 1991. On that date, Mrs. Trickey was driving an automobile which collided with a City truck operated by John A. Rice. Mrs. Trickey was deemed to be at fault in the accident. Because our investigation indicated that Mrs. Trickey, an elderly widow, bad limited income and assets from which to satisfy any judgment in favor of the City, the City Council agreed to accept $10,000.00 insurance coverage limits for property damage from Mrs. Tricksy's automobile liability insurance carrier in full settlement of the City claim for vehicle repairs amounting to $1],]51.93. As a result of the accident with Mrs. Trickey, City employee John A. Rice received severe injuries, and was temporarily disabled. Due to his injuries, Mr. Rice filed a workers compensa- tion claim against the City of Bangor. In return, the City gave notice of a subrogation claim under 39 M.R.S.A. s 68 against the proceeds of any personal injury settlement Mr. Rice might obtain from Mrs. Trickey or her insurance carrier. The City's subrogation claim had not .been resolved by the earlier property damage settlement. Recently, Barbara A. Brown, attorney for Mr. Rice, has proposed to settle the City's subrogation claim by payment in full of the $10,888.17 costs incurred by the City as a result of Hu - Rice's workers r.Rice'sworkers compensation claim. The proposed payment to the City would be funded out of a $20,000.00 insurance settlement to Mr. Rice, to be paid by Mrs. Tricksy's liability carrier. As with the prior $10,000.00 property damage settlement, the $20,000.00 payment reflects Mrs. Tricksy's liability policy coverage limits for bodily injury. The proposed settlement of the City's subrogation claim, however, would include a payment of $3,388.17 In attorneys fees to Ms. Brown, for a net payment to the City of $7,500.00. In my opinion, payment at an attorneys fee in this amount is unwarranted, because the City had already obtained a policy limits settlement offer ($20,000.00) from Mss. Tricksy's liability insurance carrier 93-129 prior to the involvement of Ms. Brown or other members of her law Eire in this case. The sole effect Of Ma. Brown 'a involvement in this matter, so Ear as the City's subrogation claim is concerned, has been to generate a bill for attorneys fees. This item is before the Finance Committee for the Committee's recomend4 a lull Council, in that the City's claim amount exceeds $50,000.0. It is my recommendation that the Council accept thep ttlament, but also authorize my Department to pursue arbitr ich of Ms. Brown's attorneys fee under Maine Bar Rules 9 and 3.3(C), copy attached. Copies of relevant orrespondence and the proposed release form are also attached. £5. E.S. to IAttachments pc: City Manager ( Finance Director G�'�atlJ�L� DZ 5,000.00