Kentucky Supreme Court Rules on Worker’s Comp Payments
Ruling in a case in mid-December, 2018, the Kentucky Supreme Court held that the Kentucky Structured Settlement Protection Act applied only to “tort claims” and did not apply to workers’ compensation settlement payments. In 2015 Ray Thomas settled a workers’ comp claim against his employer. The settlement agreement provided for certain lump sum payments to him, and monthly payments for a period of 20 years. Less than 6 months after settling his claim, Thomas sought to sell his periodic payments to DRB Capital, LLC. The sale was approved by the circuit court. The insurance company, American General appealed the decision. The Kentucky Court of Appeals upheld the circuit court’s decision, and American General again appealed. In Am. Gen. Life Ins. Co. v. DRB Capital, LLC, No. 2017-SC-000329-DG, 2018 Ky. LEXIS 535 (Dec. 13, 2018), Kentucky’s highest court reversed the decision of the lower court, and found that the settlement agreement, uniform qualified assignment, and annuity policy each contained “clear language prohibiting” assignment of the payments and since they were “the result of a workers’ compensation claim, not a tort claim” the Kentucky Structured Settlement Protection Act did not apply.