An appellate court in New York has ruled that the members of a failed self-insurance fund could not avoid paying a default judgment to the state Workers’ Compensation Board for the cost of a claim from one of the failed fund’s member employers. The case, New York State Workers’ Compensation Board v. Bast Hatfield, involves the Elite Contractors’ Trust which failed in April 2010. Elite had an $82 million deficit when it was declared insolvent, Hatfield owed $2.1 million (based upon its share of Elite’s liabilities) to the board upon insolvency but refused to pay. The court ordered that Hatfield must reimburse the Board for a claim from one of Hatfield’s employees for which the Board had paid out $26,177.15, despite the fact that the state’s Special Disability Fund had already reimbursed the Board for the claim. The court reasoned that the language of the statutes was clear in stipulating the Board’s entitlement to payment specifically from the trust of trust members.
Read an overview from WorkCompCentral (paid content) here.
Read the decision here.