A recent appellate decision demonstrates the necessity for state-fund employers to retain legal counsel to protect their interests when a workers’ compensation claim is appealed to state court. In Smith v. Kaleal, 2007-Ohio-6560, (11th Dist. Lake County), the claimant, Christopher Smith, filed a workers’ compensation claim against his employer, Dan Kaleal, owner of All Occasion Limousine, Inc. Smith’s claim was denied administratively by the Industrial Commission of Ohio, and he filed a notice of appeal and complaint in the Lake County Court of Common Pleas naming both the Bureau of Workers’ Compensation (BWC) and Kaleal as defendants.  

Although Kaleal defended the claim at the administrative level, he failed to file an answer or otherwise enter an appearance in the court case. The Attorney General’s office sent Kaleal a letter informing him that the BWC was a co-defendant in the case and would assist him, but that Kaleal had the right to retain private counsel. Kaleal did not respond to this letter, did not hire private counsel, and did not answer Smith’s discovery requests.

As the case proceeded to trial, Smith and the BWC reached a settlement agreement that ultimately was accepted by the court. The court then dismissed the case with prejudice by agreement of the parties. Kaleal, however, filed a motion to terminate the settlement agreement. The court denied Kaleal’s motion since he did not assert any specific reason that would entitle him to relief from judgment. Kaleal appealed that decision to the Eleventh District Court of Appeals. After quickly dispensing with Kaleal’s claim that he was not properly served with the complaint, the appellate court upheld the BWC’s authority to settle claims under such circumstances even if employers do not agree. 

This case demonstrates the necessity for state-fund employers to retain legal representation when court appeals are filed on workers’ compensation claim that are still in their experience. Although the Attorney General’s office, on behalf of the BWC, takes the lead in defending state-fund employers in court, hiring private legal counsel allows the employer to oversee the litigation and to be sure that the case is being defended properly. In addition, hiring counsel guarantees the employer a seat at the table if settlement discussions are held. If the employer does not believe that a settlement to which the injured worker and BWC agree is in its best interest, the Attorney General’s practice is not to force the employer to settle but, rather, to give the employer the opportunity, through its own counsel, to defend the appeal.