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IN THE SUPREME COURT OF TENNESSEE SPECIAL WORKERS' COMPENSATION APPEALS PANEL AT JACKSON (February 6, 1997 Session)

JAMES CLIFFORD TATUM, Plaintiff-Appellee,

) )

DYER CHANCERY ) J. Steven Stafford Judge No. 02S01-9609-CH-00079

) ) Vs. ) ) METHODIST HOSPITAL OF ) DYERSBURG, ) ) Defendant-Appellee ) ) and ) ) SUE ANN HEAD, DIRECTOR OF ) THE DIVISION OF WORKERS' ) COMPENSATION, TENNESSEE ) DEPARTMENT OF LABOR ) SECOND INJURY FUND ) ) Defendant-Appellant. )

FILED
April 17, 1997 Cecil Crowson, Jr.
Appellate C ourt Clerk

For Appellant: Ms. Sandra E. Keith Assistant Attorney General Cordell Hull Bldg., 2nd Floor 426 5th Ave., North Nashville, TN 37243

For Appellee: Mr. Charles M. Agee, Jr. Attorney-at-Law P. O. Box 280 Dyersburg, TN38025

MEMORANDUM

OPINION

Members of Panel: Lyle Reid, Associate Justice, Supreme Court Joe C. Loser, Jr., Special Judge Leonard W. Martin, Special Judge

JUDGMENTS OF TRIAL COURT SET ASIDE; CASE REMANDED FOR NEW TRIAL.

Martin, Judge

MEMORANDUM OPINION

This workers' compensation appeal has been referred to the Special Workers' Compensation Appeals Panel of the Supreme Court in accordance with Tenn. Code Ann. section 50-6-225 (e)(3) for hearing and reporting to the Supreme Court of findings of fact and conclusions of law.

The director of the Workers' Compensation Division of Tennessee Department of Labor, as trustee for the Second Injury Fund (Second Injury Fund), appeals from the decision of the trial court. The court approved, over the objection of the Second Injury Fund, a settlement agreement between the employee, James Clifford Tatum, and the employer, Methodist Health Systems (Methodist Hospital of Dyersburg, Inc.), limiting the employer's liability to benefits based on 31 per cent (31%) permanent partial disability to the whole body. The claim against the Second Injury Fund was reserved until trial. The trial of the case was between the employee and the Second Injury Fund. Subsequently, at trial, the trial court found the employee to be permanently and totally disabled and held the Second Injury Fund liable for 60 per cent (60%) of that total disability. Because the court erred in approving the settlement over the objection of the Second Injury Fund, the panel concludes that both judgments should be set aside, and the case remanded for a new trial on all issues.

The trial court recognized its error and stated in its memorandum opinion of April 29, 1996, as follows:
"This settlement was approved over the objection of the Fund. In retrospect, the Court should not have approved the settlement over the objection of the Fund, but should have tried both claims together."

However, the trial court apparently believed that it had cured its error. We conclude otherwise. In a very recent case decided by the Supreme Court on December 23, 1996, the court reasoned as follows:
Here, the trial court approved a settlement concerning the 2

issue of disability caused by the subsequent injury though a party, the Second Injury Fund, did not agree to its terms. That determination cannot be made, over the objection of the Second Injury Fund, by agreement between the employee and the employer . . . . Because the Second Injury Fund has not settled the liability issue by agreement, it is entitled to "submit the entire matter for determination to the judge . . . to hear and determine the issues and render and enforce judgment. Tenn. Code Ann.

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