Court bars injured worker’s claim against Second Injury Fund after settlement

An injured worker who settled her claim with her employer cannot pursue additional benefits from the state’s Second Injury Fund when the settlement did not establish the employer’s liability, the Iowa Supreme Court ruled Friday.

In Sarah Kingsbury v. Second Injury Fund of Iowathe court reversed a lower court decision and held that the worker’s compromise settlement precluded her from continuing her claim against the fund.

The case arose after Sarah Kingsbury, a pharmacy technician, suffered injuries in a 2021 workplace fall and later settled her workers compensation claim with her employer, Walmart, for $52,500.

Ms. Kingsbury subsequently sought benefits from the Second Injury Fund, which provides additional compensation to workers with prior disabilities who sustain a second qualifying injury.

The court said her claim failed because the settlement did not fix the employer’s liability or establish a compensable permanent disability—both prerequisites for triggering fund liability.

“Liability of the employer is a statutory prerequisite to liability of the fund,” the court said, noting that the settlement left unresolved the extent of Ms. Kingsbury’s permanent disability.

Because the agreement was a full and final compromise, it also barred further claims under the state’s workers compensation law on the same subject matter, the court said.

The ruling overturns a district court decision that had allowed Ms. Kingsbury’s claim to proceed and instead reinstates a summary judgment in favor of the fund.

In a dissent, Justice David Waterman said the majority’s interpretation undermines Iowa’s policy favoring settlements and improperly prevents injured workers from pursuing separate claims against the fund after resolving disputes with employers.

The case was remanded with instructions to affirm the administrative dismissal of Ms. Kingsbury’s claim.