EQUITABLE RULING ALLOWS EMPLOYER TO RETAIN EQUITY IN HOME

In the event of a catastrophic injury, the Georgia Workers’ Compensation Act requires an employer/insurer to provide the injured employee with reasonable and necessary rehabilitation services. This often requires the employer/insurer to make structural modifications to an employee’s home. In extreme cases, an employer/insurer can be required to provide the employee with new housing, which creates questions as to who will hold title to the new home and who will be responsible for its maintenance.

Just last month, in Southern Concrete v. Spires, the Georgia Court of Appeals addressed whether an employer/insurer could meet its legal obligations by simply providing the injured employee with a life estate in a suitable home. A life estate is a possessory interest in property that is limited to the life of the person holding it. Upon the life tenant’s death, all interest in the property “reverts” to the grantor.

Spires was severely injured in a construction accident, and his injuries were considered catastrophic due to paraplegia.  The employer initially made modifications to Spires’ own home, but the house was later condemned by county officials due to problems with the septic system. The parties agreed that the employer would provide Spires with a new wheelchair-accessible home, but they could not agree on where the new home would be built or to whom it would be titled. Spires insisted that the new house be built on his own land and that he receive full title.

The ALJ granted Spires’ request, but the Appellate Division reversed, giving Spires two options: he could either sell a portion of his land to the employer, or the house could be built elsewhere on land purchased by the employer. Either way, title would be held by the employer, and Spires would receive only a life estate.

The Court of Appeals agreed, holding that the employer was not obligated to build a wheelchair-accessible home on Spires’ property and that the employer could meet its obligations under the Act and Board Rules by providing Spires’ with a life estate in a suitable home while itself retaining title to the property. In reaching its conclusion, the Court of Appeals rejected Spires’ contention that the house was merely a medical device in which the employer had no financial interest and his contention that only a superior court had the authority to grant a life estate.

The Court’s holding seems to strike an appropriate balance between an employer/insurer’s financial interests and an employee’s need for suitable housing. By granting a life estate, the employee has exclusive use of the property for his lifetime, but the employer/insurer retains its equity in the home so that upon the employee’s death, it can recoup its investment. The Court did not specifically address who would be responsible for maintenance of the home, but it noted that the employer had already agreed to provide such maintenance — no doubt a wise decision by the employer to better protect its investment.