IWIF to pay $500,000 to settle lawsuit

The Towson-based state Injured Workers' Insurance Fund has agreed to pay a half-million dollars to settle a lawsuit that claimed it was illegally taping telephone conversations with lawyers and their clients.

Under terms of the agreement, signed yesterday by Baltimore County Circuit Judge Lawrence R. Daniels, plaintiffs Jack J. Schmerling, a Glen Burnie attorney, and Robbie L. Arnold, who had a claim pending before IWIF, will receive $15,000 and $5,000, respectively.


The bulk of the money, $480,000, goes to the plaintiffs' lawyers for legal expenses.

According to court records, IWIF has agreed that it will not record calls as it did before the suit was filed and that it will play recordings made between February 1998 and May 1999 only in the presence of IWIF lawyers.


According to the records, IWIF admitted no liability to the plaintiffs in settling the suit.

The settlement was approved May 19 by the state Board of Public Works, according to court records.

Those documents show that the payments would come from IWIF money, and that neither the state's funds nor the state's Self-Insurance Trust would be affected.

The lawsuit was filed five years ago by Baltimore attorney Jeff E. Messing, who originally sought to bring a class action lawsuit. Daniels did not allow the class action.

The lawsuit alleged that thousands of phone conversations were secretly taped in violation of Maryland's wiretap law, which states that all parties to a telephone call must give their consent before the conversation may be intercepted or recorded.

IWIF provides workers' compensation insurance coverage to Maryland businesses. Created by the state legislature about 85 years ago, it is run by a board appointed by the governor.

Schmerling declined to comment yesterday.

Attempts to reach Arnold, Messing and an attorney for IWIF were unsuccessful.