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Kerperien v. Lumberman's Mutual Casualty Insurance6/18/2002
Opinion:
This case involves the subrogation provisions of the Missouri Workers' Compensation Law. The parties have cooperated in an agreed statement of facts, and so the only questions remaining are those of law. The briefs demonstrate diligent research, but no case has been cited which presents a precise answer to the question before us.
Employee Roxanne Kerperien was severely injured in an accident arising out of and in the course of her employment. Her employer's workers' compensation insurer paid a total of $116,192.53 in compensation benefits for disability and medical expenses. She then filed a negligence action against a third party. The jury fixed her damages at $2,500,000, finding that the defendant's negligence was responsible for 75% of the damage and that she was 25% at fault. The trial court then entered judgment against the defendant for $1,875,000. The defendant moved for a new trial. While the motion was pending, the parties reached a settlement by reason of which $1,175,000 was paid to the employee in full discharge of the defendant's obligation.
The employee then tendered $31,064.92 to the appellant workers' compensation insurer in full settlement of its subrogation rights under Sec. 287.150.3, RSMo 2000. The tender was refused, the insurer claiming that the proper amount was $66,105.61. The employee then filed a declaratory judgment action asking the court to determine the appropriate subrogation payment. The court accepted the employee's position and ordered the employee to pay the insurer $31,064.92 in full satisfaction of the subrogation claim. The insurer appeals. We reverse.
The governing statute, Sec. 287.150 RSMo 2000, provides in pertinent part as follows:
3. Whenever recovery against the third person is effected by the employee or his dependents the employer shall pay from his share of the recovery the proportionate share of the expenses of recovery, including a reasonable attorney fee. After the expenses and attorney fee have been paid, the balance of the recovery shall be apportioned between the employer and the employee or his dependents in the same ratio that the amount due the employer bears to the total amount recovered if there is no finding of comparative fault on the part of the employee, or the total damages determined by the trier of fact if there is a finding of comparative fault on the part of the employee. Notwithstanding the foregoing provision, the balance of the recovery may be divided between the employer or the employee or his dependents as they may otherwise agree...
The italicized portions were added to the statute in 1993, no doubt in response to the decision in Rogers v. The Home Indemnity Company, 851 S.W.2d 672 (Mo.App. 1993). The amended statute, in effect, requires a reduction in the employer's (or insurer's) subrogation entitlement if a percentage of fault is assessed against the employee in a damage suit against a third party.
The employee argues that the trial judge was correct in using the gross damage figure determined by the jury as a starting point, and in reducing the insurer's subrogation entitlement by reason of the comparative fault assessed against the employee by the jury. We conclude, however, that the parties to the damage action effectively annulled the verdict of the jury, both as to amount and as to the assessment of comparative fault, when they agreed to a settlement for a figure less than the judgment for the plaintiff employee in the trial court.
The precise point is a matter of first impression in Missouri, but our conclusion is supported by Barker v. H.J. Transporters, Inc., 837 S.W.2d 537 (Mo.App. 1992), holding that, in de
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