GEORGIA SUBROGATION
Written by
Joseph T. Brasher
I. INTRODUCTION
Official Code of Georgia Annotated §34-9-11.1
provides a statutory right of recovery on behalf
of an employer and/or insurer that pays workers’
compensation benefits due to an injury caused
by a third-party tort feasor. In the event that the employee is participating
in the litigation against the third party defendant,
the employer’s ability to recover its subrogation
lien interest is conditioned upon the employee
being fully and completely compensated for all
economic and non-economic loss, taking into account
the benefits received under the Workers’
Compensation Act, as well as the amount of recovery
from the third party.
What follows is a practical guide to representing
subrogation lien holders and tips regarding maximizing
subrogation lien recovery as the personal injury
case goes to trial.
II. PRELIMINARY
CONSIDERATIONS
This text will focus on issues which generally
arise after a third party claim has been initiated
by the employer or employee/plaintiff against
the third party. Please bear in mind that, under
the decision of Rowland
v. Department of Administrative Services,
219 Ga. App. 899, 466 S.E.2d 923 (1996), it is
essential that an employer claiming a subrogation
lien interest place the plaintiff, defendant and
liability insurer on notice of the subrogation
claim as early as possible.
Special consideration should also be given to
the procedural vehicle utilized by the employer
to participate in any third party claim involving
the claimant/plaintiff. Under the recent decision
of Georgia Electric Membership
Corporation v. Hi-Ranger, 275 Ga. 197,
563 S.E.2d 841 (2002), the Georgia Supreme Court,
answering a certified question from the Eleventh
Circuit Court of Appeals, found that an employer
participating as a plaintiff under subsection
(c) of the subrogation statute has independent
rights against the third party defendant. An employer’s
rights against the defendant as a plaintiff or
co-plaintiff should be contrasted with the limited
rights that an employer has against the defendant
if the employer is participating as an intervenor
under subsection (b) of the subrogation statute.
III. INTERVENTION
VERSUS DIRECT ACTION
The subrogation statue provides that the ability
to bring a claim against the third party defendant
rests solely with the employee during the first
year following the accident. However, upon the
one (1) year anniversary of the date of accident,
there is a partial assignment of the cause of
action by operation of law to the employer. During
the period between the first anniversary of the
date of accident and the expiration of the statute
of limitations (the second anniversary of the
date of accident) both the employer and employee
have the right to prosecute an action against
a the responsible third-party tort feasor. Note
that damages recoverable by the employer are limited
to medical, indemnity, and death benefits paid
under the Workers’ Compensation Act.
If an employee files suit against the responsible
third party during the first year following the
accident (before the one (1) year anniversary),
then the employer has no other choice but to intervene
in the action under O.C.G.A. §34-9-11.1(b).
However, if the employee has taken no action
to assert a claim during the first year, the employer
may file an action against the responsible third
party defendant asserting the cause of action
in the employer’s name. This is loosely
referred to as a “direct action.”
Under the Hi Ranger decision, it is always preferable
for an employer to file a direct action. Claims
should be diaried by defense counsel for the one
(1) year anniversary date. If no action has been
taken to commence an action against the third
party defendant, counsel representing the employer’s
subrogation lien interest should file suit on
the 366th day following the date of accident.
This will allow the employer to assert independent
rights against the responsible third party.
Two recent Court of Appeals decisions, Canal
Insurance Co v. Liberty Mutual Insurance,
2002 W.L. 176522 (Ga. App. 2002) and International
Maintenance Corp. V. Inland Paperboard and Packaging,
Inc., 2002 W.L. 175397 (Ga. App. 2002),
hold that an employer participating in the third
party litigation as an intervenor under subsection
(b) is completely derivative through the claim
asserted by the employee. In the event that the
employee decides to settle, these recent cases
hold that the plaintiff can settle his or her
claim against the defendant at any time, for any
amount. If the employer is a mere intervenor,
the employer has no claim against the released
defendant. The employer is then relegated to attempting
to affect a recovery against the settlement proceeds
then held by the plaintiff. When a plaintiff reaches
a compromised settlement, which, by its very nature
will entail less than the total amount of economic
and non-economic damages claimed, it is very difficult
for an employer to demonstrate full compensation
as a pre-requisite for recovery.
The same would not be true if the employer had
asserted a direct action under subsection (c).
In that case, under the Hi-Ranger decision, if
the plaintiff chooses to settle with the defendant,
then, irrespective of any release granted by the
plaintiff, the employer would have continuing
rights against the defendant following the defendant’s
settlement with the plaintiff. In fact, if an
employer has filed a direct action, and, for what
ever reason, the plaintiff is no longer participating
in the litigation, the employer is relieved of
its obligation to demonstrate full compensation.
GEMC v. Hi-Ranger,
563 S.E2d 841 at 843 (Ga. 2002).
Always try and name the employer (rather than
the insurer) as the lien holder. In the event
a jury hears the subrogation issue, the jury may
be more sympathetic to an employer than an insurance
company.
IV. PREPARING FOR
TRIAL
Whether an employer is participating as an intervenor
or a plaintiff, special consideration should be
given to the following issues.
A. CONSIDER
A LADDER/TIER REIMBURSEMENT AGREEMENT
In order to save the cost of participating
in a third-party claim (particularly time intensive
litigation such as products liability or medical
malpractice) it is often advisable, depending
on the facts of the case, to enter into a reimbursement
agreement with the plaintiff and forego participation
in the third-party litigation. This has an obvious
savings of attorneys’ fees and expenses.
Such an agreement also serves to manage the
risk associated with subrogation recovery (such
as the full compensation doctrine).
When using a reimbursement
agreement of this type, be sure to expressly
state that there will be a sharing of litigation
expenses, or that the total amount of the subrogation
lien will be a net payment without allocation
for expenses, loss of consortium, attorneys’ fees, etc.
Some of the most effective leverage used to
persuade a plaintiff to enter into a reimbursement
agreement can be exerted at the Pre-Trial Order
stage by the employer’s demand to submit
verdict forms, jury charges, and an allocation
of the plaintiff’s jury challenges to
the employer. Many of the recommendations regarding
pre-trial tactics to maximize subrogation lien
recovery have not been tested before the appellate
courts. The subrogation statute, as drafted,
is replete with opportunities for novel arguments
to be made in good faith regarding collateral
source implications. In order to avoid protracted
appeals (and the inevitable escrowed settlement
or judgment proceeds) plaintiff/claimants will
often enter into reimbursement agreements that
allow an employer to maximize its subrogation
lien recovery.
B. PARTICIPATION
IN DISCOVERY
In the event that it is not feasible to manage
recovery of the subrogation lien by a reimbursement
agreement, I have found it helpful to ask that
all parties provide copies of discovery and
deposition notices to me as counsel for the
employer. I generally advise my clients that
it is helpful to attend the plaintiff’s
and defendant’s (or Rule 30 (b)(6) representative)
deposition. Sometimes a request to be allowed
to participate in crucial medical depositions
can persuade a plaintiff to consider a reimbursement
agreement. Most plaintiff’s attorneys
would not relish the idea of an attorney representing
the employer participating in a doctor’s
evidentiary deposition.
C. PREPARATION
OF THE EMPLOYER’S PORTION OF A PRE-TRIAL
ORDER AND SUBMISSION OF SPECIAL INTERROGATORY
VERDICT FORMS
Attached as Appendix
D is a outline of an intervenor’s
portion of a pre-trial order to be submitted
in third-party claims. Please bear in mind that
this pre-trial order merely gives some suggestions
for an attorney representing an employer regarding
a subrogation claim. This pre-trial order is
not applicable to all cases, and counsel for
an employer should give thoughtful attention
to the specifics of the pre-trial order before
it is submitted to the trial court. Make certain
that you have addressed the special interrogatory
verdict form issue. The Court of Appeal has
ruled that special interrogatory verdict forms
are necessary in order to determine what portion
of the jury’s award are being allocated
to economic and non-economic damages. See Bartow
County Board of Education v. Ray, 229
Ga. App. 333, 497 S.E.2d 29 (1997).
D. PREPARATION
OF JURY CHARGES
If the trial judge allows the workers’
compensation lien holder to participate at trial
(discussed below), please make sure that you
bring jury charges from the statute and interpreting
case law that will give a jury some guidance
on the issue of full compensation, as well as
allocation of damages between economic and non-economic
losses.
V. MEDICAL
EXPENSES MAY BE RECOVERED AS A SEPARATE ITEM
In the decision of North
Brothers v. Thomas, 236 Ga. App 839, 513
S.E.2d 251 (1999), the Court of Appeals found
that a plaintiff may be made whole, in regard
to medical bills, if all of the bills submitted
at trial have been paid by the workers’
compensation carrier and there are no outstanding
medical bills. In North Brothers, the Court of
Appeals upheld the trial court’s entry of
a judgment allowing recovery of medical expenses
paid, in that the medical expenses paid by the
employer were the only expenses incurred in treatment
of the underlying injuries. The jury in North
Brothers awarded $25,000.00 for medical expenses
using a special verdict form. The jury also awarded
$25,000.00 for pain and suffering. The Court of
Appeals found that the employer did not have a
claim against damages awarded for pain and suffering.
However, because the employer had paid $60,000.00
in medical expenses, and there was no evidence
of any outstanding, unpaid medical expenses, the
trial court’s decision that the employee
had been fully compensated for his medical expenses
was affirmed on appeal.
Often, a plaintiff’s attorney will attempt
to ensure that a plaintiff has as least some medical
bills which were not paid (or even submitted)
to the employer for payment in the underlying
workers’ compensation claim.
As a case is prepared for trial, make sure you
have a complete copy of all medical bills and
compare that to the pay details generated by the
employer or the insurer/third party administrator.
If there are no additional medicals beyond those
medicals paid as a result of the workers’
compensation claim, be sure to include the appropriate
language in the pre-trial order (and submit a
special interrogatory jury verdict form) to address
those medical expenses and reimbursement of those
medical expenses by the judge or jury.
VI. CAN A JURY
CONSIDER WHETHER A PLAINTIFF HAS BEEN MADE WHOLE?
In Liberty Mutual v.
Johnson, 244 Ga. App. 338, 535 S.E.2d 511
(2000), the Court of Appeals upheld the trial
court’s decision that there is no right
to a jury trial on the issue of full compensation.
I argue that this case is limited in its scope
of application to cases where the plaintiff and
defendant have settled and fixed the total amount
of the employee’s recovery from the third
party. Please note when a case is proceeding to
trial on the issues of liability and damages,
I contend that the Liberty Mutual v. Johnson case
does not apply. Johnson is limited by its facts
to cases where the amount of the third-party recovery
has been pre-determined. In the event that a case
proceeds to jury trial and a jury must award damages
that are sufficient to fully compensate the plaintiff,
I argue that due process and equal protection
require that the employer be allowed to present
evidence regarding the subrogation lien in the
liability and damage phase of the trial. A jury
must fully compensate the plaintiff before the
lien interest can be recovered. I argue that traditional
notions of fundamental fairness require that a
jury, charged with entering an award sufficient
to fully compensate the plaintiff, must be aware
of the subrogation lien interest before rendering
a verdict.
Trial judges across Georgia are divided on the
issue of whether a employer should be allowed
to present evidence regarding the subrogation
lien at trial. In my experience, some judges have
invoked the collateral source rule to prevent
the employer from presenting evidence of a subrogation
lien at the liability/damage phase. Many judges
opt to allow a bifurcated proceeding, addressing
the subrogation lien issue after the jury has
rendered its verdict. I take issue with this approach
in that the collateral source rule is designed
to prevent a wrong-doer from taking advantage
of payments made by a collateral source. In the
case of a subrogation lien recovery, the defendant
would not be taking an improper credit for the
amount of workers’ compensation benefits
paid; rather, knowledge of the lien would empower
the jury to require the defendant to reimburse
the employer the workers’ compensation benefits
paid to the employee. This would have the opposite
result of allowing a defendant to profit from
payment of workers’ compensation benefits
by the employer.
VII. WHAT TO
DO IF THE EMPLOYER IS PARTICIPATING AS AN INTERVENOR
AND THE PLAINTIFF AND DEFENDANT SETTLE THE CASE
PRIOR TO TRIAL.
What happens in the event that the plaintiff
settles with the defendant and the employer is
participating as an intervenor? Typically, a plaintiff
will file a motion to avoid the subrogation lien
citing the failure of the third party recovery
to completely compensate the plaintiff. While
there is no independent right to a jury trial
in this circumstance, it has been my experience
that trial judges will, upon request by the subrogated
employer, set the matter for a evidentiary hearing.
The trial court will then take evidence regarding
full compensation. These proceedings invariably
will focus on testimony, not only from the plaintiff,
but also from both vocational and economic experts
as to the amount of the plaintiff’s damages,
his ability to earn in the future, and the amount
of economic benefit which the plaintiff can expect
if workers’ compensation benefits are continuing
under the Act. This is particularly true in catastrophic
cases.
While the Georgia Star
Plumbing v. Bowen, 225 Ga. App. 379, 484
S.E.2d 26 (1997) case provides that an employer
cannot increase the amount of its subrogation
lien interest by projecting future workers’
compensation payments, I argue that an employer
can introduce evidence at the evidentiary hearing
regarding a plaintiff’s continued entitlement
to workers’ compensation benefits. This
is true because the statute provides that the
trier of fact must take into account the plaintiff’s
economic and non-economic damages balanced against
the amount recovered from the third party and
benefits paid under the Workers’ Compensation
Act. While the subrogation lien amount is limited
to the amount of benefits paid on the date of
the subrogation lien recovery (if any), I argue
that a trial judge must take into account the
economic value of future workers’ compensation
benefits in order to properly apply the statute.
For an example of what not to do at an evidentiary
hearing when relying on expert testimony, please
see CGU Insurance Company
v. Sable Industries, 225 Ga. App. 236,
564 S.E.2d 836 (2002).
VII. INTERPLAY
BETWEEN THE WORKERS’ COMPENSATION CLAIM
AND SUBROGATION LIEN RECOVERY
An employer’s advocate attempting to obtain
a subrogation recovery must be as aggressive as
the facts and procedural posture will allow. However,
it is important to recognize that the most valuable
subrogation dollar recovered is the one that is
never spent in the underlying workers’ compensation
claim. Often an employer’s most efficient
means of maximizing a subrogation lien interest
is by agreeing to waive (or receive a reduced
recovery of) the subrogation lien in conjunction
with settlement of the underlying workers’
compensation claim. From the vantage of a cost
benefit analysis, it is often more lucrative for
an employer to agree to waive the subrogation
lien in exchange for a reduction of new money
which will be paid in lump sum to settle the underlying
workers’ compensation claim. This is especially
true in light of the inherent risks associated
with participating in the litigation as an intervenor,
and the difficult task of demonstrating full compensation.
Keep in mind that the employer bears the burden
of demonstrating full compensation.
Bartow County v. Ray, 229 Ga. App. 333,
494 S.E.2d 29 (1997); Liberty
Mutual Ins. Co. V. Johnson, 244 Ga. App.
338, 535 S.E.2d 511 (2000).
Be wary, as an advocate representing an employer,
of the ethical implications which arise as a result
of the interplay between bartering subrogation
recovery for settlement of a workers’ compensation
claim for a reduced amount. If an advocate accepts
a subrogation claim on a contingent fee basis,
and it becomes clear that the employer’s
best interests would be served by a waiver of
the subrogation lien, the subrogation advocate
will be required to place his client’s interest
before his financial interests (which typically
results in free work being performed by the advocate).
VIII.CONCLUSION
I hope you find these practical tips valuable
when representing employers in a subrogation context.
Remember the importance of initiating a direct
action under subsection (c) of the statute, whenever
possible. Review the attached statute, checklist,
reimbursement agreement, and pre-trial order carefully.
When reviewing appellate decisions interpretating
the statute, go beyond the head notes and look
at the actual language of the opinion. Aggressive
and novel interpretations of the case law open
obscure avenues available to an employer attempting
to affect the maximum recovery of a subrogation
lien interest. Remember, most of the successful
subrogation recoveries do not result in reimbursement
of the subrogation lien from the judgment or settlement
proceed obtained by the plaintiff. Often, the
most efficient subrogation recoveries are achieved
by a waiver of the lien in conjunction with some
other consideration given in the underlying workers’
compensation claim.
SUBROGATION CASE SYNOPSIS
1. Canal Insurance Company
v. Liberty Mutual Insurance Company, 256
Ga. App. 866, 570 S.E.2d 60 (2002)
The employee in this case sued the third party
tortfeasor and the workers’ compensation
company chose not to intervene.
While the third party was on notice of the
workers’ compensation subrogation lien,
they chose to settle this case with the employee
for the employee’s non-economic damages.
At that point, the employee dismissed the
case with prejudice against the third party
tortfeasor.
The Court of Appeals addressing the issue,
whether the workers’ compensation carrier
must intervene to protect and enforce the subrogation
lien, held that so long as the employee files
first, and the employer is relegated to intervening
under subsection (b) of the subrogation statute,
the plaintiff can settle with the defendants
and dismiss them from the litigation without
addressing the lien.
2. International Maintenance
Corporation v. Inland Paperboard and Packaging,
Inc., 256 Ga. App. 752, 569 S.E.2d 865
(2002)
The employee and his wife sued the third party
tortfeasor and the workers’ compensation
carrier intervened under O.C.G.A. §34-9-11.1(b)
in their personal injury action. Subsequently,
the trial court struck the intervenors from
the action but gave them the right to proceed
in a separate action. The Court of Appeals disagreed
with this Order. Also, the employee in this
action settled with two of the four defendants
and the trial court approved their dismissal.
In addressing this question, the Court of Appeals
held that it was proper for the trial court
to dismiss such defendants. This is so because:
When a settlement is reached or a judgment
is entered in a suit governed by O.C.G.A.§34-9-11.1(b),
the lien attaches to the recovery, “that
is, to the money now in the hands of the injured
employee.” Citing Powell
v. Daniels Construction and Demolition, Inc.,
232 Ga. App. 422, 424 (3) (501 S.E.2d 578) (1998).
After the employee settles with a defendant,
and the lien has attached to the proceeds, there
is no longer any purpose for intervention. An
employer/insurer cannot continue to pursue a
claim against that defendant when intervention
was pursuant to subsection (b).
3. CGU Insurance Company
v. Sabel Industries, Inc., 255 Ga. App.
236, 564 S.E.2d 836 (2002).
This case involves a catastrophically injured
employee who filed suit against a third party
tortfeasor. That suit was settled in April of
2001 for $4.5 million dollars. However, in March
of that year, the workers’ compensation
insurance carrier had placed all parties on
notice of its subrogation rights. Subsequently,
the injured employee and his wife filed motions
to confirm settlement and dissolve the workers’
compensation insurance carrier’s lien.
The Trial Court found in favor of the employee
and his wife stating that the insurance carrier
had not proven the employee had been fully and
completely compensated. Also, there is no way
to distinguish which portion of the settlement
was for the wife’s consortium claim and
what portion was for compensation of the employee’s
injuries.
In upholding the Trial Court’s decision,
the Court of Appeals noted that regardless of
whether the settlement would have been a complete
award for the employee, the record supported
the conclusion that the insurance carrier failed
to meet its burden that the employee had been
fully and completely compensated. Also, the
Court of Appeals agreed with the Trial Court
that “the law does not authorize a lien
against the settlement proceeds with respect
to future benefits paid to [an employee].”
Id.
4. Hartford Insurance
Company v. Federal Express Corporation,
253 Ga. App. 520, 559 S.E.2d 530 (2002).
Here, the injured employee received workers’
compensation benefits from the workers’
compensation carrier, as well as a lump sum
settlement from the third party tortfeasor.
The Trial Court found in favor of the employee
and refused to enforce the workers’ compensation
carrier’s lien. Basing his decision on
the fact that the workers’ compensation
carrier failed to prove that the employee had
been fully and completely compensated. In upholding
this decision, the Court of Appeals reasoned
that in the settlement there was no specific
payment made for medical expenses.
5. City of Warner Robins
v. Baker, 255 Ga. App. 601, 565 S.E.2d
919 (2002).
Here, the employee filed a civil action against
the third party tortfeasor and although aware
of the action, the workers’ compensation
insurance carrier chose not to intervene. However,
it did make the employee aware of their subrogation
lien. Once the employee settled with the third
party tortfeasor, the workers’ compensation
carrier tried to enforce its lien and the employee
refused. Subsequently, the employee filed a
Motion to Extinguish the subrogation lien arguing
that he had not been fully and completely compensated.
The Trial Court granted the Motion to Extinguish
the lien.
The Court of Appeals in upholding the Trial
Court stated that;
“an employer/ insurer that has a subrogation
lien has an absolute right to intervene in both
trials and settlement negotiations, the existence
of the lien itself is not dispositive. The employer
and insurer must act to protect it.” Id.
Also, the Court of Appeals notes that the burden
of proof is on the employer and insurer to prove
that the employee has been fully and completely
compensated by the proceeds of the settlement.
Finally, the Court of Appeals states that:
“[W]hen the employee negotiates a settlement
of his claim against the tortfeasor and the
settlement is a lump sum. A reviewing court
cannot determine from the settlement documents
what portion of the settlement was allocated
to economic losses and what portion was meant
to compensate for non-economic losses. The result
is that the lien cannot be enforced, because
full and complete compensation cannot be shown.”
Id.
6. Georgia Electric Membership
Corp. v. Hi-Ranger, Inc., 275 Ga. 197,
563 S.E.2d 841 (2002).
Here, the injured employee and his employer
filed a joint action against a third party tortfeasor.
Subsequently, the employee settled his claim
with the third party tortfeasor and released
them with prejudice. This led to the following
question being certified to the Supreme Court
of Georgia;
“Whether a claim for repayment of workers’
compensation benefits against a third party
tortfeasor is extinguished by the employee’s
settlement of his claim and execution of a limited
release.”
First, the Supreme Court of Georgia stated
that the full and complete compensation language
within §34-9-11 applies both the section
(b) and (c) actions. However, the Court admitted
that the full and complete compensation language
applies procedurally different when dealing
with a §34-9-11.1(b) action versus a §34-9-11.1
(c) action. Under a (b) action, an employer
would have to show he has been fully and completely
compensated by the third party. On the other
hand, under a (c) action the roles are reversed
because an employer/insurer only needs to give
an employee that which is in excess of its own
full and complete recovery. Finally, the Court
holds that the release which states, “[employer]
is not released herein and the workers’
compensation subrogation claim asserted by [employer]
for the benefits paid in behalf of [employee]
shall remain pending before the court,”
does not extinguish the employer’s subrogation
action against a tortfeasor.
7. Georgia Electric Membership
Corporation (GEMC) v. Garnto, 266 Ga. App.
452, 597 S.E.2d 527 (2004).
The employee, Curtis Garnto was injured in
an on-the-job vehicle accident in Georgia. Pursuant
to his injury he was paid workers’ compensation
benefits in the amount of $76, 509.75. The Claimant
eventually filed suit against the third party
tortfeasor at which time, the employer (GEMC)
intervened in the action to assert its subrogation
lien per O.C.G.A. § 34-9-11.1.
During the litigation process, the employee
settled his action against the former employer
for $175,000.00; GEMC tried to assert its subrogation
lien to the proceeds of the settlement asserting
that the employee had been fully and completely
compensated. GEMC and the employee did not have
a hearing on the issue of full compensation,
rather the parties submitted briefs and affidavits
to the trial court for consideration. The trial
court concluded that GEMC had not put on any
evidence to show that it had been fully and
completey compensated and therefore was not
entitled to the fulfillment of its lien.
On the appellate level the Court of Appeals
affirmed the decision of the trial court and
concluded that said court did not to give the
affidavits of GEMC any weight. The Court stated
that the decisions and factual findings of the
trial court must be adopted unless clearly erroneous.
8. Johnson v. Comcar,
252 Ga. App. 62, 556 S.E.2d 148 (2001).
A Virginia employee was injured in an automobile
accident in Georgia in the course and scope
of his employment for a Virginia employer and
received workers’ compensation benefits
under Virginia law.
The employer/insurer subsequently filed a
tort action in Georgia against the third-party
driver.
The defendant driver, his employer and insurer
filed a motion for partial summary judgment
on the ground that plaintiff’s insurer
was not entitled to assert a subrogation claim.
Reversing the trial court’s denial of
defendant’s motion, the Court of Appeals
held that while O.C.G.A § 34-9-11.1 grants
to an employer/insurer the right to recover
workers’ compensation benefits paid to
an employee for damages caused by a third party,
the language of the statute is clear in that
the employer/insurer can only recover those
benefits paid under the Georgia Workers’
Compensation Act.
Thus, as the benefits paid to the employee
were under Virginia law, employer/insurer had
no Georgia subrogation rights in the case.
9. Tyson Foods, Inc.
V. Craig et al., 266 Ga. App. 443, 597
S.E.2d 520 (2004).
The employee, Eddie Craig, was injured in a
January ,1999 truck collision in Fulton County,
Georgia. He was paid $97,840.43 benefits under
the Texas Labor Code § 401.001. As in the
Garnto case referenced above, the employee filed
a suit against the third party tortfeasor for
damages arising from the collision. In response
to the employee’s actions, the employer,
Tyson Foods, intervened in the action to assert
its subrogation lien per O.C.G.A §34-9-11.1.
The employee, eventually settled his claim
for $160,000.00. The employee filed a motion
with the trial court asking it to find that
Tyson Foods was not entitled to any portion
of the settlement proceeds, while Tyson moved
the Court to enter an order enforcing its lien.
The trial Court found in favor of the employee
and denied Tyson’s motion.
On appeal Tyson Foods argued that the trial
court should have recognized its right to enforce
its subrogation lien, stating that the trial
court erred in: (1) failing to give full faith
and credit to the Texas workers’ compensation
statute and (2) finding that the Tyson could
not show full compensation under Georgia law.
The Court of Appeals affirmed the decision
of the trial Court ruling that (1) when an injury
occurs in Georgia, the Georgia workers’
compensation rule of law applies (2) Texas laws
of recovery were against Georgia public policy
an inapplicable in that in Texas the “first
money” of any recovery goes to the payor
of workers’ compensation benefits while
in Georgia an employer must show full and complete
compensation to recover in subrogation and (3)
Tyson foods did not have the right to recover
in subrogation because O.C.G.A § 34-9-11.1
only allows for recovery of benefits paid under
Georgia law. Since the benefits Tyson paid the
employee were paid under Texas law subrogation
was not available.
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