Reinsurance Law Blog : Oklahoma Insurance Lawyer & Attorney : Stauffer & Nathan Law Firm

In Salazar Roofing & Construction, Inc. v. City of Oklahoma City, 2010 OK 34, a city dump truck driver backed up into Salazar’s dump truck, causing damages. The City admitted that the city driver was in the course and scope of his employment and admitted liability, but claimed it was only liable for Salazar’s insurance deductible. The City claimed that an exclusion from liability for “Any claim or action based on the theory of indemnification or subrogation;” applied and precluded any liability in excess of the insurance deductible, since the loss had been paid by Salazar’s insurer. The Supreme Court disagreed, noting that “the Claim filed under the Governmental Torts Claim Act by Salazar was filed in Salazar's name, directly against the tortfeasor, for the benefit of the owner of the damaged vehicle. The action was not filed by the insurance carrier to recoup the amount paid to insured. Therefore it appears that this matter is a first-party claim, not a claim for subrogation. No subrogation is at issue in the instant matter. There is no party secondarily liable for the damage caused by the City's negligence present in the case at bar.”

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In McBride v. NES Rentals, an employee was killed on the job in a multi vehicle accident.  The employee's family received workers comp death benefits, then sued the various tortfeasors.  The employer and the workers comp carrier sought to intervene.  The trial court denied the intervention, but the COCA (Court of Civil Appeals) found that the employer should have been allowed to intervene and press its claim regarding death benefits and both the employer and the carrier should have been allowed to intervene and recoup expenses of the last illness and the funeral.  

The case is rather difficult because of recent changes in the workers comp laws in Oklahoma.  It used to be that an employer had no right to subrogate against comp death benefits.  But the statute was changed, and allowed the employer to recover from a third party the amount of death benefit payments made to a claimant's survivors under the Workers Comp Act.

The court states: 

Because §44(d) grants employer the right to recover from the third party causing the death ofits employee, but specifically independent of the death benefits paid to claimant's survivors under the Workers' Compensation Act, the claimant's survivors suffer no unconstitutional reduction or limitation of their recovery against the third-party tortfeasor.

Thus the employer has the right to intervene for death benefits paid by the carrier, and both the carrier and the employer have the right to intervene for last illness and funeral expenses.

This case has not yet been released for publication, and is subject to change. 

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In FFE Transportation Services, Inc. v. Pilot Travel Centers, L.L.C., the plaintiff, Medlin, had slipped and fallen while fueling at the defendant's station.  Plaintiff received workers compensation benefits from FFE, and then sued the defendant.  FFE also sued defendant for the benefits it paid to Medlin.  The verdict form had a place for the jury to fill in for the amount to award to plaintiff and to FFE.  The jury found against the defendant and filled in separate amounts for each of the plaintiffs.  This was reversible error.

The verdict form did not permit damages to be awarded to Medlin without awarding damages to FFE, nor did it permit a jury to award damages of less than a stipulated amount to FFE. The court said, "Moreover, it is not clear from this form whether FFE's stipulated damages are to be deducted from Medlin's award, or whether Medlin's award was over and above that given to FFE. FFE's derivative subrogation claim would normally be deducted from any damages awarded to Medlin; however, the verdict is not clear whether this was the intent of the jury."  

The court held: Because FFE has paid Medlin's medical expenses and lost wages (which are the subject of FFE's subrogation claim), if FFE is an active, named party participating at trial, Medlin cannot request and seek to recover damages for those medical expenses and lost wages; only FFE can do so. However, if FFE is not an active, named party participating at trial, the trial court must ask the jury, if it finds in Medlin's favor, to set out the amounts, if any, attributable to medical expenses and lost wages so that the court and the parties can ascertain what compensation FFE is entitled to for its subrogated interest.

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