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iLaw Dictionary
California
Law Dictionary
Workers Compensation-Employer and Insurer Subrogatation Rights for Benefits Paid.
(Fremont Comp. Ins. v. Sierra Pine )
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Workers Compensation-Employer and Insurer Subrogatation Rights for Benefits Paid.
(Fremont Comp. Ins. v. Sierra Pine )

Private employers may create a self-insurance plan, but most buy insurance. (Witkin, supra, § 134, p. 706.) Then the carrier assumes liability and is “subrogated to all rights of the employer arising out of assumption of liability or payment of compensation.” (Id., § 137, p. 708; see Ins. Code 11662; Employers Mutual Liability Ins. Co. v. Tutor-Saliba Corp. (1998) 17 Cal.4th 632, 638-639 (Employers Mutual).) The “employer is subrogated to the personal injury claim of the employee against the third party. Therefore, the employer’s insurer is also so subrogated when it stands in the shoes of the employer. The insurer is also, however, subrogated to the employer’s additional rights and liabilities against the third party. For example, while the employee has no claim for reimbursement of workers’ compensation benefits against the third party, the employer, and therefore its insurer, does.” (Employers Mutual, supra, 17 Cal.4th at p. 639, italics added.)

As the italicized passage just quoted indicates, one way to reduce the insurance burden on employers is to allow employers and their insurers to pursue third parties who kill or injure workers and thereby cause the payment of benefits. In contrast, a wrongful death suit is based on a new cause of action which recompenses heirs for their pecuniary losses, and is not a survival of whatever cause of action the decedent may have had for injuries. (Horwich v. Superior Court (1999) 21 Cal.4th 272, 283; see Travelers Ins. Co. v. Sierra Pacific Airlines (1983) 149 Cal.App.3d 1144, 1159 [wrongful death claim “independent of an action for recovery of funds paid out under section 3852”] (Travelers); see Smith v. County of Los Angeles (1969) 276 Cal.App.2d 156, 164 (Smith).)

The carrier may choose how to try to recoup payments it has made. It may: (1) intervene in an injured worker’s action, (2) file an independent action, or (3) assert a lien in an injured worker’s action. (§§ 3852, 3853, 3856; see Gapusan v. Jay (1998) 66 Cal.App.4th 734, 739, fn. 3 (Gapusan); O’Dell v. Freightliner Corp. (1992) 10 Cal.App.4th 645, 653 (O’Dell); 16 Couch on Insurance (3d ed. 2000) § 225:152.) This ensures the employee does not get a double recovery, the third party does not have to defend two lawsuits, and compensation insurance rates are minimized. (O’Dell, supra, 10 Cal.App.4th at p. 653; Abdala v. Aziz (1992) 3 Cal.App.4th 369, 376-377 (Abdala).)

Section 3852 now provides in part: “The claim of an employee . . . for compensation does not affect his or her claim or right of action for all damages proximately resulting from the injury or death against [third parties]. Any employer who pays, or becomes obligated to pay compensation, or who pays, or becomes obligated to pay [the State pursuant to section 4706.5, where the employee has no dependents], may likewise make a claim or bring an action against the third person. In the latter event the employer may recover in the same suit, in addition to the total amount of compensation, damages for which he or she was liable including all salary, wage, pension, or other emolument paid to the employee or to his or her dependents. The respective rights against the third person of the heirs of an employee [suing for wrongful death], and an employer claiming pursuant to this section, shall be determined by the court.” “Employer” includes the insurance carrier. (§ 3850, subd. (b).) A death benefit is compensation. (§ 3207; Travelers, supra, 149 Cal.App.3d at p. 1155.)

Fremont_Comp_Ins_v_Sierra Pine

Aug 04 2004

C034569
[PDF] [DOC]

Fremont Comp. Ins. v. Sierra Pine 8/4/04 CA3

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