CGU Ins. Co. v. Sabel Industries, Inc.

• Citation: 255 Ga. App. 236,564 S.E.2d 836
• Decision Date: 02 May 2002
• Docket Number: No. A02A0701.,A02A0701.
• Parties: CGU INSURANCE COMPANY v. SABEL INDUSTRIES, INC. et al.
• Court: United States Court of Appeals (Georgia)

564 S.E.2d 836

255 Ga. App. 236

CGU INSURANCE COMPANY v. SABEL INDUSTRIES, INC. et al.

No. A02A0701.

Court of Appeals of Georgia.

May 2, 2002.

Lowendick, Cuzdey & Ehrmann, Stephen Cuzdey, Atlanta, Frederick J. Conklin, Jr., Marion G. Waters IV, Loganville, for appellant.

Carlock, Copeland, Semler & Stair, Wayne D. McGrew III, Goodman & Goodman, Michael D. Goodman, Freed & Berman, Gary S. Freed, Kenneth A. Hindman, Atlanta, for appellees.

SMITH, Presiding Judge.

This appeal arises out of the trial court's dismissal of an action filed by CGU Insurance Company against Douglas and Amy Harrison for recovery of workers' compensation benefits paid to Douglas Harrison. The trial court dismissed the action and dissolved CGU's subrogation lien on the ground that CGU failed to meet its burden of proving that Harrison had been fully and completely compensated for his losses under OCGA § 34-9-11.1(b), among other grounds. Because some evidence supports the trial court's decision, we affirm. We also conclude that CGU is not allowed under the statute to assert a lien against the settlement with respect to benefits not yet paid to Harrison.

On February 29, 2000, during the course of his employment with Newnan Land Development, Douglas Harrison was catastrophically injured while driving his vehicle. As he met and passed by a tractor-trailer traveling in the opposite lane toward him, four large metal plates weighing approximately 400 pounds each fell from the trailer and struck Harrison's vehicle. The tractor-trailer was operated by a Sabel Industries, Inc. employee. Harrison's left leg was nearly severed by one of the plates, and amputation above the knee was required later that day.¹ Several additional surgeries over the next month were required to remove infected tissue, to adjust the length of his limb, and to prepare him to be fitted for a prosthesis. He then underwent several months of rehabilitation and was fitted for and received a prosthesis. Using modified machinery at his job as a tug boat operator, Harrison returned to work at his pre-injury wage approximately one year after the accident, earning approximately $34,000 per year. Harrison is married and has three children, aged ten, six, and six months at the time of the accident.

CGU paid workers' compensation benefits on behalf of Harrison's employer. As of June 15, 2001, CGU had paid $212,333.92 in medical expenses, temporary total disability benefits, and permanent partial disability benefits. In October 2000, Harrison and his wife filed a negligence action against Sabel Industries and the driver of the tractor-trailer. Following mediation in April 2001, the Harrisons' claims were settled for $4,500,000, with $4,000,000 allocated as a lump-sum payment and $500,000 paid out through an annuity. Meanwhile, in March, CGU placed the parties on notice of its claimed subrogation rights. Issues concerning the subrogation lien were not resolved during the mediation. The Harrisons filed a motion to confirm settlement, to add CGU as a party defendant, and to dissolve the workers' compensation lien. CGU filed a motion to intervene, which was subsequently granted.

The trial court then conducted a hearing to determine whether CGU is entitled to recover on its subrogation lien under OCGA § 34-9-11.1. After CGU presented its evidence, the trial court granted a directed verdict to the Harrisons, stating that CGU had not carried its burden of proving full and complete compensation. The court also stated that CGU had not proved which portion of the settlement was attributable to Mrs. Harrison's consortium claim. In a formal written order, the court stated that the motion for directed verdict had been transformed into a motion to dismiss.² The court granted the motion and dissolved CGU's lien. CGU appeals, arguing that the trial court erred in granting a directed verdict on the basis that CGU failed to prove full and complete compensation as to all present and future economic and noneconomic losses. CGU also maintains that the court erred in placing the burden on it to prove the value of Mrs. Harrison's consortium claim and in directing a verdict on the ground that no evidence was presented as to the value of that claim.

1. We first address CGU's argument that the trial court erred in concluding that it failed to meet its burden of proving full and complete compensation to Harrison. Under OCGA § 34-9-11.1(b), if an injured employee asserts a right of action against a person other than the employer,

and the employer's liability under this chapter has been fully or partially paid, then the employer or such employer's insurer shall have a subrogation lien, not to exceed the actual amount of compensation paid pursuant to this chapter, against such recovery. The employer or insurer may intervene in any action to protect and enforce such lien. However, the employer's or insurer's recovery under this Code section shall be limited to the recovery of the amount of disability benefits, death benefits, and medical expenses paid under this chapter and shall only be recoverable if the injured employee has been fully and completely compensated, taking into consideration both the benefits received under this chapter and the amount of the recovery in the third-party claim, for all economic and noneconomic losses incurred as a result of the injury.

The trial court concluded that the evidence presented by CGU was inadequate to show full and complete compensation to Harrison. The court found the expert testimony introduced by CGU to be speculative and also concluded that because the settlement did not allocate a specific award to Mrs. Harrison for her consortium claim, it could not determine whether the remainder of the settlement fully and completely compensated Harrison.

CGU presented the testimony of two experts. Zan Lanford, a certified rehabilitation registered nurse and rehabilitation consultant, testified concerning Harrison's future medical and vocational needs, stating that his future medical needs are minimal and that his vocational outlook is bright given his education and vocational history. Although not familiar with the industry, she stated that Harrison had previously worked in the grain industry and that if he were to transition into another vocation, he is employable, based on her review of the labor market. She stated that his history in management could transfer into another job, as well as his previous history of working in agriculture. Also, Lanford testified that he needed only one college credit to receive a bachelor's degree and that obtaining this degree would make him more marketable.

On cross-examination, however, Lanford admitted that although she reviewed information from the Department of Labor to determine Harrison's vocational outlook, she did not perform a labor market survey, which would have been required to comprehensively determine his employability. In addition, in assessing his future needs, she did not speak with Harrison, his wife, or the rehabilitation supplier who actually worked with Harrison. With regard to his educational background, Lanford did not know the name of the college he attended, nor did she know how many of his college credits would transfer several years after they were received. Those credits were earned toward a degree in physical education, and Lanford acknowledged that this degree would be of no use to Harrison after the accident. Although she previously testified that he needed only one college credit to graduate with a bachelor's degree, she admitted that she in fact did not know how long completion of a bachelor's program would take.

As for Harrison's vocational outlook, Lanford was aware of the recommendation of Harrison's physician that he avoid slippery and uneven surfaces, and she stated that she would not recommend working on a boat on a lake. She testified concerning the possibility of his working in the grain industry but admitted that she did not know what type of work he would be doing, and her assessments had not included adaptations and modifications for machinery that would be needed for field work. In fact, she acknowledged that she did not know the nature of Harrison's previous work at a seed company and if this work required field work. Harrison testified that a portion of his previous experience did require him to work in the field.

In addition, Lanford agreed on cross-examination that large individuals, such as Harrison, with above-the-knee amputations often experienced difficulties with gait, including chronic hip and back pain sometimes requiring surgery. She did not know whether Harrison would need this surgery. She further testified that, in addition to the primary prosthetic used by an amputee, two other types of prosthetics were essential—a backup for use when the primary prosthetic is damaged, and one intended for use while bathing. She did not know, however, whether these devices had been provided to Harrison. Harrison testified that CGU denied him a backup prosthetic.

Patricia Killingsworth, a mediator and arbitrator, also testified on behalf of CGU. She evaluated Harrison's economic and noneconomic losses, stating that the total loss was approximately $1.3 million. Her assessment for the portion of this sum representing lost wages did not, however, take into account the possibility of future surgeries and associated lost work time. In evaluating Harrison's losses, Killingsworth relied on information provided by Lanford. She admitted that her calculation concerning future lost wages was inaccurate, since the information provided by Lanford was based on Lanford's uninformed opinion that he needed only one college credit. In addition, although Killingsworth was an experienced mediator, she had no previous experience evaluating above-the-knee amputations. Finally, like Lanford, Killingsworth did not interview Harrison, and she agreed this would have been helpful in...