Kavadas v. North Dakota Workers Compensation Bureau

• Decision Date: 13 March 1991
• Docket Number: No. 900348CA,900348CA
• Citation: 466 N.W.2d 839
• Parties: Jeffrey D. KAVADAS, Appellant, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee. Civ.
• Court: North Dakota Court of Appeals

Page 839

466 N.W.2d 839

Jeffrey D. KAVADAS, Appellant, v. NORTH DAKOTA WORKERS COMPENSATION BUREAU, Appellee.

Civ. No. 900348CA.

Court of Appeals of North Dakota.

March 13, 1991.

Miller, Norman & Kenney, Moorhead, Minn., for appellant; argued by Kevin J. Deitz.

Dean J. Haas (argued), Asst. Atty. Gen., North Dakota Workers Compensation Bureau, Bismarck, for appellee.

ALLAN L. SCHMALENBERGER, District Judge.

Jeffrey D. Kavadas appeals from a district court judgment affirming the North Dakota Workers Compensation Bureau's determination of its statutory subrogation interest. We affirm.

On July 16, 1987, Kavadas was injured while attempting to arrest Jeffrey Lorenzen, who had been drinking at Poor Richards Bar. Kavadas was employed as a police officer with the Grand Forks Police Department, and he filed an application for workers compensation benefits. The Bureau accepted his claim, and as of January 17, 1990, had paid Kavadas $54,810.16 in benefits.

Kavadas commenced a civil action against Lorenzen and Poor Richards. The jury returned a verdict awarding Kavadas damages in the amount of $254,000.52. The jury apportioned 75 percent of the fault to Lorenzen and 25 percent of the fault to Poor Richards. Pursuant to Section 32-03.2-02, N.D.C.C., the trial court determined that Lorenzen's and Poor Richards' liability was several, not joint. ¹ Thus Kavadas was entitled to recover $190,500.39 from Lorenzen and $63,500.13 from Poor Richards. In addition, Kavadas was also allowed costs and disbursements of $12,504.98.

Kavadas has recovered nothing from Lorenzen, but has recovered damages from Poor Richards of $63,500.13, costs and disbursements of $6,133.68, and interest of $8,838.22 for a total of $78,472.03.

The Bureau's subrogation rights are set forth in Section 65-01-09, N.D.C.C.:

"... The fund shall be subrogated to the rights of the injured employee or his dependents to the extent of fifty percent of the damages recovered up to a maximum of the total amount it has paid or would otherwise pay in the future in compensation and benefits for the injured employee...."

The Bureau claimed subrogation rights to one-half of the $78,472.03, less the Bureau's responsibility for attorney fees and costs. The Bureau calculated its subrogation interest as follows:

One-half of the total recovery of $78,472.03 $39,236.01

Less:

Bureau's responsibility for attorney

                 fees ( 1/3 of $39.236.01)                   $13,078.67
                 Bureau's share of costs                        6,252.49
                 Costs previously paid                          (1,701.25)
                                                              ------------
                Total reductions                                             (17,629.91)
                                                                            ------------
                Net subrogation interest claimed                            $21,606.10
                                                                            ------------
                                                                            ------------
                

Kavadas argues that the Bureau's subrogation interest should be limited to the percentage of the total damage award actually recovered by the claimant. More specifically, Kavadas asserts that he has only recovered 25 percent of the total amount of his damage award and, therefore, the Bureau should only be allowed to recover 25 percent of the workers compensation benefits paid to him.

In Waith v. Workmen's Compensation Bureau, 409 N.W.2d 94, 96 (N.D.1987), the Supreme Court stated:

"As we indicated in [State by Workmen's Compenstion Bureau v.] Clary [389 N.W.2d 347 (N.D.1986) ], the statute unambiguously provides that the Bureau's subrogation rights apply 'to the extent of 50 percent of the damages recovered.' The provision neither permits nor requires the Bureau's subrogation interest to be further reduced when the recipient's recovery from the third-party tortfeasor does not constitute a total recovery of the damages sustained by the recipient. The reason that a recipient secures only a partial recovery against the third-party tortfeasor is immaterial to the application of the Bureau's subrogation rights under Section 65-01-09, N.D.C.C."

The same rationale is applicable in this case. Neither Section 32-03.2-02, N.D.C.C., nor Section 65-01-09, N.D.C.C., permits a reduction of the subrogation rights because the claimant is unable to recover his full damages from all tortfeasors.

Although Kavadas argues for the application of equitable concepts, the majority in Waith, supra, rejected this argument. The majority recognized "that the rights conferred on employers and employees under workmen's compensation statutes are purely statutory." Waith, supra, 409 N.W.2d at 97. Thus, the Bureau's subrogation interest should not be restricted to coincide with Kavadas'...