Pma Group v. Trotter

• Decision Date: 16 June 2006
• Docket Number: No. 94,451.,94,451.
• Citation: 135 P.3d 1244
• Parties: PMA GROUP and Aeroflex, Inc., Appellants, v. Deah TROTTER, Appellee.
• Court: Kansas Supreme Court

135 P.3d 1244

PMA GROUP and Aeroflex, Inc., Appellants, v. Deah TROTTER, Appellee.

No. 94,451.

Supreme Court of Kansas.

June 16, 2006.

As Corrected June 21, 2006.

Patrick J. Murphy, of Wallace, Saunders, Austin, Brown & Enochs, Chartered, of Wichita, argued the cause, and Dwight D. Fischer and Janell Jenkins Foster, of the same firm, were on the brief for appellants.

Troy H. Gott, of Patterson, Gott & Burk, L.C., of Wichita, argued the cause, and Travis J. Burk, of the same firm, was with him on the brief for appellee.

The opinion of the court was delivered by ALLEGRUCCI, J.:

Deah Trotter was struck by a car driven by a coworker, La Ied Kirkpatrick, in the parking lot of their employer, Aeroflex, Inc. (Aeroflex). Trotter accepted workers compensation benefits from Aeroflex and its insurer, PMA Group (PMA). Trotter and Aeroflex and PMA filed a negligence action against Kirkpatrick. Without asserting a workers compensation defense, Allstate Insurance Company (Allstate), Kirkpatrick's insurer, entered into a settlement agreement with Trotter to pay her the policy limits. Aeroflex and PMA intervened in Trotter's action to assert their subrogation rights. The district court realigned the parties, making Aeroflex and PMA the plaintiffs and Trotter the defendant. The district court rejected plaintiffs' subrogation claim and ordered the settlement proceeds distributed to Trotter. Aeroflex and PMA appeal.

The case was transferred from the Court of Appeals by the authority of K.S.A. 20-3018(c).

In his order granting Trotter's motion to disburse the settlement proceeds to her, the trial judge made findings of fact, which have not been challenged by the parties. The following numbered paragraphs are based on the trial court's findings:

1. On December 11, 2002, Trotter was walking to her vehicle in Aeroflex's parking lot when her coworker, La Ied Kirkpatrick, backed her car over Trotter's right foot and ankle.

2. As a result of her coworker's negligence, Trotter suffered numerous injuries to her right foot and ankle that have so far required five surgeries. At the time of the trial court's order, a sixth surgery was scheduled. Aeroflex and PMA have paid workers compensation benefits to Trotter. At the time of the trial court's order, the workers compensation benefits totaled over $113,000 and the plaintiffs were continuing to pay.

3. On or about January 24, 2003, Aeroflex and PMA's agent, Gallagher Bassett Services, Inc., sent a letter to Kirkpatrick. The letter informed Kirkpatrick that her negligence had caused the injuries to Trotter, plaintiffs were paying workers compensation benefits to Trotter, and plaintiffs were claiming a subrogation lien against Kirkpatrick for all monies that they may be required to spend in discharging their obligations under the provisions of the Workers Compensation Act. Aeroflex and PMA suggested that Kirkpatrick turn the matter over to the appropriate insurance carrier.

4. Allstate insured Kirkpatrick and the automobile she was driving on the day of the accident. Allstate, on behalf of Kirkpatrick, offered to pay its policy limits of $100,000. Allstate also told Trotter that she needed to talk to Aeroflex and PMA to determine whether they were claiming a workers compensation subrogation lien and, if so, the amount.

5. Trotter talked to Aeroflex and PMA, both of whom claimed a workers compensation subrogation lien and asserted they were entitled to all the settlement proceeds. Aeroflex and PMA retained counsel, as did Trotter.

6. On December 9, 2004, Aeroflex and PMA filed suit against Kirkpatrick. Their counsel alleged that he also represented Trotter. The petition alleged that Kirkpatrick's negligence caused Trotter's injuries, that Kirkpatrick was Trotter's coworker and the accident occurred on the employer's premises, and that Trotter suffered damages in excess of $75,000. The action was dismissed on February 22, 2005.

7. Also on December 9, 2004, Trotter's counsel filed a similar petition naming Kirkpatrick as the defendant.

8. On December 24, 2004, Trotter signed a Release of Kirkpatrick from all liability in exchange for payment of $100,000, the limits of the Allstate policy.

9. On January 14, 2005, Aeroflex and PMA filed to intervene in Trotter's action. The trial court permitted them to intervene on January 21, 2005.

10. On February 8, 2005, Kirkpatrick was dismissed and the parties were realigned so that Aeroflex and PMA are plaintiffs and Trotter is the defendant.

The trial court concluded that K.S.A. 44-504(b) only permits an employer to have a subrogation lien if a recovery of money, by settlement or verdict, is from some "other person." The trial court further concluded that, because some "other person" is defined in K.S.A. 44-504(a) as someone other than a coworker or employer of the injured party and Kirkpatrick was Trotter's coworker, Aeroflex and PMA have no subrogation lien.

K.S.A.2005 Supp. 44-501(a) provides in part:

"If in any employment to which the workers compensation act applies, personal injury by accident arising out of and in the course of employment is caused to an employee, the employer shall be liable to pay compensation to the employee in accordance with the provisions of the workers compensation act."

K.S.A.2005 Supp. 44-501(b) provides: "Except as provided in the workers compensation act, no employer, or other employee of such employer, shall be liable for any injury for which compensation is recoverable under the workers compensation act. . . ." K.S.A. 44-504(a) and (b) authorize a worker's remedy against a negligent third party and an employer's subrogation:

"(a) When the injury or death for which compensation is payable under the workers compensation act was caused under circumstances creating a legal liability against some person other than the employer or any person in the same employ to pay damages, the injured worker or the worker's dependents or personal representatives shall have the right to take compensation under the workers compensation act and pursue a remedy by proper action in a court of competent jurisdiction against such other person.

"(b) In the event of recovery from such other person by the injured worker or the dependents or personal representatives of a deceased worker by judgment, settlement or otherwise, the employer shall be subrogated to the extent of the compensation and medical aid provided by the employer to the date of such recovery and shall have a lien therefor against the entire amount of such recovery, excluding any recovery, or portion thereof, determined by a court to be loss of consortium or loss of services to a spouse. The employer shall receive notice of the action, have a right to intervene and may participate in the action. The district court shall determine the extent of participation of the intervenor, including the apportionment of costs and fees. Whenever any judgment in any such action, settlement or recovery otherwise is recovered by the injured worker or the worker's dependents or personal representative prior to the completion of compensation or medical aid payments, the amount of such judgment, settlement or recovery otherwise actually paid and recovered which is in excess of the amount of compensation and medical aid paid to the date of recovery of such judgment, settlement or recovery otherwise shall be credited against future payments of the compensation or medical aid. Such action against the other party, if prosecuted by the worker, must be instituted within one year from the date of the injury and, if prosecuted by the dependents or personal representatives of a deceased worker, must be instituted within 18 months from the date of such injury."

The trial court reasoned that, because K.S.A. 44-504 is inapplicable to a worker's remedy against a negligent coworker, it likewise is inapplicable for the purpose of creating an employer's subrogation lien against an amount recovered by a worker from a coworker.

The issue before this court is whether the trial court's interpretation of the statute was erroneous. Interpretation of a statute is a question of law over which an appellate court exercises unlimited review. Cooper v. Werholtz, 277 Kan. 250, 252, 83 P.3d 1212 (2004).

On appeal, Aeroflex and PMA argue that the trial court's ruling gave Trotter a double recovery contrary to the express language of the Workers Compensation Act, the public policy it codifies, and the case law interpreting it. Appellants cite and quote from several cases containing statements against double recoveries in workers compensation cases. None of the cases, however, are controlling in the present case.

Appellants quote the following from Houston v. Kansas Highway Patrol, 238 Kan. 192, 200-01, 708 P.2d 533 (1985), overruled in part on other grounds by Murphy v. IBP, Inc., 240 Kan. 141, 727 P.2d 468 (1986): "The purpose of K.S.A. 44-504 is to ensure that the injured worker does not receive a double recovery. The employer should be reimbursed only from that portion of a settlement or judgment that would be compensable under the act. That is the intent of the legislature." Houston is factually distinguishable from the present case in that the worker was not injured by a coworker. And, when viewed in context, the language quoted by-Aeroflex and PMA offers only dubious support for appellants' position. The language is from a concurring and dissenting opinion that would limit the employer's right to subrogation. The majority in Houston affirmed the trial court's denial of an injured highway patrolman's request to recover claimed noncompensable personal losses attributable to the collision—sick pay, holiday pay, and personal property—off the top of a $40,000 lump sum settlement with the negligent third party, leaving the rest subject to subrogation. 238 Kan. at 195-96, 708 P.2d 533. The dissenters would have remanded the matter to the trial court with directions to limit the amount subject to...