(Section 287.150 sets forth the employer's right of recovery of part of the payments of compensation made in a case where a third-party tortfeasor caused the injury to the employee, who also was in the scope and course of her or his employment at the time of the injury.)
In Bi-state Development Agency v Gurley, 101 S.W.3d 344 (Mo. App. E.D. 2003), third party tortfeasor settled injured employee's claims. The Circuit Court then apportioned proceeds between the employee and employer pursuant to the workers' compensation subrogation statute but subtracted employee?s attorney?s fees and expenses from the settlement amount before the apportionment. Employer appealed. The Court of Appeals ruled that employee investigated and prepared for trial against the tortfeasor without the assistance of the employer therefore the deduction of his attorney fees and expenses before apportionment was allowed. Affirmed.
In ATS, Inc. v Listenberger, 111 S.W.3d 495 (Mo. App. E.D. 2003), employee settled a legal malpractice suit against former attorneys who failed to timely file a suit against third-party tortfeasor for injuries sustained in a work related accident. Employer then filed a petition declaring their right to recover in subrogation from the amount the employee received from the legal malpractice settlement. The Circuit Court entered summary judgment in favor of employee since the insurer and the employee did not have a subrogation interest. The Court of Appeals upheld, stating that the workers' compensation subrogation statute requires that there be a "third party" who caused them injury. The Court of Appeals ruled that the attorneys were not a "third party" with respect to subrogation and that legal malpractice is not an "injury." Therefore the employer was not entitled to subrogation.
In Kerperien v Lumbermens Mutual Insurance Co., 100 S.W.3d 778 (Mo. Banc. 2003), in an appeal from the E.D. appellate court, set out below, a divided Supreme Court held that where there is a comparative fault in a third-party negligence suit involving a Workers' Compensation claimant, the subrogation right of the employer or insurer for remuneration made prior to the resolution of the third-party case is the portion of the subrogation statute related to comparative fault. The employer's share is computed by the jury's finding of "total damages (here $2,500.000.00), rather than by the "total amount recovered" (here $1,175,000.00). VAMS 287.150. The total damages are $2,500,000, the total amount recovered is $1,175,000.00. Comparative fault was 75%. The percentage, less the cost of recovery ($470,000.00) and minus the expenses ($31,505.80) gives you the net third-party recovery of $6,073.45.20. This figure is divided against the total damage figure of $2,500,000 rather than against the gross amount recovered of $1,175,000.00. The percentage of recovery is dramatically reduced from 9% to .046411% or a net recovery of $31,302.00 rather than almost double that amount. Interesting math.!
(Note: This is a "slippery slope" and needs careful attention).
In Bi-State Development Agency v Watson, 40 S.W.3d 403 (Mo.App. E.D. 2001), the employer's driver was injured by a driver of an auto which struck the bus. Claimant got her W/C benefits, and a judgement against the other driver, being represented by the same attorney that represented Bi-State in the W/C action. Claimant got a new attorney, Bi-State moved to get its subrogation interest protected against the driver of the other car, the trial court stating there was a conflict of interest, the Court of Appeals holding that Bi-State's actions before and during trial were irrelevant to its right to recover under Section 287.150, and allowed full subrogation protection.