Thursday, August 5, 2004
Insurer May Sue Third Party Tortfeasor to Recover Death Benefits Paid to Non-Spouse, C.A. Rules
By a MetNews Staff Writer
A workers’ compensation insurer that has paid death benefits to someone who could not independently maintain a wrongful compensation action may sue a third-party tortfeasor to recover what it paid, the Third District Court of Appeal ruled yesterday.
Labor Code Sec. 3852, which allows the carrier to “bring an action against third parties” responsible for an industrial injury resulting in payment of benefits, permits suit against any party who could have been sued while the worker was alive, Justice Fred Morrison wrote.
The decision overturns a judgment in favor of Loren Hill, Sierra Pine, Ltd, and Ampine, the defendants in an action by Fremont Compensation Insurance Company.
Fremont is trying to recover the $125,000 in death benefits it was ordered to pay to Cynthia Nesmith, the former wife of Fred Manning. The company claims the defendants are responsible for Manning’s job-related death.
Fremont paid the benefits to Nesmith after the Workers’ Compensation Appeals Board determined that Manning left no heirs and that Nesmith, who was still living with Manning at the time of his death, was his dependent. Workers’ compensation law provides that death benefits are paid to the decedent’s heirs, or if there are no heirs, to his or her dependents; otherwise they escheat to the state.
Amador Superior Court Judge Susan C. Harlan dismissed the suit, concluding that Sec. 3582 subrogated the carrier to Nesmith’s rights, and that since she had no standing to sue for wrongful death, the company had no standing to sue the alleged tortfeasors.
What Harlan failed to consider, Morrison said, was the effect of Sec. 3851, which provides that a recoupment action survives the death of the employee.
The justice explained:
“...Manning could have sued defendants for his injuries had he lived. If for some reason he chose not to sue them, Fremont ‘likewise’ could have sued defendants to recoup its payments. Section 3851 provides, ‘The death of the employee[,] or of any other person, does not abate any right of action established by this chapter.’ Equivalent language has been in the compensation statutes for a long time....This is a legislative abrogation of the common law rules regarding the deaths of parties, and provides for survivorship of Fremont’s right to sue, notwithstanding Manning’s death.”
The case is Fremont Compensation Insurance Company v. Sierra Pine, Ltd, C0345569.
Copyright 2004, Metropolitan News Company