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Tomlinson v. Continental Casualty Company9/2/2003
Transcontinental relies on Young v. Columbia Southwestern Medical Center, 1998 OK CIV APP 124, 964 P.2d 987, as authority for its argument that statutory subrogation is not subject to the "make whole" rule. In Young, the Oklahoma Health Care Authority paid medical expenses, pursuant to approved medicaid benefits, for a baby who sustained damages at birth and later died. The parents of the baby filed a wrongful death action against the hospital and the claim was settled for $500,000. OHCA then sought to enforce its statutory lien for repayment of the medical expenses it paid. In Young, this court noted that 63 O.S.Supp.1996 §5051.1 provided OHCA a lien to recover expenses it has paid when the payee receives a settlement or judgment sufficient to pay both the payee's counsel fees and the lien. 8. This court expressly held that Youngblood is inapplicable to a case involving a statutory lien. Id. Although Young addressed a different statutory provision, we agree with Transcontinental that Young provides strong support for the decision that a statutory subrogation right is not limited by the "make whole" rule.
Nothing in §44, nor in the cases discussing it, refers in any way to a requirement that the claimant be made whole by a third-party settlement before the compensation insurer's subrogation right arises. As has been stated, the purpose of §44 is to prevent a double recovery. And, while one may argue that a person who has not been fully paid for his total damages is not receiving a "double benefit," indeed such person is receiving a double benefit where the third-party settlement exceeds the amount awardable under the Workers' Compensation Act. In that situation, the employee is receiving the amount awardable under the Act from two sources, which is the outcome prohibited by §44. While no case involving §44 expressly addresses whether the claimant has been made whole, we note that much of the discussion in Prettyman revolved around the fact that the injured worker settled with the third-party tortfeasor for less than the amount requested in his petition. Nevertheless, the court rejected the trial court's decision to accordingly reduce the subrogation amount. Prettyman established that in any case where the third-party settlement is for an amount equal to or greater than the amount of compensation provided for in the Workers' Compensation Act, the compensation insurer is entitled to subrogate the full amount of compensation benefits paid. Nothing in Youngblood requires a different result in cases proceeding under §44 statutory subrogation.
The Maryland Court of Appeals addressed this issue in Podgurski v. One Beacon Insurance Co., 374 Md. 133, 821 A.2d 400 (Md.App.2003). In that case, the injured worker sought to avoid reimbursing the compensation insurer after the third-party tortfeasor declared bankruptcy to avoid paying the full damages award. Id. at 403-404. The court noted the subrogation provision in the Maryland workers' compensation statutes was unambiguous. It provided that when an injured worker recovers damages from another, the worker may deduct his costs and expenses and then "shall reimburse" the compensation insurer for the compensation already paid or awarded, as well as amounts paid for medical services, and only then may the worker keep the balance of the damages recovered. Id. at 407. The court noted that the subrogation statute did not modify the damages from which subrogation was required to "sufficient" or "total" damages. Id. The court further explained that the statute simply asks whether the employee recovered damages from a third party in excess of the amount of compensation paid, and that the subrogation statute does not consider whether the employee has been fully com
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