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Esquivel v. Labor Commission of Utah5/23/2000
e before us, disbursement of a third-party recovery, can be determined from the terms of the statute using traditional methods of statutory construction. Furthermore, the statutory terms of section 34A-2-106(5) are of a specific nature and do not connote a general grant of discretion. Therefore, the court of appeals erred in granting deference to the Labor Commission Appeals Board for interpretation of the statute.
II. STATUTORY CONSTRUCTION
On appeal, the parties present two opposing interpretations of Utah Code Ann. § 34A-2-106. The Esquivels argue that the apportionment of attorney fees and costs should be applied to the recovery first. Additionally, they encourage us to adopt a formula that uses the net recovery rather than the gross recovery as the basis for determining the insurance carrier's apportionment of expenses.
Alternatively, Redd Roofing, CNA, and the Labor Commission argue that the insurer should have priority, and therefore, the balance of the recovery should be completely used to offset CNA's future benefit obligations. Our primary goal in interpreting statutes, however, is to give effect to the legislature's intent based on the purpose of the statute. See Evans v. State, 963 P.2d 177, 184 (Utah 1998). We therefore look first to the plain language of section 34A-2-106. See id.
Disbursement of proceeds recovered in a third-party tort action due to injuries or death arising from a work-related accident is controlled by section 34A-2-106(5) of the Utah Code. This section provides in pertinent part:
(5) If any recovery is obtained against a third person, it shall be disbursed in accordance with Subsections (5)(a) through (c).
(a) The reasonable expense of the action, including attorneys' fees, shall be paid and charged proportionately against the parties as their interests may appear. Any fee chargeable to the employer or carrier is to be a credit upon any fee payable by the injured employee or, in the case of death, by the dependents, for any recovery had against the third party.
(c) The balance shall be paid to the injured employee, or the employee's heirs in case of death, to be applied to reduce or satisfy in full any obligation thereafter accruing against the person liable for compensation. Utah Code Ann. § 34A-2-106(5) (1997).
Double recovery for injuries or death sustained in conjunction with an accident covered by workers' compensation is not permitted. See Worthen v. Shurtleff & Andrews, Inc., 426 P.2d 223, 225 (Utah 1967); see also Allstate Ins. Co. v. Bliss, 725 P.2d 1330, 1334 (Utah 1986); 82 Am. Jur. 2d Workers' Compensation § 110 (1992). Therefore, a third-party recovery must reimburse the employer or insurer for workers' compensation sums already paid as well as offset for future liability of sums owed. See Worthen, 426 P.2d at 225. However, the employer or insurer must first bear a proportionate share of the expenses for obtaining the recovery. See id.; see also Prettyman v. State Dep't of Fin., 496 P.2d 89, 91 (Utah 1972). Section 34A-2-106(5) ensures this equitable arrangement.
We will now apply the statute as it reads to show how each step should have been applied in the instant case.
The plain language of the statute requires that if any recovery is obtained, it must be disbursed in accordance with subsection (5)(a) through (c). See Utah Code Ann. § 34A-2-106(5). That language indicates that it is the gross recovery being disbursed because no deductions have been allowed to this point. Expenses have not yet been paid or accounted for. Therefore, we begin with the gross recovery of $203,507.25.
Next, section 34A-2-106(
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