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Texas Department of Transportation v. Anderson6/22/2000
I. INTRODUCTION
This is an appeal involving a workers' compensation insurance carrier's subrogation rights. We are asked to decide whether the trial court properly apportioned the settlement proceeds and awarded attorneys' fees. Under prevailing case law, we hold that the trial court did not err.
II. BACKGROUND
Dorothy Anderson, while in the course and scope of her employment with the Texas Department of Transportation (TDOT), was hit and killed by a car while inspecting a high-occupancy-vehicle lane. Dorothy's husband, Tony R. Anderson, and their two adult children, Clifford R. Anderson and Cherie M. Engel, (collectively, the Andersons) filed a wrongful death action against the driver of the car, the driver's mother, the company that leased the car to the driver's mother, and a number of the companies involved in the construction of the high-occupancy-vehicle lane. TDOT intervened to recover its $64,316.93 workers' compensation lien. The leasing company and the driver's mother were non-suited during discovery. The remaining defendants settled during mediation for $300,000.
The parties tried the issue of proper allocation of the settlement proceeds to the trial court. The trial court apportioned 50% of the settlement to Tony, 25% to Clifford, and 25% to Cherie. From Tony's $150,000 award, the court calculated his recovery and TDOT's future offset to be $30,163.98:
| $150,000.00 |(50% of settlement) |
|- $8,278.64|(Tony's attorneys' expenses) |
| $141,721.36 | |
|- $47,240.45 |(Tony's attorneys' fees) |
| $94,480.91 | |
|- $64,316.93 |(TDOT's lien) |
| $30,163.98 |(Tony's recovery and future | | |offset) |
The court then additionally awarded Tony's attorney 1/3 of TDOT's workers' compensation lien, totaling $21,438.98. See Tex. Lab. Code Ann. § 417.003 (Vernon 1996). Considering the benefit accruing to TDOT as a result of Tony's attorneys' services, the trial court apportioned $19,438.98 to Tony's attorneys for recovery of TDOT's subrogation interest and $2,000 to TDOT's attorneys.
Raising three points, TDOT argues that (1) the trial court erred in apportioning 50% of the settlement proceeds to Tony's adult children, (2) the trial court erred in its method of calculation of Tony's recovery, and (3) the trial court abused its discretion in awarding the Andersons' attorneys a 1/3 fee from TDOT's lien.
III. RIGHT TO REIMBURSEMENT
A workers' compensation carrier has a statutory right to reimbursement from the proceeds paid to a beneficiary by a third-party tortfeasor. See id. § 417.001 (Vernon Supp. 2000), § 417.002 (Vernon 1996). The statute does not limit reimbursement to only those benefits that were reasonable and necessary. See Texas Workers' Compensation Ins. Fund v. Serrano, 962 S.W.2d 536, 538 (Tex. 1998).
Neither the employee nor his representatives have any right to any funds received from a third-party tortfeasor until the carrier receives payment in full. See Capitol Aggregates, Inc. v. Great Am. Ins. Co., 408 S.W.2d 922, 923 (Tex. 1966); Insurance Co. of N. Am. v. Wright, 886 S.W.2d 337, 341 (Tex. App.-Houston [1st Dist.] 1994, writ denied). The carrier's right to reduce its liability from a payment of a third-party must not be compromised. See Capitol Aggregates, 408 S.W.2d at 924. However, the carrier has subrogation rights only over that portion of an award or settlement that represents the interest of the beneficiary. See Wright, 886 S.W.2d at 341; Bridges v. Texas A & M Univ. Sys., 790 S.W.2d 831, 834 (Tex. App.-Houston [14th Dist.] 1990, no writ). The proper divis
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