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Gutierrez v. City of Albuquerque8/25/1998
tled to only that part of the tort recovery which represents monies paid that duplicate compensation it has paid or is liable to pay. The Judge must start from the presumption that the employer is entitled to full reimbursement, because, as we said in Montoya, "if the worker has dealt with the third party in good faith and at arm's length, then the net amount paid presumptively would be the amount by which the employer's liability is reduced." (citing Transport Indemnity); see also 44 Am. Jur. 2d Insurance ยง 1818 (1982) (insured's tort recovery shall be presumed to include the full amount of the insurer's subrogated interest, and it is the insured's burden to rebut the presumption with evidence that the recovery includes elements of the cause of action for which there is no right of subrogation). However, a worker who has resolved her third-party suit can no longer be said, as a matter of law, to have been made financially whole. See . A worker must be given the opportunity to show, and has the burden to prove, that in fact the tort recovery was fairly and reasonably calculated in good faith to compensate for injuries not covered by the benefits the employer has paid. If a worker does so, the worker's compensation Judge must apportion a worker's tort recovery into its reasonable elements, and compare those with a breakdown of the compensation benefits paid by employer. An employer has an interest in those elements of the worker's tort recovery which are also covered by worker's compensation, but no interest in those elements of a worker's tort recovery that were calculated in good faith to remedy losses not covered.
{15} For example, in this case the workers' compensation Judge determined that Worker proved just over $367,609 in total tort damages needed to make her whole. The Judge divided that sum into the following elements:
reasonable medical expenses: $24,969 (about 7% of the total tort damages)
lost wages: $220,604 (about 60% of the total tort damages)
pain and suffering: $122,000 (about 33% of the total tort damages)
Worker reached a reasonable compromise settlement of $140,000. Apportioning this settlement in the same manner results in Worker receiving the following elements and amounts:
reasonable medical expenses: $9,800 (7% of the $140,000 settlement)
lost wages: $84,000 (60% of the $140,000 settlement)
pain and suffering: $46,200 (33% of the $140,000 settlement)
These breakdowns are illustrated below:
Figure
Graphic file number 0 named Blank.Blank with height 234 p and width 273 p Center aligned
{16} The next step is to compare the settlement breakdown to the elements of the compensation benefits Worker received. Here, Employer paid $24,969 in medical benefits, which was the total amount of Worker's reasonable medical expenses. Because Employer paid 100% of these expenses, 100% of any amount that Worker received in tort for those expenses would duplicate benefits Employer paid. Therefore, Employer is entitled to 100% of the amount worker received in tort settlement for medicals, or $9,800.
{17} Employer did not pay the entire amount of Worker's lost wages. Employer paid about $27,000 in disability benefits, which amounts to roughly 12% of the total wages required to make Worker whole ($27,000/$220,604 = .12). Employer is entitled to 12% of the part of Worker's settlement covering lost wages (.12 x $84,000), or $10,080.
{18} Employer paid nothing to Worker for pain and suffering. Therefore, Employer is entitled to 0% of Worker's tort settlement for this element. The amount of her settlement intended to compensate
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