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Nicholas v. Morgan11/12/2002
__ P.3d __
Plaintiff/appellee sustained an on-the-job injury and hired two attorneys with the same firm, defendants/appellees, to represent him in his workers' compensation claim and third-party tort claim arising out of the work-related injury. Appellant, State Insurance Fund, paid a total of $169,060.46 in workers' compensation benefits to or on behalf of plaintiff. Subsequently, plaintiff sued his attorneys for malpractice alleging failure to list all injuries in the workers' compensation claim and failure to investigate and timely commence the third-party tort claim. The Fund filed a petition for intervention in the malpractice suit alleging a right to reimbursement under 85 O.S.1991, § 44 and a right to intervene under 12 O.S.1991, § 2024. The district court, the Honorable P. Thomas Thornbrugh, District Judge, Tulsa County, Oklahoma, dismissed the petition for intervention. The Fund appealed. The Court of Civil Appeals affirmed. The Fund sought certiorari review.
CERTIORARI PREVIOUSLY GRANTED; OPINION OF THE COURT OF CIVIL APPEALS, DIVISION III, VACATED; DISTRICT COURT'S DISMISSAL ORDER REVERSED; CAUSE REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.
This is an appeal by the State Insurance Fund (Fund) from the district court's dismissal of its petition for intervention in a legal malpractice action. The dispositive question presented on certiorari is whether the right of the insurance carrier prescribed by 85 O.S.1991, § 44(a) for pro tanto reimbursement of workers' compensation benefits paid extends to the proceeds of the injured worker 's legal malpractice action against his attorney for failure to timely commence an action against the third-party tortfeasor. We answer in the affirmative. We hold the district court erred in dismissing the Fund's petition for intervention.
I. Background
On August 13, 1991, Teddy Raye Nicholas, plaintiff/appellee, an employee of Billy Boy Construction, was engaged in the construction of a log house when an untethered log swinging from a crane hit him in the chest. Nicholas retained attorney Michael C. Taylor, defendant/appellee, to represent him in his workers' compensation claim for this work-related injury and attorney Jay V. Morgan, defendant/appellee, to represent him in his tort claim against the crane operator. Both attorneys were associated with Accidents & Personal Injuries, Inc., d/b/a Michael C. Taylor & Associates.
Taylor pursued Nicholas' claim under the Workers' Compensation Act. The employer's insurer, the Fund, paid $83,516.75 workers' compensation benefits to Nicholas and $85,543.71 for medical expenses on behalf of Nicholas.
Nicholas engaged Morgan to represent him against the third-party tortfeasors. On August 13, 1993, two years after the work-related injury occurred, Morgan filed Nicholas' tort action against the unidentified crane company and crane operator as John Doe Crane Company and John Doe Crane Operator. Morgan never effected service of process in that action.
Nicholas subsequently discharged both his attorneys and filed a law suit pressing two legal malpractice claims against the corporate law firm and the two attorneys, one based on the representation provided by Taylor and the other based on the representation provided by Morgan. Nicholas alleged Taylor negligently failed to list all his injuries in the Form 3 resulting in a loss of workers' compensation benefits. He alleged Morgan negligently failed to investigate and timely file his action against the third-party torfeasors. The Fund filed a petition for intervention asserting it is entitled to be reimbursed for the workers' compensation benefits it paid
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