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Struhs v. Protection Technolohies12/20/1999
employer that pays worker's compensation to an injured employee may be reimbursed out of the recovery from a liable third party. I.C. § 72-223. The statute provides, "If compensation has been claimed and awarded, the employer having paid such compensation or having become liable therefor, shall be subrogated to the rights of the employee, to recover against such third party to the extent of the employer's compensation liability." I.C. § 72-223(3). Within the worker's compensation title, the term "award" usually (but not always) refers unambiguously to action by the Industrial Commission. Struhs asserts that the "claimed and awarded" language in the statute requires that worker's compensation benefits must be "awarded" by an action of the Industrial Commission before an employer has a right to subrogate.
A statute is ambiguous where the language is capable of more than one construction. See Killeen v. Vernon, 121 Idaho 94, 97, 822 P.2d 991, 994 (1991). In construing an ambiguous statute, this Court attempts to ascertain legislative intent through examining factors such as the statute's language, the reasonableness of a proposed interpretation, and the policy underlying the statute. Kootenai Elec. Coop., Inc. v. Washington Water Power Co., 127 Idaho 432, 435, 901 P.2d 1333, 1336 (1995); see also Davaz v. Priest River Glass Co., 125 Idaho 333, 336, 870 P.2d 1292, 1295 (1994).
The wording of I.C. § 72-223(3) dates to 1971, when the legislature recodified the worker's compensation title. 1971 Idaho Sess. Laws ch. 124. The legislative purpose was, in part, to "prescrib the rights, duties, obligations and liabilities of employers, employees and sureties." Id. The dual purposes of subrogation under I.C. § 72-223 are to achieve an equitable distribution between responsible parties "by assuring that the discharge of an obligation be paid by the person who in equity and good conscience ought to pay it" and "to prevent the injured claimant from obtaining a double recovery for an injury ." Presnell v. Kelly, 113 Idaho 1, 3, 740 P.2d 43, 45 (1987). Neither of these purposes would be served by a rule that forbids recovery by an employer who voluntarily pays benefits. Such a rule would undercut expeditious payment of claims by sureties and result in delay and unnecessary litigation.
Our previous decisions have consistently recognized an employer's subrogation rights where the employer voluntarily paid benefits. For instance, in Barnett v. Eagle Helicopters, this Court interpreted I.C. § 72-223(3) in apportioning an injured employee's damages between a negligent third party and a negligent employer whose surety had paid worker's compensation benefits and had estimated future benefits. Barnett v. Eagle Helicopters, Inc., 123 Idaho 361, 363, 848 P.2d 419, 421 (1993). This Court held that the trial court correctly reduced the verdict against the third party only by worker's compensation benefits actually paid, and correctly ordered the injured employee to reimburse the third party (up to its total sum of liability) only when he was actually paid future benefits. Id. at 364, 848 P.2d 422. See also Cameron v. Minidoka County Highway Dist., 125 Idaho 801, 802, 874 P.2d 1108, 1109 (1994) (where surety voluntarily paid death benefits and claimants settled with third party, issue was what proportion of litigation costs and attorney fees the surety should pay in proportion to amount of third-party recovery which benefited the surety); Runcorn v. Shearer Lumber Prods., Inc., 107 Idaho 389, 391-92, 395-96, 690 P.2d 324, 326-27, 330-31 (1984) (interpreting subrogation statute in apportioning employee's damages between negligent third party and negligent employer where surety had paid worker's compensation benefits).
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