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McGRANAHAN v. McGOUGH11/30/1990
This is an appeal from a district court decision that Harold L. McGranahan could structure a settlement in a work-related tort action against a third party to avoid subrogation by Bettis Asphalt, his employer, and National Indemnity Company, its workers compensation carrier.
Harold L. McGranahan was in a pickup truck when his vehicle was struck by an Umthun Trucking Company truck driven by Donald W. McGough. At the time of the accident, McGranahan was working and on the job for Bettis Asphalt Company. McGranahan suffered injuries to his right knee. He filed a workers compensation claim and received benefits, which included temporary disability compensation, medical expenses, and permanent partial disability compensation.
McGranahan also sued McGough and Umthun Trucking Company.
Bettis Asphalt and National Indemnity Company moved to intervene, and the motion was granted.
McGranahan settled with McGough and Umthun Trucking for an amount that included medical expenses, loss of service for his wife, and pain and suffering. The district court found the settlement "fair, just and equitable" and entered the judgment. The district court later resolved the subrogation issue when it allowed Bettis Asphalt and its insurer to recover only the medical expenses less attorney fees. Bettis Asphalt and National Indemnity Company appeal on the subrogation issue as it pertains to the recovery for pain and suffering and loss of services.
To resolve the issues in this case, this court must determine the legislative intent of the workers compensation subrogation statute, K.S.A. 1989 Supp. 44-504.
"The fundamental rule of statutory construction is that the purpose and intent of the legislature governs when the intent can be ascertained from the statute. In construing statutes, the legislative intention is to be determined from a general consideration of the entire act. Effect must be given, if possible, to the entire act and every part thereof. To this end, it is the duty of the court, as far as practicable, to reconcile the different provisions so as to make them consistent, harmonious, and sensible." State v. Adee, 241 Kan. 825, 829, 740 P.2d 611 (1987).
Since the statute at issue is a part of the Workers Compensation Act an additional rule of construction must be remembered. " hen a workers' compensation statute is subject to more than one interpretation, it must be construed in favor of the worker if such construction is compatible with legislative intent." Houston v. Kansas Highway Patrol, 238 Kan. 192, 195, 708 P.2d 533 (1985).
The question here concerns the extent of an employer's subrogation rights to an employee's recovery in a third-party action. "The extent and nature of the subrogation rights of an employer under the workmen's compensation statutes are matters for legislative determination." Negley v. Massey Ferguson, Inc., 229 Kan. 465, 469, 625 P.2d 472 (1981). Since 1927, the legislature's determination has been expressed in one version or another of K.S.A. 44-504, which now says in part:
"(a) When the injury or death for which compensation is payable under the workers compensation act was caused under circumstances creating a
legal liability against some person other than the employer or any person in the same employ to pay damages, the injured worker or the worker's dependents or personal representatives shall have the right to take compensation under the workers compensation act and pursue a remedy by proper action in a court of competent jurisdiction against such other person.
"(b) In the event of recovery from such other person
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