Title: Anderson v. NATIONAL CARRIERS INC.

State: kansas

Issuer: Kansas Supreme Court

Document:

240 Kan. 101 (1986)
727 P.2d 899
ARCHIE ANDERSON, Appellee,
v.
NATIONAL CARRIERS, INC., a Kansas Corporation, and TRAVELERS INSURANCE COMPANY, Lien Intervenor, Appellants.
No. 58,405

Supreme Court of Kansas.
Opinion filed October 31, 1986.
Ken W. Strobel, of Williams, Larson, Strobel, Estes & Malone, P.A., of Dodge City, argued the cause, and B.G. Larson, of the same firm, was with him on the brief for appellant.
Lelyn J. Braun, of Lelyn J. Braun, Chartered, of Garden City, argued the cause and was on the brief for appellee.
The opinion of the court was delivered by
MILLER, J.:
This is an appeal by National Carriers, Inc., and Travelers Insurance Company, a workers' compensation insurance carrier and lien intervenor, from the judgment of the District Court of Seward County, Kansas, which reduced the amount of the insurer's subrogation lien by the percentage of fault attributed to the plaintiff's employer. The basic issue concerns the applicability of the 1982 amendment to K.S.A. 44-504 to the insurer's subrogation rights. The injury occurred before the amendment, and recovery by the worker against the negligent third party occurred after the effective date of the amendment.
The factual and procedural background is as follows. On November 24, 1980, Anderson, an employee of National Beef Packing Company, was injured on the job when a truck of *102 National Carriers, Inc., backed over him. Travelers Insurance Company, as National Beef's workers' compensation carrier, made substantial payments to or on behalf of Anderson following his injury. On December 21, 1981, Anderson filed this lawsuit against National Carriers, Inc., as owner and operator of the truck which caused his injuries. On July 6, 1982, a settlement agreement in the workers' compensation matter was entered into between Anderson and Travelers and was approved by the administrative law judge. That agreement provided in part that:
Idle Wild Foods is the parent company of both National Beef and National Carriers.
On July 1, 1982, the 1982 amendment to K.S.A. 44-504 became effective. Thus, at the time of the compromise settlement, July 6, the 1982 amendment to K.S.A. 44-504 was in effect. On September 3, 1982, Travelers filed its notice of lien and intervened in this case. On April 22, 1983, following a jury trial, judgment was entered in this case for the plaintiff. The jury attributed 29% fault to Anderson, 22% fault to National Carriers, and 49% fault to National Beef. It also found total damages in the amount of $700,000. The judgment was affirmed on appeal. Anderson v. National Carriers, Inc., 10 Kan. App.2d 203, 695 P.2d 1293, rev. denied 237 Kan. 886 (1985). Thereafter, National Carriers paid to the district court the amount of the judgment against it, $154,000, with accrued interest. This amount was invested in an interest-bearing account pending disbursement. Travelers claimed a lien for the total amount of its workers' compensation payments to Anderson, $96,219.39. In June 1985, the district court reduced Travelers' subrogation claim by the percentage of fault attributed to Anderson's employer, National Beef, (49%) and the district court also awarded one-third of the remaining subrogation lien as attorney fees for plaintiff's counsel. National Carriers and Travelers appeal.
Travelers contends that the trial court erred in reducing the subrogation lien for two reasons. It claims that the 1982 amendment to K.S.A. 44-504, now K.S.A. 1985 Supp. 44-504(d), could not be applied in this case because the accidental injury occurred *103 prior to the effective date of the amendment. It also contends that the compromise settlement should not be interpreted to allow reduction of the employer's subrogation lien. Additionally, it argues that the trial court erred in allowing attorney fees to plaintiff's attorney; and finally, it argues that the district court erred in failing to award accrued interest to the employer and Travelers on the amount of the subrogation lien recovered as a result of this action.
We agree with the trial court and the Court of Appeals that the 1982 amendment, K.S.A. 1985 Supp. 44-504(d), applies in this case. We adopt the applicable portion of the opinion of the Court of Appeals which states:
Anderson, the claimant, and Travelers, the insurance carrier, were bound by the law as it existed at the time the compromise settlement agreement was effective. On July 6, 1982, the amendment was effective and was the then-existing law.
The next issue is whether the trial court erred in awarding fees to Anderson's attorney out of Travelers' subrogation proceeds. The attorney filed the action, tried it to a jury in district court, and successfully defended it on appeal and petition for review. Such fees are authorized, in the discretion of the trial court, by statute. K.S.A. 1985 Supp. 44-504(c). We agree with and adopt the opinion of the Court of Appeals on this point. That portion of the opinion reads:
*107 On the allocation of interest issue, the Court of Appeals held that the employer. (or in its stead, the insurance carrier) is entitled to recover interest on the amount of its subrogation lien from the date of the judgment and remanded the case to the trial court for distribution of interest accordingly. That portion of the Court of Appeals decision is not challenged in this court, and we find it well reasoned, fair, and equitable, and a just determination of that issue.
The judgment of the Court of Appeals is affirmed. The judgment of the district court reducing the subrogation lien by the percentage of the employer's fault and awarding attorney fees is affirmed. The district court's award of all interest on the judgment to the plaintiff is reversed and the case is remanded to the trial court for distribution of interest according to the views expressed in this opinion and that of the Court of Appeals.