IN THE

SUPREME COURT OF THE STATE OF ARIZONA

STEPHANIE JACKSON, AN INDIVIDUAL,

Plaintiff/Appellant,

V.

EAGLE KMC L.L.C., AKA EAGLE KMC TRANSPORTATION, AKA EAGLE 

TRANSPORTATION CO., AKA EAGLE J&K TRANSPORTATION L.L.C., AKA 

EAGLE TUCSON SOUTH, L.L.C., AKA EAGLE TRANSPORTATION, L.L.C., AN 

ARIZONA CORPORATION; RACHAEL GABRIELLA HENDER, A SINGLE WOMAN;

WERNER ENTERPRISES, INC., A FOREIGN CORPORATION; DRIVERS 

MANAGEMENT, L.L.C., A FOREIGN CORPORATION, ET AL.,

Defendants/Appellees.

No. CV-18-0056-PR

Filed January 2, 2019

Appeal from the Superior Court in Mohave County

The Honorable Charles W. Gurtler, Judge

No. S8015CV201600092

REVERSED AND REMANDED

Opinion of the Court of Appeals, Division One

244 Ariz. 224 (App. 2018)

VACATED

COUNSEL:

Ryan Skiver (argued), The Skiver Law Firm, Scottsdale; James E. Harris, 

Harris & Associates P.C., L.L.O., Omaha, NE, Attorneys for Stephanie 

Jackson

Phillip H. Stanfield, Daniel O. King, Lori L. Voepel (argued), Jones, Skelton 

& Hochuli, P.L.C., Phoenix, Attorneys for Eagle KMC L.L.C., Rachael 

Gabriella Hender, Werner Enterprises, Inc., and Drivers Management,

L.L.C.
JACKSON V. EAGLE KMC LLC, ET AL.

Opinion of the Court

2

James F. Mahoney, Emily K. Dotson, Resnick & Louis, P.C., Scottsdale, 

Attorneys for Amicus Curiae Arizona Trucking Association

Stanley G. Feldman, Miller, Pitt, Feldman & McAnally, P.C., Tucson; David 

L. Abney (argued) Ahwatukee Legal Office P.C., Phoenix, Attorneys for 

Amicus Curiae Arizona Association for Justice/Arizona Trial Lawyers 

Association

JUSTICE GOULD authored the opinion of the Court, in which CHIEF

JUSTICE BALES and JUSTICES PELANDER, TIMMER, BOLICK, and 

LOPEZ, and JUDGE ECKERSTROMjoined.

JUSTICE GOULD, opinion of the Court:

¶1 We hold that Arizona’s automatic assignment provision in 

A.R.S. § 23-1023(B) does not apply when an employee receives workers’ 

compensation benefits under another state’s laws. Rather, the law of the 

state in which an employee’s workers’ compensation is paid determines the 

assignment rights of the employer and employee. 

I.

¶2 Stephanie Jackson, a South Carolina resident, was employed 

as a semi-truck driver for Drivers Management, LLC (“DM”), a Nebraska 

company. DM contracted with Eagle KMC, LLC (“Eagle”), an Arizona 

company, to provide training for Jackson in Arizona. In February 2014, 

Jackson was a passenger in a semi-truck driven by Rachael Hender, an 

Eagle employee. Jackson was injured when Hender rolled the semi-truck

while driving in Arizona. She subsequently applied for and received 

workers’ compensation in Nebraska. DM, which is self-insured for 

workers’ compensation, paid Jackson’s benefits. 

 

* Vice Chief Justice Robert M. Brutinel has recused himself from this case. 

Pursuant to article 6, section 3, of the Arizona Constitution, the Honorable 

Peter J. Eckerstrom, Chief Judge of the Arizona Court of Appeals, Division 

Two, was designated to sit in this matter.
JACKSON V. EAGLE KMC LLC, ET AL.

Opinion of the Court

3

¶3 In February 2016, a few days before Arizona’s two-year

statute of limitations expired, see A.R.S. § 12-542(1), Jackson filed this 

personal injury action against Eagle, Hender, and Werner Enterprises (the 

registered owner of the semi-truck) (collectively “Eagle”), alleging several 

claims, including strict liability, negligence, and “statutory violations.” In 

accordance with Nebraska law, because DM had a subrogation claim 

against any third-party recovery, Jackson named DM as a defendant. See

Neb. Rev. Stat. § 48-118 (stating an “employer having paid or paying 

compensation to [an] employee . . . shall be made a party to the suit” for 

subrogation purposes).

¶4 Eagle filed a motion to dismiss (later converted into a motion 

for summary judgment) arguing that pursuant to § 23-1023(B), Jackson had 

no legal interest in the action. Section 23-1023(B) provides, among other 

things, that if a person entitled to compensation under Arizona’s workers’ 

compensation laws does not file an action against a third person who 

caused the injury within one year of the action accruing, the action is 

deemed to be assigned to the employer or the workers’ compensation 

insurer. The superior court granted summary judgment in favor of Eagle, 

reasoning that § 23-1023(B) applied here, and thus Jackson had no legal 

interest in the action. 

¶5 The court of appeals reversed. Jackson v. Eagle KMC LLC, 244 

Ariz. 224, 227 ¶ 14 (App. 2018). Relying on Quiles v. Heflin Steel Supply Co., 

145 Ariz. 73, 77 (App. 1985), it held that § 23–1023(B) did not apply to 

Jackson’s claim because her “workers’ compensation benefits were 

adjudicated and paid in Nebraska,” and therefore the law of Nebraska

“governs subrogation, lien, and assignment rights in this action.” Jackson, 

244 Ariz. at 227 ¶ 13. 

¶6 We granted review to determine whether the automatic 

assignment provision in § 23-1023(B) applies to actions against a thirdparty tortfeasor when an injured employee receives workers’ compensation 

benefits under another state’s laws. We have jurisdiction pursuant to article 

6, section 5(3) of the Arizona Constitution and A.R.S. § 12-120.24.

II.

¶7 We review de novo the superior court’s grant of summary 

judgment. Delgado v. Manor Care of Tucson AZ, LLC, 242 Ariz. 309, 312 ¶ 10 

(2017). 
JACKSON V. EAGLE KMC LLC, ET AL.

Opinion of the Court

4

¶8 The issue is whether Arizona or Nebraska law applies to 

Jackson’s claim against Eagle. If Arizona law applies, then Jackson has no 

legal interest in the action. Specifically, pursuant to § 23-1023(B), because 

Jackson did not file a claim against Eagle within one year after the accident, 

her claim was automatically assigned to DM. In contrast, if Nebraska law 

applies, then Jackson retains her legal interest, because Nebraska has no

automatic assignment provision. See Neb. Rev. Stat. § 48-118 (“Nothing in 

the Nebraska Workers’ Compensation Act shall be construed to deny the 

right of an injured employee . . . to bring suit against such third person in 

his or her own name.”).

A.

¶9 In Quiles, our court of appeals held that “[w]hen 

compensation has been paid[,] the law of the state of compensation should 

govern in third-party actions including the nature and extent of lien 

subrogation, and assignment rights.” 145 Ariz. at 77. This rule comports 

with the Restatement (Second) of Conflict of Laws § 185 (Am. Law Inst. 

1971) (stating that the law of the state in which compensation is paid 

governs employee claims against third-party tortfeasors); see also 14 Lex K.

Larson, Larson’s Worker’s Compensation § 144 (Matthew Bender, rev. ed. 

2018) (“[I]f compensation has been paid in a foreign state and suit is brought 

against a third party in the state of injury, the substantive rights of the 

employee . . . and the employer are ordinarily held governed by the law of 

the foreign state.”). Several other jurisdictions also follow this rule. See, 

e.g., Kolberg v. Sullivan Foods, Inc., 644 N.E.2d 809, 811 (Ill. App. Ct. 1994) 

(holding that the law of the state where workers’ compensation benefits 

were applied for and received applied to employee’s claim against third 

party); Langston v. Hayden, 886 S.W.2d 82, 85–86 (Mo. Ct. App. 1994) (same); 

Harris v. Ballard, 953 N.Y.S.2d 366, 367 (N.Y. App. Div. 2012) (same); Am. 

Interstate Ins. Co. v. G & H Serv. Ctr., Inc., 884 N.E.2d 1228, 1230–32 (Ohio Ct. 

App. 2005) (same).

B.

¶10 Eagle contends, however, that by enacting A.R.S. § 23-904(C)

in 2009, the legislature “effectively overruled” Quiles. According to Eagle, 

unless a third-party claim is “exempt” under § 23-904(C), Arizona workers’ 

compensation law applies. Eagle asserts that because Jackson does not 

qualify for an exemption pursuant to § 23-904(C), she is subject to the 

automatic assignment provision in § 23-1023(B) and therefore has no legal 

interest in this action. We disagree.

¶11 We need not determine whether Jackson’s claim is exempt 

under § 23-904(C) because the statute is not relevant to the choice of law 

issue in this case. Section 23-904(C), by its terms, does not apply to the 
JACKSON V. EAGLE KMC LLC, ET AL.

Opinion of the Court

5

assignment rights of employees and employers in the context of a thirdparty claim. Rather, § 23-904(C) addresses when an out-of-state employee 

who is injured in Arizona is “exempt from” (i.e., not entitled to receive)

workers’ compensation benefits in Arizona. Indeed, apart from subsection 

(C), the remainder of § 23-904 focuses on the payment of workers’ 

compensation benefits. See § 23-904(A), (B) (stating that Arizona employees 

injured in this state or another state are “entitled to” Arizona workers’ 

compensation benefits); § 23-904(G) (discussing the set-offs and credits 

applied to workers’ compensation paid to an employee who receives 

benefits in both Arizona and another state ); see also Stambaugh v. Killian, 242

Ariz. 508, 509 ¶ 7 (2017) (stating we construe a subsection of a statute in the 

context of the entire statute). 

¶12 To the extent there is any ambiguity, § 23-904(C)’s legislative 

history supports our construction. Nothing in that history indicates that 

the statute was intended to affect third-party claims. Rather, the legislative 

history shows that the statute’s purpose was to address the payment of 

workers’ compensation benefits for workers who may be eligible to receive 

benefits in Arizona and another state. See Ariz. State Senate Fact Sheet for 

S.B. 1148, 51st Leg., 1st Reg. Sess. (Jan. 30, 2013) (stating that the law was

meant to replace the existing “statute that dictates . . . the right to 

compensation of an out-of-state employee injured in Arizona.”) (emphasis 

added); see also Hearing on S.B. 1148 Before the S. Comm. on Commerce, Energy 

and Military, 51st Leg., 1st Reg. Sess. (Jan. 30, 2013) (statement of Sen. John 

McComish, Member, S. Comm. on Commerce, Energy & Military), 

http://azleg.granicus.com/MediaPlayer.php?clip_id=11508&autostart=0

&meta_id=226129 (explaining, as the bill’s sponsor, that the statute is 

intended to require employees to file for benefits in their state of 

employment to protect Arizona employers from having to pay benefits 

under the more generous workers’ compensation laws of another state).

¶13 In short, § 23-904(C) does not abrogate the rule set forth in 

Quiles. We therefore approve Quiles and hold that because Jackson received 

workers’ compensation benefits in Nebraska, that state’s law regarding 

assignment applies to her claims against Eagle in this action. Thus, because 

Nebraska does not have an automatic assignment provision, Jackson has a 

legal interest in those claims. 
JACKSON V. EAGLE KMC LLC, ET AL.

Opinion of the Court

6

III.

¶14 For the foregoing reasons, we vacate the court of appeals’

opinion, reverse the superior court’s grant of summary judgment in favor 

of Eagle, and remand the case to the superior court for further proceedings 

consistent with this opinion.