ROBERT GRAHAM, ) 

 ) 

 Employee-Appellant/Cross-Respondent, ) 

 ) 

v. ) 

 ) 

LATCO CONTRACTORS, INC., ) 

 ) 

 Employer-Respondent/Cross-Appellant, ) 

 ) Nos. SD33332 & SD33337 

and LEGION INSURANCE CO. (In Liquidation)/ ) Filed: 4-7-15 

MISSOURI PROPERTY & CASUALTY ) 

INSURANCE GUARANTY ASSOCIATION ) 

 ) 

Insurer-Respondent/Cross-Appellant, ) 

 ) 

and TREASURER OF THE STATE OF ) 

MISSOURI AS CUSTODIAN OF THE ) 

SECOND INJURY FUND, ) 

 ) 

Additional Party-Respondent. ) 

APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS COMMISSION 

AFFIRMED IN PART, REVERSED IN PART AND REMANDED

This appeal arises from an adjudication by the Labor and Industrial Relations 

Commission (Commission) of a dispute concerning a § 287.150.3 subrogation claim.1

 

 

1

 All references to statutes are to RSMo (2000). 
2

Under the very unusual circumstances presented by this case, the Commission exceeded 

its powers by deciding that controversy in this administrative worker’s compensation 

proceeding. Therefore, we reverse that portion of the final award of compensation and 

remand for further proceedings consistent with this opinion. 

 In 1995, Robert Graham (Employee) began working for Latco Contractors, Inc. 

(Employer). Employee built and maintained chicken houses where he was routinely 

exposed to chemicals and wastes incidental to poultry farming. As a result of this 

exposure, Employee began to experience respiratory problems in late 1996 or early 1997. 

He also developed a nervous system disorder in which he became hypersensitive to a 

wide variety of distinct smells. When exposed to perfume or gasoline fumes, for 

example, Employee would lose consciousness due to insufficient oxygenation to his 

brain. His respiratory problems and nervous system disorder worsened over time. He 

developed memory problems and an inability to control his temper, exhibiting angry 

outbursts from time to time. By 2000, Employee was unable to continue working for 

Employer. At the time, Employee was approximately 41 years old. He resided with his 

wife (Wife) and their two young sons, who were then ages 4 and 5. 

 In July 2000, Employee filed a worker’s compensation claim seeking permanent 

and total disability due to occupational disease diagnosed on July 5, 2000. Employer was 

then insured by Legion Insurance Co. (Legion). Although Employer and Legion denied 

the claim, Legion paid some of Employee’s medical bills. Legion became insolvent in 

April 2002. Missouri Property & Casualty Insurance Guaranty Association (MIGA) then 

became obligated to provide statutory coverage, but it did not pay any of Employee’s 
3

medical bills or any other worker’s compensation benefits. Employee sought medical 

treatment on his own and went to see doctors at the Veterans Administration. 

In 2002, Employee and Wife filed a lawsuit against Tyson Foods for Employee’s 

personal injuries and Wife’s separate claim for loss of consortium. In September 2005, 

Employee and Wife settled their claims for a total of $730,000. Their share of the 

settlement included a check made payable to both Employee and Wife in the amount of 

$313,712.90. 

In April 2012, a hearing was held on Employee’s worker’s compensation claim 

by an administrative law judge (ALJ). At the hearing, Employee and Wife testified that 

they shared the net recovery from the Tyson lawsuit equally. Wife testified that she and 

Employee used the funds to buy their home and to “pay back money that we had to 

borrow for the six years we had no income[.]” She also provided extensive testimony 

concerning the ways in which Employee’s injury caused a loss of consortium to Wife. 

The documentary evidence adduced at the hearing included an affidavit from Employee’s 

attorney, detailing the amounts dispersed in the third-party settlement.2

 The attorney 

testified, inter alia, that Employee and Wife’s settlement check “represented both 

[Employee’s] share of the proceeds ... for his personal injuries and [Wife’s] share of the 

proceeds ... for her loss of consortium claim[.]” 

In April 2013, the ALJ determined, inter alia, that Employee was permanently 

and totally disabled from the July 5, 2000 occupational disease alone.3

 The ALJ made 

 

2

 Attorney fees and expenses totaled $312,134.93. Additional funds are being 

held in trust for the benefit of Employee and Wife pending the outcome of a Medicare 

claim and this case.

3

 For that reason, no liability was assessed against the Second Injury Fund. 
4

two rulings relevant to the subrogation issue: (1) the entire net recovery from the Tyson 

lawsuit was subject to the § 287.150.3 subrogation lien; and (2) because “MIGA stands in 

the shoes of Legion[,]” MIGA was entitled to be reimbursed $41,293.40 for medical bills 

paid by Legion. On review, the Commission decided that MIGA was not entitled to 

recover medical payments made by Legion. The Commission adopted the ALJ’s 

decision on all other issues. This appeal by Employee and cross-appeal by MIGA 

followed. 

One ground for reversal of a decision by the Commission is that it acted without 

or in excess of its powers. See § 287.495.1(1). Additionally, we independently review 

Commission decisions that are interpretations or applications of law. See Johnson v. 

Denton Construction Co., 911 S.W.2d 286, 287 (Mo. banc 1995); Birdsong v. Waste 

Management, 147 S.W.3d 132, 138 (Mo. App. 2004). Employee and MIGA each 

challenge the Commission’s decision on the statutory subrogation issue, which we agree 

must be reversed based upon the very unusual procedural problems presented here. 

Because of those problems, the Commission acted in excess of its powers by deciding the 

subrogation issue in this administrative worker’s compensation proceeding. 

The facts relating to the settlement of the Tyson lawsuit are undisputed. The 

lawsuit involved a personal injury claim brought by Employee and a loss of consortium 

claim brought by Wife. A third-party recovery by Employee on his personal injury claim 

is subject to the statutory subrogation interest created by § 287.150.3. See Kinney v. 

Schneider Nat’l Carriers, Inc., 200 S.W.3d 607, 610 (Mo. App. 2006). “[T]he employee 

becomes the trustee of an express trust for the benefit of the employer for that part of the 

recovery subject to subrogation.” Missouri Highway & Trans. Comm’n v. Merritt, 204 
5

S.W.3d 278, 283 (Mo. App. 2006). Any amount recovered by Wife, however, is not 

subject to that statutory right of subrogation. See Bridges v. Van Enterprises, 992 

S.W.2d 322, 329-30 (Mo. App. 1999); William H. Pickett, P.C. v. Am. States Fam. Ins. 

Co., 857 S.W.2d 309, 312-13 (Mo. App. 1993).4 As noted above, Employee and Wife 

settled their respective claims for one lump sum payment. There was no apportionment 

of the settlement proceeds between the claims in the settlement documents. Both 

Employee and Wife were named as payees on the settlement check, and they shared the 

money equally. Based upon Wife’s testimony and the affidavit from her attorney, she 

took the position that some of the settlement proceeds belonged to her. The 

Commission’s ruling, however, effectively determined that all of the net settlement 

proceeds belonged to Employee and that Wife received nothing to settle her separate, 

non-subrogated loss of consortium claim.5

 

4

 This follows from the principle that, “[w]hen a married person is injured, two 

independent, separate and distinct causes of action arise: one accrues to the injured 

person for the injuries, and the other accrues to the injured person’s spouse for damages 

suffered as a result of his or her loss of the injured person’s services, society and 

companionship.” H.R.B. v. J.L.G., 913 S.W.2d 92, 99 (Mo. App. 1995). “Missouri 

recognizes a loss of consortium claim as a separate and distinct personal injury claim.” 

Wright v. Barr, 62 S.W.3d 509, 537 (Mo. App. 2001). “The claim encompasses the 

other spouse’s loss of affection, care, companionship, and services, as well as an 

impairment or destruction of the sexual life of the married couple, due to the conduct of a 

tortfeasor.” Id. 

5

 The Commission’s decision was based upon Ryder Integrated Logistics, Inc. v. 

Royse, 125 F.Supp. 2d 375 (E.D. Mo. 2000). Ryder involved a third-party settlement in 

which an employee and his wife received one lump sum check to settle the employee’s 

personal injury claim and the wife’s separate loss of consortium claim. Id. at 377-78. 

The settlement documents did not contain an apportionment of the proceeds by amount or 

percentage between the two claims. Id. at 382-83. Citing only Pennsylvania law, the 

trial court in Ryder decided the lack of apportionment conclusively established that the 

wife received nothing for the settlement of her separate loss of consortium claim. Id. at 

382-83. We find the reasoning in Ryder unpersuasive and decline to follow it. 
6

 Wife is not a party to this worker’s compensation case. The joinder rules found 

in Rule 52 of Missouri Rules of Civil Procedure do not apply. McGuire v. Christian 

County, 442 S.W.3d 117, 122 (Mo. App. 2014). We are not aware of any other statute or 

regulation that permits Wife to be joined as a party to this proceeding. It would be a 

violation of due process to permit the Commission to affect Wife’s rights and interests in 

a proceeding to which she is not, and cannot be made, a party. See Pauli v. Spicer, 445 

S.W.3d 667, 673-74 (Mo. App. 2014). 

MIGA’s cross-appeal presents another facet of the same problem. The statutory 

subrogation claim was based upon the payment of Employee’s medical expenses by 

Legion. The obligation to pursue that claim rests, by statute, on Legion. See

§ 287.150.6. That insurer, however, is in liquidation. Therefore, Legion no longer has 

standing to pursue the subrogation claim. The order to liquidate was required to name the 

Director of the department of insurance as the liquidator. See § 375.1152(5); 

§ 375.1176.1. One of the liquidator’s powers is to collect all debts and money due the 

insurer, which includes the power to pursue any creditor’s remedies available to enforce 

the claim. See § 375.1182.1(6). Like Wife, the Director is not a party to this proceeding. 

By deciding the statutory subrogation issue in the Director’s absence, the Commission 

exceeded its powers. See Doss v. Howell-Oregon Elec. Co-op., Inc., 158 S.W.3d 778, 

782 (Mo. App. 2005) (trial court erred by adjudicating a worker’s compensation lien 

when the insurer was not a party to that action). In Doss, we outlined five different 

circuit court remedies available to the parties to adjudicate a § 287.150 subrogation 

claim. Id. at 782-83. Bridges provides an example for how this sort of subrogation 

dispute, involving the proper apportionment of a third-party settlement between a 
7

subrogated wrongful death or personal injury claim and a non-subrogated loss of 

consortium claim, can be decided after an evidentiary hearing has been conducted. See

Bridges, 992 S.W.2d at 326-28 (affirming an apportionment of $2,000 to the death claim 

and $166,000 to the loss of consortium claim). No reported Missouri appellate opinion 

involving similar facts, on the other hand, appears to authorize the Commission to 

adjudicate that issue in an administrative proceeding. 

The portion of the Commission’s final award adjudicating the statutory 

subrogation dispute is reversed. In all other respects, the Commission’s final award of 

compensation is affirmed. The cause is remanded for entry of an amended final award of 

compensation consistent with this opinion. 

JEFFREY W. BATES, J. – OPINION AUTHOR 

DANIEL E. SCOTT, J. – CONCUR 

WILLIAM W. FRANCIS, JR., C.J./P.J. – CONCUR