## F I L E D United States Court of Appeals Tenth Circuit 

### OCT 17 2000 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

JERRY ALLEN ENFIELD, by and through his conservator and natural mother, Mae Enfield, Plaintiff-Appellee,

v. A.B. CHANCE COMPANY, a subsidiary of Emerson Electric Company; EMERSON ELECTRIC CO., Defendants, and THE CITY OF GOODLAND, KANSAS, Intervenor-Appellant. No. 99-3369

Appeal from United States District Court for the District of Kansas (D.C. No. 94-CV-1423-JTM)

Richard L. Friedeman, of Watkins, Calcara, Rondeau, Friedeman, Bleeker, Glendenning & McVay, Chtd., Great Bend, Kansas, forthe appellant. David A. Hoffman (Donald W. Vasos with him on the b rief), of Vasos Law Offices, Fairway, Kansas, for the appellee.* The Honorable Henry A. Politz, United States Court of Appeals for the

Fifth Circuit, sitting by designation. 2 Before BRORBY , POLITZ, * and BRISCOE , Circuit Judges.

BRISCOE , Circuit Judge

The City of Goodland, Kansas (the City), appeals th e district court’s order interpreting portions of the Kansas workers’ compen sation subrogation statute, Kan. Stat. Ann. § 44-504. When an employer pays wo rkers’ compensation benefits and/or medical aid to an injured employee, § 44-504(b) affords the employer a subrogation interest in amounts recovere d by the employee from a third-party tortfeasor responsible for the employee ’s injuries. Section 44-504(b) also, under certain circumstances, affords the empl oyer a credit against future payments of workers’ compensation or medical aid. The subrogation interest and future credit are subject to reduction under § 44-5 04(d), however, if the employer is found to have contributed to the employee’s inju ries. At issue here is the proper method of calculating the reduction under § 44-504(d). Although our interpretation of § 44-504 differs significantly fr om that adopted by the district court, we agree with the court’s result and affirm its judgment.
I. Plaintiff-appellee Jerry Allen Enfield, an employee of the City, was3

severely injured on the job in 1992 when a utility pole broke and fell on him while it was being removed from the ground. Since that time, Enfield has received workers’ compensation benefits from the Ci ty’s workers’ compensation insurance carrier, Employers Mutual Insurance Company (EMIC). In September 1994, Enfield filed this products liability diversi ty action against defendant A.B. Chance (Chance), the manufacturer of the digger-der rick that was being used to remove the utility pole from the ground at the time of the accident. The City, represented by EMIC, intervened in order to monitorthe proceedings. The case proceeded to trial and the jury found Chance and th e City equally responsible for Enfield’s injuries. The jury further found Enfield ’s total damages to be $3,466,004.00. The district court entered judgmentagainst Chance and in favor of Enfield in the amount of $1,733,002.00 ($3,466,0 04.00 multiplied by Chance’s 50% share of liability). Chance filed a direct app eal, and this court affirmed the district court’s judgment. Enfield v. A.B. Chance Co. , 182 F.3d 931, 1999 WL 191198 (10th Cir. 1999) (unpublished opinion). Chance subsequently tendered payment of the judgment, plus statutory interest, t o Enfield. Citing the provisions of Kan. Stat. Ann. § 44-504, EMIC and the City filed a motion to enforce workers’ compensation lien. In their motion, EMIC and the City claimed they were entitled to a workers’ compe nsation lien in the amount of $253,460.67 (approximately half of the workers’ compensation benefits paid to4

Enfield) against the amount recovered by Enfield fr om Chance. Enfield filed a response in opposition, as well as his own motion e ntitled “Plaintiff’s Motion for Determination of Goodland’s Diminished Lien, CreditAgainst Future Worker’s Compensation Payments, and Proportionate Share of Attorney’s Fees and Expenses.” App. at 148. The district court simult aneously granted Enfield’s motion and denied EMIC’s and the City’s motion. In doing so, the district court concluded that, due to the jury’s determination that the City was 50% responsible for Enfield’s injuries, the City’s workers’ compens ation lien should be reduced to zero (in fact, as explained below, the court conclu ded the lien had a negative value) and the City should receive no credits again st future payments of workers’ compensation and medical aid.
II. All of the issues raised on appeal concern the dist rict court’s interpretation of Kan. Stat. Ann. § 44-504. We review those issue s de novo. See Salve Regina College v. Russell , 499 U.S. 225, 239 (1991) (stating that “courts of appeals review the state-law determinations of district cou rts de novo”); Mount Olivet Cemetery Ass’n v. Salt Lake City , 164 F.3d 480, 485 (10th Cir. 1998) (same). The City contends the district court erred in apply ing § 44-504, both with respect to the reduction of the City’s subrogation interest and the determination of the City’s right to credit against future payments of medical aid and workers’5

compensation benefits. To properly understand the City’s arguments, it is necessary to first review the language of the statu te and the district court’s analysis. Three subsections of § 44-504 are relevant to this dispute. Subsection (a) affords an injured employee “the right to take comp ensation under the workers compensation act and pursue a remedy by proper acti on in a court of competent jurisdiction against” any third-party (other than h is employer or the employer’s agents) who is responsible for the employee’s injur ies. Subsection (b) affords the employer a subrogation interest, as well as the rig ht to potential credit against future compensation and medical aid, in the event t he injured employee recovers from the third-party tortfeasor:

In the event of recovery from such other person by the injured worker or the dependents or personal representative s of a deceased worker by judgment, settlement or otherwise, the employer shall be subrogated to the extent of the compensation and me dical aid provided by the employer to the date of such recove ry and shall have a lien therefor against the entire amount of such r ecovery, excluding any recovery, or portion thereof, determined by a c ourt to be loss of consortium or loss of services to a spouse. The employer shall receive notice of the action, have a right to intervene and may participate in the action. The district court shal l determine the extent of participation of the intervenor, including the apportionment of costs and fees. Whenever any judgment in any such action, settlement or recovery otherwise is recovered by th e injured worker or the worker’s dependents or personal representati ve prior to the completion of compensation or medical aid payments, the amount of such judgment, settlement or recovery otherwise act ually paid and recovered which is in excess of the amount of compe nsation and medical aid paid to the date of recovery of such j udgment,6

settlement or recovery otherwise shall be credited against future payments of the compensation or medical aid. Kan. Stat. Ann. § 44-504(b). Subsection (d) provid es for reduction of the employer’s subrogation and future credit interests in the event the employer and/or its agents are partially responsible for the employee’s injuries:

If the negligence of the worker’s employer or those for whom the employer is responsible, other than the injured worker, is found to have contributed to the party’s injury, the empl oyer’s subrogation interest or credits against future payments of comp ensation and medical aid, as provided by this section, shall be diminished by the percentage of the recovery attributed to the neglig ence of the employer or those for whom the employer is responsi ble, other than the injured worker. Kan. Stat. Ann. § 44-504(d). The outcome of the parties’ subrogation motions hin ged on the interpretation of the following phrase contained in subsection (d): “the employer’s subrogation interest or credits against future paym ents of compensation and medical aid . . . shall be diminished by the percen tage of the recovery attributed to the negligence of the employer.” The district court interpreted the term “recovery,” as used in the above-quoted phrase, to mean the actual amount recovered by the employee from the third-party tort feasor. The court then concluded that the proper “formula for determining the diminished lien is as follows: diminished lien = lien - [recovery x % of employer’s fault].” App. at 277. Likewise, the district court concluded that t he proper formula for7

determining the employer’s diminished future creditis as follows: “diminished future credit = future credit - [recovery x % of employer’s fault].” Id. at 279. The City takes issue with all of these conclusions. First, the City contends that the term “recovery” cannot refer to the actual amount recovered by the employee from the third-party tortfeasor because no ne of that amount is ever attributable to the negligence of the employer. In stead, the City contends, the term “recovery,” as used in subsection (d), must re fer to the amount of workers’ compensation benefits and medical aid received by t he employee from the employer. Second, the City contends that the formu la for determining the diminished subrogation lien should be as follows: d iminished lien = lien x % of employer’s fault. Finally, the City contends that the formula for determining the diminished future credit should be as follows: dimi nished future credit = future credit x % of employer’s fault. We address these a rguments in order. Meaning of the term “recovery” In addressing the City’s arguments on this point, w e begin by examining the history of subsection (d). “Prior to 1982, [§] 44-504 did not provide for reduction of an employer’s subrogation lien if the employer was found to be partially at fault for the employee’s injuries, eve n though [Kan. Stat. Ann. §] 60- 258a provided for comparative fault.” Anderson v. National Carriers, Inc. , 727 P.2d 899, 901 (Kan. 1986). Although the Kansas Sup reme Court “recognized the8

inequities in allowing a partially negligent employ er to recover full subrogation in Negley v. Massey Ferguson, Inc. , [625 P.2d 472] (1981),” it “refused to reduce the employer’s lien since ‘[t]he extent and nature of the subrogation rights of an employer under the workmen’s compensation statutes are matters for legislative determination.’” Anderson , 727 P.2d at 901 (quoting Negley , 625 P.2d at 476). The Kansas legislature responded swiftly to Negley , “amend[ing] [§] 44-504 effective July 1, 1982, by adding subsection (d).” Id. at 901. As originally implemented in 1982, subsection (d) r ead as follows: If the negligence of the worker’s employer or those for whom the employer is responsible, other than the injured worker, is found to have contributed to the party’s injury, the empl oyer’s subrogation interest or credits against future payments of comp ensation and medical aid, as provided by this section, shall be diminished by the percentage of the damage awardattributed to the negligence of the employer or those for whom the employee is responsi ble, other than the injured worker. Kan. Stat. Ann. § 44-504(d) (1982) (emphasis added)

. In 1991, in Brabander v. Western Co-op. Elec. , 811 P.2d 1216 (Kan. 1991), the Kansas Supreme Court was asked to decide whethe r the original version of subsection (d) “require[d] the trial court to reduc e an employer’s workers compensation subrogation interest: (1) by the perce ntage of fault attributed to the employer by the factfinder; or (2) by the percentag e of the damage award itself attributable to the employer’s negligence.” Id. at 1217. The Kansas Supreme Court concluded that subsection (d) clearly and una mbiguously required the9

diminution to be determined by multiplying the dama ge award by the employer’s percentage of fault or negligence. Id. at 1219. In other words, the court determined the diminution formula to be as follows: diminished lien = lien - [damage award x % of employer’s fault]. With respe ct to the alternative interpretation proposed by the employer in Brabande r , the Kansas Supreme Court stated: “Had the legislature intended that the dimi nution was to be determined by applying the employer’s percentage of fault or negl igence to the subrogation interest itself, it could have so provided as it di d in the provision in Kansas Automobile Injury Reparations Act,” which provided that the insurer’s “‘right of subrogation shall be reduced by the percentage of n egligence attributable to the injured person.’” Id. (quoting Kan. Stat. Ann. § 40-3113a(d)). In July 1993, approximately two years after Braband erwas issued, the Kansas legislature amended subsection (d) to read a s it does today. The single change implemented by the amendment was to drop the term “damage award” and substitute the term “recovery.” To date, neither t he Kansas Supreme Court nor the Kansas Court of Appeals has had an opportunity to determine how, if at all, the 1993 amendment affected the diminution formula. See Maas v. Huxtable & Assocs., Inc. , 929 P.2d 780, 785-86 (Kan. Ct. App. 1996) (affirm ing trial court’s conclusion that § 44-504(d) applies to third-party actions that are settled; although the court noted that “[h]ow the legislatur e intended the employer’s1 The district court failed to recognize this problem . Instead, it took the

actual amount collected by Enfield from Chance and multiplied that by the percentage of fault allocated by the jury to the Ci ty. For the reasons explained above, however, none of the actual amount collected by Enfield from Chance is (continued...) 10 percentage of negligence to be determined . . [wa]s not clearly stated in the statutory language,” it was not called upon to deci de the proper formula). Turning now to the City’s arguments, we agree that the district court erred in defining the term “recovery” as the amount actua lly recovered by the employee from the third-party tortfeasor. The actual amountrecovered by an employee from a third-party tortfeasor, at least in a case w here a jury has assessed damages and percentages of fault, will neverinclude any amounts attributable to the negligence of the employer. An example will highli ght this conclusion. Assume that an injured employee sues a third-party tortfea sor and, at trial, the jury concludes the employee has incurred a total of $500 ,000 in damages and that the third-party tortfeasor and the employer are equally responsible (each 50% negligent). The actual amount recovered by the emp loyee from the third-party tortfeasor after trial will be $250,000 (the total damage award x the third-party’s degree of fault). None of the $250,000 actually re covered from the third-party tortfeasor is attributable to the employer; rather, the employer is responsible for the remaining $250,000 damages assessed by the jury(although those damages are uncollectible under the Kansas Workers Compensationscheme). 1 The result is1 (...continued)

allocable to the negligence of the City or its empl oyees.

2 The same would hold true in cases in which the thir d-party tortfeasor settles with the employee, unless the settling part ies agree that the settlement amount includes amounts attributable to the employe r’s negligence. 11 that subsection (d) is effectively nullified since there is no diminishment of the employer’s subrogation interest under subsection (d ). 2 See generallyWalters v. Metropolitan Educ. Enterp., Inc. , 519 U.S. 202, 209 (1997) (“Statutes must be interpreted, if possible, to give each word some op erative effect.”); Gustafson v. Alloyd Co. , 513 U.S. 561, 574 (1995) (noting that Supreme Cou rt will avoid interpretation of statute that “renders some words altogether redundant”); Kungys v. United States , 485 U.S. 759, 778 (1988) (noting the “cardinal ru le of statutory interpretation that no provision should be construe d to be entirely redundant”); Mountain States Tel. Co. v. Pueblo of Santa Ana , 472 U.S. 237, 249 (1985) (noting “the elementary canon of construction that a statute should be interpreted so as not to render one part inoperative.”) (intern al quotations omitted). We conclude there is an additional problem with the district court’s definition of the term “recovery.” The term “recov ery” is used throughout § 44- 504, most notably in subsection (b). For example, subsection (b) provides, in part, as follows: Whenever any judgment in any such action, settlemen t or recovery otherwise is recovered by the injured worker or the worker’s dependents or personal representative prior to the completion of3 Black’s Law Dictionary defines the term “recovery” as “the restoration or

vindication of a right existing in a person, by the formal judgment or decree of a competent court,” and “[t]he amount finally collect ed, or the amount of judgment.” Black’s Law Dictionary 1276 (6th ed. 19 90).

4 Indeed, employment of the district court’s definiti on of the term “recovery” in subsection (b) would render some of i ts language redundant. For example, subsection (b) would effectively read “the amount of such recovery [i.e., the amount actually collected from the third-party tortfeasor] otherwise actually paid and recovered.” 12 compensation or medical aid payments, the amount of such judgment, settlement or recoveryotherwise actually paid and recovered which is in excess of the amount of compensation and medical aid paid to the date of recoveryof such judgment, settlement or recoveryotherwise shall be credited against future payments of the co mpensation or medical aid. Kan. Stat. Ann. § 44-504(b) (emphasis added). As this example indicates, the term “recovery” has two different meanings, dependi ng upon how it is used in the statute. As used in the first, second, and fourth instances in the above-quoted sentence, the term refers generally to a “vindicati on of rights” by way of money damages. 3 In the third instance (i.e., “date of recovery”), it refers to the time when the amount of money is collected. In none of these instances, however, does the term refer to the amount of money or damag es actually collected by the employee from the third-party tortfeasor. 4 Adopting the district court’s interpretation would thus result in the term “recov ery” having one meaning for purposes of subsection (d), and a separate meaning (or meanings) for purposes of the remainder of the statute. See generallyEstate of Cowart v. Nicklos Drilling13

Co. , 505 U.S. 469, 479 (1992) (noting the “basic canon of statutory construction that identical terms within an Act bear the same me aning”); Martin v. Board of County Comm’rs , 848 P.2d 1000, 1006-07 (Kan. Ct. App. 1993) (inte rpreting statutory phrase so that it has “the same meaning e ach time it appears”); Central State Bank v. Albright , 737 P.2d 65, 68 (Kan. Ct. App. 1987) (“It is a we ll recognized rule of statutory construction used to d etermine legislative intent that ordinarily identical words or terms used in differe nt statutes on a specific subject are interpreted to have the same meaning in the abs ence of anything in the context to indicate that a different meaning was intended.” ). The City’s proposed alternative definition of the t erm “recovery” is just as problematic. The City argues that the term “recove ry,” as used in § 44-504(d), should be interpreted to mean “the workers’ compens ation recovery.” Aplt’s Opening Brief at 15. Accepting the City’s argument , however, would mean that the term “recovery” would have one meaning for purp oses of subsection (d) and another meaning (or meanings) for purposes of subse ction (b). As with the district court’s interpretation, this is clearly co ntrary to all accepted rules of statutory construction. See , e.g. , Estate of Cowart , 505 U.S. at 479 (noting the “basic canon of statutory construction that identic al terms within an Act bear the same meaning”). Further, the City’s proposed defin ition makes no sense even if applied solely in the context of subsection (d). U nder the Kansas workers’14

compensation scheme, an employer’s responsibility t o provide an injured worker with medical aid and compensation benefits is not t ied to the employer’s negligence in causing the injury. Thus, applying t he City’s proposed definition of the term “recovery,” there would never be a diminis hment in the employer’s subrogation interest because none of the workers’ c ompensation payments made by the employer would be “attribut[able] to the neg ligence of the employer” or its agents as required by subsection (d). As with the district court’s proposed definition, the City’s proposed definition would ef fectively render the envisioned diminishment under subsection (d) a nullity. The question is therefore how to interpret the term “recovery” as used in subsection (d) to avoid these problems. Although t he City could perhaps argue that in a case such as this the term should refer o nly to the judgment entered by the trial court, we conclude that would be inapprop riate because the statute specifically employs the term “judgment” in other p ortions of § 44-504. In other words, had the Kansas legislature intended the term “recovery,” as used in subsection (d), to refer to a judgment, it presumab ly would have said so. In our view, the only workable solution is to adopt the br oad definition of “recovery” that is employed, with the one exception noted abov e, throughout subsection (b) of the statute, i.e., a vindication of rights by way of money damages. In a case such as this that proceeds to a jury verdict, the t erm would encompass the total15

damage figure decided by the jury (and the result w ould be the same as if the pre1993 version of subsection (d) had been applied). In cases involving settlements, it would encompass the total amount of the settleme nt. In adopting this broad interpretation, we reject th e City’s assertion that such an interpretation is contrary to the purpose o f the 1993 amendment to subsection (d). According to the City, the 1993 am endment to subsection (d) was implemented by the Kansas legislature in response t o the Brabanderopinion and “in a manner to benefit the employer.” City’s Open ing Brief at 9. Importantly, however, there is little, if any, support for the C ity’s arguments. There is no legislative history to which we can refer, and the timing of the amendment (i.e., two years after Brabander ) is less than persuasive authority for the notion that the legislature intended the amendment as a response to Brabander . In our view, it is likely the term “recovery” was utilized by the legi slature to signal that the lien reduction would apply whenever there is a vindicati on of legal rights by way of money damages, regardless of whether that vindicati on occurs in the context of a trial (and a damage award) or a settlement (and a s ettlement amount). This interpretation is consistent with the decision in M aas , which specifically held that subsection (d), as amended in 1993, applies to thir d-party actions that are settled. 929 P.2d at 786. Proper formula for reducing subrogation interest16

Our next task is to determine the proper formula fo r reducing the amount of the employer’s subrogation interest under subsectio n (d). More specifically, the question is whether subsection (d) provides for red ucing the amount of the subrogation interest by multiplying it directly aga inst the percentage of fault allocated to the employer (subrogation interest x e mployer’s percentage of fault), or by subtracting from the subrogation interest the product of the “recovery” multiplied by the percentage of fault allocated to the employer (subrogation interest - [recovery x employer’s percentage of fau lt]). We conclude the latter formula is the proper one. Had the Kansas legislature intended the formula urged by the City, it could easily have said so in subsection (d) (e.g., by stating the employer’s sub rogation interest shall be diminished by the percentage of fault allocated to the employer or those for whom the employer is responsible). Instead, it chose to use the phrase “diminished by the percentage of the recovery attributed to the ne gligence of the employer or those for whom the employer is responsible.” Given this choice of language, we have little doubt the legislature intended that the employer’s subrogation interest be reduced by the product of the “recovery” multipl ied by the percentage of fault allocated to the employer. As the following exampl e demonstrates, this formula produces more rational results than the formula pro posed by the City: Example 1: Injured worker sues third-party tortfeas or and prevails at trial. Jury finds third party and employer equally responsible for17

worker’s injuries (50% and 50%). Jury finds worker ’s total damages are $500,000. At the time of trial the employer ha s paid the worker $250,000 in medical aid and workers’ compensation b enefits. Proper formula: diminished lien = lien - (damage award x % of emplo yer’s negligence) = $250,000 - ($500,000 x 50%) = $250,000 - $250,000 = $0 City’s proposed formula: diminished lien = lien x % of employer’s negligence

= $250,000 x 50% = $125,000 Under our formula, the injured worker would ultimat ely collect $500,000, an amount equivalent to the total damages assessed by the jury at trial. The worker would be made whole, without any double recovery, a nd both the third party and the employer would pay amounts equal to the amounts of liability assessed by the jury at trial. In contrast, under the City’s propo sed formula, the injured worker would receive a total of $375,000 in money, medical aid, and benefits from both the third party and the employer. The employer wou ld benefit at the worker’s expense by receiving a $125,000 subrogation lien ag ainst the $250,000 collected from the third party (and effectively reducing thatamount to $125,000). Proper formula for reducing future credits For the same reasons, we conclude the proper formul a for reducing an employer’s future credits under subsection (d) is a s follows:18

diminished future credits = future credits - (damag e award x % of employer’s negligence) Again, an example will help clarify why this formul a, as opposed to the City’s proposed formula, is more consistent with the langu age of subsection (d): Example 2: Same facts as Example 1, except that the employer has paid only $100,000 in medical aid and workers’ comp ensation benefits to the worker at the time of trial. Undersubsection (b), the actual amount recovered by the worker from the thir d party would exceed the amount of medical aid and workers’ compe nsation benefits by $150,000. Thus, subsection (b) would a fford the employer a credit in that amount against future pay ments of medical aid and workers’ compensation benefits. However, b ecause the employer was found to be at fault in causing the wo rker’s injuries, subsection (d) would require the amount of future c redits to be reduced. Proper formula: diminished future credits = credits - (damage award x % of employer’s negligence) = $150,000 - ($500,000 x 50%) = $150,000 - $250,000 = ($100,000) City’s proposed formula: diminished future credits = credits x % of employer ’s negligence = $150,000 x 50% = $75,000 Under the formula we adopt today, the employer’s fu ture credits would effectively be diminished to zero (although it is a ctually a negative figure), and the employer would receive no credits against futur e medical aid or compensation payments it might make to the worker. The result i s that the injured worker19

would be allowed to collect the full amount of dama ges assessed by the jury. In contrast, under the City’s proposed formula, the employer would receive a credit of $75,000 against future medical aid or workers’ c ompensation payments. Assuming the worker becomes entitled to an addition al $150,000 in medical aid and workers’ compensation benefits (the jury’s pred iction of the worker’s total damages), the injured worker would receive only an additional $75,000 from the employer. The worker would receive a total of $425 ,000 in money and benefits from the third party and the employer ($250,000 fro m the third party and $175,000 from the employer), and would not be made whole. Further, the employer would never pay the full amount determined by the jury. In short, the employer would benefit at the expense of the worker

. Having outlined what we believe to be the proper fo rmula under subsection (d) for reducing an employer’s future credit, we no te that this formula is not perfect. In some instances, particularly where the employer’s percentage of fault is relatively low, the employer will receive a futu re credit even though the employer has not paid an amount equal to or greaterthan the amount of liability assessed to it by the jury. An example will demons trate this point: Example 3: Assume the injured worker sues the third -party tortfeasor and, at trial, the jury finds the worker’s total da mages to be $1,000,000, and assesses 80% liability to the third -party and 20% liability to the employer. Further assume that at the time of trial, the employer has paid $100,000 in compensation benefits to the worker. Although the employer would not receive a subrogati on lien against5 This figure, the future credit allowed for under su bsection (b), is derived

by taking the amount received from the third party ($800,000) and subtracting the amount of compensation benefits paid by the employe r ($100,000). 20 the amount paid by the third-party (i.e., $800,000) , the employer would receive a credit against future compensation payments. Diminished future credit = $700,000 5 - ($1,000,000 x 20%) = $700,000 - $200,000 = $500,000 Application of proper formulas Applying the above-outlined formulas to the facts o f this case produces the following results: Diminished lien = $506,921.35 - ($3,466,004 x 50%) = $506,921.35 - $1,733,002 = ($1,226,080.65) Diminished Future Credit = $1,226,080.65 - ($3,466, 004 x 50%) = $1,226,080.65 - $1,733,002 = ($506,921.35) The City has no subrogation lien and receives no fu ture credit. Although it applied a different method of computation, this is the same result reached by the district court.

Simultaneous reduction of employer’s subrogation in terest and its credits against future compensation The City next contends the district court erred in reducing both its subrogation interest and its credits against future compensation. In support of its21

contention, the City points to the following langua ge in subsection (d): “the employer’s subrogation interest or credits against future payments of compensation and medical aid . . . shall be diminis hed.” According to the City, use of the term “or” rather than the term “and” in the subsection indicates that the diminishment must occur either to the subrogation i nterest or the future credits, but not both. The City did not raise this argument before the dis trict court. Instead, the City conceded in its district court pleadings that both its subrogation lien andits future credits should be diminished under subsectio n (d). See , e.g. , App. at 82 (arguing the City’s future credits should be dimini shed in a manner similar to the City’s subrogation lien). For this reason, we find it unnecessary to reach the merits of the issue now raised by the City. See Tele-Communications, Inc. v. Commissioner , 104 F.3d 1229, 1232 (10th Cir. 1997) (noting that“[g]enerally, an appellate court will not consider an issue raised f or the first time on appeal”). Instead, we will assume, as argued by the City to t he district court and as concluded by the district court, that both the subr ogation lien and the future credits can be diminished. Combining values obtained from diminished lien and diminished future credit formulas When it disposed of the parties’ motions, the distr ict court applied what it believed to be the proper formulas under subsection (d) for determining the City’s22

diminished lien and the City’s diminished future cr edit. In particular, the district court computed the City’s diminished lien in the fo llowing manner: Diminished Lien = Lien - [Recovery - % of Employer’s Fault] = $506,921.35 - [$1,733,002.00 x 50%] = $506,921.35 - $866,501.00 = ($359,579.65) App. at 278. The district court then computed the City’s diminished future credit in the following manner: Diminished Future Credit = $1,226,080.65 - [$1,733, 002.00 x 50%] = $1,226,080.65 - 866,501.00 = $359,579.65 Id. at 279. At Enfield’s urging, the district court c ombined the two values and essentially eliminated the City’s future credit “by the negative value of the diminished lien.” Id. According to the district court, this final calcu lation was proper because (1) it did not thwart the intent of the statute, i.e., prevent a worker from receiving a double recovery, and (2) it was co nsistent with the notion that “‘workers compensation statutes should be liberallyconstrued in favor of the worker if such construction is compatible with legi slative intent.’” Id. at 279-80 (quoting Maas , 929 P.2d at 784). In its final argument on appeal, the City contends the district court erred in combining the values it obtained from using the dim inished lien and diminished future credit formulas. According to the City, thi s combining of values is not23

anticipated or allowed by the language of the statu te. We agree with the City. Reading the language of su bsection (d), there is no indication that the Kansas legislature intended that the values resulting from the diminished lien and diminished future credit calcul ations would be combined, or that one could be carried over to the other. Furth er, although carrying over one value to another might produce a more “just” resultin some circumstances, that is not always the case. The problem is that, although the formula for computing the diminished lien produces equitable results in all c ircumstances, the formula for computing the diminished future credit is imperfect . That, however, is a problem to be addressed by the Kansas legislature and not b y allowing values from one formula to be carried over to another. City’s motion to certify The City has filed a motion to certify to the Kansa s Supreme Court each of the issues it has raised on appeal. Tenth Circuit Rule 27.1(A) governs certification of questions of state law and provide s that “[w]hen state law permits, this court may: (1) certify a question arising unde r state law to that state’s highest court according to that court’s rules; and (2) stay the case in this court to await the state court’s decision of the certified questio n.” 10th Cir. R. 27.1(A). Kansas state law permits the Kansas Supreme Court to answe r questions of law certified to it by24

a court of appeals of the United States [or] a Unit ed States district court . . . , when requested by the certifying court if there are involved in any proceeding before it questions of l aw of this state which may be determinative of the cause then pendin g in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the supreme court and the court of appeals of this state. Kan. Stat. Ann. § 60-3201. While certification is appropriate “where the legal question at issue is novel and the applicable state law is unsettled,” Allstat e Ins. Co. v. Brown , 920 F.2d 664, 667 (10th Cir. 1990), it is never compelled. See Lehman Brothers v. Schein , 416 U.S. 386, 390-91 (1974). “[U]nder the diversity statutes the federal courts have the duty to decide questions of state law even if difficult or uncertain.” Copier v. Smith & Wesson Corp. , 138 F.3d 833, 838 (10th Cir. 1998) (citing Meredith v. Winter Haven , 320 U.S. 228, 235 (1943)). We “generally will no t certify questions to a state supreme court when the requesting party seeks certification only after having received an adverse decision from the district court.” Massengale v. Oklahoma Bd. of Med. Exam’rs in Optometry , 30 F.3d 1325, 1331 (10th Cir. 1994). Applying these general principles to the circumstan ces presented here, we deny the City’s motion for certification. Although the issues raised by the City are novel and somewhat difficult, the City did not seek certification until after it received an adverse decision from the district court. That fact alone persuades us25

that certification is inappropriate.
III. The City of Goodland’s motion for certification of questions of state law is DENIED. Enfield’s motion for a finding that this appeal is frivolous and for an award of damages and costs is DENIED. The judgmentof the district court is
AFFIRMED.