PRESENT: All the Justices 

LIBERTY MUTUAL INSURANCE COMPANY, ET AL. 

v. Record No. 010350 OPINION BY JUSTICE BARBARA MILANO KEENAN 

 January 11, 2002 

DAWN M. FISHER AND JOHN M. GARLOCK, 

CO-ADMINISTRATORS OF THE ESTATE OF 

MARY K. PILKERTON, DECEASED. 

FROM THE CIRCUIT COURT OF ALBEMARLE COUNTY 

H. Selwyn Smith, Judge Designate 

 In this appeal, we consider whether the trial court erred 

in barring an employer from recovering under a workers’ 

compensation lien, as part of the settlement of a third-party 

wrongful death action, benefits paid to persons who did not 

participate in the settlement of that wrongful death action. 

 In November 1993, the decedent, Mary K. Pilkerton, was 

employed as a receptionist by Windham Home for Adults (Windham), 

a nursing home facility. Elizabeth A. Bishop, an elderly 

resident of Windham, tripped and fell as she walked across 

railroad tracks adjoining Windham’s property. After being 

informed that Bishop needed assistance, the decedent went to 

help Bishop, who was lying on the railroad tracks. While the 

decedent was attempting to rescue Bishop, a train struck and 

killed both of them. 

 The decedent was survived by three children, Dawn M. 

Fisher, Carolyn K. Canipe, and Kristie L. Pilkerton. At the 

time of the decedent's death, Kristie L. Pilkerton was the 
decedent's minor dependent. The decedent had another dependent, 

Ashley N. Pilkerton, the daughter of Dawn M. Fisher, who was six 

years old at the time of the decedent's death. The decedent had 

legal custody of Ashley and provided all her monetary support. 

 The decedent's beneficiaries filed a claim with the 

Workers' Compensation Commission requesting an award for various 

benefits as a result of the decedent's accidental death. 

Windham and its insurance carrier, Liberty Mutual Insurance Co. 

(Liberty), stipulated that the decedent died from injuries 

arising out of and in the course of her employment with Windham. 

 In May 1995, the Commission entered an award on behalf of 

Kristie L. Pilkerton and Ashley N. Pilkerton for the payment of 

weekly benefits in the amount of $379.70, to be shared equally 

between them until Kristie's eighteenth birthday in December 

1994. After Kristie's eighteenth birthday, the award provided 

that Ashley would receive the full amount of $379.70 for a 

maximum period of 400 weeks or until certain statutory exclusion 

criteria were met. The Commission also awarded payment of the 

decedent's funeral expenses in the amount of $1,818.92. The 

other two daughters of the decedent, Dawn M. Fisher and Carolyn 

K. Canipe, were not eligible for benefits under the Commission's 

award. 

 In February 1997, Dawn M. Fisher and John M. Garlock, the 

decedent’s brother, (collectively, the Administrators), 

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qualified as co-administrators of the decedent's estate and 

filed a wrongful death action in the trial court against CSX 

Transportation, Inc. (CSX) and National Railroad Passenger 

Corporation (Amtrak). In November 1999, the Administrators 

filed a Petition for Approval of Settlement and Determination of 

Lien in which they asked the trial court to approve a $210,500 

settlement and to determine the amount of the employer's lien 

for workers' compensation benefits that the employer had paid. 

 Liberty and Windham (collectively, Liberty) filed petitions 

seeking to intervene in the wrongful death action based on Code 

§§ 65.2-309 and –310. Code § 65.2-309 provides, in relevant 

part: 

A. A claim against an employer under this title for 

injury or death benefits shall operate as an 

assignment to the employer of any right to recover 

damages which the injured employee, his personal 

representative or other person may have against any 

other party for such injury or death, and such 

employer shall be subrogated to any such right and may 

enforce, in his own name or in the name of the injured 

employee or his personal representative, the legal 

liability of such other party. The amount of 

compensation paid by the employer or the amount of 

compensation to which the injured employee or his 

dependents are entitled shall not be admissible as 

evidence in any action brought to recover damages. 

. . . . 

C. No compromise settlement shall be made by the 

employer in the exercise of such right of subrogation 

without the approval of the Commission and the injured 

employee or the personal representative or dependents 

of the deceased employee being first obtained. 

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Code § 65.2-310 states: 

In any action by an employee, his personal 

representative or other person against any person 

other than the employer, the court shall, on petition 

or motion of the employer at any time prior to 

verdict, ascertain the amount of compensation paid and 

expenses for medical, surgical and hospital attention 

and supplies, and funeral expenses incurred by the 

employer under the provisions of this title and deduct 

therefrom a proportionate share of such amounts as are 

paid by the plaintiff for reasonable expenses and 

attorney's fees as provided in § 65.2-311; and, in 

event of judgment against such person other than the 

employer, the court shall in its order require that 

the judgment debtor pay such compensation and expenses 

of the employer, less said share of expenses and 

attorney's fees, so ascertained by the court out of 

the amount of the judgment, so far as sufficient, and 

the balance, if any, to the judgment creditor. 

 Liberty asked the trial court to determine the total amount 

of compensation benefits and recoverable expenses incurred by 

Liberty and, after deducting reasonable attorney's fees for the 

Administrators' attorney, to order CSX and Amtrak to pay to 

Liberty all compensation benefits and expenses previously 

incurred by Liberty on the decedent’s behalf. In its petition, 

Liberty stated that it had paid a total of $123,484.32, 

including $1,818.13 in funeral expenses and $121,666.19 in 

indemnity benefits, to the decedent's dependents. 

 In June 2000, the trial court held a hearing on the 

Administrators' settlement petition. On the date of the 

hearing, Fisher, as the mother and legal guardian of Ashley N. 

Pilkerton, and Garlock, as Ashley's trustee, filed a waiver 

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renouncing Ashley's right to receive any proceeds from the 

wrongful death settlement. On June 28, 2000, the trial court 

approved the settlement petition and entered a final order 

disbursing the settlement proceeds. 

 The trial court's disbursal of the settlement proceeds 

included $10,538.50 "to Liberty Mutual for reimbursement of its 

lien for worker[s'] compensation payments made to Kristie Lynn 

Pilkerton," and $1,818.13 to Liberty for its payment of the 

decedent's funeral expenses. However, the court denied payment 

to Liberty for compensation benefits in the amount of 

$111,824.66 paid to Ashley N. Pilkerton, because Ashley had 

renounced her right to receive funds from the wrongful death 

settlement. 

 The trial court relied in its ruling on the decision in ACB 

Trucking, Inc. v. Griffin, 5 Va. App. 542, 365 S.E.2d 334 

(1988), an appeal from the Workers' Compensation Commission that 

addressed benefits recoverable under the Workers' Compensation 

Act by an injured worker's dependents. There, the Court of 

Appeals stated: 

When an estate's beneficiaries have received a third 

party recovery, the carrier's right to subrogation 

operates in relation to each beneficiary in an 

individual manner. The carrier may assert its right 

to subrogation on behalf of each individual only to 

the extent that individual has recovered money in the 

third party settlement. . . . When a beneficiary has 

received less under the settlement than he is entitled 

to receive under the Workers' Compensation Act, the 

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employer may assert its subrogation rights up to the 

amount of money received by the beneficiary in the 

settlement. 

Id. at 548, 365 S.E.2d at 338. 

 Liberty filed a Petition for Reconsideration, which the 

trial court denied. Liberty appeals from the trial court's 

judgment. 

 Liberty argues that the trial court erred in barring 

Liberty from recovering under its statutory lien the amount of 

compensation paid to a beneficiary who did not receive payment 

in the wrongful death settlement. Liberty contends that the 

employer's lien created by Code § 65.2-309 attaches regardless 

of the identity of a plaintiff or the plaintiff's status as a 

participant in the settlement of a third-party action. Liberty 

also asserts that Code §§ 65.2-309 and -310 do not provide a 

trial court any discretion to reduce or deny recovery of damages 

under an employer's lien. 

 In response, the Administrators argue that Code § 65.2-309 

authorizes an employer to recover damages for benefits paid only 

when the employer independently prosecutes an action against a 

third-party tortfeasor and recovers damages against that 

tortfeasor. The Administrators contend that because Code 

§ 65.2-310 does not address the settlement of an action brought 

by an employee or her personal representative, the employer's 

lien does not attach to amounts recovered in such a settlement, 

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but attaches only against a judgment rendered against a third 

party after a trial. We disagree with the Administrators' 

arguments. 

 We consider Code §§ 65.2-309 and –310 in a manner that 

harmonizes and gives effect to each statute. See City of 

Virginia Beach v. Siebert, 253 Va. 250, 252, 483 S.E.2d 214, 216 

(1997); First Va. Bank v. O'Leary, 251 Va. 308, 312, 467 S.E.2d 

775, 777 (1996). Under Code § 65.2-309, once a workers' 

compensation claim is made, an employer has a right "to 

enforce," in its own name or in the name of the injured employee 

or her personal representative, the legal liability of a third 

party. Code § 65.2-309; see Safety-Kleen Corp. v. Van Hoy, 225 

Va. 64, 67-68, 300 S.E.2d 750, 752 (1983); Sheris v. Sheris Co., 

212 Va. 825, 834, 188 S.E.2d 367, 373 (1972); Feitig v. 

Chalkley, 185 Va. 96, 101, 38 S.E.2d 73, 75 (1946). Code 

§ 65.2-812 provides that an employer's insurance carrier is 

subrogated to all rights and duties of the employer when the 

insurance carrier has assumed the employer's liability or has 

paid compensation for which the employer is liable. See SafetyKleen, 225 Va. at 68, 300 S.E.2d at 752. 

 Code § 65.2-310 operates to protect an employer's lien in 

an action brought by an employee or her personal representative 

against a third party. See Circuit City Stores, Inc. v. Bower, 

243 Va. 183, 188, 413 S.E.2d 55, 57 (1992). At any time before 

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a verdict is reached in an action, an employer may petition the 

court under Code § 65.2-310 to ascertain the amount of its lien 

and deduct from that amount certain fees and expenses incurred 

by the plaintiff. Code § 65.2-310 further directs that if a 

judgment is obtained in an action, the court shall order the 

judgment debtor to reimburse the employer this sum from the 

amount of the judgment. See Safety-Kleen, 225 Va. at 68, 300 

S.E.2d at 752-53. 

 We conclude that the language of Code §§ 65.2-309 and –310, 

considered together, permits an employer to assert its statutory 

lien against any recovery obtained in an action brought against 

a third party liable for the employee’s injury or death. 

Code § 65.2-309(A) assigns to the employer "any right to recover 

damages which the injured employee, his personal representative 

or other person may have against any other party for such injury 

or death . . . ." (Emphasis added.) 

The only restriction that Code § 65.2-309 imposes on the 

employer’s lien rights is set forth in Code § 65.2-309(C), which 

takes effect when those lien rights are asserted in a compromise 

settlement arising from an action that the employer has 

initiated against a third party. This statutory provision 

directs that in such circumstances, settlements reached by an 

employer will be subject to the approval of the Workers' 

Compensation Commission and the injured employee, her personal 

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representative, or the dependents of the deceased employee. Id. 

Apart from this restriction, Code § 65.2-309 does not otherwise 

restrict an employer’s right to recover damages in a compromise 

settlement under the employer's statutory right of subrogation. 

The language of Code § 65.2-310 does not limit the lien 

rights created by Code § 65.2-309 when a compromise settlement 

is reached in a third-party action brought by an injured 

employee or her personal representative. The trial court’s duty 

to compute the amount that an employer may recover under its 

lien is not limited to actions in which a verdict is reached and 

a judgment is obtained. See Circuit City, 243 Va. at 188, 413 

S.E.2d at 57. Code § 65.2-310 directs the trial court to make 

this computation at the employer’s request in “any action” 

against a third party brought by an employee or her personal 

representative. In the event that a judgment is obtained 

against a third party, the employer is further protected by the 

statute’s requirement that the court order the judgment debtor 

to pay the amount of the employer’s lien, minus certain fees and 

expenses, from the amount of the judgment. Therefore, we 

conclude that an employer’s lien rights created by Code § 65.2-

309 may be enforced in any action against a negligent third 

party that is resolved by a compromise settlement, irrespective 

of whether the action is initiated by an employer, its employee, 

or the employee’s personal representative. 

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 The contrary interpretation advanced by the Administrators 

would permit a trial court to refuse enforcement of a lien 

created by Code § 65.2-309 when a compromise settlement is 

reached in an action brought by an employee or her personal 

representative against a third party. We reject this 

interpretation because the language employed by the General 

Assembly in Code §§ 65.2-309 and -310 evidences no such intent. 

The Administrators' interpretation also would improperly allow 

employees who settle their claims against third parties to 

shield their recovery from an employer's lien. Such a result 

would directly conflict with the established principle that an 

employee may not prosecute an action against a negligent third 

party to the prejudice of an employer's lien rights. See Stone 

v. George W. Helme Co., 184 Va. 1051, 1058-59, 37 S.E.2d 70, 73 

(1946); Skelly v. Hertz Equip. Rental Corp., 35 Va. App. 689, 

698, 547 S.E.2d 551, 555-56 (2001). 

 Based on our holding, we also disagree with the statutory 

interpretation rendered by the Court of Appeals in ACB Trucking. 

The language of Code §§ 65.2-309 and –310 does not restrict an 

employer's right to obtain reimbursement of benefits paid to the 

amount that an individual beneficiary has recovered in a thirdparty action. In the absence of statutory language to that 

effect, there is no basis for placing such limits on an 

employer's right of recovery under the statutory lien created by 

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Code § 65.2-309. Thus, to the extent that the holding in ACB 

Trucking is inconsistent with the holding we express here, we 

overrule that portion of the Court of Appeals' decision. 

 Finally, we find no merit in the Administrators' argument 

that a trial court has discretion under the Virginia Wrongful 

Death Act, Code §§ 8.01-50 through –56, to determine whether an 

employer may obtain recovery under its lien created by Code 

§ 65.2-309. The language of Code §§ 65.2-309 and –310 does not 

permit any such restriction to be placed on the amount that an 

employer may recover under its statutory lien. In addition, no 

provision in the Wrongful Death Act gives a trial court the 

discretion to impose limits on the amount of the employer’s lien 

created by Code § 65.2-309. 

 For these reasons, we will reverse the trial court's 

judgment and remand the case for proceedings consistent with the 

principles set forth in this opinion. 

Reversed and remanded.

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