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URT 

EF DEPUTY CLERK BY 

140 Nev., Advance Opinion (.-0

IN THE SUPREME COURT OF THE STATE OF NEVADA 

No. 84974 

FILED 

AMTRUST NORTH AMERICA, INC., 

Appellant, 

vs. 

RAMON VASQUEZ, JR., 

INDIVIDUALLY, 

Respondent. 

Appeal from a district court order adjudicating a workers' 

compensation lien. Eighth Judicial District Court, Clark County; Susan 

Johnson, Judge. 

Reversed and remanded. 

Hooks Meng & Clement and Shaun R. Meng, Las Vegas, 

for Appellant. 

GGRM Law Firm and Jason D. Mills, Las Vegas; Naqvi Injury Law and 

Farhan R. Naqvi, Elizabeth E. Coats, and Paul G. Albright, Las Vegas, 

for Respondent. 

BEFORE THE SUPREME COURT, EN BANC.' 

OPINION 

By the Court, LEE, J.: 

Workers' compensation serves a vital role in protecting workers 

by providing financial support to those who suffer injury or death in the 

'The Honorable Linda Marie Bell, Justice, having voluntarily 

disqualified herself, did not participate in the resolution of this appeal. 

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course and scope of their employment. Understanding the importance of 

this benefit, the Nevada Legislature enshrined workers' compensation 

legislation in the early 1900s allowing injured workers to receive financial 

recovery for medical care as a result of their on-the-job injury without 

resorting to common-law tort remedies. See Virden v. Srnith, 46 Nev. 208, 

210, 210 P. 129, 129 (1922). However, when a workers' compensation 

insurer pays benefits to an insured worker, Nevada law allows the insurer 

to assert an interest against further recovery collected by the worker from 

a third party. NRS 616C.215(5). Guided by the importance of workers' 

compensation benefits and the statutory directive to refrain from applying 

common law principles, we consider the rights of an insurer following a 

settlement between the insured and a third party. NRS 616A.010. 

Appellant AmTrust North America, Inc., a workers' 

compensation insurer, intervened as subrogee in a third-party lawsuit filed 

by respondent Ramon Vasquez, Jr., against multiple defendants, in 

connection with injuries he sustained while in the course and scope of his 

employment. After years of litigation, Vasquez and the defendants reached 

a settlement agreement. On a subsequent motion to adjudicate AmTrust's 

workers' compensation lien based on Vasquez's settlement proceeds, the 

district court determined that, under Breen and Porernba, AmTrust was not 

entitled to recover any portion of the settlement proceeds despite its lien.2

We issue this opinion to reconcile the conflict between our 

caselaw and NRS 616C.215(5), the statute that controls a workers' 

compensation insurer's lien rights. Namely, we hold that (1) there is no 

requirement that an insurer intervene or otherwise participate in the 

2Breen v. Caesars Palace, 102 Nev. 79, 715 P.2d 1070 (1986); Poremba 

v. S. Nev. Paving, 133 Nev. 12, 388 P.3d 232 (2017). 

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injured worker's third-party claim to recover on its lien under NRS 

616C.215(5); (2) the Breen formula, created in direct conflict with the 

controlling statute, has proven unworkable and is therefore abandoned in 

favor of a straightforward lien analysis, under which the insurer's lien 

applies to recovery from any third parties for the covered injuries without 

an allocation of the injured employee's litigation fees and costs; and (3) in 

contradiction of our holding in Poremba, NRS 616C.215(5) mandates that 

an insurer collect from the "total proceeds" of any recovery of an injured 

worker, including any portion allocated to noneconomic injuries. We 

therefore overrule those portions of Breen and Poremba that are 

inconsistent with this opinion. 

FACTS AND PROCEDURAL HISTORY 

While working in a restaurant, Vasquez slipped in a puddle of 

liquid and sustained injuries. Shortly thereafter, he filed a workers' 

compensation claim, which AmTrust accepted. AmTrust paid workers' 

compensation benefits for medical expenses, missed wages, permanent 

disability, and vocational rehabilitation, totaling $177,335.59. 

Subsequently, Vasquez initiated third-party litigation against 

several defendants, asserting multiple claims related to his workplace 

injuries. AmTrust intervened as subrogee and also filed claims against the 

third-party defendants. After nearly two years of litigation, Vasquez and 

the third-party defendants reached a $400,000 settlement. Without input 

from AmTrust, Vasquez and the third-party defendants allocated the 

settlement as follows: $83,577.22 in special damages (past medical) and 

$316,422.78 in general damages (noneconomic damages, namely, pain and 

suffering). After Vasquez's costs and attorney fees were subtracted from 

the settlement amount, Vasquez was left with a net recovery of $193,706.71. 

At the time of the settlement, AmTrust had expended over $50,000 in costs 

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and fees. Following the settlement, Vasquez filed a motion to adjudicate 

the workers' compensation lien and argued that AmTrust was entitled to 

none of the settlement proceeds or, at most, $83,577.82, pursuant to Breen 

and Porernba. 

After holding a hearing on the motion, the district court found 

that, although AmTrust intervened, it did not meaningfully participate in 

the third-party litigation and therefore was required to bear a portion of the 

third-party litigation costs and fees pursuant to Breen. The district court 

also held that AmTrust could not recover from the portion of the settlement 

designated to compensate Vasquez for noneconomic damages, pursuant to 

Porernba. 

Without providing a mathematical calculation, the district 

court found that AmTrust was not entitled to any recovery on its lien. The 

district court stated that, "notwithstanding the application of Poremba, 

AmTrust's proportionate share of the litigation expenses in obtaining the 

[s]ettlement exceeds" its lien "under any application of the Breen formula in 

this matter." Put another way, the application of the Breen formula 

resulted in AmTrust owing money for litigation expenses in an amount 

greater than its lien. Accordingly, the district court granted Vasquez's 

motion, adjudicating the lien on the settlement proceeds at $0, and 

dismissed AmTrust's complaint. AmTrust now appeals. 

DISCUSSION 

AmTrust challenges the district court's application of Breen and 

Poremba. We review the application of caselaw de novo. Las Vegas Metro. 

Police Dep't v. Blackjack Bonding, Inc., 131 Nev. 80, 85, 343 P.3d 608, 612 

(2015). In considering the district court's application of the two cases, it is 

evident that Breen and Porernba conflict with the plain language of NRS 

616C.215(5). It is also clear that the formula set forth in Breen is 

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unworkable. Based on these observations, we are compelled to overrule 

those portions of Breen and Poremba that are inconsistent with this opinion 

and reverse the district court's order adjudicating AmTrust's lien. 

Legal standard 

"[U]nder the doctrine of stare decisis, we will not overturn 

[precedent] absent compelling reasons for so doing." Miller v. Burk, 124 

Nev. 579, 597, 188 P.3d 1112, 1124 (2008) (footnote omitted). Rigid 

adherence to stare decisis is the preferred course of action because it 

"promotes the evenhanded, predictable, and consistent development of legal 

principles, fosters reliance on judicial decisions, and contributes to the 

actual and perceived integrity of the judicial process." Payne v. Tennessee, 

501 U.S. 808, 827 (1991). However, the doctrine of stare decisis should not 

be so rigidly applied that the court avoids revisiting its prior decisions, 

especially where it appears that a prior decision runs contrary to the plain 

language of a statute. See Rupert v. Stienne, 90 Nev. 397, 400, 528 P.2d 

1013, 1015 (1974) ("The doctrine of stare decisis must not be so narrowly 

pursued that the ...law is forever encased in a straight jacket."). 

Precedent should be overruled where it is proven "unworkable" or "badly 

reasoned." State v. Lloyd, 129 Nev. 739, 750, 312 P.3d 467, 474 (2013) 

(internal quotation marks omitted). 

We overrule Breen to the extent it conflicts with this opinion 

In Breen, an employee was injured in the course of his 

employment and was taken to a hospital, where he later died. Breen v. 

Caesars Palace, 102 Nev. 79, 80, 715 P.2d 1070, 1071 (1986). Because the 

employee's work-related injuries were apparently nonfatal, the employee's 

family filed a complaint against the treating physician and the hospital, 

alleging medical malpractice. Id. Two years after the employee's death, 

and just weeks before the family reached a $1,000,000 settlement with the 

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physician and the hospital, Caesars intervened and filed a subrogation lien 

against the prospective settlement. Id. At the time of the settlement, 

Caesars had paid $39,728.16 in benefits and had reserved $650,000 as 

future pension benefits. Id. at 81, 715 P.2d at 1071. Subsequently, the 

employee's family used the settlement proceeds to reimburse Caesars for 

the paid benefits, and Caesars stopped paying pension benefits, claiming an 

offset. Id. 

The employee's family challenged Caesars' interest in the 

settlement proceeds before a Department of Administration hearing officer. 

Id. The hearing officer, an appeals officer, and the district court all 

concluded that, pursuant to NRS 616C.215, then codified as NRS 616.560,3

Caesars was entitled to assert a lien against the settlement proceeds. Id. 

On appeal, this court held that insurers, to avoid any unjust 

enrichment, may be charged with a proportionate share of third-party 

litigation expenses when they fail to timely intervene in the insured's thirdparty action. Id. at 85, 715 P.2d at 1074. In other words, Breen held that a 

lienholder is subject to a reduction of its lien when it refuses to exercise its 

independent right to pursue a cause of action against responsible third 

parties. 

The Breen court determined that while NRS 616C.215 made 

clear that Caesars was entitled to assess its lien against the total settlement 

proceeds, the statute left open the equitable issue regarding the allocation 

of fees and costs between the insured and the insurer underlying the thirdparty settlement. Breen, 102 Nev. at 84, 715 P.2d at 1073. To address this 

3At the time of Breen, NRS 616C.215 was codified as NRS 616.560 

(substituted 1995). Breen, 102 Nev. at 81 n.1, 715 P.2d at 1071 n.l. The 

minor differences between NRS 616C.215 and NRS 616.560 have no effect 

on our analysis or conclusion in this opinion. 

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perceived statutory deficiency, the Breen court looked to other states for 

guidance. Id. at 84, 715 P.2d at 1073-74. In doing so, the court considered 

principles of fundamental fairness and unjust enrichment to conclude that 

an insurer must bear a portion of the fees and costs incurred by the insured. 

In furtherance of promoting the same, the court devised a formula designed 

to balance the injured worker's efforts in obtaining a third-party judgment 

to compensate for his injuries and the insurer's right to subrogation. 

Consequently, the formula devised by the court to determine an insurer's 

proportionate share of the fees and costs is as follows: 

Total amount of lien 

Insurer's share — 

Settlement rninus fees and costs 

Excess recovery 

Insured's share — 

Settlement minus fees and costs 

Id. at 85, 715 P.2d at 1074. 

Now, some decades later, time-tested application of the Breen 

formula has proven to be unworkable. For this reason, in addition to the 

Breen court's deviation from NRS 616C.215, as addressed more fully below, 

we are compelled to overrule Breen to the extent that it conflicts with this 

opinion. 

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Breen conflicts with NRS 616C.215 because the statute does not 

require insurers to bear a portion of the injured worker's third-party 

litigation expenses 

While courts are often endowed with broad equity powers, 

workers' compensation is a creature of statute. Accordingly, la]ny changes 

in the workers' compensation program must come from the legislature, not 

the courts." 82 Am. Jur. 2d Workers' Cornpensation § 3 (2013). 

Under NRS 616C.215(5) "[i]n any case where the insurer . . . is 

subrogated to the rights of the injured employee . . . the insurer . . . has a 

lien upon the total proceeds of any recovery from some person other than 

the employer, whether the proceeds of such recovery are by way of 

judgment, settlement or otherwise." Although the Breen court correctly 

concluded that insurers are entitled to assess the total proceeds of thirdparty recoveries, meaning proceeds designated to compensate for both 

economic and noneconomic loss, nothing on the face of the statute requires 

insurers to bear a portion of the costs and fees incurred by an insured during 

third-party litigation. We recognize Breen's well-intentioned attempt to 

mimic the equitable approaches taken by sister states; however, in the 

context of the workers' compensation statutory scheme, this was 

inappropriate. See In re Fontainebleau Las Vegas Holdings, 128 Nev. 556, 

569, 289 P.3d 1199, 1212 (2012) (explaining that principles of equity cannot 

overcome statutory provisions). As neither NRS 616C.215(5) nor any other 

provision in the workers' compensation statutory scheme requires an 

insurer to monetarily contribute to third-party litigation before assessing 

its lien, we conclude that Breen was thus wrongly decided. 

The Breen formula is unworkable and is therefore abandoned 

In addition to violating the plain language of NRS 616C.215(5), 

the Breen formula has proven unworkable both in its application and 

purpose. Breen emphasized that the proffered formula was designed to 

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safeguard principles of fundamental fairness and equity. Breen, 102 Nev. 

at 84-85, 715 P.2d at 1073-74 (indicating that principles of equity, fairness, 

and justice should be considered when allocating litigation costs) (citing Sec. 

Ins. Co. of Hartford u. Norris, 439 S.W.2d 68, 70 (Ky. 1969)). Specifically, 

the formula was intended to prevent an insurer from being unjustly 

enriched. Id. at 85, 715 P.2d at 1074. 

Mathematically, the Breen formula was intended to split 

litigation costs and fees between the insurer and the insured in a manner 

that, in accordance with fundamental principles of fairness, led to recovery 

for both parties. Here, the Breen formula failed to provide a net positive 

recovery for AmTrust, demonstrating that it is mathematically flawed and 

unworkable. AmTrust paid Vasquez $177,335.59 in workers' compensation 

benefits and Vasquez subsequently received a $400,000 gross settlement. 

While the district court failed to perform the math, instead summarily 

opining that AmTrust would not be entitled to recovery under any 

application of the formula, were the district court to have performed the 

math, it would have likely performed the following calculations: 

$177,335.59 (AmTrust lien) 

AmTrust's share — — .915 

$193,706.71 (Settlement minus fees and cost) 

$16,371.12 (Net settlement minus lien) 

Vasquez's share — — .085 

$193,706.71 (Settlement minus fees and cost) 

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Under the formula, AmTrust's share of the third-party litigation costs and 

fees would be $188,858.42, which exceeds the sum it paid to Vasquez in 

workers' compensation benefits. This is also after AmTrust expended in 

excess of $50,000 in its own fees and costs to represent its interests in its 

subrogation claim. Ironically, and contrary to its intended equitable design, 

the Breen formula results in a net negative recovery for AmTrust. The 

formula further results in a double recovery for Vasquez, as he initially 

received workers' compensation payments in the sum of $177,335.59 and 

was then further able to recover a gross sum of $400,000 for the same 

injuries. This is an unintended result of a fundamentally flawed formula.4

Concurrent with its mathematical defects, the Breen formula 

has also been proven unworkable because the broad grant of discretion has 

led to inconsistent results. For instance, while we have indicated that the 

Breen formula does not apply where an insurer timely intervenes, see 

generally Breen, 102 Nev. 79, 715 P.2d 1070, or where an insurer "expend[s] 

its own monies and efforts to obtain an adequate settlement or judgment," 

State Indus. Ins. Sys. v. Eighth Jud. Dist. Ct., 111 Nev. 28, 33, 888 P.2d 911, 

914 (1995), overruled on other grounds by Am. Home Assurance Co. v. 

Eighth Jud. Dist. Ct., 122 Nev. 1229, 147 P.3d 1120 (2006), recent 

interpretations of our directives have so evolved that some district courts, 

including this one, now require that the insurer not only intervene early 

and expend its own fees in prosecution of its subrogated claims, but that the 

insurer's participation also be "meaningful." Reverting to the plain 

language of the statute win remove the ever-evolving and inconsistent 

4This result also contravenes NRS 616C.215's prohibition against 

double recovery for an insured. 

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application of Breen, as it simply allows insurers to assert a lien upon the 

total proceeds of the injured worker's claim. 

Here, AmTrust quickly intervened and participated in 

depositions, motions, and discovery. Reflective of these efforts, AmTrust 

expended over $50,000. Deeming these efforts to not be "meaningful," the 

district court subjected ArnTrust's lien recovery to the formula articulated 

in Breen, which resulted in a net zero recovery for AmTrust. This result is 

both unfair and inequitable as it not only deprived AmTrust of the amount 

it paid to Vasquez, but further forced AmTrust to absorb the $50,000 it 

expended during the third-party litigation. 

As the Breen formula has proven unworkable, it must be 

abandoned. The well-intended formula was designed to apportion litigation 

costs and fees between the insurer and insured in the name of fairness and 

equity. The unintended consequence, however, can result in the divestment 

of the insurer's statutory lien in favor of providing an insured with double 

recovery, as was the case here. Given the unworkable nature of the Breen 

formula, triggered by an insurer's failure to timely intervene in the 

insured's third-party litigation, continued reliance on the same is not 

warranted. 

Insurers may collect from the "total proceeds" of any recovery by an injured 

worker 

Having determined that Breen set forth an unworkable 

standard and departed from the plain language of the controlling statute, 

we turn our attention to Poremba and find a similar flaw. 

Three decades after Breen, in Porernba v. Southern Nevada 

Paving, an injured employee opened a workers' compensation claim that the 

insurer accepted and later closed. 133 Nev. 12, 14, 388 P.3d 232, 234-35 

(2017). The employee filed a tort claim and received a settlement designed 

to compensate for economic and noneconomic damages. Id. at 14, 388 P.3d 

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at 235. After receiving the settlement, the employee requested to reopen 

his workers' compensation claim under NRS 616C.390, but the insurer 

denied the request, claiming an offset based on the third-party settlement. 

Id. at 14-15, 330 P.3d at 235. 

In addressing whether settlement funds designated to 

compensate for noneconomic damages are assessable by an insurer, the 

Poremba court held that insurers may only assess settlement funds 

designated to compensate for expenses within NRS 616A.090's definition of 

compensation, not the total settlement proceeds. Id. at 18, 388 P.3d at 238. 

In reaching this holding, Poremba did not reference NRS 616C.215 or Breen, 

both of which indicate that an insurer's lien applies to the total settlement 

proceeds, not just those proceeds designated to compensate for expenses 

covered by NRS 616A.090. Thus, Porernba's limitation stands in direct 

conflict with both precedent and the plain language of the controlling 

statute.5

As demonstrated by the instant case, Poremba has left courts 

confused. Under Poremba, uncertainty as to when an insurer may assess 

the total proceeds of a third-party settlement and when an insurer may only 

assess the settlement portion designated to compensate for expenses 

covered by NRS 616A.090 has loomed in lower courts. We now clarify that 

an insurer may assess the total proceeds of a third-party settlement, even 

where the matter is reopened pursuant to NRS 616C.390 and irrespective 

of whether the proceeds are designated as economic or noneconomic in 

nature. 

5We also note our concern that under Poremba's distinction between 

economic and noneconomic damages, litigants could be motivated to 

structure settlements in a manner that would unjustly minimize an 

insurer's statutory lien. 

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Based on the above-recognized errors in Breen and Porernba, we 

conclude that strict adherence to these precedents is not warranted. We 

therefore overrule Breen and Porernba to the extent that they conflict with 

NRS 616C.215(5) and this opinion. Litigants and courts should now rely 

wholly upon NRS 616C.215(5) and applicable surrounding statutes when 

adjudicating workers' compensation liens. With this course correction, we 

return the issue of regulating workers' compensation liens to the 

Legislature. Cf. Moranz v. Harbor Mall, LLC, 502 P.3d 488, 500-01 (Haw. 

2022) (applying a statute requiring insurers to bear a pro-rata share of the 

third-party litigation costs and fees); Knapp v. Tenn. Gas Pipeline Co., 829 

A.2d 1052, 1053 (N.H. 2003) (applying a statute requiring courts to divide 

third-party litigation costs and fees as "justice may require"); Jones v. 

Pringle & Herigstad, P.C., 546 N.W.2d 837, 840-41 (N.D. 1996) (applying a 

statute outlining the percentage-based distribution of third-party 

settlement funds).6

CONCLUSION 

When a workers' compensation insurer pays benefits to an 

insured, NRS 616C.215(5) provides that the insurer has a lien against the 

total proceeds of any recovery the insured may collect from a third party. 

In Breen and Porernba, we deviated from the plain language of the statute, 

and we now correct course by overruling the portions of those cases 

6AmTrust also argues that the district court erred when it dismissed 

its complaint against the aforementioned third-party defendants; however, 

as the third-party defendants are not parties to the instant appeal, we do 

not address this contention. 

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inconsistent with the statute. We therefore reverse the district court's order 

adjudicating the workers' compensation lien and remand the case for 

further proceedings consistent with this opinion. 

Lee 

We concur: 

 C.J. 

Cadish 

J. 

Stiglich 

Picky J. 

Pickering 

(74 Herndon 

Iftwo J. 

Parraguirre 

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