Opinion ID: 1864717
Heading Depth: 3
Heading Rank: 2

Heading: Worker's compensation carrier's statutory lien for UIM.

Text: Unlike National Farmers, U.S. West has no contractual policy provision providing for a setoff of UIM benefits for worker's compensation benefits received. However, as the worker's compensation carrier, U.S. West has a statutory worker's compensation lien if the employee collects damages from another person. SDCL 62-4-39 provides: If compensation has been awarded and paid under this title and the employee has recovered damages from another person, the employer having paid the compensation may recover from the employee such an amount equal to the amount of compensation paid by the employer to the employee, less the necessary and reasonable expense of collecting the same. National Farmers asserts that the statutory lien is not applicable where the damages received are UIM benefits from a self-insured employer. We are aware there is a jurisdictional split as to whether a worker's compensation carrier's subrogation rights extend to actions based on an employer's UIM policy. See, e.g., Manning v. Fletcher, 324 N.C. 513, 379 S.E.2d 854 (1989) (finding statute permits reduction of UIM by the amounts paid as worker's compensation); Christy, 510 A.2d 22 (holding self-insurer is required to provide UIM to employee but has statutory lien on any worker's compensation benefits paid); Terry v. Aetna Cas. & Sur. Co., 510 S.W.2d 509 (Tenn.1974); cf. Knight v. Insurance Co. of North America, 647 F.2d 127 (10th Cir.1981) (finding subrogation is allowed only for tort damages and UIM sounds in contract); Travelers Ins. Co. v. National Farmers Union Prop. & Cas. Co., 252 Ark. 624, 480 S.W.2d 585 (1972); Janzen v. Land O'Lakes, Inc., 278 N.W.2d 67 (Minn.1979). The statutes interpreted in many of the cases disallowing a worker's compensation lien have language limiting subrogation only to actions in tort. SDCL 62-4-39 clearly has no such restriction and allows reimbursement if the employee has recovered damages from another person. Moreover, allowing the lien is consistent with South Dakota's public policy of avoiding duplicate recovery for the same injury. SDCL 62-4-38; St. Paul Fire & Marine Ins. v. Farner, 648 F.2d 489, 491 (8th Cir.1981). Therefore, U.S. West has a statutory lien for any worker's compensation that it may apply against its liability for UIM. Defendant Bang's argument that allowing a lien will result in procedural complications requiring a plaintiff to choose between proceeding against either a tort-feasor or his worker's compensation carrier has no merit. A plaintiff is not required to determine the extent of worker's compensation before proceeding with a tort claim. Helmbolt v. Lemars Mut. Ins. Co., 404 N.W.2d 55, 59 (S.D.1987). In conclusion, we hold that a self-insurer is required to provide UIM, that an employee may recover UIM from his employer if his injury was caused by a third-party tort-feasor, that the statutory UIM limit for a self-insurer is $100,000 absent a request for additional coverage, that UIM policy provisions purporting to set off worker's compensation are invalid and that an entity that is self-insured for worker's compensation has a statutory lien against any self-insured UIM benefits for compensation paid. WUEST, HENDERSON, SABERS and AMUNDSON, JJ., concur.