Opinion ID: 7011523
Heading Depth: 2
Heading Rank: 3

Heading: The City’s Claim for Damages

Text: The Board contends that the City may not recoup anything on account of disability benefits paid to Vasquez, because the San Diego City Employees’ Retirement System (SDCERS), not the City, made the payments. Because the City was obligated to pay additional funds to SDCERS as a result of Defendants’ allegedly tortious conduct, the district court properly denied the Board’s motion for partial summary judgment on this theory. The City introduced evidence showing that, as a result of Vasquez’ early disability retirement, it will be forced to pay more into the disability retirement system than it otherwise would. Vasquez is entitled to greater benefits on account of his early, disability retirement than he would have obtained under an ordinary service retirement pension. The City argues that, under California Labor Code § 3852, it is therefore entitled to recover the excess from Defendants. Nothing in section 3852 provides that an employer may recover only those funds that it pays directly to an injured employee. To the contrary, the statute gives employers the right to subrogation for all compensation that it “becomes obligated to pay” as a result of a third party’s tortious conduct. The City has presented evidence that it became “obligated to pay” additional money to SDCERS as a result of Defendants’ alleged negligence. The statute allows the City to pursue an action against Defendants. Our reading of the statute is consistent with California cases interpreting section 3852. See, e.g., Associated Indem. Corp. v. Pac. S.W. Airlines, 128 Cal.App.3d 898, 180 Cal.Rptr. 685, 688-89 (1982) (allowing suit against third-party tortfeasor to recover payments made to Department of Industrial Relations before section 3852 was amended to provide for such suits explicitly); Travelers Ins. Co. v. Sierra Pac. Airlines, 149 Cal.App.3d 1144, 197 Cal.Rptr. 416, 422 (1983) (“The scheme created by section 3852 is to hold the third-party tort-feasor liable for all consequences of his acts. Any amount which the employers or their insurer is obligated to pay, including those payments made to the state under section 4706.5, subdivision (a), is inclusive of the overall scheme.”). Nor can there be a double recovery, as Defendants fear, because whatever money SDCERS obtains from the City will offset the damages, if any, that SDCERS otherwise might be able to recover from Defendants. REVERSED and REMANDED for further proceedings consistent with this opinion.