Opinion ID: 894976
Heading Depth: 1
Heading Rank: 2

Heading: The Carrier's Right to First Money

Text: The law governing this settlement is simple: the compensation carrier gets the first money a worker receives from a tortfeasor. [10] First-money reimbursement is crucial to the worker's compensation system because it reduces costs for carriers (and thus employers, and thus the public) and prevents double recovery by workers. [11] If an employee is killed in the course and scope of employment, the compensation carrier must pay benefits to the worker's legal beneficiaries (usually a spouse or minor children). [12] If the death was caused by a third party, the beneficiaries may bring wrongful death and survival claims, [13] and a carrier who pays benefits may do the same in the name of the beneficiaries or the employee. [14] If there is a recovery, rather than the employee owning the money and being forced to disgorge it, the carrier is first entitled to the money up to the total amount of benefits it has paid, [15] according to the following statutory plan:  any net recovery up to the amount of past benefits goes to the carrier; [16]  any recovery greater than past benefits but less than all future benefits goes to the beneficiary, but releases the carrier from future payments to that extent; [17]  any recovery greater than past and future benefits combined goes to the beneficiary. [18] There is nothing discretionary about this statute; a carrier's right to reimbursement is mandatory. In the words of the statute: The net amount recovered by a claimant in a third-party action shall be used to reimburse the insurance carrier for benefits, including medical benefits, that have been paid for the compensable injury. [19] Thus, until a carrier is reimbursed in full, the employee or his representatives have no right to any of such funds. [20] Obviously, the carrier did not get the first money when the trial court denied its subrogation claim and distributed the entire settlement to the Ledbetter estate, the plaintiffs' attorney, and the ad litem. The court of appeals correctly held the trial court abused its discretion in doing so.