Opinion ID: 2222251
Heading Depth: 1
Heading Rank: 14

Heading: subrogation interest of health insurance carrier

Text: The single judge's order set forth the medical expenses she found to be compensable and stated that Principal Health Insurance Company (Principal), Dawes' health insurance carrier, should be reimbursed as its interest may appear for payments made on behalf of the plaintiff. The single judge did not specify how this reimbursement was to be made, ordering only that Wittrock pay for and on behalf of [Dawes] the medical and hospital expenses incurred by [Dawes] as a result of said accident and injury. Dawes argued to the review panel that the single judge had erred by failing to order that Dawes be reimbursed for expenses that had been paid either by him or by Principal. The review panel rejected this argument, stating that Dawes is not entitled to reimbursement for payments made by a health insurer. The review panel ordered that Principal be reimbursed. The review panel, relying upon Kidd v. Winchell's Donut House, 237 Neb. 176, 465 N.W.2d 442 (1991), ordered that on remand, the single judge should specify the amount of reimbursement. Dawes now assigns that the review panel erred in directing the single judge to determine the extent of Principal's subrogation interest in Dawes' workers' compensation award. Dawes' assignment of error has merit. The Workers' Compensation Court does not have jurisdiction to determine Principal's subrogation interest, if any, in Dawes' workers' compensation award. In Miller v. M.F.S. York/Stormor, 257 Neb. 100, 595 N.W.2d 878 (1999), an injured employee filed a petition in the Workers' Compensation Court, requesting compensation and seeking a determination as to the amount of credit to which the employer was entitled as a result of the employee's settlement of a third-party tort action filed in federal court. We concluded, however, that the Workers' Compensation Court did not have jurisdiction to make such a determination. Id. As a statutorily created court, the Workers' Compensation Court is a tribunal of limited and special jurisdiction and has only such authority as has been conferred upon it by statute. Id. The Workers' Compensation Court can only resolve disputes that arise from the provisions of the Nebraska Workers' Compensation Act. Miller, supra . In Miller, we held that the Nebraska Workers' Compensation Act did not confer jurisdiction on the Workers' Compensation Court to hear personal injury suits against nonemployers. The employee's suit against the tort-feasor at issue in that case did not arise under the provisions of the Nebraska Workers' Compensation Act, and the Workers' Compensation Court did not have jurisdiction to determine the amount of credit to which the employer may have been entitled. Miller, supra . The same principles of law apply here. A dispute between Dawes and Principal regarding Principal's subrogation interest, if any, does not arise under the provisions of the Nebraska Workers' Compensation Act. Subrogation is the substitution of one person who is not a volunteer, the subrogee (in this case, Principal), for another, the subrogor (Dawes), as the result of the subrogee's payment of a debt owed to the subrogor so that the subrogee succeeds to the subrogor's right to recover the amount paid by the subrogee. See Combined Insurance v. Shurter, 258 Neb. 958, 607 N.W.2d 492 (2000). A party's right to subrogate may arise under principles of equity, may be contractual, or may be set out in statute. Id. In this case, any subrogation interest of Principal must arise in equity or pursuant to Principal's health insurance contract. However, the Workers' Compensation Court does not have general equitable jurisdiction. See Anthony v. Pre-Fab Transit Co., 239 Neb. 404, 476 N.W.2d 559 (1991). Nor does any provision of the Nebraska Workers' Compensation Act afford the Workers' Compensation Court jurisdiction to resolve contractual disputes between employees and third-party insurers. Cf. Miller, supra . We conclude, therefore, that the Workers' Compensation Court does not have jurisdiction to determine whether, or to what extent, Principal may have a subrogation interest in the proceeds of Dawes' workers' compensation award. Dawes also correctly contends that any benefits to which he is entitled should be paid to him. Neb.Rev. Stat. § 48-130 (Reissue 1998) provides: No savings or insurance of the injured employee or any contribution made by him or her to any benefit fund or protective association independent of the Nebraska Workers' Compensation Act shall be taken into consideration in determining the compensation to be paid thereunder; nor shall benefits derived from any other source than those paid or caused to be paid by the employer as herein provided be considered in fixing compensation under such act. Pursuant to § 48-130, the payment of private insurance benefits does not entitle an employer to reduce an employee's benefits due under the Nebraska Workers' Compensation Act. Nunn v. Texaco Trading & Transp., 3 Neb.App. 101, 523 N.W.2d 705 (1994). While a private insurance policy may provide that benefits payable under the private insurance policy can be offset by workers' compensation benefits paid, that is a contract issue, and not a matter for the Workers' Compensation Court to resolve. See, Miller v. M.F.S. York/Stormor, 257 Neb. 100, 595 N.W.2d 878 (1999); Nunn, supra . Furthermore, Neb.Rev.Stat. § 48-147 (Cum.Supp.2002) provides that liability for compensation under [the Nebraska Workers' Compensation Act] shall not be reduced or affected by any insurance of the injured employee, or any contribution or other benefit whatsoever, due to or received by the person entitled to such compensation, and the person so entitled shall, irrespective of any insurance or other contract, have the right to recover the same directly from the employer. While both §§ 48-130 and 48-147 preclude an employer from reducing an employee's workers' compensation benefits due to the employee's private insurance, § 48-147 specifically provides that the employee has the right to recover the workers' compensation benefits directly from the employer. Kidd v. Winchell's Donut House, 237 Neb. 176, 465 N.W.2d 442 (1991), relied upon by the review panel, is not to the contrary. In Kidd, this court directed the Workers' Compensation Court to determine the subrogation rights of the then Nebraska Department of Social Services (DSS) in workers' compensation benefits awarded to a recipient of DSS medical assistance benefits. However, we did so based on Neb.Rev.Stat. § 68-716 (Cum. Supp.1988), which then provided: An application for medical assistance benefits shall give a right of subrogation to the Department of Social Services. Subject to sections 68-1038 to 68-1046, subrogation shall include every claim or right which the applicant may have against a third party when such right or claim involves money for medical care. The third party shall be liable to make payments directly to the Department of Social Services as soon as he or she is notified in writing of the valid claim for subrogation under this section. We held that pursuant to § 68-716, in a workers' compensation case, DSS and any third party liable to DSS were entitled to a determination of the subrogation interest. In Kidd, supra, the Workers' Compensation Court was required to determine the subrogation interest of DSS because the broad language of § 68-716 gave DSS a subrogation interest in every right or claim the applicant had against a third party, and required the third party (in that case, the employer) to make payments directly to DSS. Jurisdiction to decide the matter was conferred on the Workers' Compensation Court by statute. See Zavala v. ConAgra Beef Co., 265 Neb. 188, 655 N.W.2d 692 (2003) (Workers' Compensation Court possesses only such authority as is delineated by statute). In this case, however, there is no applicable analog to § 68-716. We conclude that the Workers' Compensation Court lacks jurisdiction to determine Principal's subrogation interest, if any, in Dawes' workers' compensation award. Dawes is entitled to the full measure of his compensation benefits, and any interest of Principal must be determined in another proceeding brought in a court of competent jurisdiction. See Miller v. M.F.S. York/Stormor, 257 Neb. 100, 595 N.W.2d 878 (1999). The order of the review panel is reversed to the extent that it directs the single judge to determine how Principal should be reimbursed, and the order of the single judge should be reversed to the extent that it states Principal should be reimbursed.