Opinion ID: 1057402
Heading Depth: 1
Heading Rank: 5

Heading: The Motion for Substitution of Parties

Text: ¶ 27. Defendant would also have us find error in the superior court's denial of defendant's motion for substitution of CVPS' workers' compensation insurance carrier as plaintiff following the workers' compensation settlement. We decline to do so. ¶ 28. DCS concedes that plaintiff was the real party in interest at the beginning of this litigation, but contends that plaintiff s subsequent settlement of her workers' compensation claim made CVPS the real party in interest, by operation of 21 V.S.A. § 624. In support of this claim, DCS notes that, after the settlement, plaintiff was represented by counsel who had represented CVPS in the workers' compensation proceeding. Although DCS cites Professional Conduct Rule 1.7(b) which bars representation of a client when that representation may be materially limited by the lawyer's responsibilities to . . . a third personin support of this position, DCS does not allege that the rule was actually violated. Rather, DCS cites Rule 1.7 for the proposition that counsel could not have represented plaintiff had her interest in this action not become subservient to that of her employer. ¶ 29. Section 624 of Title 21 governs recoveries from third parties in workers' compensation cases. First, § 624(a) provides that a workers' compensation recovery is not an employee's exclusive remedy when a third party is also liable for dam ages. As DCS notes, § 624(a) permits an employer or its insurance carrier to commence an action against liable third parties if the employee fails to do so. Section 624(b) governs settlement of claims by employees, employers, and their respective insurance carriers, and § 624(c) provides that settlements by employees do not bar further action by the employer or its insurance carrier. Section 624(e) provides that damages recovered by employees from third parties will be applied as follows: first, the employer (or its insurance carrier) shall be reimbursed for any amounts paid or payable to the date of recovery; second, the employee is paid the balance of the recovery, but that payment is treated as an advance on any future payments due to the employer. ¶ 30. The Vermont Rules of Civil Procedure require that every action be prosecuted in the name of the real party in interest. V.R.C.P. 17(a). Vermont's Rule 17 is, in pertinent part, identical to the federal rule. See F.R.C.P. 17(a) (Every action shall be prosecuted in the name of the real party in interest.). The effect of the federal rule is that the action must be brought by the person who, according to the governing substantive law, is entitled to enforce the right. 6A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 1543, at 334 (2d ed.1990). However, it is not necessary that there always be only one real party in interest. Prevor-Mayorsohn Caribbean, Inc. v. Puerto Rico Marine Mgmt., Inc., 620 F.2d 1, 4 (1st Cir.1980). The identical provision of the Vermont rule must be construed to the same effect. ¶ 31. We therefore do not agree with DCS that plaintiff was no longer a real party in interest after she settled her workers' compensation claim. Section 624(e) makes clear that, although CVPS or its insurance carrier would, after the settlement, have had a right to reimbursement from any recovery Ms. Smedberg made in her claim against DCS, plaintiff remained an interested party. Any amount recovered beyond the amount due to CVPS as reimbursement would have been hers as an advance on future workers' compensation payments. Any amount greater than the sum of past and future workers' compensation payments would be plaintiff's alone. ¶ 32. Because 21 V.S.A. § 624(a) explicitly authorizes injured employees to proceed against third parties, plaintiff is a real party in interest under V.R.C.P. 17. The fact that 21 V.S.A. § 624(e) allows an employer to be reimbursed from recoveries awarded to employees does not compel a different result. We also find DCS's argument from the rules of professional conduct unpersuasive. Accordingly, we find no error in the superior court's denial of DCS's motion for substitution of parties.