Opinion ID: 1760577
Heading Depth: 1
Heading Rank: 2

Heading: SubrogationSection 287.150

Text: Claimants argue that Employer is not entitled to subrogation of the compensation benefits awarded. We disagree. Claimants first contend that the Commission concluded that Employer has no rights of subrogation for compensation benefits. In his decision, the ALJ calculated the compensation and death benefit, in part, by using the birth date of the youngest claimant and assuming death benefits would be payable until he reached the age of twenty-one. The Commission found that the ALJ's prospective calculation of the compensation and death benefit based on the benefits that may have been payable for the youngest claimant was improper. The Commission stated that if the youngest claimant was a full-time student he could be entitled to benefits until age twenty-two, Claimants could all die before age eighteen, and Claimants could become active duty members of the armed forces or become physically or mentally incapacitated from wage earning. See section 287.240.(4)(b). The Commission found these possibilities made it impossible to determine the amount of benefits that would be paid. The Commission concluded that along with the increase in compensation owed from the date of Employee's death until the ALJ's award, the increase in compensation and death benefit under section 287.120.4 should be applied as the compensation became due. The Commission's decision refers to weekly compensation payments of $172.71 and a fifteen percent increase beginning February 21, 1996, the date of the ALJ's award. [6] Claimants suggest the Commission ordered Employer to continue to pay weekly death benefits and a fifteen percent increase; therefore, the Commission concluded that Employer has no subrogation rights for compensation benefits. In his decision, the ALJ specifically rejected Claimants' argument that due to its safety violations Employer waived all subrogation rights. The Commission modified the ALJ's award to the extent indicated in its decision. The Commission did not address Claimant's waiver argument and, therefore, adopted the ALJ's decision. The Commission recalculated the amount of the increase in the compensation and death benefit because of certain errors by the ALJ. [7] This recalculation does not reflect that the Commission was modifying the ALJ's decision regarding Claimants' argument of waiver. Claimants next contend that it is inequitable for Employer to be entitled to subrogate the compensation awarded because it violated Missouri safety statutes. Section 287.150 governs subrogation rights of employers. This section has no provision that an Employer forfeits it subrogation rights because of its fault or specific violations of state safety statutes. Missouri case law does not support Claimants' contention. An employer's negligence is not a factor in an action against a third party brought by an employer under the subrogation statute. General Box Co. v. Missouri Utilities Co., 331 Mo. 845, 55 S.W.2d 442, 449 (1932). In General Box , the dependents of an employee who died from injuries arising out of and in the course of employment were awarded compensation benefits. Id. at 443. Under Missouri's then subrogation statute, section 3309, RSMo 1929, the employer brought a wrongful death action against a third party, electric company, alleging the company's negligence caused the employee's death. The company pleaded as an affirmative defense that the employer's negligence was the cause of the employee's death. Id. at 444. The Court held that the subrogation statute made no exception for the subrogation rights of the employer to recover against a negligent third party based on any negligence of the suing employer concurring with or contributing to the third party's negligence. Id. at 445. The Court stated that the sole test of a third party's liability to the subrogated employer is the liability of the third party to the injured employee or dependents, and it was no defense for the third party to show that the employer was concurrently and contributorily negligent. Id. In a later case involving an employee's action against a third party, the Court considered the third party's argument that it was improper to permit the employee to recover for the concurrent negligence of the third party and the employer, because it would permit the employer to profit by its own negligence. Liddle v. Collins Construction Company, 283 S.W.2d 474, 478 (Mo. 1955). Relying on General Box , the Court rejected this argument. Id. Furthermore, it has been held that without a specific indemnity agreement, an employer is not liable to the non-employer defendant for any sums that the latter might be responsible for in tort to the injured plaintiff-employee. Martin v. Fulton Iron Works Co., 640 S.W.2d 491, 496 (Mo.App.1982). These cases notwithstanding, Claimants argue other jurisdictions have decided that an employer's negligence is a factor to be considered in determining the employer's subrogation rights. Roe v. Workmen's Compensation Appeals Board, 12 Cal.3d 884, 117 Cal.Rptr. 683, 528 P.2d 771, 774-776 (Ca. 1974); Liberty Mutual Insurance Company v. Adams, 91 Idaho 151, 417 P.2d 417, 421-423 (Id.1966). The decisions in these states are in the minority. 2B Arthur Larson & Lex K. Larson, The Law of Workmen's Compensation, sections 75.22, 75.23 (1996). For the following reasons, we decline to adopt the minority rule. Missouri's workers' compensation statutes provide a no-fault system of compensation for workers. An employer subject to the statutes is liable to furnish compensation irrespective of negligence for an employee's personal injury or death arising out of and in the course of employment. Section 287.120.1. Accordingly, there may be instances where compensation is owed despite a lack of negligence by an employer. The purpose of the subrogation statute is to protect and benefit the employer liable for compensation, and the statute is designed to afford indemnity for compensation payable by the employer. McCormack v. Stewart Enterprises, Inc., 916 S.W.2d 219, 224 (Mo.App.1995). The statute prevents an employee from receiving a double recovery, which has been referred to as an `evil to be avoided.' Id. (citation omitted). In addition, an employer does not escape liability for violating state statutes. Section 287.120.4 provides for an increase in the compensation and death benefit when an employee's injury is caused by the failure of an employer to comply with a state statute. Finally, section 287.150 does not distinguish between an employer whose fault contributed to an employee's death or injury and an employer that was free of fault. If we were to adopt the minority rule, this would create a substantial exception to the subrogation statute, namely that an employer is only entitled to subrogation when it is free of fault. This is more properly a function of the legislature. Claimants also contend that Missouri's adoption of comparative fault bars Employer's subrogation rights. The adoption of comparative fault does not amend the statute governing the rights of the employer to recoup compensation payments from a third-party tort-feasor. Rogers v. Home Indemnity Co., 851 S.W.2d 672, 676 (Mo.App.1993). In Rogers, the employee settled his negligence suit against a third party for $65,000, based on a total sum of $130,000, which was reduced fifty percent because of the employee's stipulated percentage of fault. Id. at 673. The trial court calculated the employer's insurer's subrogation interest as $23,752.97 using the formula set out in Ruediger v. Kallmeyer Brothers Service, 501 S.W.2d 56, 59 (Mo. banc 1973). Id. at 674. The employee argued that in light of the adoption of comparative fault the insurer's interest of $23,752.97 should be reduced fifty percent, the amount of proportionate fault assessed to the employee. Id. In rejecting this argument, the Court held that under the subrogation statute an employer is entitled to reimbursement for amounts paid to an employee for workers' compensation benefits from any recovery against a third-party tortfeasor and that comparative fault played no part in the amount due the employer. Id. at 676. The Court did note that the employer was not at fault. Id. at 673. However, this does not alter the analysis. As held in Rogers, the adoption of comparative fault does not amend the subrogation statute. [8] In addition, Missouri's adoption of comparative fault has not altered the rule regarding a third party's action against an employer for contribution. Sweet v. Herman Bros., Inc., 688 S.W.2d 31, 32-33 (Mo.App.1985); See Redford v. R.A.F. Corp., 615 F.Supp. 547, 548-549 (W.D.Mo.1985). Employer is entitled to subrogation of compensation benefits including medical expenses as determined by the Commission. McCormack, 916 S.W.2d at 226. The Employer's right to subrogate as to the amount of the increase in the compensation and death benefit under section 287.120.4 is no different from the right to subrogate as to the amount of the other compensation awarded. As noted earlier, section 287.120.4 states that the compensation and death benefit shall be increased. The statute makes no attempt to differentiate the part of the award calculated under other provisions of chapter 287 and the part of the award calculated under section 287.120.4. Subrogation is governed by section 287.150. That section specifically provides: [T]he employer shall be subrogated to the right of the employee or to the dependents and the recovery shall not be limited to the amount payable as compensation to such employee or dependents, but such employer may recover any amount which such employee or [the] dependents would have been entitled to recover. Any recovery by the employer against such third person, in excess of the compensation paid by the employer shall be paid forthwith. (Emphasis added.) This section likewise makes no distinction between the part of the compensation and death benefit computed under section 287.120.4 and the part of the compensation and death benefit computed under other provisions of chapter 287. In light of the clear language of the statutes, the Commission was in error in determining that Employer forfeited its right to subrogation of the increased compensation and death benefit under section 287.120.4. This part of the Commission decision is reversed.