Opinion ID: 2447106
Heading Depth: 2
Heading Rank: 2

Heading: the subrogation agreement

Text: Turning to the assignments of error made by the petitioner in the Court of Appeals and repeated here, to the effect that the State Board is without power to require a subrogation agreement in cases of this nature, we are of the opinion that the assignments of error are not well taken. Under a general statute pertaining to the Board of Claims, which was apparently not repealed by the Military Code of 1970, members of the Tennessee state guard while on active duty or in training shall be considered as employees of the state... . T.C.A. § 9-808. In the new Military Code, as previously pointed out, there are express provisions for the payment of benefits in case of death or injury to guardsmen in line of duty. With respect to death benefits, T.C.A. § 7-147(1)(b) provides: The death benefit so paid shall be the same as those as are now provided under the workmen's compensation laws of this state or as said law shall be hereinafter amended... . With respect to injuries not resulting in death, the Board of Claims is directed to compensate a guardsman. ... in the same manner and to the same extent as now provided under the workmen's compensation law of this state, or as said law shall hereinafter be amended... . T.C.A. § 7-147(2). Other employees of the state government and its departments are also entitled to benefits measured by the provisions of the state workmen's compensation law, with certain exceptions not here pertinent. T.C.A. § 9-807. It thus appears that the State is placed in the position of an employer of National Guardsmen and other State employees sustaining injury in line of duty, and, in effect, the State's workmen's compensation law and its benefits are made applicable to such personnel. Any employer in the state operating under the Tennessee workmen's compensation law is, by statute, given a right of subrogation, to the extent of compensation benefits paid or payable, against any third-party claim or right of action held by the employee or his dependents. T.C.A. § 50-914. These provisions were in the original workmen's compensation law enacted in 1919. Prior to 1949, however, an employee was required to elect between a third-party claim or workmen's compensation benefits; he could not pursue both remedies. Wilson v. Chattanooga, 179 Tenn. 234, 165 S.W.2d 373 (1942); Keen v. Allison, 166 Tenn. 218, 60 S.W.2d 158 (1933). Since a basic amendment contained in Chapter 277 of the Public Acts of 1949, the employee has been entitled to receive compensation and still pursue his remedy against a third party, subject to the right of subrogation as aforesaid. The details of the right of subrogation, including such matters as counsel fees for the employer and the employee, have been spelled out in some detail in the statute by amendments subsequent to 1949. T.C.A. § 50-914, containing the right of subrogation, has remained in its present form since 1963, without further amendment. In addition to the statutory right of subrogation this Court has held that an employer or its insurer who pays medical or other benefits to or for an injured employee in excess of those required by the Workmen's Compensation Act is entitled to recover those excess benefits, by way of subrogation, from a third-party tortfeasor. U.S.F. & G. Co. v. Elam, 198 Tenn. 194, 278 S.W.2d 693 (1955). The Court has also permitted the doctrine of equitable subrogation to be applied generally when one person discharges the debt or obligation of another. Castleman Constr. Co. v. Pennington, 222 Tenn. 82, 432 S.W.2d 669 (1968). The State Board of Claims has adopted its Rule 13A, to the effect that no disbursements will be made to a State employee by the Board of Claims until a subrogation agreement has been executed by him, providing that the State will be reimbursed to the extent of one-third of any sum he may receive from such third party, but only to the full amount expended if it should be less than one-third of the recovery. The rule further provides that no part of the recovery due the State shall be diminished by any collection fees or for any reason whatsoever. This rule is not strictly in accord with the provisions of T.C.A. § 50-914, governing workmen's compensation proceedings generally. The subrogation or reimbursement rights of the employer are not limited to any particular percentage of the third-party recovery under the general statute, and there are provisions for diminishing the amount of the award to the employer by reasonable counsel fees. Nevertheless, the rule of the Board of Claims, on the whole, is far less stringent, insofar as the employee is concerned, than the general statute, and falls well within the confines and limits of T.C.A. § 50-914. On behalf of the petitioner it is contended, with considerable force and logic, that the meaning and purpose of the statutes governing the Board of Claims, and those of the Military Code under consideration here, are simply that the benefit schedules contained in the workmen's compensation law of the state shall be used to measure an award made to an injured or deceased employee. It is insisted that the subrogation features of the state workmen's compensation law are not incorporated by reference either into the general statutes governing the Board of Claims or into the Military Code, and that the State Board has exceeded its authority in so interpreting these statutes and in requiring a subrogation agreement such as that involved here. This, at best, is a matter of judgment and of the interpretation of the statutes. Rule 13a has been in force for a considerable period of time, and represents a reasonable interpretation of the statutes by the Board of Claims. The subrogation right and its accompanying statutory lien in favor of an employer have been integral parts of the Tennessee workmen's compensation system since 1919. All workmen's compensation awards in the state are governed by and are subject to the rights of the employer, when third-party claims are involved. Since the State of Tennessee is placed in the role of an employer as to claimants such as those involved here, and since awards to state employees are governed by the terms and provisions of the Workmen's Compensation Act, we do not consider that the conclusion reached by the State Board in the present case is an unreasonable one, to the effect that the State is entitled, as any other employer, to be subrogated when a third-party is or may be liable to the injured employee. Accordingly we are of the opinion that the State Board has made an interpretation and construction of both the general statutes governing that Board and of the Military Code which is a reasonable one. If the Legislature has had in the past any contrary intention, it has not so indicated. If the interpretation made by the Board is not that intended by the Legislature, the latter body is, of course, free at any time to amend the statutes in question so as to delete the subrogation requirements imposed by the Board. It results that the judgment of the Board of Claims is affirmed, and the cause is remanded to that Board for such further proceedings as may be appropriate. All costs incident to the appeal are taxed to the Board of Claims. FONES, C.J., and COOPER and BROCK, JJ., concur. HENRY, J., not participating.