456 S.W.3d 907 (Mo. App S.D. 2016)
Full Opinion: [Graham v. Latco Contractor, Inc]
Code(s): C009 Subrogation
Factual
Background:
In a case involving an unusual set of
facts, Claimant was employed by Latco Contractors to build and maintain chicken
houses. In the position, he was regularly exposed to chemicals and wastes
incidental to poultry farming. As a result of this exposure, Claimant developed
a nervous system disorder which would cause various issues, including loss of
consciousness due to insufficient oxygenation to the brain. Eventually, he was
unable to continue working for Employer. Claimant filed a claim for
compensation which was denied by Employer and he sought treatment on his own.
Employer was originally insured by Legion who originally paid some of the
medical in the amount of $41,293.40. Legion eventually became insolvent and
Missouri Property and Casualty Insurance Guarantee Association (“MIGA”) became
obligated to provide statutory coverage. MIGA did not pay any of Claimant’s
benefits. Claimant and his wife filed a separate civil action against Tyson
Foods for his injuries and for his Wife’s loss of consortium. That case was
settled for $730,000.00. Claimant and his wife shared the proceeds of this
settlement.
Commission Decision:
The ALJ found that Claimant was
permanently and totally disabled from the occupational injury alone. The ALJ
found that the entire net recovery from the Tyson lawsuit was subject to the
§287.150.3 subrogation lien and that because MIGA stands in the shoes of
Legion, MIGA was entitled to reimbursement of the $41,293.40 for medical bills
paid by Legion. On review, the Commission decided that MIGA was not entitled to
recover medical payments by Legion, as The Director of Insurance as the
liquidator, has the powers to collect debts and moneys owed to the insurer.
Analysis/Holding:
The Court determined that Wife’s portion
of the Tyson settlement was not subject to the statutory right of subrogation.
The Court found that the Wife is not a party to this claim, and joinder rules
found in Rule 52 of the Missouri Rules of Civil Procedure to not apply. It
would be a violation of due process to permit the Commission to affect Wife’s
rights and interests in a proceeding to which she is not and cannot be made a
party. The Director was also found not a party to this proceeding and the
Commission exceeded its powers. Cause reversed and remanded.
The Takeaway:
Subrogation liens cannot be assessed
against or on behalf of parties not named in the claim.