Missouri: Commission Exceeded Authority in Ordering Subrogation Payment

A Missouri appellate court held that the state’s Industrial Relations Commission’s power to order an employee (and his spouse) to repay some $41,000 in medical benefits following the successful settlement of a third-party civil action for an amount far exceeding the subrogation lien could not stand since the Commission did not have jurisdiction over all required parties. The employee and his wife sued Tyson Foods and settled their case for $730,000. Legion Insurance had paid $41,000 in medicals before it became insolvent. Missouri Property & Casualty Insurance Guaranty Association (MIGA) took responsibility for the claim but did not pay any additional benefits. As to the subrogation issue, the ALJ found: (1) the entire net recovery from the Tyson lawsuit was subject to the § 287.150.3 subrogation lien; and (2) because MIGA stood “in the shoes” of Legion, MIGA was entitled to be reimbursed $41,293.40 for medical bills paid by Legion. The court of appeals held that the Commission had exceeded its jurisdiction. Noting that there had been no segregation of the wife’s consortium interest from the interest of the injured employee, the court added that the wife’s interest was not subject to the subrogation lien. She was not a party to the workers’ compensation case and no statute provided for her joinder. As to MIGA and Legion, the former was not entitled to reimbursement and the latter could not be paid since it was in liquidation. The Director of the Department of insurance was the appropriate party to collect debts owed to Legion, but like the employer’s wife, the Director had not been joined as a party. The portion of the Commission’s final award adjudicating the statutory subrogation dispute was, therefore, reversed.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is a leading commentator and expert on the law of workers’ compensation.

LexisNexis Online Subscribers: Citations below link to Lexis Advance. Bracketed citations link to lexis.com.

See Graham v. Latco Contractors., Inc., 2015 Mo. App. LEXIS 379 (Apr. 7, 2015) [2015 Mo. App. LEXIS 379 (Apr. 7, 2015)]

See generally Larson’s Workers’ Compensation Law, § 117.06 [117.06]

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law.