Texas: State Supreme Court Answers Complex Question as to Credit Allowed to Carrier in Third Party Action with Multiple Beneficiaries

Under Texas law, consistent with that in the large majority of states, a workers’ compensation carrier has a subrogation interest in a third-party civil action to the extent of its prior payments for benefits and to treat the amount recovered as an advance against the carrier’s future payment obligation.  Here, for example, the third-party settlement involved a surviving spouse who had remarried and, therefore, would not be entitled to receive future benefits, and a number of surviving children, who would be entitled to future benefits.  The trial court apportioned the largest share, some $350,000, to the surviving spouse and a smaller share, some $80,000, to the decedent’s children.  The core issue was whether the carrier was obligated to resume benefit payments after allowing for an $80,000 credit, or was it required to being such payments only after giving it a credit for the entire $430,000. Answering a question certified to it by the Fiifth Circuit Court of Appeals, the Supreme Court of Texas held that under these facts, their had been but a single, collective recovery, rather than separate recoveries by each beneficiary.  Accordingly, only after allowing the carrier a full credit of the $430,000 sum would it be required to reinstitute benefits payments.

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 State Office of Risk Management v. Carty, 2014 Tex. LEXIS 503 (June 20, 2014) [2014 Tex. LEXIS 503 (June 20, 2014)]

See generally Larson’s Workers’ Compensation Law, § 117.01 [117.01]

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

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