West Virginia: Insurer Has No Subrogation Interest Since Benefits “Paid” Under Policy Were Less than Employer’s Large Deductible

Under the West Virginia subrogation statute [W. Va. Code § 23–2A–1], a party is entitled to a lien only to the extent that it has actually paid a sum of money. Accordingly, where a mining electrician suffered catastrophic injuries when he was struck and run over by an underground shuttle car and the electrician’s employer paid $1.8 million in benefits because its workers’ compensation insurance policy contained a $2 million deductible per claim, the insurer had no subrogation interest in a third-party products liability action filed by the electrician and his wife against various companies that had designed and/or manufactured the shuttle car; it had paid nothing. Allowing a lien to the carrier would result in a windfall. Moreover, because the employer/mining company had also settled an intentional tort action filed against it by the plaintiffs and had signed an agreement setting “any and all claims related to the Subject Incident,” the employer was also barred from claiming a subrogation lien on any settlement proceeds in the products liability action.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is the co-author of Larson’s Workers’ Compensation Law (LexisNexis).

LexisNexis Online Subscribers: Citations below link to Lexis Advance.

See Old Republic Ins. Co. v. O’Neal, 2016 W. Va. LEXIS 505 (June 10, 2016)

See generally Larson’s Workers’ Compensation Law, § 116.08.

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

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