California Appeals Court Holds Subrogation Includes “All Benefits” Paid by Employer in Slip & Fall Indemnity Case

A plaintiff sued Wal-Mart for injuries she sustained at one of Wal-Mart’s stores while acting within the course and scope of her employment with Acosta, Inc. The trial court found Wal-Mart liable for the plaintiff’s injuries. Under California Labor Code sections 3852 and 3856, appellant Hartford Accident & Indemnity Company (Hartford) applied for a lien on the plaintiff’s judgment to obtain reimbursement for the California workers’ compensation benefits it paid her. Although the judgment included compensation for her medical expenses, it did not include compensation for her lost wages. The court granted Hartford a lien on the judgment but reduced the lien amount.

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In August 2012, the plaintiff was working for Acosta when she fell and injured herself on Wal-Mart’s premises. Hartford was Acosta’s workers’ compensation insurer and paid the victim more than $152,000 in benefits, including more than $115,000 in medical expenses and roughly $37,000 in temporary disability indemnity for her lost wages.

In July 2014, following a three-day bench trial, the court found Wal-Mart 100 percent at fault and entered judgment against Wal-Mart for $355,000, including $178,000 in past medical expenses, $102,000 in future medical expenses, and $75,000 in past and future pain and suffering. Although the complaint sought lost wages and earning capacity, the court did not award her damages for these items because she did not ask for them at trial.

Hartford filed a notice and application for a lien on the judgment, based on the workers’ compensation benefits it paid to the victim. The trial court issued an order to show cause why it should not grant the requested lien. The plaintiff filed an opposition, arguing the court should reduce the lien amount by the nearly $37,000 Hartford sought for the temporary disability benefits it paid because she did not present evidence regarding those payments at trial, and therefore the court did not award her that amount as damages.

After a hearing, the trial court found the reasonable amount of attorney fees and costs the plaintiff incurred was roughly $63,000, and it granted Hartford a lien on the judgment for nearly $53,000. The court provided no explanation on how it determined the amount of the lien, but the parties agreed the court excluded from the lien the disability indemnity payments Hartford made because the amount Hartford sought ($152,489.99) minus both the reasonable attorney fees and costs the court found ($62,623.66) and the disability indemnity payments ($36,929.32) equaled the amount of the lien allowed by the court ($52,937.01). Hartford appealed the trial court’s post-judgment order, arguing the court exceeded its authority by reducing the lien amount for any item other than reasonable attorney fees and costs.

The California Appeals Court for the Fourth District agreed with Hartford, reasoning that section 3856’s plain language and related precedent granted Hartford a first lien on the judgment in the amount it paid the victim for workers’ compensation benefits. Her choice not to seek lost wages at trial did not diminish Hartford’s lien rights under California law.

The court therefore modified the post-judgment order granting Hartford a lien on the victim’s judgment against Wal-Mart to include $36,929.32 in disability benefits that Hartford paid her, and it affirmed the modified order granting Hartford a lien in the increased amount of $89,866.33. It further held that Hartford should recover its costs on appeal.

The premises liability lawyers at Neumann Law Group represent victims throughout the Los Angeles area. Call us at (213) 227-0001 for a free consultation.

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