4th DCA Grants CWCI Request to Publish Duncan v. Wal-Mart Ruling

The 4th District Court of Appeal has granted CWCI’s request to publish its recent ruling in Duncan v. Wal-Mart Stores; The Hartford, a civil case in which an injured worker sued Wal-Mart for injuries she sustained at one of their stores while acting within the course and scope of her employment.  The trial court found Wal-Mart liable for the claimant’s injuries and awarded her $355,000 for medical, pain and suffering.  The workers’ comp insurer subsequently applied for a lien on that judgment, seeking reimbursement for the benefits it had paid ($115,000 for medical care and $37,000 for temporary disability).  The injured worker argued that the comp carrier should not be entitled to recover TD benefits because she had not sought damages for lost wages at trial. The court agreed with the injured worker, granting the insurer a lien on the judgment, but reducing the lien amount to exclude the TD payments.

The insurer appealed that order, arguing the court lacked authority to reduce the lien amount for any item other than reasonable attorney fees and costs.  The Appeals Court concurred and modified the trial court’s order, holding that the plain language of LC §3856 grants workers’ comp insurers the first lien on the judgment in the amount it paid to the injured employee for workers’ comp benefits.  In its ruling, the Appeals Court noted that the applicant’s choice not to seek lost wages at trial did not diminish the insurer’s lien rights to recover reimbursement of all forms of benefits paid, including indemnity benefits, specifically stating:  “The employer’s lien attaches to the entire judgment the employee obtained, including any award for pain and suffering or other damages that the employee cannot recover through the workers’ compensation system.”

There are two very important aspects of this decision: 

1. a workers’ compensation insurer can be reimbursed for damages that the injured worker did not claim, such as lost wages/TD; and
2. The entire award is subject to the employer’s lien rights, so the insurer can obtain full reimbursement from a civil damages award — even where the civil award is intended to compensate for losses such as pain and suffering that cannot be compensated in workers’ comp.

The publication of this ruling means it may be cited as an authoritative interpretation of the law in future cases, and will be binding on the Appeals Board and WCJs.

BY/