Holley v. Ace American Insurance Co.

2013 OK 88, 313 P.3d 917, 37 I.E.R. Cas. (BNA) 58, 2013 WL 5728104, 2013 Okla. LEXIS 120
CourtSupreme Court of Oklahoma
DecidedOctober 22, 2013
DocketNo. 110247
StatusPublished
Cited by25 cases

This text of 2013 OK 88 (Holley v. Ace American Insurance Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holley v. Ace American Insurance Co., 2013 OK 88, 313 P.3d 917, 37 I.E.R. Cas. (BNA) 58, 2013 WL 5728104, 2013 Okla. LEXIS 120 (Okla. 2013).

Opinions

REIF, V.C.J.

1 This Court is asked to decide whether Oklahoma law prohibiting subrogation of workers' compensation death benefits prevents Ace American Insurance Company (Insurer) from recouping death benefits it has paid to the widow of an Oklahoma worker killed at a jobsite in Texas. Insurer paid widow death benefits provided by Texas law and is seeking subrogation from tort damages widow also recovered in a Texas wrongful death case.

12 Insurer and widow agree that (1) the deceased worker's contract for employment was made in Oklahoma, (2) worker was killed in the scope of his employment at employer's jobsite in Texas, and (8) widow could elect to receive workers' compensation death benefits under either Texas law or Oklahoma law. The parties further agree that widow recovered both workers' compensation death bene[919]*919fits from employer and tort damages from third parties as provided by Texas law. They disagree, however, over the law that governs insurer's right to be subrogated from widow's tort damages to the extent of the workers' compensation death benefits it paid widow.

{ 3 Insurer has basically argued that Texas law allowing subrogation applies, because the workers' compensation death benefits and widow's tort recovery were both based on Texas law. The gist being that Oklahoma law cannot be applied, because widow did not invoke Oklahoma law to be compensated for the loss of her husband. In contrast, Widow has basically contended that her election to receive compensation for the loss of her husband under Texas law did not waive other rights given under Oklahoma workers' compensation law as a consequence of the deceased worker's Oklahoma contract of employment. In essence, Widow asserts that Oklahoma's subrogation prohibition applies to all benefits paid for the job-related death of an Oklahoma worker including those provided by Texas law or any other jurisdiction.

[ 4 Widow brought a declaratory judgment suit to resolve this controversy. The trial court ruled in favor of widow. Upon appeal by Insurer, the Court of Civil Appeals agreed that widow could seek other "benefits" under Oklahoma law, notwithstanding her election to seek compensation under Texas law. However, the Court also concluded that statutory law required widow to commence a proceeding by filing a claim to preserve and pursue further "benefits," like the subrogation prohibition. Noting that widow had never filed a claim with the Oklahoma Workers' Compensation Court, the Court of Civil Appeals ruled Texas law allowing subrogation applied, and not Oklahoma's anti-subrogation rule. Widow filed a petition for certiorari, seeking review of the opinion of the Court of Civil Appeals. This Court has previously accepted this case for review.

T5 The resolution of the controversy between the parties has required the trial court and Court of Civil Appeals to construe Oklahoma statutory law set forth in 85 0.8. 2001, § 4 1 and 85 0.8.8upp.2005, § 44(b)2. [920]*920This was the applicable law at the time of the worker's death on July 29, 2008. Statutory construction presents a question of law and lower court rulings in this regard are reviewed de novo. State ex rel. Oklahoma Tax Comm'n v. Sun Co., 2009 OK 11, 18, 222 P.3d 1046, 1048.

T6 The text of § 4 makes it clear that an Oklahoma employment contract is protected by "all the provisions of the Workers' Compensation Act of this state ... irrespective of where accident resulting in injury may occur." The text of § 44(b) similarly unequivocally provides that; "[The employer or his insurance carrier shall not have the right of subrogation to recover money paid ... for death claims or death benefits under the Workers' Compensation Act."

T7 The chief problem with the holding of the Court of Civil Appeals lies in construing the prohibition on seeking subrogation as a "benefit." Not every valuable right under the Workers' Compensation Act is a "benefit." See First Nat'l Bank of Belleville v. Poul Hughes Trucking Co., 1982 OK CIV APP 28, 11 6-10, 645 P.2d 1054, 1055 (interest on an unpaid award is not a benefit). The statutory prohibition against subrogation is not a "benefit," but rather a public policy protection and substantive element of the right to receive and obligation to pay death benefits.

18 "The right of an employee to compensation arises from the contractual relationship existing between the employee and the employer on the date of injury, and the statutes then in force form part of that contract and determine the substantive rights and obligations of the parties." Knoit v. Halliburton Services, 1988 OK 29, 14, 752 P.2d 812, 818. "The right to compensation and the obligation to pay such benefits are vested, and become fixed by law at the time of the injury." Id. (emphasis added). More particularly, this Court has said "Rights of survivors of a deceased employee [to] claim death benefits ... become fixed upon date of death and are determinable under the law in effect on that date." Independent School District No. 89 v. McReynolds, 1974 OK 186, 528 P.2d 313 (syllabus).

1 9 On July 29, 2008, the date of deceased worker's death, the statutory and contractual obligation of employer and insurer to pay death benefits contained the express element that this obligation was without a right of subrogation. The coordinate right of the deceased Oklahoma worker and his dependents that became vested and fixed by law was to receive death benefits free from any right of subrogation on the part of employer or insurer. The obligation and right were thus established "irrespective of where accident resulting in injury may occur." The legislature evinced no intent to make this element of the death benefit obligation and right dependent upon (1) the amount of the death benefit, (2) the forum in which the death benefits are determined, or 8) the jurisdiction in which a widow or other dependent might seek compensation from third parties.

T10 This conclusion is further supported by reading sections 4 and 44 together. See tion 44(b) prohibits subrogation of "money paid by the employer or his insurance carrier for death claims or death benefits under the Workers' Compensation Act." § 44(b) (emphasis added). Under section 4, dependents of an Oklahoma worker who is killed while working in another state can obtain death benefits under the Workers' Compensation Act in one of two ways. The dependents can either (1) "commence and maintain [an] action for benefits and compensation in the State of Oklahoma," or (2) receive "benefits or compensation provided under any law of the state where injury [or death] occurred." If the benefits or compensation paid under the laws of another state result from a final determination of an action in the other state, the dependents are "precluded from [al] right of action under the Workers' Compensation Act of this state." The context indicates they are precluded from a right of action in Oklahoma for benefits or compensation. This is the only express consequence of an election to receive "benefits or compensation" under the laws of another state. Nothing in section 4 changes the fact [921]*921that death benefits paid under the law of another state (whether by adjudicated claim or not) constitute "money paid by the employer or his insurance carrier ... under the Workers' Compensation Act," and are thus protected from subrogation.

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Cite This Page — Counsel Stack

Bluebook (online)
2013 OK 88, 313 P.3d 917, 37 I.E.R. Cas. (BNA) 58, 2013 WL 5728104, 2013 Okla. LEXIS 120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holley-v-ace-american-insurance-co-okla-2013.