Weber v. Tucson Electric Power Co.

47 P.3d 1142, 202 Ariz. 504, 375 Ariz. Adv. Rep. 13, 2002 Ariz. App. LEXIS 77
CourtCourt of Appeals of Arizona
DecidedMay 30, 2002
DocketNo. 2 CA-CV 2001-0117
StatusPublished
Cited by2 cases

This text of 47 P.3d 1142 (Weber v. Tucson Electric Power Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Weber v. Tucson Electric Power Co., 47 P.3d 1142, 202 Ariz. 504, 375 Ariz. Adv. Rep. 13, 2002 Ariz. App. LEXIS 77 (Ark. Ct. App. 2002).

Opinion

OPINION

DRUKE, J.

¶ 1 William Weber was seriously injured while employed by Tucson Electric Power Company (TEP) and began receiving workers’ compensation benefits. In a related third-party action, he reached a settlement with one of the defendants before proceeding to trial against the remaining defendant, who had named the other defendant and TEP as nonparties at fault. The jury awarded Wil[505]*505liam $2 million in damages and found TEP twenty-five percent at fault. TEP asserted a lien against the settlement pursuant to A.R.S. § 23-1023(C). This appeal requires us to decide whether, as TEP contends, it is entitled to recover the full amount of its lien against the settlement or whether, as the trial court ruled, the lien is subject to reduction based on the equitable apportionment rule adopted by our supreme court in Aitken v. Industrial Commission, 183 Ariz. 387, 904 P.2d 456 (1995). For the reasons that follow, we affirm the trial court’s ruling.

¶ 2 William’s injury occurred after the hydraulic boom controlling the bucket in which he was working collapsed because of a metallurgical failure, throwing him from the bucket and impaling him on a metal bracket of the TEP truck. While receiving workers’ compensation benefits from TEP, a self-insured employer, William and his wife filed a third-party negligence and product liability action against a number of entities, including W.H. Pingree Company, the seller of the boom, and Southwest Field Services, Inc., the company that had maintained and repaired it. Without TEP’s consent, the Webers reached a settlement with Pingree for $950,000. By that time, TEP had paid William approximately $65,000 in workers’ compensation benefits.

¶ 3 TEP then asserted a lien on the settlement proceeds, based on § 23-1023(C). The relevant part of the statute provides that if an injured employee files a third-party action against another person whose negligence or wrong caused the employee’s on-the-job injury,

the insurance carrier or other person liable to pay the [employee’s] claim shall have a lien on the amount actually collectable from such other person to the extent of such compensation and medical, surgical and hospital benefits paid----The insurance carrier or person shall contribute only the deficiency between the amount actually collected and the compensation and medical, surgical and hospital benefits provided or estimated by the provisions of this chapter for such case. Compromise of any claim by the employee or his dependents at an amount less than the compensation and medical, surgical and hospital benefits provided for shall be made only with written approval of the compensation fund, or of the person hable to pay the claim.

In response to TEP’s lien, the Webers contended that because the jury had determined that William’s damages were $2 million and because the jury had found TEP twenty-five percent at fault, the lien should be reduced by $500,000. When TEP disagreed, the Webers sought a declaratory judgment that the lien was subject to the reduction. After both parties filed motions for summary judgment, the trial court granted the Webers’ motion, finding that the equitable apportionment rule of Aitken applied. This appeal by TEP followed. We review de novo a trial court’s grant of summary judgment. Strojnik v. General Ins. Co. of Am., 201 Ariz. 430, 36 P.3d 1200 (App.2001).

¶ 4 We first examine Aitken to determine its applicability. There, the injured employee was awarded benefits after filing a workers’ compensation claim. She also filed a negligence action against the construction company that had caused her injury. Following a trial, the jury awarded her almost $320,000 in damages and apportioned the fault as follows: sixty-five percent to the construction company, twenty-five percent to the employer, and ten percent to the employee. From the reduced sum the employee collected from the construction company, she reimbursed the employer’s compensation carrier the amount of workers’ compensation benefits she had already received. The carrier then claimed it had a hen against the balance of her damages for future compensation it expected to pay. The employee challenged the lien as excessive, in hght of the jury’s apportionment of twenty-five percent of the fault to the employer.

¶ 5 The supreme court noted that, before the legislature adopted the Uniform Contribution Among Tortfeasors Act, A.R.S. §§ 12-2501 through 12-2509, “a literal reading of the hen statute did not detract from the overall purpose of the workers’ compensation scheme, which is to protect injured employees.” Aitken, 183 Ariz. at 390, 904 P.2d at 459. But, with the abrogation of joint and several liability and the corresponding ability [506]*506of a third-party tortfeasor to name an employer as a nonparty at fault, see Dietz v. General Electric Co., 169 Ariz. 505, 821 P.2d 166 (1991), the court concluded that the appropriate interpretation of the lien statute required achieving “a reasonable balance between the rights of employer and employee, consistent with the underlying goals of the compensation scheme.” Aitken, 183 Ariz. at 392, 904 P.2d at 461. Accordingly, the court held “that a carrier may assert a lien on a third party recovery only to the extent that the compensation benefits paid exceed the employer’s proportionate share of the total damages fixed by verdict in the action.” Id.

¶ 6 But, as TEP points out, Aitken involved a lawsuit in which the liability of all parties was adjudicated at trial. Thus, the supreme court necessarily did not address the application of the equitable apportionment rule where one of the third-party tortfeasors settles with the injured employee. And, relying on Grijalva v. Arizona State Compensation Fund, 185 Ariz. 74, 912 P.2d 1303 (1996), and Stout v. State Compensation Fund, 197 Ariz. 238, 3 P.3d 1158 (App.2000), TEP maintains that Aitken does not apply to a pretrial settlement with a party who does not go to trial. Although TEP is correct that Grijalva and Stout involved pretrial settlements, they do not directly address the precise issue raised here.

¶ 7 In Grijalva, an employee was seriously injured after he fell from a roof. He sued the manufacturer and distributor of a board that had broken and later settled his case against the distributor. The employee refused the manufacturer’s offer to settle its case because of concern about the State Compensation Fund’s lien against the proceeds. His attorney and the trial judge then negotiated a settlement that included conducting a summary trial. At its conclusion, the judge found that the employee’s damages exceeded $10 million and that the employer was one hundred percent at fault. Based on the court’s findings, the employee contended the Fund had no lien against his settlement proceeds, and the trial judge agreed.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Twin City Fire Insurance Co. v. Graciela Leija
422 P.3d 1033 (Arizona Supreme Court, 2018)
Twin City v. Leija
Court of Appeals of Arizona, 2017

Cite This Page — Counsel Stack

Bluebook (online)
47 P.3d 1142, 202 Ariz. 504, 375 Ariz. Adv. Rep. 13, 2002 Ariz. App. LEXIS 77, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weber-v-tucson-electric-power-co-arizctapp-2002.