Federated Mut. Ins. Co. v. McNeal
| Docket Number: | 2004-CA-02450-SCT Linked Case(s): 2004-CA-02450-SCT ; 2004-CA-02450-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 11-30-2006 Opinion Author: Dickinson, J. Holding: Motion for rehearing filed by appellee is denied. The previous opinion is withdrawn and these opinions are substituted therefor. |
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| Additional Case Information: |
Topic: Workers’ compensation - Right of subrogation - Section 71-3-71 - Made whole doctrine - Intervention - M.R.C.P. 24 Judge(s) Concurring: Smith, C.J., Waller and Cobb, P.JJ., Dickinson, and Carlson, JJ. Dissenting Author : Diaz, Easley, Graves and Randolph, JJ., would grant. Procedural History: Motion for Rehearing Nature of the Case: CIVIL - TORTS-OTHER THAN PERSONAL INJURY & PROPERTY DAMAGE |
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| Trial Court: |
Date of Trial Judgment: 11-04-2004 Appealed from: Smith County Circuit Court Judge: Robert G. Evans Case Number: 98-0230 |
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| Party Name: | Attorney Name: | |||
| Appellant: | Federated Mutual Insurance Company |
WILLIAM BIENVILLE SKIPPER |
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| Appellee: | Kevin Darrin McNeal | ROBERT G. GERMANY EUGENE COURSEY TULLOS MARK K. TULLOS |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Workers’ compensation - Right of subrogation - Section 71-3-71 - Made whole doctrine - Intervention - M.R.C.P. 24 |
| Summary of the Facts: | The motion for rehearing is denied, and this opinion is substituted for the original opinion. Kevin McNeal was injured while delivering fuel to a customer of his employer, John Weatherford, Inc., who maintained a workers’ compensation insurance policy with Federated Mutual Insurance Company. McNeal applied for and was paid workers’ compensation benefits. McNeal filed a complaint in the against Navistar International Truck and Engines Corp. ABA Corporation, and Waters International Trucks, Inc., alleging these defendants negligently caused the accident that led to his injuries. The jury assessed McNeal’s total damages at $2,250,000 against Navistar International Truck and Engines Corporation, ABA Corporation, and Waters International Trucks, Inc. The jury also found McNeal to be twenty-five percent at fault, and a judgment was entered in McNeal’s favor for $1,687,500. The defendants appealed, but the parties reached a settlement before the conclusion of the appeal. In its order approving the third-party settlement, the circuit court noted that McNeal disputed Federated’s entitlement to a workers’ compensation subrogation lien and directed the parties to deposit the disputed portion of the settlement funds in an interest bearing account maintained by McNeal’s attorney. Federated, who had never formally sought intervention in the case and was not a party, filed a Motion to Compel Compliance requesting the circuit court order McNeal to reimburse it for all workers’ compensation benefits paid to him. The circuit court denied Federated’s motion. Federated appeals. |
| Summary of Opinion Analysis: | Federated argues that the lower court erred in holding the equitable ‘made whole’ doctrine applies to statutory workers’ compensation subrogation liens, despite the clear language of section 71-3-71. Section 71-3-71 unambiguously provides that, after deducting the costs of collection and attorneys’ fees, any recovery from a third party (whether by award or through settlement) must be applied first to repay the workers’ compensation insurer for benefits it paid the claimant. Federated paid workers’ compensation benefits to McNeal pursuant to the Mississippi workers’ compensation statutes, and McNeal recovered money from the third-party defendants. Thus, the money recovered by McNeal from the defendants, after deducting collection and attorneys’ fees, must next be used to reimburse the workers’ compensation provider. A workers’ compensation insurer’s right of reimbursement exists by virtue of statute and must rise or fall strictly as a matter of statutory interpretation. Thus, the circuit court erred when it applied the equitable “made whole” doctrine to the statutory right of subrogation provided in section 71-3-71. Federated admits it did not formally pursue intervention pursuant to M.R.C.P. 24 but, instead, filed a motion for enforcement of its lien. Mississippi lacks relevant precedent on whether Federated may appeal the circuit court’s decision without intervention. The Fifth Circuit has applied a three-part test to determine whether investors, as non-parties, could nonetheless appeal the district court’s order. Under this test, a court inquires whether the nonparty actually participated in the proceedings below, the equities weigh in favor of hearing the appeal, and the non-party has a personal stake in the outcome. No objection was ever raised to Federated’s active participation. The circuit court’s improper imposition of the “made whole” doctrine substantially affects Federated’s statutory subrogation rights. The repayment of money owed to it under section 71-3-71 gives Federated a personal stake in the outcome. Although the formal procedural requirements of Rule 24 were not met, no objection was raised to either Federated’s participation in the trial court or its pursuit of this appeal. Additionally, Federated satisfies the test for non-party standing to appeal. |
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