Liberty Mut. Ins. Co. v. Shoemake
| Docket Number: | 2011-CA-00179-COA Linked Case(s): 2011-CA-00179-COA ; 2011-CT-00179-SCT ; 2011-CT-00179-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 05-02-2013 |
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| Court of Appeals: |
Opinion Link Opinion Date: 05-29-2012 Opinion Author: Griffis, P.J. Holding: Reversed and remanded |
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| Additional Case Information: |
Topic: Workers compensation - Reimbursement of benefits - Conflict of laws - Restatement (Second) of Conflict of Laws § 145(2) - Significant relationship - Insurer’s subrogation rights - Waiver of rights - Third-party litigation Judge(s) Concurring: Lee, C.J., Barnes, Ishee, Roberts, Carlton and Fair, JJ. Non Participating Judge(s): Maxwell, J. Concur in Part, Dissent in Part 1: Irving, P.J. Concur in Part, Dissent in Part Joined By 1: Russell, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - OTHER Appealed from Court of Appeals |
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| Trial Court: |
Date of Trial Judgment: 12-28-2010 Appealed from: Newton County Circuit Court Judge: Marcus D. Gordon Disposition: APPELLANT’S MOTION FOR SUMMARY JUDGMENT DENIED AND APPELLEE’S MOTION FOR SUMMARY JUDGMENT GRANTED Case Number: 09-CV-101-NWG |
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| Note: | On May 2, 2013, the Supreme Court found that MCA Section 71-3-71 requires a workers’ compensation insurer to join or intervene in a third-party action to become entitled to reimbursement, and it reversed the judgment of the Court of Appeals and affirmed the judgment of the circuit court. The SCT opinion can be found at http://courts.ms.gov/Images/Opinions/CO84027.pdf | |
| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | Liberty Mutual Insurance Company |
TARA S. CLIFFORD |
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| Appellee: | Richard Shoemake | DAVID C. DUNBAR LINDSEY T. SIMMONS | ||
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 - Reimbursement of benefits - Conflict of laws - Restatement (Second) of Conflict of Laws § 145(2) - Significant relationship - Insurer’s subrogation rights - Waiver of rights - Third-party litigation |
| Summary of the Facts: | Liberty Mutual Insurance Company filed a complaint against Richard Shoemake seeking reimbursement for workers’ compensation benefits paid on his behalf. Shoemake filed a motion for summary judgment, and Liberty Mutual filed a response and a cross-motion for summary judgment. The court granted Shoemake’s motion for summary judgment and denied Liberty Mutual’s motion for summary judgment. Liberty Mutual appeals. |
| Summary of Opinion Analysis: | Liberty Mutual takes issue with the circuit court’s application of Alabama law to Liberty Mutual’s subrogation rights. Shoemake argues that Alabama law governs Liberty Mutual’s subrogation rights and that under Alabama’s “common fund doctrine,” Liberty Mutual is only entitled to reimbursement for $82,226.84. The general rule in Alabama is that attorney fees can be awarded only when authorized by statute, when provided in a contract, or by special equity, such as in a proceeding where the efforts of an attorney created a fund out of which fees may be paid. Shoemake argues that Alabama’s common-fund doctrine applies to his case; therefore, Liberty Mutual’s subrogation interest should be reduced by its proportionate share of attorney’s fees, which equal $50,175.81. Under Mississippi law, the compensation insurance carrier is entitled to full reimbursement out of the proceeds of the employee’s third-party recovery for the compensation benefits paid to the employee with no deduction for a share of the employee’s cost of the recovery. In this case, both the injury and the negligent conduct causing the injury occurred in Alabama. Thus, the first two factors under Restatement (Second) of Conflict of Laws § 145(2) favor Alabama. However, the site of the injury does not invariably determine choice of law when the most substantial relationships of the parties and the dominant interest of the forum require application of another state’s law. Given that Shoemake is a Mississippi resident, and his employer, Simmons, is a Mississippi company, the next two factors under section 145(2) favor Mississippi. Furthermore, the fact that Shoemake received benefits in accordance with Mississippi’s workers’ compensation law also strongly favors Mississippi. Finally, applying Alabama law to an insurer’s subrogation rights even though the insurer paid benefits under Mississippi’s workers’ compensation law would not protect justified expectations or provide a predictable and unified result. Based on these facts, Mississippi has a more significant relationship to the case than Alabama. Accordingly, the circuit court erred in applying Alabama law to Liberty Mutual’s subrogation rights. Under Mississippi law, Liberty Mutual is entitled to reimbursement for benefits paid on Shoemake’s behalf. However, Shoemake argues that Liberty Mutual waived its subrogation rights because it never sought to intervene in Shoemake’s third-party lawsuit. Mississippi case law has never required the insurance carrier to join or intervene in an employee’s third-party litigation to validate or enforce its subrogated claim to the proceeds recovered in that litigation. Liberty Mutual is entitled to statutory reimbursement. The case is remanded for the circuit court to determine the exact amount of Liberty Mutual’s subrogation interest for the workers’ compensation benefits paid. |
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