The recovery of workers compensation benefits is not barred where a worker also has recovered damages from third parties whose actions most directly caused the injuries. Workers compensation benefits, however, will be reduced to the extent and amount that they duplicate damages already recovered, so as to prevent a double recovery. This scenario is illustrated in the recent decision by the Kentucky Court of Appeals,Wal-Mart Stores, Inc. v. Wells, No. 2009-CA-001682-WC.
Donald Wells, a Wal-Mart employee, was injured by carbon monoxide exposure caused by employees of Atlas and Unarco, who were repairing a freezer. Wells received $500,000 in settlement from Atlas and 400,000 from Unarco for his personal injuries. He then pursued a workers compensation claim against Wal-Mart and was awarded $440,659.21 in income benefits in past and future medical benefits.
Wal-Mart's contention that Wells was completely barred from any recovery of workers compensation benefits was rejected as contrary to numerous prior decisions including Cincinnati Ins. Co. v. Samples, 192 SW3d 311 (Ky. 2006); AIK Selective Self Ins. Fund v. Bush, 74 SW3d 251 (Ky. 2002); and Hillman v. American Mut. Liability Ins. Co., 631 SW2d 848 (Ky. 1982). The court explained Kentucky law as follows:
...if you collect on a workers' compesnaiton claim, you cannot collect the awards in the civil action that mirror workers' compensation benefits; i.e., money for past and future medical expenses, lost wages, and the impairment of power to earn money. If an employee does pursue both claims, then the employer has a right to subrogation against the proceeds recovered in the civil action that duplicate the workers' compensation benefits. This prevents the employee from receiving a double recovery.
The court then explained that Wal-Mart's workers compensation liability would be calculated as follows: first, a total of $444,080.36 of the damages recovered from Atlas and Unarco duplicated workers compensation benefits and therefore were subject of a subrogation lien by Wal-Mart. Second, the fees and expenses incurred by Wells in prosecuting his claims against Atlas and Unarco must be deducted; these totaled $317,268.76. Therefore, Wal-Mart had a subrogation credit of $126,811.60 ($444,080.36 minus $317,268.76).
