Opinion
Civil Action H-12-1647
04-11-2014
Julia Bob, et al., Plaintiffs, v. Harsco Corporation, Defendant.
Opinion on Reimbursement
1. In November of 2011, Herbert L. Bob died when a gas compressor fell on him. His wife -Julia - and his daughters - Kimberly and Candace - sued Harsco Corporation, the manufacturer of the compressor. The parties settled for $950,000. Julia received one-half; Kimberly and Candace each received one-quarter. 2. Through March 7, 2014, American Zurich Insurance Company has disbursed $98,480.99 of worker's compensation benefits to Julia. She continues to receive weekly payments in the amount of $787.00. 3. Zurich must be reimbursed for the $98,480.99 that it has paid to Julia because she has recovered from a third party. Zurich must subtract two adjustments from its reimbursement: (a) a proportionate share of the cost of the lawsuit; and (b) no more than one-third of $98,480.99 for its share of the attorney's fees. 4. Because Kimberly and Candace were not beneficiaries of Herbert's worker's compensation, Zurich may not be reimbursed from their portion of the settlement. 5. To calculate Zurich's proportionate share of the costs to bring the lawsuit, divide the benefits paid by Julia's recovery.
| Zurich's Percentage of Julia's Recovery: | |
| Benefits paid by Zurich: | $98,480.90 |
| Divided by Julia's recovery: | $475.000.00 |
| Zurich's proportionate share: | 20.70% |
6. The total cost of this lawsuit was $91,873.64. One-half of that cost - $45,936.82 - is attributable to Julia, with the other one-half attributable to Kimberly and Candace.
| Zurich's Proportionate Share of Julia's Costs: | |
| Julia's Expenses: | $45,936.82 |
| Multiplied by Zurich's share: | 20.70% |
| Zurich's share of the costs: | $9,508.92 |
7. In Texas, an insurer must pay a reasonable attorney's fee that may not exceed one-third of its gross reimbursement amount. Because Julia's lawyers represented Zurich's interests, it will pay them one-third.
| Zurich's Attorney's Fees: | |
| Benefits paid by Zurich: | $98,480.99 |
| Divided by one-third: | 3.00 |
| Zurich's share of attorney's fees: | $32,826.99 |
8. To calculate Zurich's reimbursement, subtract its share of the attorney's fees and costs from its gross recovery.
| Zurich's Lien | |
| Benefits paid: | $98,480.99 |
| Less its share of attorney's fees: | $32,826.99 |
| Less its share of the costs: | $9,508.02 |
| Zurich's total reimbursement: | $56,145.08 |
9. Through March 7, 2014, Zurich was owed a reimbursement of $56,145.08. 10. In Texas, a recovery from a third party that exceeds what the carrier has disbursed in worker's compensation benefits is a credit against future benefits. Zurich wants a credit against its weekly payments of $787.00.
| Zurich's Credit | |
| Julia's net recovery to date: | $475,000.00 |
| Less gross reimbursement to Zurich: | $98,480.99 |
| Less her attorney's fees: | $150,607.60 |
| Less her 79.6% share of expenses: | $364V-90 |
| Total credit: | $189,483.51 |
11. Through March 7, 2014, Zurich was owed a credit of $189,483.51 against disbursements under the policy after March 7.
Tex. Labor Code § 417.002(b).
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Signed on April 11, 2014, at Houston, Texas.
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Lynn N. Hughes
United States District Judge