Opinion
No. 70-596
Decided June 29, 1971.
Workmen's compensation claimant's compensable injury was aggravated by subsequent unrelated auto accident. Industrial Commission adopted referee's order subrogating workmen's compensation insurer to claimant's rights against alleged tort-feasor in auto accident. Claimant appealed.
Reversed
1. WORKERS' COMPENSATION — Subrogation — Insurance Carrier — Petitioner's Rights — Third-Party Tort-Feasor — Later Accident — Error. Where petitioner, recipient of temporary total disability benefits, suffered an aggravation of her compensable injury in a subsequent non-industrial automobile accident, Industrial Commission had no statutory authority to order that compensation insurance carrier be subrogated to petitioner's rights against alleged third-party tort-feasor in that later accident and its attempt to create such a right of subrogation was error.
Review of Final Order from The Industrial Commission of the State of Colorado
Feder Morris, Paul D. Rubner, for petitioner.
Duke W. Dunbar, Attorney General, John P. Moore, Deputy, Peter L. Dye, Assistant, for respondents Director of Division of Labor and Employment and The Industrial Commission of the State of Colorado.
Zarlengo, Mott and Carlin, Albert E. Zarlengo, Jr., for respondents American Employers Insurance Company and Alderson Candy Company.
This is an appeal from a final order of the Industrial Commission. The petitioner's main argument deals with the question of whether the Industrial Commission has authority to award subrogation to an insurance company where tortfeasor liability arises from an accident subsequent to and unconnected with the industrial accident for which workmen's compensation was sought and where the latter, non-industrial accident aggravated the disability caused by the original industrial accident.
The petitioner was originally injured in an industrial accident on November 18, 1965, when she fell from her chair and struck her head and back. As a result of this accident, the petitioner underwent psychiatric treatment for a condition described as "very deep seated and profound conversion neurosis or post-traumatic neurosis which seems not amenable to therapy." After a hearing, the Industrial Commission found that petitioner was temporarily totally disabled and entered an appropriate award.
Almost three years later, on June 16, 1968, petitioner was involved in an automobile accident. This accident occurred when the automobile in which petitioner was riding as a passenger was struck from the rear by another vehicle. The principal injuries suffered by petitioner in this accident consisted of an aggravation of her pre-existing condition of conversion or post-traumatic neurosis.
At the time of the automobile accident, petitioner was under treatment by a psychiatrist for her condition of traumatic neurosis. This treatment was under workmen's compensation medical provisions during a period of temporary total disability and was paid for by the respondent carrier, American Employers Insurance Co.
In a hearing before a referee, petitioner's doctor stated that the automobile accident aggravated petitioner's industrial accident injuries and had retarded her recovery. The doctor was unable to apportion any degree of injury between disability arising from the industrial accident and that arising from the subsequent automobile accident.
After a hearing, the referee by order dated December 12, 1968, found as follows:
"Referee having reviewed the entire file and the testimony finds that the claimant is still temporarily and totally disabled, and that the primary cause of said disablement is her admitted accident of November 18, 1965."
The carrier did not appeal from this finding.
Approximately one year later, on December 30, 1969, the Division of Labor of the Department of Labor and Employment held another hearing to determine:
(1) The termination of temporary total disability; and
(2) The extent of permanent partial disability.
As a result of this hearing, the referee by order dated March 10, 1970, found that petitioner was 50% permanently partially disabled as a working unit and terminated her temporary total disability status. The total award was $12,740 for permanent partial disability. Also included in this order was the following:
"The Referee further finds that the automobile accident in which the claimant was involved on June 18, 1968 did aggravate her condition and did prolong her recovery period and that the respondent should be entitled to subrogation rights on any third party recovery obtained by the claimant."
Petitioner took exception to the above and ultimately submitted a petition for review to the Industrial Commission. The Industrial Commission in its findings of fact and award dated August 31, 1970, adopted the Referee's order of March 19, 1970. Thereafter, review was sought in this court.
We agree with the petitioner that the Industrial Commission has no authority to award subrogation rights to the respondent carrier under circumstances as presented by the facts in this case. In the absence of specific statutory authorization, there is no right to subrogation. Orth v. Shiely Petter Crushed Stone Co., 253 Minn. 142, 91 N.W.2d 463; Horne v. Superior Life Insurance Co., 203 Va. 282, 123 S.E.2d 401; Bello v. Commissioner of Department of Labor and Industry, 103 N.J. Super. 180, 246 A.2d 759.
The Workers' Compensation Statutes of Colorado have not provided for subrogation in a situation such as the one presented in this case. The Industrial Commission cites the case of Industrial Commission v. Standard Insurance Co., 149 Colo. 587, 370 P.2d 156. However, we find the facts of that case distinguishable. The factual situation in Meachem v. N.Y. Central R.R. Co., 8 N.Y.2d 293, 169 N.E.2d 913, 206 N.Y.S.2d 569, is a more closely analogous situation. In that case an employee received compensable injuries in November 1945. He was involved in an automobile accident in February 1948 and died in May 1948. The Compensation Board determined that the industrial accident in 1945 was the cause of death. The deceased's widow and administratrix instituted a wrongful death action against a third party. The employer, a self-insuror, claimed the right of subrogation to the proceeds of the settlement effected in the wrongful death action to the extent of benefits paid. The New York Court of Appeals held that the employer was not entitled to subrogation, saying:
"* * * (T)o us it is clear beyond any doubt that the action so settled was not such a 'third party' suit as is dealt with in Section 29 [relating to subrogation of claims] since it had nothing whatever to do, in time or place or otherwise, with the industrial accident of November 7, 1945, which is the basis for the workmen's compensation death award here in litigation."
In reaching its decision, the court noted that because the entire Workers' Compensation Act related to "employees", it could not be read to apply to persons who when injured in subsequent accidents were not employees, thus precluding the right to subrogation.
The Colorado Workers' Compensation Act also limits coverage to accidents arising out of and in the course of employment. The obligation of the carrier to pay compensation arose from the original accident (which occurred in the course of employment) as found by the referee in his order of December 12, 1968. Only employees qualify and only a third-party claim arising out of the industrial accident may be assigned and subrogated to the carrier under the provisions of 1969 Perm. Supp., C.R.S. 1963, 81-13-8.
[1] There being no statutory authority for the subrogation to a carrier of rights against an independent third-party tortfeasor under the conditions of this case, the attempt of the Industrial Commission to create such a right was an error.
The order of the Industrial Commission is reversed and the cause is remanded with directions to enter an award allowing petitioner to retain all amounts recovered, or which may be recovered, from the subsequent third-party tortfeasor.
CHIEF JUDGE SILVERSTEIN and JUDGE DUFFORD concur.