Opinion
A144803
01-13-2017
PUBLIC SERVICE MUTUAL INSURANCE COMPANY, Intervener and Appellant, v. STEVEN M. SVETLIK, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Alameda County Super. Ct. No. HG13676541)
Steven M. Svetlik drove his car into a restaurant where Jennifer Carranza was working, injuring her. The restaurant's workers' compensation insurance carrier, Public Service Mutual Insurance Company (Insurer), paid $18,388.14 in workers' compensation benefits and medical expenses on Carranza's behalf. Carranza sued Svetlik. Insurer filed a complaint in intervention seeking reimbursement for the benefits paid on Carranza's behalf.
Before trial, Carranza rejected Svetlik's Code of Civil Procedure section 998 offer to compromise (998 offer). The jury determined Svetlik was negligent and awarded Carranza damages of $23,030.07, an amount less than the 998 offer. Svetlik's costs exceeded the verdict for Carranza, and she dismissed the complaint in exchange for a mutual wavier of costs. In January 2015, after Carranza dismissed the complaint, the court entered judgment for Carranza (January 2015 judgment), which provided "costs and any apportionment of the verdict, if any" would be determined by the court "after notice of motion." The court subsequently vacated the January 2015 judgment pursuant to a stipulation between Carranza and Svetlik, and denied Insurer's motion to apportion that judgment. The court concluded the January 2015 judgment had been vacated and Insurer could not "recover from a Judgment that is no longer valid or enforceable." The court also determined Carranza dismissed her complaint against Svetlik and "obtained no monetary recovery" from him, and that a workers' compensation lien may not exceed the amount of damages recovered by an employee. The court dismissed Insurer's complaint in intervention.
Insurer appeals, contending: (1) the 998 offer was invalid; (2) it is entitled to reimbursement under the January 2015 judgment; (3) the court erred by vacating the January 2015 judgment; and (4) the dismissal of its complaint in intervention was improper.
We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Carranza was working at a Livermore restaurant when Svetlik crashed his car through the restaurant, injuring Carranza. Insurer paid $18,388.14 in workers' compensation benefits and medical expenses on Carranza's behalf. Carranza sued Svetlik. Insurer filed a complaint in intervention pursuant to Labor Code section 3853, seeking reimbursement for the benefits paid on Carranza's behalf.
All undesignated statutory references are to the Labor Code. Section 3853 authorizes the employer or workers' compensation insurance carrier to "join as party plaintiff" in an action brought by an employee against a third party tortfeasor.
Svetlik made a 998 offer in the amount of $50,000. The 998 offer required Carranza to release her claims against Svetlik and to "reimburse and indemnify all released parties for any amounts which any insurance carriers . . . may recover . . . in reimbursement for amounts paid to or on behalf of . . . Carranza, as a result of the acts . . . giving rise to [the] lawsuit[.]" Carranza rejected the offer. During pre-trial proceedings, the parties agreed Insurer's recovery, if any, would not be decided by questions on the verdict form. Verdict, Dismissal, and January 2015 Judgment
The jury determined Svetlik's negligence caused the accident and awarded Carranza damages of $23,030.07. When the parties were unable to agree on a judgment on the verdict, counsel for Svetlik mailed the court a proposed judgment and served it all parties. That same day, Svetlik filed a costs memorandum seeking $35,631.05. Carranza and Insurer also filed memoranda of costs.
Insurer moved to strike Svetlik's costs. It claimed Svetlik was not entitled to costs because the 998 offer was void, and that allowing Svetlik to recover costs would prejudice Insurer and Carranza, and defeat the purpose of Code of Civil Procedure section 998. According to Insurer, awarding Svetlik costs "would usurp the jury's verdict . . . of which a portion was to be awarded to [Insurer] by way of stipulation or post-trial court order[,]" which "had a statutory right to intervene and seek reimbursement from [Svetlik], whose sole act of negligence caused [Insurer's] damages. [Insurer] was not comparatively negligent and should not be barred from recovery from its proper share of the jury verdict in light of [Svetlik's] failure to make any effort in good faith to settle the [Insurer's] workers' compensation lien nor by its less than virtuous [998 offer] which was ambiguous, unapportioned, conditional, and improper."
In December 2014 — a few days after Insurer moved to strike Svetlik's costs, but before a hearing on the motion to strike — Carranza dismissed her complaint against Svetlik in exchange for his agreement to waive recovery of $12,600.98, the costs in excess of the verdict. On January 2, 2015, after the complaint had been dismissed, the court entered the January 2015 judgment for Carranza in the amount of $23,030.07, with "costs and any apportionment of the verdict, if any, [to be] determined by the Court, after notice of motion."
In late January 2015, the court ruled on Insurer's motion to strike Svetlik's costs. The court declined to strike the costs bill, but determined Svetlik could not recover costs from Insurer and Insurer "has no obligation to pay any of those costs." As the court explained, the 998 offer had no effect on Insurer's "right to recover costs because the . . . 998 offer was never served on the [Insurer], wasn't directed to the [Insurer], and did not contain any provision allowing the [Insurer] to indicate acceptance of the offer[.]"
The Proposed Amended Judgment and Insurer's Motion to Apportion the January 2015 Judgment
The next day, Svetlik informed the court that Carranza had "agreed to take nothing and dismiss her complaint against" Svetlik in exchange for his agreement to waive recovery of his costs in excess of the verdict. Svetlik submitted a proposed amended judgment providing "judgment is entered in the amount of [$]0 in favor of [Svetlik] and against [Carranza] and [Insurer]" and that Svetlik "is the prevailing party."
Insurer objected to the amended judgment, arguing it conflicted with the January 2015 judgment and "controvert[ed]" the court's ruling on Insurer's motion to strike Svetlik's costs bill. Insurer requested the court "hold in abeyance any action" on the proposed amended judgment until the court considered Insurer's forthcoming motion to apportion the January 2015 judgment and for an award of costs. A few days later, Insurer filed its motion to apportion the January 2015 judgment and for costs. Insurer sought "$18,388.14 as reimbursement for workers' compensation benefits plus interest" and costs. Svetlik opposed the motion.
In February 2015, Carranza and Svetlik stipulated to set aside the January 2015 judgment on the grounds that "when [the] Judgment was entered in favor of . . . Carranza, [she] had already dismissed her complaint with prejudice and was no longer a party to this case." Carranza served Insurer with the stipulation. The court vacated the January 2015 judgment pursuant to the stipulation.
Following a March 2015 hearing, the court denied Insurer's motion to apportion the January 2015 judgment. The court rejected Insurer's argument that it was entitled to recover "its workers' compensation lien and costs from the [January 2015] Judgment." It explained the January 2015 judgment, which "did not provide any relief to [Insurer] was vacated, pursuant to the stipulation of [Carranza and Svetlik]" and Insurer "cannot recover from a Judgment that is no longer valid or enforceable. In addition, a workers' compensation lien is parasitic and may not exceed the amount of damages the employee recovers, in judgment or settlement, from the third party tortfeasor. [Citations.] . . . [Carranza] did not recover any amount of money from [Svetlik]; she stipulated to vacate her Judgment for a mutual waiver of costs . . . . Because there is no longer any valid or enforceable Judgment in [Carranza's] favor and [she] obtained no monetary recovery from [Svetlik], [Insurer] cannot recover anything from [Svetlik] on its workers' compensation lien or Memorandum of Costs." The court also rejected Insurer's argument that it could recover "based on the verdict alone[,]" concluding that when an insurer and insured "together prosecute an action against Defendant, [Insurer] may recover 'out of the amount of such judgment for damages.'" The court dismissed Insurer's complaint in intervention.
DISCUSSION
I.
General Principles
"Where the tort of a third party causes injury to an employee, Labor Code section 3852 permits the employee to sue the tortfeasor for all damages proximately resulting from the injury even though he or she has received from an employer workers' compensation benefits covering some of the same injuries and resulting disability. To prevent an employee from retaining both third party damages and workers' compensation benefits for the same injuries and disabilities, the Labor Code permits an employer to recover workers' compensation benefits it has become obligated to pay and/or has paid by (1) bringing an action directly against the tortfeasor (§ 3852), (2) joining as a party plaintiff or intervening in an action brought by the employee (§ 3853), or (3) allowing the employee to prosecute the action and then applying for a first lien against the amount of the employee's judgment [citation]. [¶] Where, . . . the employer intervenes, its status is akin to that of a subrogee. [Citations.] Its right to recover workers' compensation benefits derives from and does not extend beyond the employee's tort remedy against the negligent third party. [Citation.]" (Demkowski v. Lee (1991) 233 Cal.App.3d 1251, 1257-1258.)
In this context, "employer" includes the employer's workers' compensation insurer. (LaBorde v. McKesson & Robbins, Inc. (1968) 264 Cal.App.2d 363, 365, fn. 2, citing § 3850; Lohnes v. Astron Computer Products (2001) 94 Cal.App.4th 1150, 1153 [a workers' compensation carrier who pays benefits to an employee has "an unconditional right to intervene in an employee's action against a third party tortfeasor"].)
II.
Insurer is Not Entitled to Reimbursement Under the January 2015 Judgment,
Nor Under the Verdict
Insurer claims it is entitled to reimbursement under the January 2015 judgment. We disagree. "An employer is entitled to press its reimbursement claims only against a judgment or settlement in favor of its employee." (Gapusan v. Jay (1998) 66 Cal.App.4th 734, 743.) Here, there was no judgment in favor of Carranza: she dismissed her complaint against Svetlik and recovered no money from him, and the court vacated the January 2015 judgment.
Insurer contends Svetlik's 998 offer was invalid. We need not determine the validity of the 998 offer because Carranza and Svetlik settled the dispute and Carranza dismissed her complaint against him. As Insurer conceded at oral argument, Carranza was not required to obtain Insurer's consent before settling with Svetlik. (§ 3859, subd. (b) ["employee may settle and release any claim he may have against a third party without the consent of the employer. Such settlement or release shall be subject to the employer's right to proceed to recover compensation he has paid in accordance with Section 3852"].) Whether Carranza was required to notify Insurer of the settlement, and whether Insurer may recover from Carranza the benefits it paid on her behalf, are not at issue. (See Board of Administration v. Glover (1983) 34 Cal.3d 906, 913-914; Insurance Co. of North America v. T.L.C. Lines, Inc. (1996) 50 Cal.App.4th 90, 101 [discussing whether an insurer who has not received notice of a settlement between an employee and third party tortfeasor is entitled to recover benefits paid on employee's behalf].) "Issues do not have a life of their own: if they are not raised or supported by argument or citation to authority, we consider the issues waived." (Jones v. Superior Court (1994) 26 Cal.App.4th 92, 99.)
Carranza's failure to recover against Svetlik deprived Insurer, the intervener, of its right to recover. (Deutschmann v. Sears, Roebuck & Co. (1982) 132 Cal.App.3d 912, 916 (Deutschmann) [an "'intervener becomes an actual party to the suit by virtue of the order authorizing him to intervene'" and "the failure of the plaintiff to recover from a defendant would likewise deprive an intervener of the right to recover, since a decision on the merits would affect the rights of both plaintiff and intervener to collect from defendant"]; Low v. Golden Eagle Ins. Co. (2002) 101 Cal.App.4th 1354, 1362-1363 ["intervener remains bound to substantive limitations on its recovery imposed by the law of subrogation" and noting courts "have held a subrogated insurer has no right to recover from a third party who has been released from liability by the insured"]; Finney v. Manpower, Inc. (1981) 123 Cal.App.3d 1066, 1067 [recovery by the intervener should be limited to the third-party tortfeasor's proportional share of responsibility].) The cases upon which Insurer relies — Kuhlmann v. Pascal & Ludwig (1970) 5 Cal.App.3d 144 (Kuhlmann) and Scalice v. Performance Cleaning Systems (1996) 50 Cal.App.4th 221 (Scalice) do not alter our conclusion. In those cases, there was a monetary judgment for the plaintiff. (Kuhlmann, supra, 5 Cal.App.3d at p. 149; Scalice, supra, 50 Cal.App.4th at pp. 224-225.) Here, there was no such recovery.
Nor are we persuaded by Insurer's claim that it was entitled to apportionment based on the verdict. Insurer argues it is entitled to apportionment of the verdict to reimburse its lien based on the "pre-trial agreements amongst the parties" that "apportionment, if any, was to be determined by court." Insurer overstates the colloquy among the parties about the content and questions on the special verdict form. At most, the parties agreed no questions regarding the amount of the Insurer's claim would appear on the special verdict. Insurer's tactical decision that apportionment would be decided by the court following a post-trial motion does not create an obligation to reimburse Insurer. As stated above, Insurer's reimbursement claim is dependent on a judgment or settlement in favor of the employee. (Gapusan v. Jay, supra, 66 Cal.App.4th at p. 743; see § 3856, subd. (c) [referring to "judgment for damages recovered" and providing "the court shall apply out of the amount of such judgment for damages an amount sufficient to reimburse the employer"] (italics added).)
III.
Insurer Has Not Demonstrated the Court Erred by
Vacating the January 2015 Judgment
Insurer contends the court erred by vacating the January 2015 judgment pursuant to Carranza and Svetlik's stipulation. According to Insurer, the stipulation to vacate the judgment was "void ab initio" because Carranza dismissed her complaint before entering into the stipulation she therefore had "no standing to seek any further remedies from the court." This argument is forfeited because Insurer did not raise it in the trial court. (Schultz v. Workers' Comp. Appeals Bd. (2015) 232 Cal.App.4th 1126, 1134.) Nor does insurer's reliance on City of Palmdale v. Board of Equalization (2012) 206 Cal.App.4th 329 (Palmdale) demonstrate the trial court erred by vacating the January 2015 judgment. Palmdale concerned Code of Civil Procedure section 128, which governs when an appellate court may vacate a judgment. (Palmdale, supra, 206 Cal.App.4th at p. 338.)
We are not persuaded by Insurer's claim — unsupported by authority — that the stipulation is invalid because Insurer "never consented to vacating the judgment[.]" "[I]t is elemental that an intervener who comes into the case to join a plaintiff does so in subordination to and in recognition of the propriety of plaintiff's case. Necessarily this is so, because it is the plaintiff who has made himself liable to his counsel for legal services and has had to carry the brunt of all the expenses involved in preparing the case for filing and for trial. . . . In a case of this character, as in any case, the plaintiff must be permitted through [its] counsel to dominate and control the suit to its conclusion, unfettered by the views of the interveners . . . . In short, the interveners are deemed to accede not only to the plaintiff's theory of recovery, but that plaintiff's counsel shall represent them along with the plaintiff." (Mann v. Superior Court (1942) 53 Cal.App.2d 272, 280.)
Insurer also claims the court "had no jurisdiction" to vacate the January 2015 judgment unless it replaced it with another judgment under Code of Civil Procedure section 663. We reject this argument for several reasons. First and as discussed above, it is forfeited because Insurer did not raise it in the trial court. Additionally, by requesting the court "hold in abeyance" any action on the proposed amended judgment, Insurer "invited the error of which it now complains" and cannot argue on appeal that the court erred by not following the procedure in Code of Civil Procedure section 663. (See City of Scotts Valley v. County of Santa Cruz (2011) 201 Cal.App.4th 1, 29.) Third, "Code of Civil Procedure section 663, by its own terms, applies only to a decision of the court based upon facts or to a special verdict of a jury. 'A motion to vacate under [Code of Civil Procedure] section 663 is a remedy to be used when a trial court draws incorrect conclusions of law or renders an erroneous judgment on the basis of uncontroverted evidence.' [Citation.]" (Plaza Hollister Ltd. Partnership v. County of San Benito (1999) 72 Cal.App.4th 1, 14.) Here, the court did not draw an incorrect legal conclusion or render an erroneous judgment based on uncontroverted evidence.
IV.
Any Assumed Error in Dismissing the Intervention Complaint
Was Not Prejudicial
Insurer's final claim is the court erred by dismissing the complaint in intervention. Insurer relies on a single case, Deutschmann, supra, 132 Cal.App.3d 912, where the insured sued a retail company for personal injury and property damages resulting from a fire caused by a defective television set. (Id. at p. 914.) The insurer became subrogated to the insured by paying policy proceeds for property damage and intervened in the insured's lawsuit. (Ibid.) The trial court dismissed the action, including the insurer's complaint in intervention, on the ground the insured had failed to file the proof of service of summons in a timely manner. (Id. at pp. 914-915.)
The appellate court reversed, holding the dismissal of the intervention complaint was erroneous because the insurer timely intervened and was entitled to proceed with the lawsuit notwithstanding the insured's failure to timely file the proof of service of summons. (Deutschmann, supra, 132 Cal.App.3d at p. 915.) Deutschmann determined the insurer was subrogated to the rights of the insured, and "[a]s such subrogee, . . . may intervene in a pending action for damages brought by the insured. [Citation.]" (Ibid.) The court concluded an intervener should not "be deprived of a trial on the merits of his action by virtue of the plaintiff's failure to pursue his litigation." (Id. at p. 916.)
Under Deutschmann, Insurer had an undisputed right to intervene in Carranza's lawsuit against Svetlik. But unlike that case, Insurer was not "deprived of a trial on the merits" as a result of Carranza's failure to prosecute the action. (Deutschmann, supra, 132 Cal.App.3d at p. 916.) Here, Insurer participated fully in the trial of the case to verdict, but Carranza dismissed the complaint after the jury reached a verdict because Svetlik's costs exceeded the damages the jury awarded. Deutschmann does not demonstrate the court erred by dismissing Insurer's intervention complaint.
Even if we assume for the sake of argument the court erred by dismissing the complaint in intervention (Carnation Co. v. Superior Court (1969) 1 Cal.App.3d 891, 896, disapproved on other grounds in Denham v. Superior Court (1970) 2 Cal.3d. 557, 563), Insurer has not demonstrated prejudice. Insurer cites no authority supporting the contention that its claim for reimbursement "vested" at trial. That Insurer made a tactical decision to file a complaint in intervention (§ 3853) instead of filing an independent action does not establish prejudice.
DISPOSITION
The orders are affirmed. Steven M. Svetlik is entitled to costs on appeal. (Cal. Rules of Court, rule 8.278.)
/s/_________
Jones, P.J. We concur: /s/_________
Needham, J. /s/_________
Bruiniers, J.