Double Recovery Case Analysis

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If published, as recommended by the court, the decision would likely turn the law of third-party liability in worker’s compensation cases on its head.

The decision in Page is inapposite to this case. The Supreme Court emphasized, in the very first sentence of its opinion, “We are faced with one question in this review: Whether the Worker’s Compensation Act permits a worker’s compensation insurer to assert a claim for an injured worker’s pain and suffering in an action against a third party, when the employee has specifically declined to participate in the action?”

The court in Page concluded that the WCA does not bar such a suit. In that case, an employee, Dorothy Gross, was injured while working when she fell in her employer’s parking lot. Threshermens, her employer’s worker’s compensation insurer, made payments to Gross as a result.

Gross could have, but chose not to, pursue an action against Page, the owner of the parking lot. Threshermens brought suit instead, naming Gross as an involuntary plaintiff, but still Gross did not participate in the action.

Among the damages sought by Threshermens was Gross’ pain and suffering. The owner sought to bar Threshermens from pursuing such damages in the absence of participation in the suit by Gross, but the Supreme Court permitted Threshermens to do so.

The decision has nothing to do with double recovery, but merely provides that a worker’s compensation insurer can assert any claim against a third-party tortfeasor that the employee could — including pain and suffering.

Every day in this state, injured workers settle with their employer’s worker’s compensation insurers, while also pursuing third-party tortfeasors for damages not covered by the WCA — the most valuable usually being pain and suffering. Yet, no published Wisconsin case remotely suggests that this constitutes impermissible double recovery.

Furthermore, even if Keltgen’s paltry $10,000 settlement with CDC’s compensation insurer did include damages for pain and suffering, it would not constitute double recovery for him to pursue CDC’s liability insurer for the same damages, because of the structure of the WCA, which prevents any possibility of double recovery by establishing a statutory formula for distributing proceeds from third-party tortfeasors.

Section 102.29(1) provides for distribution of such recoveries as follows: (1) costs of collection; (2) one-third to the employee; (3) reimbursement to the worker’s compensation insurer; and (4) any remainder to the employee.

	Links Wisconsin Court of Appeals Related Article Worker can’t sue for pain and suffering

Thus, if Keltgen were permitted to pursue a claim against CDC and St. Paul, the liability insurer, and recover a judgment, there would still be no double recovery.

After collection costs and Keltgen’s one-third were allocated, the next $10,000 of that judgment (the amount of Keltgen’s earlier settlement), would go to Venture and Wausau, as the worker’s compensation insurers.

That this case is brought against the employer, alleging dual persona status, rather than against a traditional third-party tortfeasor, has no bearing on the case. As the Supreme Court stated in Henning v. General Motors Assembly Div., 143 Wis.2d 1, 15, 419 N.W.2d 551, 556 (1988), “An employer may become a third person vulnerable to tort suit by an employee, if — and only if — he possesses a second persona so completely independent from and unrelated to his status as an employer that by established standards the law recognizes it as a separate legal person.”

Thus, if an employer fits into the dual persona doctrine, it is a third party for purposes of the tort action. If the injuries are the result of the employer’s third-party tortfeasor persona, rather than its persona as employer, then the employer’s liability insurer should reimburse the employer&#146
;s worker’s compensation insurer whatever has already been paid to the employee, and the employee should recover whatever else he is entitled to under traditional tort law.

– David Ziemer

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David Ziemer can be reached by email.