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WC Credit for Products Liability Settlement? (California)

PostPosted: Wed Dec 09, 2009 11:31 am
by dwightroad
Client had wc injury and subsequently had industrial surgery with hardware. Hardware was found to be defective. Client was part of class action for products liability (bad hardware). WC carrier did not pay for surgery to remove bad hardware, no TD, and did not pay for surgery to put in the new non-defective hardware. Client received settlement as part of class. Client rated after all done and client physically recovered very well. WC carrier wants credit for all dollars received by client in class action settlement as against all benefits owed, including permanent disability (which is the same as it would have been regardless of bad hardware out/good hardware in).
This fails the logic test. Does anyone know of any case law that would prohibit a credit with these facts?

Re: WC Credit for Products Liability Settlement? (California)

PostPosted: Wed Dec 09, 2009 6:03 pm
by stewshe

My Work Comp Index discusses Malpractice on pages 451-452. I'm not certain it is applicable, but Civil Code Section 3333.1 prohibits subrogation.

I then cite two cases discussing "credit." One case allows a credit, but the other does not.

In another case the malpractice claim settled and the employer was barred from asserting a credit....with review denied by the Supreme Court.


Re: WC Credit for Products Liability Settlement? (California)

PostPosted: Thu Dec 10, 2009 9:19 am
by jpod
I am not sure the manufacturer is covered under the exclusion Stew discusses; you have a product liability recovery not a recovery from professional malpractice.

But i agree with you that I fail to see in this case why a credit should attach. It is true that LC 3861 requires the judge to award credit, but I agree with you the the argument should be there is no credit from a recovery from the "injury" suffered by the employee during his job duties, but rather the recovery is from the insult due to the defective product.

I have not seen any cases like this so I am no help there.

Re: WC Credit for Products Liability Settlement? (California)

PostPosted: Thu Dec 10, 2009 9:33 am
by stewshe
L.C. 3861 discusses reimbursing the ER...but here the ER has not paid anything relating to the defective product and the additional expense it caused.

Yes, they paid for the initial surgery where the product was implanted, but the surgery was needed.

Had they paid to replace the defective product, they might have a claim for reimbursement...of the additional amount they paid because of the defect. But they only paid for the initial surgery.

I can't see any judge in the state awarding them anything if these are the facts.

After the most recent surgery the EE was in the same situation he was in after the initial surgery IF THE PRODUCT HAD NOT BEEN DEFECTIVE.

The producer of the defective product has paid the additional costs and the ER/CC has not lost one cent due to the defective product, therefore I do not see they have standing to claim anything. I suspect the claim is being asserted by a newbie claims person/supervisor without any input from a "subro" attorney.


Re: WC Credit for Products Liability Settlement? (California) (C

PostPosted: Thu Dec 10, 2009 2:59 pm
by jpod
Actually LC 3861 discusses credits for any employee recovery, not reimbursements but I agree with you stew...

I would argue that LC 3861 does not apply to this recovery...b/c the recovery is not for the injury that happened at work...the recovery is for insult created by the defective part....but I am not certain that the injury can be extracted from the chain of causation. For instance if the defective part did add to PD wouldn't it be a compensable consequence of the original injury...and therefore wouldn't LC 3861 attach?

The recent police officer case involving CIGA (Baur) seemed to indicate "any recovery" applied. So I guess the ultimate question of law is: does the recovery stem from the worker's comp injury or i it entirely separate and therefore LC 3861 can not attach. The law isn't always fair, but if fairness ruled the day I agree no credit should, but it is unclear if the two injuries can be separated.

LANCE BAUR, Petitioner, v. WORKERS‟ COMPENSATION APPEALS BOARD and CITY OF STOCKTON, Respondents is the case, I do not have the cite.

Re: WC Credit for Products Liability Settlement? (California)

PostPosted: Thu Dec 17, 2009 9:07 pm
by laesquire

Fight the credit.

I agree this is not a medical malpractice lawsuit. However, the money received comes from an event that did not cause the original injury. Usually this is the scenario on allowing credits.

Whoever paid for the subsequent surgeries should go after the workers compensation carrier for reimbursement.

Re: WC Credit for Products Liability Settlement? (California)

PostPosted: Fri Dec 18, 2009 7:56 am
by jpod
If it is not a medical malpractice situation then the product manaufacturer is the one liable for what ever costs another party incurred..while I agree they would need to name the WC carrier, ultimately the manufacturer is liable. It sounds like the manufacturer is the one who picked up the surgery and related costs.

I would think the plaintiff wants to keep the WC carrier out of the picture as much as possible. If you think the WC carrier is liable then the credit definitely attaches under 3861.