Workers Compensation Death Benefits Not Subject to Insurer's Subrogation Claim

In McBride v. Grand Island Express, 2010 WL 5080933, 2010 OK 93, the Oklahoma Supreme Court held that insurers have no right to subrogation for workers compensation insurance death benefits paid to a deceased employee’s beneficiaries.  Insurers who paid workers compensation death benefits can no longer intervene in third-party actions to recover under principles of subrogation. 


Plaintiff/Appellee McBride, Sr. as Personal Representative of his son’s estate sued for wrongful death/negligence after an accident where Eldon McBride, Jr. was killed. McBride Jr. worked for NES Rentals as a truck driver. McBride Jr. stopped his employer’s truck and trailer to investigate a minor accident on a bridge. He was standing in the roadway on the bridge when he was struck by a tractor/trailer owned by Grand Island Express, Inc, driven by Therance White, Jr. and a tractor/trailer owned by DCM Transport and driven by Kenneth Minter. 

The workers compensation insurer paid wrongful death benefits to McBride Jr.’s widow and children. The employer paid for funeral and burial expenses. Additionally, the workers compensation insurer is obligated to pay weekly benefits to McBride Jr.’s widow and children for an indefinite time.


The employer and insurer intervened in the estate’s wrongful death suit against third parties, Grand Island and DCM, based on their interpretation of 85 O.S. § 44, to recover from the third parties death benefits paid and those anticipated to be paid in the future through subrogation. The Personal Representative moved for summary judgment against the insurer, arguing that only an employer and not an insurer had the right to pursue the third-party tortfeasor to recover death benefits under 85 O.S. § 44(d) and that the employer had not paid any death benefits. Plaintiff also sought severance of the intervenors’ claim from the main action. The trial court granted Plaintiff’s motions.

The statute, 85 O.S. § 44(d) allows an employer the right to recover death benefits, but does not allow the employer’s workers compensation insurance carrier the same right. The statute does not create a right for the insurer to pursue a third party. In contrast, 85 O.S. § 44(c) specifically gives an employer or his insurance carrier a right of subrogation in certain situations, not including death benefits. By specifically leaving out insurance companies in the language of § 44(d), the Oklahoma legislature intended for only employers to have a separate cause of action for the recovery of death benefits paid by the employers. The trial court, relying on this provision, granted summary judgment to the Personal Representative of the decedent’s estate and dismissed the insurer’s subrogation claim.


NES Rentals, McBride Jr.’s employer, and its workers compensation insurer, the Insurance Company of the State of Pennsylvania, sought appellate review of the trial court’s grant of summary judgment to the Personal Representative of the decedent’s estate.


On appeal, the Court of Civil Appeals reversed the trial court and allowed the insurer to intervene and allowed subrogation of death benefits. The Oklahoma Supreme Court granted certiorari and reversed, reinstating the trial court’s termination of the insurer’s intervention and subrogation action.


The Oklahoma Supreme Court noted in its opinion that the employer had the right to subrogation to recover the death benefits, but there was no right of subrogation for the insurer to recover death benefits from third persons. The Court said that the employer or insurer had no historical right to payment of death benefits because death benefits subrogation was unauthorized and was viewed as violative of Okla. Const. art. 23 § 7 which provides:  "The right of action to recover damages for injuries resulting in death shall never be abrogated, and the amount recoverable shall not be subject to any statutory limitation, provided however, that the Legislature may provide an amount of compensation under the Workers' Compensation Law for death resulting from injuries suffered in employment covered by such law, in which case the compensation so provided shall be exclusive, and the Legislature may enact statutory limits on the amount recoverable in civil actions or claims against the state or any of its political subdivisions."


The Court held that Section 44(d) grants to the employer but not the insurer an independent cause of action to recover from a third-party tortfeasor the money paid out in death benefits under the Workers’ Compensation Act and that Section 44(d) prohibits the employer or carrier from acquiring any interest in the death benefits received by the employee or the employee’s beneficiary, or in a life insurance policy owned by the employee. The Court stated that if the Legislature intended to create a right of recovery for the insurance carriers, it would have included them in the first sentence of Section 44(d). The Court held that the insurance carrier cannot stand in the shoes of the employer and the employer cannot vicariously seek damages for losses it did not incur.


The Court in McBride decided an issue of first impression, as no prior decisions had construed 44 O.S. § 44(d), regarding an “employer” the right to recover in subrogation death benefits paid by an insurer. In McBride the Court specifically held that the insurer could not “stand in the shoes” of its insured, the employer, to recover through subrogation death benefits the insurer paid.


Other theories of recovery still exist; the opinion cuts off only the right of subrogation.