Nevada Supreme Court tosses comp case law in insurer subrogation

The Nevada Supreme Court on Thursday ruled unanimously that workers compensation insurer AmTrust North America Inc. can recoup some of the $177,335 it paid in medical expenses and income replacement to a restaurant worker who settled a third-party negligence lawsuit over his slip-and-fall.

The decision reverses and remands a ruling by a district court in Amtrust N. Am., Inc. V. Vasquez, Jr. that applied a calculation in case law from 1986 and 2017 that proved the insurer was not owed anything in subrogation, despite also paying $50,000 in legal costs for the negligence lawsuit, which was settled for $400,000.

The state’s highest court said it issued its opinion “to reconcile the conflict between our case law and… the statute that controls a workers compensation insurer’s lien rights.”

While holding that “there is no requirement that an insurer intervene or otherwise participate in the injured worker’s third-party claim to recover on its lien,” the ruling states that a formula that calculates recovery by an insurer was “created in direct conflict with the controlling statute” on liens and “has proven unworkable and is therefore abandoned in favor of a straightforward lien analysis.”

The court also said that case law is in conflict with state law which “mandates that an insurer collect from the ‘total proceeds’ of any recovery of an injured worker, including any portion allocated to noneconomic injuries.”