When an employee sustains an injury arising out of and in the course of their employment, the Exclusive Remedy Doctrine provides that their only avenue for recovery against their employer is under the Workers' Compensation Act. Sabellona v. Albert Painting, Inc., 303 Ga. App. 842, 695 S.E.2d 307 (2010); Sargent v. Blankmann, 202 Ga. App. 156, 413 S.E.2d 495 (1991). This means the injured worker cannot file a tort claim against their employer for the same accident and injury that is the subject of their workers' compensation claim.
An injured worker's remedy is not limited to just the Workers' Compensation Act, however, if their injury arose out of and in the course of their employment but was caused by a third-party tortfeasor. In these situations, the injured worker can recover workers' compensation benefits from their employer and can also file a tort claim seeking both economic and noneconomic damages from the third party. When this occurs, O.C.G.A. § 34-9-11.1 creates a subrogation lien on behalf of the Employer/Insurer for amounts paid in workers' compensation benefits. The court has interpreted the statute as “granting [an employer and insurer] the right to intervene [in any action to protect and enforce such lien] if it chooses to do so.” Department of Admin. Servs. v. Brown, 219 Ga. App. 27, 464 S.E.2d 7,8 (1995).
In some states, Employer/Insurers are entitled to a dollar-for-dollar recovery against any damages obtained by the injured worker in the third party claim up to the full amount of the lien. Georgia law, however, makes enforcement of a workers' compensation lien more difficult due to what is commonly known as the “Made Whole Doctrine.” O.C.G.A. § 34-9-11.1(b) provides that “the employer's or insurer's recovery… shall be limited to the recovery of the amount of disability benefits, death benefits, and medical expenses… and shall only be recoverable if the injured employee has been fully and completely compensated, taking into consideration both the benefits received…. and the amount of the recovery in the third-party claim, for all economic and noneconomic losses incurred as a result of the injury.” In practice, this means that unless the intervening Employer/Insurer is able to show that the injured worker was “fully and completely compensated” for lost wages, medical bills, pain and suffering, loss of consortium, etc., the Employer/Insurer cannot collect on their lien.
In June 2022, the Georgia Court of Appeals illustrated the difficulties that Employer/Insurers face in enforcing subrogation liens with its decision in Donegal Mutual Insurance Group v. Jarrett, 364 Ga.App. 506 (2022). In Jarrett, the claimant received approximately $130,000 in workers' compensation benefits and later filed a third-party tort claim. The tort claim settled for $520,000 and the settlement documents included language specifically stating the plaintiff was “not made whole.” Donegal filed suit to enforce its lien, but the trial court granted summary judgment in favor of Jarrett. On appeal, Donegal argued that summary judgment was not proper and that the language stating the plaintiff was not made whole was “self-serving.” Ultimately, the Court of Appeals affirmed summary judgement for Jarrett because the lump sum settlement did not allow for any findings to establish that Jarrett was “made whole,” as it did not include any breakdown of economic versus noneconomic damages.
With this in mind, Employer/Insurers obviously face obstacles in recovering their workers' compensation subrogation liens, especially when the third-party claim settles. In practice, if the third-party claim goes to trial, the intervening Employer/Insurer should request that the jury be required to use a special verdict form itemizing the breakdown of damages. From there, it will be up to the Judge to determine if the injured worker was “fully and completely compensated,” such that the Employer/Insurer can collect on their lien. Despite these obstacles, intervening into injured workers' third-party claims is still a worthwhile pursuit for a variety of strategic reasons, and recovery of at least some portion of the lien remains common.
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