{ "id": 1404536, "name": "THE TRAVELERS INSURANCE COMPANY v. John O'HARA and Jo O'Hara, His Wife, Emilio Tirado, M.D., and Emilio Tirado, M.D., P.A.", "name_abbreviation": "Travelers Insurance v. O'Hara", "decision_date": "2002-09-12", "docket_number": "02-77", "first_page": "6", "last_page": "12", "citations": [ { "type": "official", "cite": "350 Ark. 6" }, { "type": "parallel", "cite": "84 SW.3d 419" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "256 Ark. 947", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8726076 ], "weight": 2, "year": 1974, "opinion_index": 0, "case_paths": [ "/ark/256/0947-01" ] }, { "cite": "245 S.W.2d 924", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 1678969, 10217110 ], "year": 1977, "pin_cites": [ { "parenthetical": "although the workers' compensation carrier and the beneficiary have separate rights to institute an action against a third-party tortfeasor, there is only one cause of action, and it cannot be split without the defendant's consent" } ], "opinion_index": 0, "case_paths": [ "/ark/261/0045-01", "/sw2d/245/0924-01" ] }, { "cite": "261 Ark. 45", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1678969 ], "year": 1977, "pin_cites": [ { "parenthetical": "although the workers' compensation carrier and the beneficiary have separate rights to institute an action against a third-party tortfeasor, there is only one cause of action, and it cannot be split without the defendant's consent" } ], "opinion_index": 0, "case_paths": [ "/ark/261/0045-01" ] }, { "cite": "416 S.W.2d 322", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 8724312, 8724508 ], "year": 1967, "opinion_index": 0, "case_paths": [ "/ark/242/0879-01", "/ark/242/0922-01" ] }, { "cite": "242 Ark. 879", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8724312 ], "year": 1967, "opinion_index": 0, "case_paths": [ "/ark/242/0879-01" ] }, { "cite": "328 Ark. 163", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 50333 ], "weight": 4, "year": 1997, "pin_cites": [ { "page": "168", "parenthetical": "emphasis in original" }, { "page": "169", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/ark/328/0163-01" ] }, { "cite": "310 Ark. 21", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1898925 ], "weight": 4, "year": 1992, "pin_cites": [ { "page": "28", "parenthetical": "holding that the plaintiff had been made whole, and the insurer was entitled to pursue its subrogation rights" } ], "opinion_index": 0, "case_paths": [ "/ark/310/0021-01" ] }, { "cite": "343 Ark. 143", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 226495 ], "weight": 4, "year": 2000, "pin_cites": [ { "page": "153" }, { "page": "152" } ], "opinion_index": 0, "case_paths": [ "/ark/343/0143-01" ] }, { "cite": "252 Ark. 1045", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1629883 ], "weight": 2, "year": 1972, "opinion_index": 0, "case_paths": [ "/ark/252/1045-01" ] }, { "cite": "17 S.W.3d 407", "category": "reporters:state_regional", "reporter": "S.W.3d", "case_ids": [ 11512444 ], "year": 2000, "pin_cites": [ { "parenthetical": "citing Black's Law Dictionary, 1140 (7th ed. 1999)" } ], "opinion_index": 0, "case_paths": [ "/sw3d/17/0407-01" ] }, { "cite": "341 Ark. 515", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1257773 ], "year": 2000, "pin_cites": [ { "parenthetical": "citing Black's Law Dictionary, 1140 (7th ed. 1999)" } ], "opinion_index": 0, "case_paths": [ "/ark/341/0515-01" ] }, { "cite": "343 Ark. 351", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 226540 ], "weight": 2, "year": 2001, "opinion_index": 0, "case_paths": [ "/ark/343/0351-01" ] }, { "cite": "Ark. Code Ann. \u00a7 11-9-410", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 2002, "opinion_index": 0 }, { "cite": "70 Ark. App. 152", "category": "reporters:state", "reporter": "Ark. App.", "case_ids": [ 6139387 ], "weight": 2, "year": 2000, "opinion_index": 0, "case_paths": [ "/ark-app/70/0152-01" ] } ], "analysis": { "cardinality": 533, "char_count": 10250, "ocr_confidence": 0.709, "pagerank": { "raw": 5.4033266686372354e-08, "percentile": 0.33865758196713397 }, "sha256": "1359a8be7d1b6d49e6633a2fb6927843e86d1b5ad45828a3e36eac1ced0c280f", "simhash": "1:56c0c5bedc4cce7a", "word_count": 1659 }, "last_updated": "2023-07-14T20:36:54.106154+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "THE TRAVELERS INSURANCE COMPANY v. John O\u2019HARA and Jo O\u2019Hara, His Wife, Emilio Tirado, M.D., and Emilio Tirado, M.D., P.A." ], "opinions": [ { "text": "Tom Glaze, Justice.\nThis case requires us to determine whether or not a workers\u2019 compensation insurance carrier may pursue its subrogation rights against a third-party tortfeasor when the tortfeasor and the injured party have reached a settlement. The injured worker in this case, John O\u2019Hara, suffered a work-related hernia, and underwent surgery to repair the hernia in March of 1993. During surgery, Dr. Emilio Tirado allegedly placed a stitch that injured O\u2019Hara\u2019s femoral nerve, causing him a great deal of pain and difficulty in walking. O\u2019Hara and his wife filed a medical malpractice action against Dr. Tirado, and The Travelers Insurance Company, O\u2019Hara\u2019s workers\u2019 compensation carrier, intervened in the litigation. The case went to trial and resulted in a jury verdict for O\u2019Hara in the amount of $77,332.03. However, the trial court granted O\u2019Hara\u2019s motion for a new trial, finding that the jury\u2019s award of damages was inadequate. The court of appeals affirmed this decision in Tirado v. O\u2019Hara, 70 Ark. App. 152, 15 S.W.3d 715 (2000).\n\u2022Following remand, O\u2019Hara and Dr. Tirado entered into a settlement agreement whereby O\u2019Hara agreed to accept $225,000. The agreement specifically included all claims the O\u2019Haras could assert against Dr. Tirado, and also provided that it was intended to include settlement of any claims that Travelers sought to enforce as a workers\u2019 compensation subrogation lien. Further, the agreement provided that it was not intended to \u201csettle around\u201d Travelers, and stated that both the O\u2019Haras and Dr. Tirado would contend that Travelers was not entitled to any lien on the proceeds of the settlement because O\u2019Hara had not been made whole by the amount of the settlement.\nTravelers objected to- the settlement agreement, arguing to the trial court that it was entitled to a lien on the settlement proceeds under Ark. Code Ann. \u00a7 11-9-410 (Repl. 2002). Following a hearing on the settlement agreement, the trial court found that the $225,000 would not make O\u2019Hara whole, and dismissed with prejudice Travelers\u2019 lien claim. From this order, Travelers brings this appeal, arguing that it should have been permitted to pursue its subrogation lien against Dr. Tirado. We disagree, and affirm the trial court.\nSubrogation is an equitable remedy that rests upon principles of unjust enrichment and attempts to accomplish complete and perfect justice among the parties. St. Paul Fire & Marine Ins. Co. v. Murray Guard, Inc., 343 Ark. 351, 37 S.W.3d 180 (2001). At its essence, subrogation is the substitution of one party for another in the exercise of some legal right. Welch Foods, Inc. v. Chicago Title Ins. Co. 341 Ark. 515, 17 S.W.3d 407 (2000) (citing Black\u2019s Law Dictionary, 1140 (7th ed. 1999)).\nThe workers\u2019 compensation statutes afford a right of subrogation to compensation carriers in certain instances. Arkansas Code Annotated \u00a7 ll-9-410(b) (Repl. 2002) provides that \u201c[a]n employer or carrier liable for compensation under this chapter for the injury ... of an employee shall have the right to maintain an action in tort against any third party responsible for the injury . . . .\u201d \u00a7 11-9-410(b)(1). The purpose of this statute is to protect the rights of both the compensation carrier and the employee, and as such, the proceeds of any compromise settlement of a tort claim are subject to the lien of the employer or the compensation carrier unless the settlement has been approved by a court having jurisdiction or by the Workers\u2019 Compensation Commission, after the compensation carrier has been afforded adequate opportunity to be heard. Travelers Ins. Co. v. McCluskey, 252 Ark. 1045, 483 S.W.2d 179 (1972).\nTravelers argues that, if a trial court determines that an insurer\u2019s lien rights are unenforceable against a settlement between a plaintiff and defendant, the language of \u00a7 11-9-410 should be construed in such a way as to grant the workers\u2019 compensation carrier its conventional subrogation right to pursue the defendant directly. Thus, because the trial court approved the settlement between the O\u2019Haras and Dr. Tirado, but ruled that the settlement did not make the O\u2019Haras whole, Travelers asserts that it has an absolute statutory lien on the settlement proceeds that entitles it to pursue Dr. Tirado in order to recover the money it paid to O\u2019Hara.\nHowever, this court recently considered a similar question in General Accident Insurance Co. v. Jaynes, 343 Ark. 143, 33 S.W.3d 161 (2000), where we were asked to decide whether or not a workers\u2019 compensation carrier was entitled to a lien upon the proceeds of a settlement between the injured employee and the third-party tortfeasor. The trial court had ruled that, because the plaintiff had not been \u201cmade whole\u201d by the settlement amount, the workers\u2019 compensation carrier, General Accident, was not entided to a lien on any of the settlement proceeds: This court affirmed, holding that an insurance carrier\u2019s lien right against an insured\u2019s settlement with a third-party defendant is not absolute; rather, the settlement is subject to a court\u2019s approval after the carrier has been afforded adequate opportunity to be heard. Jaynes, 343 Ark. at 153. In addition, even though an insurer\u2019s right to subrogation is statutory, that right does not arise until the insured is made whole. Id. at 152; see also Shelter Mut. Ins. Co. v. Bough, 310 Ark. 21, 834 S.W.2d 637 (1992).\nThe Jaynes holding was premised on this court\u2019s earlier decisions in Bough, supra, and Franklin v. Healthsource of Arkansas, 328 Ark. 163, 942 S.W.2d 837 (1997). In Bough, the court noted that the equitable nature of subrogation is granted an insurer to prevent the insured from receiving a double recovery, and where an insured has been made whole for his loss and is in a position where he or she will recover twice for some of his or her damages, the insurer should not be precluded from employing its right of subrogation. Bough, 310 Ark. at 28 (holding that the plaintiff had been made whole, and the insurer was entitled to pursue its subrogation rights). In Franklin, on the other hand, the plaintiff was not made whole by the settlement reached with the tortfeasor, and this court reversed the trial court\u2019s ruling that the insurer was entitled to its subrogation rights under the insurance policy. Noting that \u201cequity will require that the insured be made whole before the insurer\u2019s right to subrogation will arise,\u201d Franklin, 328 Ark. at 168 (emphasis in original), the court concluded with the following:\nAn insured\u2019s right to subrogation takes precedence over that of an insurer, so the insured must be wholly compensated before an insurer's right to subrogation arises; therefore, the insurer\u2019s right to subrogation arises only in situations where the recovery by the insured exceeds his or her total amount of damages incurred.\nId. at 169 (emphasis added).\nOn appeal, Travelers does not contest the trial court\u2019s decision to award O\u2019Hara all of the third-party settlement. O\u2019Hara was clearly not made whole by the settlement for $225,000; at the hearing on the settlement motion, O\u2019Hara stated that his damages were in excess of $400,000, and Travelers did not dispute this figure. Instead, as noted above, Travelers asserts that it should have been allowed to pursue Dr. Tirado independently and direcdy to recover its subrogation interest. However, this court has held that \u201cthere is but one cause of action\u201d as between an injured employee, a tortfeasor, and a workers\u2019 compensation carrier. St. Paul Fire & Marine Ins. Co. v. Wood, 242 Ark. 879, 416 S.W.2d 322 (1967). The court in Wood specifically held as follows:\nWhile \u00a7 40 [now \u00a7 11-9-410] recognizes that either the injured employee or the compensation carrier may initiate a tort suit against a third party, it requires that reasonable notice of the initiation of such cause of action be given to the other party. Thus, there is but one cause of action. In this situation, can we hold that the rule against splitting a cause of action prohibits the compromise settlement here proposed by Wood [the injured employee] and First Electric [the tortfeasor]? The answer is that the rule against splitting a cause of action is for the benefit of the defendant to protect him against a multiplicity of suits[. ]\nId. at 889 (emphasis added). See also U.S. Fidelity & Guaranty Co. v. Glass, 261 Ark. 45, 245 S.W.2d 924 (1977) (although the workers\u2019 compensation carrier and the beneficiary have separate rights to institute an action against a third-party tortfeasor, there is only one cause of action, and it cannot be split without the defendant\u2019s consent).\nTherefore, it is clear that the settlement between the O\u2019Haras and Dr. Tirado extinguished not only any claims between them, but also any claims that Travelers could assert against Dr. Tirado. The workers\u2019 compensation statute does not afford the compensation carrier the right to veto any compromise setdement not to its liking; the question of whether the proposed setdement should be approved is properly addressed to the discretion of the trial court. Liberty Mut. Ins. Co. v. Billingsley, 256 Ark. 947, 511 S.W.2d 476 (1974). Here, the trial court did not abuse its discretion in approving the settlement agreement between the O\u2019Haras and Dr. Tirado, because the O\u2019Haras were not made whole by the settlement amount; indeed, Travelers does not argue that it was error to approve the settlement. Neither did the court err in denying Travelers\u2019 request to sue Dr. Tirado directly, because, simply put, there was no independent cause of action Travelers could have pursued against the doctor. Therefore, the trial court\u2019s dismissal of Travelers\u2019 subrogation claim against Dr. Tirado is affirmed.", "type": "majority", "author": "Tom Glaze, Justice." } ], "attorneys": [ "Pryor, Robertson & Barry, PLLC, by: John R. Beasley, for appellants.", "Compton, Prewett, Thomas & Hickey, L.L.P., by: Floyd M. Thomas, Jr., for appellees John O\u2019Hara and Jo O\u2019Hara.", "Shackleford, Phillips, Wineland & Ratcliff, P.A., by: Dennis L. Shackleford and Norwood Phillips, for appellee Emilio Tirado, M.D. and Emilio Tirado, M.D., P.A." ], "corrections": "", "head_matter": "THE TRAVELERS INSURANCE COMPANY v. John O\u2019HARA and Jo O\u2019Hara, His Wife, Emilio Tirado, M.D., and Emilio Tirado, M.D., P.A.\n02-77\n84 SW.3d 419\nSupreme Court of Arkansas\nOpinion delivered September 12, 2002\nPryor, Robertson & Barry, PLLC, by: John R. Beasley, for appellants.\nCompton, Prewett, Thomas & Hickey, L.L.P., by: Floyd M. Thomas, Jr., for appellees John O\u2019Hara and Jo O\u2019Hara.\nShackleford, Phillips, Wineland & Ratcliff, P.A., by: Dennis L. Shackleford and Norwood Phillips, for appellee Emilio Tirado, M.D. and Emilio Tirado, M.D., P.A." }, "file_name": "0006-01", "first_page_order": 30, "last_page_order": 36 }