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Balthrop v. Wal-Mart Stores East L.P.

United States District Court, W.D. Oklahoma

January 10, 2020

WAL-MART STORES EAST, L.P. d/b/a WAL-MART SUPERCENTER, Defendant. and HARTFORD ACCIDENT & INDEMNITY COMPANY, as subrogee of Shoe Show Inc., Intervening Plaintiff,



         Hartford Accident & Indemnity Company (“Hartford”) has filed a Motion to Intervene and Brief in Support Thereof (Dkt. 12). On the date of Plaintiff's trip-and-fall accident at Defendant's store in Duncan, Oklahoma, Plaintiff was apparently acting in the course and scope of her employment for Shoe Show, Inc, and Hartford was Shoe Show, Inc.'s workers compensation carrier. Consequently, Hartford paid workers' compensation benefits in relation to the injuries Plaintiff suffered as a result of the trip-and-fall accident. Hartford now seeks to intervene as a matter of right pursuant to Rule 24 of the Federal Rules of Civil Procedure. Defendant has filed an Objection and Response to Harford Accident & Indemnity Company's Motion to Intervene (Dkt. 14).

         Both Oklahoma and Tenth Circuit precedent recognize the right of an employer's insurance carrier to intervene as of right. In the case of Black v. Texas Employers Insurance Association, 326 F.2d 603 (10th Cir. 1964), the Tenth Circuit stated: “If subrogated, a compensation insurer may intervene in an action against a third party tort-feasor as a matter of right under Fed. Rules Civ. Proc. Rule 24(a).”[1] In the case of Nicholas v. Morgan, 2002 OK 88, 58 P.3d 775, the Oklahoma Supreme Court stated: “This Court has recognized the right of an employer or insurance carrier, having paid workers' compensation benefits, to intervene in an action against a third-party tortfeasor. . . . 85 O.S.1991, § 44(a) provides a paying employer or insurance carrier, as a statutory assignee, the right to seek reimbursement from an injured worker after the latter is paid”[2]Thus, Rule 24(a) concerning “Intervention of Right” governs the outcome of Hartford's motion to intervene.

         But first, Hartford failed to comply with the directives of Rule 24(c), which require a motion to intervene to “be accompanied by a pleading that sets out the claim or defense for which intervention is sought.”[3] “The purpose of the rule requiring the motion to state the reasons therefor and accompanying the motion with a pleading setting forth the claim or defense is to enable the court to determine whether the applicant has the right to intervene, and, if not, whether permissive intervention should be granted.”[4] Because “[f]ailing to attach such a pleading complicates the court's task of evaluating the movant's legal position, ” the Court “could properly deny the application to intervene on procedural grounds alone.”[5] The Court declines to do so here, however, because “the grounds for intervention” are clearly presented in the motion to intervene, and because the Defendant hasn't objected to intervention on this basis.

         Proceeding to the merits, Rule 24(a) provides:

(a) Intervention of Right. On timely motion, the court must permit anyone to intervene who:
(1) is given an unconditional right to intervene by a federal statute; or
(2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.[6]

         Hartford invokes no federal statute in its motion to intervene. Thus, Hartford's intervention is permitted under Rule 24(a)(2) if Hartford can demonstrate the following: (1) the timeliness of the application; (2) an interest related to the property or transaction which is the subject of the action; (3) the possibility of impairment or impediment of that interests if intervention is not allowed; and (4) inadequate representation of that interest by existing parties.[7] Upon review of the filings, the Court finds that intervention as of right is warranted.

         By virtue of section 43 of the Oklahoma Administrative Workers' Compensation Act, Hartford has an interest related to Plaintiff's recovery in this case that may be impeded if intervention is not permitted. Section 43 governs the rights of an employer's workers compensation carrier to participate in litigation.

         Subpart (A) of section 43 governs situations like this, where the injured employee initiates litigation. Subpart (A)(1)(a) provides that the liability of “any third party for the injury” remains “[u]naffected” by the employee's “making of a claim for compensation against any employer or carrier for the injury” and authorizes “the employee, or his or her dependents, to make a claim or maintain an action in court against any third party for the injury.”[8] Subpart (A)(1)(b) then requires the employee to give “reasonable notice” to “[t]he employer or the employer's carrier” so that they have a reasonable “opportunity to join in the action.”[9] Subpart (A)(1)(c) then gives the employer's carrier an incentive to join in the action by giving them “a first lien on two-thirds (2/3) of the net proceeds recovered in the action that remain after the payment of the reasonable costs of collection, for the payment to them of the amount paid and to be paid by them as compensation to the injured employee or his or her dependents” if they join in the action.[10]

         Subpart (B) governs situations where the employer or the employer's workers compensation carrier initiates the litigation. Subpart (B)(1) provides that “[a]n employer or carrier liable for compensation under this act for the injury or death of an employee shall have the right to maintain an action in tort against any third party responsible for the injury or death” for the subrogation interest.[11] Subpart (B)(2) requires the employer or its carrier to give the employee “reasonable notice and opportunity to be represented in the action, ” and permits the court to determine “the liability of the third party to the compensation beneficiary . . ., as well as the third party's liability to the employer and carrier” so long as the notice requirement has been fulfilled.[12] Subpart (B)(3) allows the employer and carrier to recover “the amount that [they] have paid or are liable for in compensation, after deducting reasonable costs of collection” and then directs that “any amount recovered in excess of th[at] amount” be given to “the injured employee.”[13]

         Regarding the second factor, Hartford has made the requisite showing. Under either subpart (A) or (B)-i.e., regardless of who initiates the litigation-it is clear that an employer's workers compensation carrier is entitled to be present in the litigation because they have a subrogation interest in any proceeds recovered from the third party. The amount of that subrogation interest appears to depend upon who initiated the litigation, as the employer's carrier will only recover two-thirds of any benefits paid or to be paid when the employee commences litigation but will recover 100% of any benefits paid or to be paid when the carrier files suit.

         Defendant's Objection and Response (Dkt. 14) focuses on the first, third, and fourth factors. Defendant argues that the application to intervene is untimely insofar as Hartford waited two-and-a-half years to file it, that “Hartford has . . . failed to address why the disposition of this action may impair or impede Hartford's ability to protect the subrogation interest, ”[14] and that Plaintiff can adequately represent Hartford's interest in this ...

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