Abdala

On this appeal we must determine whether an employer is entitled to reimbursement for workers’ compensation benefits paid to its employee from a personal injury settlement between the employee and a third party tortfeasor.

I.

On June 19, 1987, Fadia Abdala (plaintiff), an employee of Foodmaker, Inc. (doing business as “Jack-in-the-Box”), sustained a back injury in an industrial related accident. Aetna Casualty & Surety Company (Aetna), the workers’ compensation carrier for Foodmaker, thereafter provided medical and other benefits to her under its policy. Some 14 weeks later, on October 1, 1987, plaintiff was involved in an automobile collision unrelated to her employment which allegedly aggravated her preexisting injuries. She subsequently brought suit against Fawzia Aziz (defendant), one of the persons purportedly at fault in the collision, and made written demand on Aetna for payment of additional medical benefits. The basis of that latter claim was set forth in a letter from plaintiff’s counsel to Aetna in July 1988: “The industrial accident may not be the exclusive cause of her present back condition and the medical bills which she incurred but as long as it is a…