Glover

We consider the respective obligations of an employer, an injured employee, and an alleged third party tortfeasor within the context of a personal injury settlement between the tortfeasor and the employee and a reimbursement claim by the employer against the tortfeasor for disability retirement benefits paid to the employee.

On January 25, 1972, Irene Lavallee, an employee of the Los Angeles City School District, was severely injured when her automobile was struck by a vehicle operated by defendant Phillip Glover. Paralyzed below the waist, Lavallee applied to plaintiff Board of Administration of the Public Employees’ Retirement System (PERS) for disability retirement compensation. On November 29, 1972, PERS informed the employee by letter that any settlement which she might reach with a third party responsible for her injuries would require PERS’ consent. Effective February 28, 1973, PERS awarded the employee disability retirement benefits in the amount of $22,172.99.

Meanwhile, on January 18, 1973, a few days before expiration of the one-year statute of limitations on her personal injury claim against defendant (see Code Civ. Proc., § 340, subd. (3)), the employee…