Fremont Compensation Insurance v. Sierra Pine, LTD.

The Workers’ Compensation Appeals Board (Board) ordered an insurance carrier to pay death benefits to the former wife of an employee killed on the job. The carrier sued alleged third party tortfeasors to recoup the money. Labor Code section 3852 (further unspecified references are to this code) allows a carrier to “bring an action against” third parties. However, the trial court ruled that section 3852 subrogated the carrier to the rights of the former wife, and because she had no standing to sue for wrongful death, the carrier had no right to sue to recoup compensation benefits. The trial court sustained a demurrer without leave to amend and the carrier timely appealed from the judgment.

Section 3852 gives the carrier standing to sue third party tortfeasors. Because the carrier could have sued to recoup benefits paid to the worker while alive, and a statute (§ 3851) provides that a recoupment action survives the death of the worker, the fact the compensation paid was a death benefit, rather than for example, vocational rehabilitation or medical benefits, makes no difference. As we will explain, to allow tortfeasors to escape liability due to the happenstance that the…