On December 30, 2016, the Idaho Supreme Court gave injured workers a late Christmas gift in the form of a decision holding that employers that are negligent waive their right to reimbursement on their subrogated claim to the proceeds of a third-party settlement or verdict. In Maravilla v. Simplot, Mr. Maravilla was injured on October 16, 2011 while working at the Don Plant in Pocatello, Idaho. He tripped on a hose that was placed across a walkway and stepped into a nearby sulfuric acid pool. Idaho Industrial Contractors, Inc. (IIC) the contractor performing the repairs on the area where Maravilla was injured, had not built a barrier and so Mr Maravilla’s right foot, upon tripping, went through the plastic placed over the top of the pad by IIC and plunged into the pool of sulfuric acid, causing chemical burns to his right foot and leg.
On February 6, 2013, Mr. Maravilla filed a third-party lawsuit against IIC. This case settled for $75,000. The case was then dismissed with prejudice on January 22, 2015.
Mr. Maravilla had also filed a workers’ compensation complaint against Simplot. On May 1, 2015, Maravilla filed a Petition for Declaratory Ruling with the Idaho Industrial Commission. Mr. Maravilla pointed the Commission to the Idaho Supreme Court’s longstanding rule that if he could prove that Simplot was negligent, and hurt him, Simplot would lose its right to subrogation or reimbursement under Idaho Code §72-223. Simplot claimed that Mr. Maravilla was precluded from arguing Simplot’s negligence because he failed to do so during the third-party litigation with IIC.
On August 11, 2015, the Commission issued its order. The Commission rejected Simplot’s claim preclusion argument and then, surprisingly, adopted a new rule regarding negligent employers’ subrogation rights. The new rule adopted by the Idaho Industrial Commission was based on the fact that joint and several liability had been abolished in Idaho, and that an employer’s negligence was no longer an absolute bar to the exercise of its rights of subrogation or right to reimbursement. The Idaho Industrial Commission held that the employer’s right of subrogation would be reduced by its proportionate of its share of fault in contributing to the claimant’s damages. Both Mr. Maravilla and Simplot appealed from the Industrial Commission’s decision to the Idaho Supreme Court.