Idaho Law Blog

By Fred J. Lewis

In its decision, the Idaho Industrial Commission had ruled that because of the Idaho Legislature abolishing joint and several liability, an employer’s negligence was no longer an absolute bar to the exercise of its right of subrogation. The Idaho Supreme Court stated that the Commission, in establishing its “new rule”, the employer’s right of subrogation would henceforth be reduced by its proportionate share of fault contributed to the claimant’s damages. At the oral argument before the Idaho Supreme Court, I argued that the Court should stick with its 50 year old rule set forth in Liberty Mutual Insurance Company v. Adams that was decided in July of 1966. In Liberty, the Idaho Supreme Court had held that an employer who was contributorily negligent in the worker’s injury was not entitled to a right of reimbursement or subrogation in proceeds that the injured worker collected against a third party. The Idaho Supreme Court then referred back to the classic line out of the Witt v. Jackson case: “when the employee or his estate has been satisfied, and the employer seeks to recover the amount paid by him, from such third party, his hands ought not to have the blood of the dead or injured workman upon them, when he thus invokes the impartial powers and processes of the law”. The Supreme Court rejected the Idaho Industrial Commission’s new rule and held that proof of any negligence on the employer’s part that contributed to the injuries to one of their employees kills their right to assert a subrogated claim to the third-party proceeds of that employee obtains in a third-party lawsuit.

The takeaway from this Supreme Court decision is that an injured worker who receives injuries as a result of concurrent negligence from their employer and some third party has two claims. His first claim is against the negligent third party and he can collect on that claim and keep all the proceeds for himself. His second claim would be his Idaho workers’ compensation claim, which he could bring against his employer and their surety and would not have to pay any of the money back that he received from the third party claim, so long as he can prove his employer’s negligence also contributed to his injury. This is a great late Christmas present from the Idaho Supreme Court to the injured men and women of Idaho.

By Fred Lewis

At the oral argument, I argued on Mr. Maravilla’s behalf that Simplot’s subrogated claim was separate and apart from Mr. Maravilla’s negligence claim against IIC. The Idaho Supreme Court held there were only two claims that had been asserted in Mr Maravilla’s case. First was Mr Maravilla’s own original negligence claim against IIC and second, Simplot’s present claim of subrogation against Mr. Maravilla. The Idaho Supreme Court went on to state that a critical component in deciding when claims are the same for purposes of res judicata is that the subsequent and present claims must be one that arises out of the same cause of action and should have been litigated in the first suit. Clearly, Maravilla’s cause of action in his negligence claim against IIC was based upon the October 16, 2011 industrial accident. On the other hand, Simplot’s subrogation claim is based upon Idaho Code Section §72-223 (3) and is derived from Mr Maravilla’s recovery from IIC. The Idaho Supreme Court pointed out that Mr. Maravilla’s recovery, rather than his injury, acted as the cause of action for Simplot’s subrogated claim. Simplot’s subrogated claim did not ripen until after Mr. Maravilla recovered from IIC. Therefore, Simplot’s subrogation claim and Mr. Maravilla’s negligence claims do not share a cause of action. Simplot could not bring its subrogation claim against Mr. Maravilla until Mr. Maravilla had recovered from IIC. 　The Idaho Supreme Court then held that for purposes of claim preclusion, Simplot’s subrogation claim was not the same claim as Mr. Maravilla’s negligence claim against IIC.