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Jackson v. Eagle KMC LLC - 1/16/2018

Arizona Court of Appeals Division One holds that after workers’ compensation has been paid, the law of the state of adjudication and compensation governs subrogation, lien, and assignment rights.


An employer contracted with a training company to train an employee to drive a semi-tractor trailer.  The employee was seriously injured when the trainer lost control of the semi, causing it to roll.  The employee filed a workers’ compensation claim in Nebraska, as required by her employment contract.  The employer was self-insured for workers’ compensation, and had a subrogation claim against any third-party recovery.

The employee later sued the training company in Arizona.  To comply with Nebraska law, the employee also sued her employer for subrogation purposes.  The training company moved for summary judgment, arguing that the employee’s claim was time-barred by A.R.S. § 23-1023(B) and that the training company was not a proper defendant under A.R.S. § 23-1022(A).  The trial court granted summary judgment in favor of the training company, finding the employee’s claim time-barred by § 23-1023(B) because the employee had not filed her claim for workers’ compensation within one year and the employer had not reassigned the claim to the employee.  The employee appealed.

The Arizona Court of Appeals reversed and remanded.  The Court rejected the contention that § 23-1023(B) is a statute of limitations, finding instead that it is part of a statutory scheme designed to require tortfeasors to pay damages, to make injured employees whole, and to reimburse employers and insurance carriers for their contributions without permitting a double recovery.  The Court held that when compensation has been paid, the law of the state of compensation governs third-party actions.  Because the employee’s workers’ compensation claim had been adjudicated and paid in Nebraska, Nebraska law rather than Arizona law governed subrogation, lien, and assignment rights.

Judge Orozco authored the opinion; Judges Brown and Campbell concurred. 

Posted by:  Phillip W. Londen

Posted On: 1/23/2018