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Jackson v. Eagle KMC L.L.C. - 1/2/2019

Arizona Supreme Court holds that after workers’ compensation has been paid under one state’s laws, that state’s laws also govern assignment of rights.

A South Carolina resident was employed as a semi-truck driver by a Nebraska company.  The employer contracted with an Arizona company to provide training to the driver.  The driver was injured during training.  She subsequently obtained workers’ compensation in Nebraska. 

A few days before Arizona’s two-year statute of limitations expired, the driver sued the training company.  The company filed a motion to dismiss (which was later converted into a motion for summary judgment).  The company relied on A.R.S. § 23-1023(B), which provides that if a person entitled to compensation under Arizona’s workers’ compensation laws does not file an action against a third person who caused the injury within one year of the action accruing, the action is deemed to be assigned to the employer or the workers’ compensation insurer. 

The superior court granted the motion.  The court of appeals reversed.  The Supreme Court granted review.

The Supreme Court explained that the decisive issue was whether Arizona or Nebraska law applied.  The Court then adopted the rule, previously stated by the court of appeals in Quiles v. Heflin Steel Supply Co., 145 Ariz. 73, 77 (App. 1985), that when a workers’ compensation claim is paid in another state, the law of that state should govern any resulting assignment of rights.  That meant that Nebraska law governed.  And because Nebraska does not provide for the automatic assignment of rights, the driver retained her legal interest. 

The Court therefore reversed the superior court’s grant of summary judgment to the training company and remanded for further proceedings.

Justice Gould delivered the opinion of the court.

Posted by: Josh Bendor

Posted On: 1/11/2019