Manthey v. San Luis Rey Downs Enterprises, Inc

In Manthey v. San Luis Rey Downs Enterprises, Inc. (1993) 16 Cal.App.4th 782, the defendant purchased the workers' compensation carrier's lien. (See Manthey, supra, 16 Cal.App.4th at p. 785.) The Manthey court reasoned: "The interest purchased from the carrier fits clearly the definition of a lien. . . . A lien on a judgment is simply a chose in action; a lien on a future interest. . . . Until a judgment is entered, defendant merely holds an expectancy." ( Id. at p. 787.) The court continued: "The workers' compensation lien is an interest in future acquired property, and that property--the judgment--does not exist until a judgment has been entered." ( Id. at p. 789.) Accordingly, the court concluded, "the lien should be taken in partial satisfaction of the judgment after it is entered." (Ibid., ) The Manthey court found its conclusion compelled by Labor Code section 3856. Any other result, such as allowing the lienholder "to satisfy its lien out of the verdict before entry of judgment would give first priority to the lien creditor and would upset the priority scheme set forth in section 3856 which requires payment of reasonable litigation expenses and attorney fees 'first,' i.e., before reimbursing the employer/insurer or its succeeding lienholder for compensation expenditures." (Ibid.)