Aitken v. Industrial Commission
In Aitken v. Industrial Commission, 183 Ariz. 387, 904 P.2d 456 (1995), Aitken was injured on the job and received workers' compensation benefits. See 183 Ariz. at 388, 904 P.2d at 457.
She sued a third party, which named her employer a nonparty at fault. See id. at 388-89, 904 P.2d at 457-58.
The jury apportioned 25% of the liability for Aitken's injuries against her employer. See id. at 389, 904 P.2d at 458. She had to reimburse her employer's workers' compensation carrier for the benefits she had already received, and the carrier claimed a lien credit against future compensation of the amount remaining from the recovery after deductions for attorneys' fees and costs. See id.
Aitken challenged the application of the full lien against her recovery in light of the reduction of her recovery due to her employer's fault. See id.
The Arizona Supreme Court in Aitken first explained that if an injured employee who has collected workers' compensation benefits successfully recovers against a third party who caused or contributed to the injury, A.R.S. 23-1023(C) allows the employer or its carrier to place a lien on the recovery. See id. at 389-90, 904 P.2d at 458-59.
The Aitken court then pointed out that before the legislature abolished or severely restricted joint and several liability by enacting A.R.S. 12-2506, injured employees could receive their full measure of damages from third-party tortfeasors even when employers were partially liable for the injuries. Id. at 390, 904 P.2d at 459.
Once joint and several liability was abrogated, the court noted, employees who had given up their right to sue negligent employers would see their recoveries against third parties effectively reduced twice, first, due to the employers' own fault and, second, when employers and their carriers satisfied full liens against those diminished awards. See id. The resulting diminution of the injured employee's total recovery, said the Aitken court, was inconsistent with the overall purpose of the workers' compensation scheme, which is to protect injured employees. Id.