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When a workers’ compensation carrier issues a policy that waives its right to subrogation the carrier also waives its right to reimbursement from any recovery by a claimant. That is the conclusion of the El Paso court of appeals in its recent decision inWausau Underwriters Insurance Co. v. Wedel.
In that case, James Wedel drove a truck for Cactus Transport, Inc. which regularly picked up asphalt from a terminal owned by Western Refining Company. Western required Cactus to subscribe to a policy of workers’ compensation insurance with a waiver of subrogation rights favorable to Western. Wausau issued the policy to Cactus with a waiver of subrogation endorsement.
Wedel fell and suffered brain and spinal cord injuries while attempting to load asphalt at Western’s facility in El Paso. Wausau paid approximately $1,548,822 in compensation benefits to Wedel, and Wedel then sued Western alleging third-party negligence. Wausau intervened and asserted its comp lien against any recovery by Wedel.
Wausau argued that its waiver of subrogation endorsement waived subrogation only as to the tort-feasor (Western) and did not waive the right to reimbursement from Wedel. In other words, Wausau asserted that its statutory rights of subrogation and reimbursement are distinct and independent rights and it could waive one without waiving the other.
The court of appeals disagreed. It held that by waiving its right of subrogation Wausau waived its right of reimbursement as well.--David L. Swanson, Stone Loughlin & Swanson, LLP