Jury finding of employer negligence cannot extinguish workers comp lien on prior settlements

In Hawkins v. Sw. Kansas Co-op Serv., the Kansas court of appeals extinguished a $852,460.34 workers’ compensation lien and substantial future credit from a $1.5 million settlement with a primary defendant. The claimant previously settled with another defendant for $925,000 and allocated 100% of that recovery to his wife’s loss of consortium claim. On the second settlement, the court reasoned that a subsequent jury trial and damages award against the non-settling defendants where 25% fault was ascribed to the employer retroactively destroyed the lien. The case was appealed to the Kansas Supreme Court, with an amicus brief filed by NASP. In the brief, NASP explained how the claimant used the trial to “destroy” the lien by pursuing the jury verdict “after the primarily liable defendants became immune, and after those defendants lost interest in this case.” On April 2, 2021 the Kansas Supreme Court reversed the court of appeals and reinstated the workers’ compensation lien in full.

In Hawkins v. Sw. Kansas Co-op Serv., No. 118,379, 2021 WL 1230974, at *12 (Kan. Apr. 2, 2021), the court ruled that under K.S.A. 44-504(b), a jury's determination of the actual damages suffered by an injured worker against a third party does not bear on the reduction of an employer's subrogation interest under K.S.A. 44-504(d) in settlement proceeds received from other third parties.

Thanks to NASP Amicus Committee.