Carty Ex Rel. Carty v. State Office of Risk Management

Case: 12-40750 Document: 00512683268 Page: 1 Date Filed: 07/01/2014

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
July 1, 2014
No. 12-40750
Lyle W. Cayce
Clerk
CHRISTY CARTY, Individually and as Next Friend for Bryce Carty, Justice
Carty and Maddy Carty, Minors and as Representative of the Estate of
Jimmy Carty Jr, Deceased,

Plaintiff–Appellee,
v.

STATE OFFICE OF RISK MANAGEMENT,

Intervenor Plaintiff–Appellant,
v.

TEXAS DEPARTMENT OF PUBLIC SAFETY,

Defendant.

Appeal from the United States District Court
for the Eastern District of Texas

Before HIGGINBOTHAM, OWEN, and GRAVES, Circuit Judges.
PER CURIAM:
Intervenor Plaintiff–Appellant State Office of Risk Management
(SORM) appeals the district court’s judgment approving the settlement
between Christy Carty, individually and as next friend to her minor children,
and a private party alleged to be responsible for her husband’s death.
Specifically, it challenges the district court’s deduction of attorneys’ fees and
expenses from its subrogation interest as well as the court’s conclusion
 Case: 12-40750 Document: 00512683268 Page: 2 Date Filed: 07/01/2014

No. 12-40750
regarding the extent to which SORM could suspend future payments to the
Carty children.
In our prior opinion, 1 we held that the district court did not commit
reversible error in deducting attorneys’ fees and expenses. 2 We concluded,
however, that SORM’s second point of error involved questions upon which
Texas law was silent. 3 Accordingly, we certified three questions to the
Supreme Court of Texas, including:
How should a workers’ compensation carrier’s right under section
417.002 [of the Texas Labor Code] to treat a recovery as an advance
of future benefits be calculated in a case involving multiple
beneficiaries? Should the carrier’s right be determined on a
beneficiary-by-beneficiary basis or on a collective-recovery basis? 4

The Supreme Court of Texas has answered this question, and its answer
is dispositive. The Texas court held that “when multiple beneficiaries recover
compensation benefits through the same covered employee, the carrier’s rights
to a third-party settlement are determined by treating it as a single, collective
recovery rather than separate recoveries by each beneficiary.” 5 Because the
district court treated the recoveries as separate, it erred in determining the
extent to which SORM was entitled to suspend future benefit payments. 6
Accordingly, the judgment of the district court is AFFIRMED in part,
VACATED in part, and REMANDED for further proceedings consistent with
this opinion.

1 Carty v. State Office of Risk Mgmt., 733 F.3d 550 (5th Cir. 2013).
2 Carty, 733 F.3d at 553-55.
3 Id. at 555.
4 Id. at 561-62.
5 State Office of Risk Mgmt. v. Carty, --- S.W.3d ----, No. 13-0639, 2014 WL 2790810,
at *1 (Tex. June 20, 2014).
6 See Carty, 733 F.3d at 552.
2