Holley v. Ace American Insurance Co.

KAUGER, J.,

with whom WINCHESTER, TAYLOR, COMBS, JJ., join dissenting.

T1 This cause arose when an Oklahoma worker, Appellee's husband, was killed at *922employer Unit Corporation's job-site in Texas. It is not disputed that: 1) the husband's contract for employment was made in Oklahoma; 2) he was killed in the seope of his employment at his employer's job-site in Texas; 3) his widow (wife) could have elected to receive workers' compensation death benefits under either Texas law or Oklahoma law; and 4) the wife recovered workers' compensation death benefits and tort damages from third parties as provided by Texas law.

2 While receiving death benefits provided under Texas law, the wife settled a third-party wrongful death claim. Insurer pursued subrogation in accordance with its statutory right under Texas' workers' compensation law. The wife filed suit for a declaratory judgment in Roger Mills County, Oklahoma, against both the employer and insurer alleging that Oklahoma law prohibited subrogation of death benefits paid for the job-related death of an Oklahoma worker covered by the Oklahoma Workers' Compensation Act (the Act)-even benefits awarded under Texas law or the law of another jurisdiction. The trial court ruled in favor of the wife, but on appeal by the insurer, the Court of Civil Appeals held that because the wife had never filed a claim with the Oklahoma Worker's Compensation Court, the law of Texas allowing subrogation applied, rather than Oklahoma Worker's Compensation law prohibiting subrogation.

{ 3 The majority holds that the Act's prohibition on subrogation in death benefit cases was a substantive element of the right to receive and obligation to pay death benefits that became vested at the time of injury, and therefore applied to all benefits wife was entitled to recover, without regard to the jurisdiction that awarded them. I disagree, and believe that the majority misconstrues the relevant statutory provisions.

14 The relevant statutes in effect at the time of the husband's death on July 29, 2008, were found at 85 0.8.2001 § 4 1 and 85 0.8. Supp.2005 § 44(b).2 The majority places great emphasis on the first sentence of 85 0.9.2001 $ 4, which provided:

[flrom and after the passage and effective date of the Workers' Compensation Act, all the provisions of the Workers' Compensa*923tion Act of this state, Sections 1 et seq. of this title, shall apply to employers and to employees, irrespective of where accident resulting in injury may occur, whether within or without the territorial limits of the State of Oklahoma, when the contract of employment was entered into within the State of Oklahoma, and the said employee was acting in the course of such employment and performing work outside the territorial limits of this state under direction of such employer.3 (Emphasis supplied).

Neither side disputes that, under this seetion, the wife would have been entitled to file a claim or commence an action to recover death benefits pursuant to the Act even though the injury did not occur in Oklahoma.

{5 However, the first sentence of 85 0.8. 2001 $ 4 cannot be read in isolation. The words, phrases, and sentences of a statute are to be understood as used, not in any abstract sense.4 Words used in a part of a statute must be interpreted in light of their context and understood in a sense which best harmonizes with all other parts of the statute.5 When read in its entirety, the true intent of § 4 as a right of election provision for the injured employee becomes evident.

11 6 The second sentence of 85 0.8.2001 § 4 indicates that the injured employee has a choice of how to pursue their right to recover. It states:

[sJuch right of election shall, however, not preclude the injured employee from recovering any benefits or compensation provided under any law of the state where injury occurred, and if such action be so commenced in such other state, or under the law of another state, and is prosecuted to final determination, such employee shall thereupon be precluded from his right of action under the Workers' Compensation Act of this state. (Emphasis supplied).

Title 85 0.9$.2001 $ 4 then provides:

... [tthe injured employee may exercise his right of election to file his claim or commence his said action or proceeding in the State of Oklahoma, at any time prior to final adjudication or determination of his rights under the laws of another state. (Emphasis supplied).

T7 The wording of the statute creates a choice between two different paths: pursue the right to recover under the Act in Oklahoma, subject to its provisions, or elect to have the right to recover and associated benefits adjudicated under the laws of another state. An injured party cannot have their right to recover adjudicated in both places: they can start out on both paths, but once an action to recover in another state is prosecuted to a final determination, an injured party has no right of action under the Act. The statute indicates that it is not just benefits that an injured employee may elect to have determined under the laws of another state, but also his/her "rights".6

18 In Pryse Monument Co. v. District Court of Kay County, 1979 OK 71, 595 P.2d 435, this court examined another right of election provision under a prior incarnation of Oklahoma workers' compensation law. That cause concerned the right of election either to pursue remedies against an employer through the workers' compensation statutes or in tort. We said of the choice:

One who sustains an on-the-job injury while employed in a business which remains impermissibly uninsured though it is governed by the Workmen's Compensation Act has been given two distinct remedies for vindication of his Single, statutorily-conferred right to recover.... Waiver by election will preclude the claimant from vexing the employer with a second suit. *924Onee a remedy is chosen and then pursued to conclusion, the point of no return is reached although there has been no satisfaction, much less vindication, of the right. Three essential elements, all present here, must coincide to make preclusion through waiver by prior election of remedies applicable: (a) two or more remedies must be in existence (b) the available remedies must be inconsistent (c) choice of one remedy and its pursuit to conclusion must be made with knowledge of alternatives that are available ... In Assessment Bond Service v. W.R. Johnston & Company, OkL., 296 P.2d 959, 964 (1956) we settled this principle in clear and unmistakable terms. Therein we said that
"'Where a plaintiff has elected one of two remedies for the enforcement of a right, and such action is barred by the statute, He is bound by his election and cannot thereafter resort to the other remedy for which a different limitation is provided.'" 7

19 Legislation in Oklahoma governing workers' compensation has evolved over time, but the Legislature's choice of words in drafting 85 0.$.2001 § 4 provides a similar choice concerning election that echoes the one discussed in Pryse The wife had a right to recover and was offered two options by 85 00.98.2001 § 4: pursue that right under the Act in Oklahoma with its associated remedies, including benefits protected from subro-gation, or pursue that right under the laws of another state.

T 10 The anti-subrogation protection of Title 85 0.8. Supp.2005 § 44(b) was not part of the right to recover that vested at the time of injury, but part of the remedy provided by one branch of the two possible paths to vindication of that right to recover. Title 85 0.8. Supp.2005 § 44(b) states specifically that the anti-subrogation provision applies to "money paid by the employer or his insurance carrier for death claims or death benefits under the Workers' Compensation Act from third persons ..." 8 Wife never sought, and never obtained, death benefits under the Act. She accepted the choice offered by 85 00.98.2001 § 4 to pursue a remedy under the laws of another state, and received a final adjudication of her rights under the laws of Texas, at which point she became barred from invoking the Act to seek a different remedy for the same injury under Act's provisions.

11 The majority cites Knott v. Halliburton Services 1988 OK 29, 752 P.2d 812 for the assertion that the anti-subrogation protections attached to benefits awarded under the Act, provided by 85 O.S. Supp.2005 § 44, were somehow part of the global right to recover that became vested at the time of injury. That was not the holding of Knott. When read in full, 14 is illustrative. It provides:

The right to compensation and the obligation to pay such benefits are vested, and become fixed by law at the time of injury. A compensation claim is controlled by the laws in existance [sic] at the time of injury and not by laws enacted thereafter. A worker's right to compensation is determined by the laws in force when the injury is sustained, notwithstanding a subsequent amendment to the law. The right of an employee to compensation arises from the contractual relationship existing between the employee and the employer on the date of the injury, and the statutes then in force form a part of that contract and determine the substantive rights and obligations of the parties. No subsequent amendment can operate retrospectively to affect in any way rights and obligations which are fixed. (Emphasis supplied).9

Knott, supra, simply holds that the statutes governing the right to workers' compensation and the obligation to pay it are those in force at the time of injury, and unaffected by subsequent amendments. In this cause, that includes 85 0.S8.2001 § 4 and the right of election is provides. Nothing about Knoit *925implies that 85 0.S. Supp.2005 § 44(b) means anything other than what its text indicates: that it applies to death claims or death benefits awarded under the Act, which 85 O.S. 2001 § 4 allows an injured employee to choose as one path of recovery.10 There is no indication that this prohibition is somehow part of a global right to recover and not part of one remedy provided by 85 0.8.2001 § 4. Knott, supra, does not mention 85 0.8. Supp. 2005 § 44(b), or subrogation, at all.

{12 The majority's interpretation of 85 ©.9$.2001 § 4 and 85 0.8. Supp.2005 § 44(b) is inconsistent with the full text of the two provisions, and is not supported by a prior decision of this Court that has examined 85 0.8. Supp.2005 § 44(b). In McBride v. Grand Island Express, Inc., 2010 OK 93, 246 P.3d 718, we analyzed the history and legislative intent behind 85 O.S. Supp.2005 § 44. Specifically, of § 44(b) we stated first in 1 12;

Section 44(b) however has no right of sub-rogation to recover money from third persons paid by the employer or his insurance carrier for death claims or death benefits under the Workers' Compensation Act. The employer or the insurance carrier had no historical right by payment of workers' compensation death benefits to pursue the tortfeasor to recover the workers' compensation death benefits paid because the right to death benefits subrogation was not authorized and was viewed as in conflict with Oklahoma Constitution, Article 23 § 7.11

Again at T 14 we stated:

Section 44(b) absolutely withholds from employer or insurer subrogation rights to recover from third parties money paid for death benefits under the Workers' Compensation Act. (Emphasis added).

McBride states that no right of subrogation existed with regard to death claims or death benefits under the Act, no more and no less. It is silent on any application of 85 O.S8. Supp.2005 § 44 to claims filed and benefits awarded under the laws of another state, and not under the Act, a choice specifically allowed by 85 0.8.2001 § 4.

113 The wife never made a claim or sought benefits under the Act, even though she would have been entitled to do so. She exercised her right of election and had her rights regarding any claim to benefits from her husband's death adjudicated by a Texas court, pursuant to the laws of Texas, under which laws she was awarded benefits. Upon doing so she was categorically excluded from pursuing an adjudication of the same right to recover under the Act in Oklahoma. As she never claimed or received benefits under the Act, by its own plain wording 85 0.8. Supp. 2005 § 44 is inapplicable.

14 The Restatement (Second) of Conflict of Laws § 185 (1971) was formulated to provide an answer to this exact question and is in accord with the above analysis and the provisions of 85 0.S8.2001 § 4 and 85 O.S. Supp.2005 § 44. It provides, simply:

The local law of the state under whose workmen's compensation statute an employee has received an award for an injury determines what interest the person who paid the award has in any recovery for tort or wrongful death that the employee may obtain against a third person on account of the same injury.

The plain wording of 85 0.5.2001 § 4 makes it obvious that it offers injured parties a choice of jurisdiction not just to adjudicate benefits, but all rights associated with an injury stemming from the relevant contractual relationship. 85 0.9$.2001 § 4 ensures that an individual who contracted in Oklahoma will be able to recover for an out-of-state injury if the law of the state where it occurs does not allow it or if they would prefer the benefits provided by Oklahoma law. It does not allow the injured party to pick and choose whatever hybrid of the laws of both states he or she would prefer, nor can I believe the Legislature intended such a result. To hold that the Workers' Compensation Act applies anyway, to prohibit subro-gation of benefits awarded in Texas under *926Texas law, functions to make the right of election provided by Title 85 0.98.2001 § 4 meaningless.

CONCLUSION

[ 15 The majority asserts that 85 0.9.2001 § 4 provides nothing more than a choice of where to seek an award of benefits that, either way, are awarded under the Oklahoma Workers' Compensation Act. They ignore all the language in the statute indicating that when a party choses to have their rights adjudicated in another state, they are choosing to have their right to recover for their injury adjudicated by the court of another state according to that state's laws, and not according to the Act. The Texas court in this cause did not award benefits pursuant to the Oklahoma Workers' Compensation Act, but pursuant to Texas law in response to an injury that occurred in Texas over which it had jurisdiction. The fact that the Act would have allowed the wife to choose an Oklahoma court instead, does not matter because wife rejected that option. While protections against subrogation of benefits may be part of the public policy protection provided by the Act, that does not matter when, as here, an injured person has chosen the courts and laws of another state to have their rights adjudicated, and declined to invoke the Oklahoma Workers' Compensation Act.

. Title 85 0.$.2001 § 4 provides in pertinent part:

From and after the passage and effective date of the Workers' Compensation Act, all the provisions of the Workers' Compensation Act of this state, Sections 1 et seq. of this title, shall apply to employers and to employees, irrespective of where accident resulting in injury may occur, whether within or without the territorial limits of the State of Oklahoma, when the contract of employment was entered into within the State of Oklahoma, and the said employee was acting in the course of such employment and performing work outside the territorial limits of this state under direction of such employer. In such case the injured employee may elect to commence and maintain his action for benefits and compensation in the State of Oklahoma as provided in the Workers' Compensation Act and the Court is hereby vested with jurisdiction thereof as fully as if such injury or accident had occurred within this state. Such right of election shall, however, not preclude the injured employee from recovering any benefits or compensation provided under any law of the state where injury occurred, and if such action be so commenced in such other state, or under the law of another state, and is prosecuted to final determination, such employee shall thereupon be precluded from his right of action under the Workers' Compensation Act of this state. Provided, the injured employee may exercise his right of election to file his claim or commence his said action or proceeding in the State of Oklahoma, at any time prior to final adjudication or determination of his rights under the laws of another state, and the fact that he shall have been furnished or provided with medical, surgical, hospital or other treatment care, or paid temporary disability compensation in such other state, or under the laws thereof, shall not preclude such injured employee from recovering further benefits and compensation under the Workers' Compensation Act of this state. Provided, further, no award made by the Court of this state shall include any compensation paid by the employer or insurance carrier before commencement of the action or proceeding in this state and any payments so made shall be treated as compensation voluntarily paid and credit therefor shall be allowed....

. 85 0.S. Supp.2005 § 44(b) provides:

(b) Notwithstanding subsection (d) of this section, the employer or his insurance carrier shall not have the right of subrogation to recover money paid by the employer or his insurance carrier for death claims or death benefits under the Workers' Compensation Act from third persons, with all common law rights against other than the employer and his employees preserved and to be in those persons who would have had such rights had there been no death claim or death benefits under the Workers' Compensation Act.

. Title 85 O.S.2001 § 4, see note 1, supra.

. Matter of Estate of Little Bear, 1995 OK 134, 122, 909 P.2d 42; State ex rel. Rucker v. Tapp, 1963 OK 37, ¶ 11, 380 P.2d 260.

. Matter of Estate of Little Bear, see note 4, supra.

. Title 85 0.$.2001 § 4 provides in pertinent part:

... [tthe injured employee may exercise his right of election to file his claim or commence his said action or proceeding in the State of Oklahoma, at any time prior to final adjudication or determination of his rights under the laws of another state. (Emphasis supplied).

. Pryse Monument Co. v. District Court of Kay County, 1979 OK 71, 12, 595 P.2d 435 (internal citations omitted).

. Title 85 O.S. Supp.2005 § 44(b), see note 1, supra.

. Knott v. Halliburton Services 1988 OK 29, 14, 752 P.2d 812.

. The other path being an an adjudication of the injured worker's rights and benefits under the laws of another jurisdiction, which the wife chose in this cause.

. McBride v. Grand Island Express, Inc., 2010 OK 93, 112, 246 P.3d 718.