Subrogation Liens and the "Made Whole" Doctrine Under Georgia Law

by Chuck DuBose, Esq.

In a recent Georgia Court of Appeals case (Austell Healthcare, Inc. v. Scott, Appeal No. A10A2346, decided March 11, 2011) the Court of Appeals held that an employer and its workers’ compensation insurer were not entitled to enforce a workers’ compensation subrogation lien against a settlement of the claim against the third-party tortfeasors. The claimant was injured in an automobile accident while working for Austell Healthcare. Aside from pursuing a workers’ compensation claim he also filed a personal injury lawsuit against several third parties he claimed were responsible for the accident. Austell Healthcare and their workers’ compensation insurer intervened in that suit. However, after the claimant settled the third party claim the trial court granted his motion to extinguish the subrogation lien asserted by the employer and insurer.

Upon appeal, the Georgia Court of Appeals affirmed the dismissal of the subrogation lien. The Court re-affirmed the principle that, in order to recover on a subrogation lien in work-related injuries, the employer must show the employee has been fully and completely compensated, taking into consideration benefits received under the Workers’ Compensation Act, as well as all economic and non-economic losses incurred as a result of the injury. In this particular case, the Court of Appeals noted the fact that the employer and insurer did not present any evidence that the employee had been fully and completely compensated at any point. While the Court of Appeals noted the trial court erroneously concluded the employer/insurer could not show the employee had been fully compensated because there was no liability award (since the parties settled), the Court again noted the fact that the employer/insurer never attempted to introduce any evidence that the employee had been fully and completely compensated at any point, not even at the hearing on the employee’s motion to extinguish the subrogation lien. This case emphasizes the difficulty in recovering on subrogation liens in Georgia but also emphasizes the importance in providing evidence to support the argument that the employee has been fully and completely compensated in order to recover on a subrogation lien.


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