Virginia Court Of Appeals Rejects Attempt To Limit Workers’ Compensation Carrier’s Reimbursement To ‘Like Damages’

Trial lawyers in Virginia have been trying for decades to convince that state’s courts to rule that a workers’ compensation carrier is not subrogated to non-economic damages awarded or recovered in a third-party tort action. On March 29, 2022, the latest such effort was turned away by the Virginia Court of Appeals.

In Stowers v. Georgia Pacific, LLC, Corey Stowers was injured at an industrial plant in Glady, Virginia while working for Georgia Pacific. He received workers’ compensation benefits from Georgia Pacific’s worker’s compensation carrier, Old Republic Insurance Company of North America.

Stowers filed suit against the manufacturer of the defective product which caused his injuries, and the employer filed a petition of lien in the third-party action. Stowers settled his third-party case on the eve of trial for $550,000.

The carrier was reimbursed its lien of $241,215.83, but a dispute arose over the amount of Old Republic’s future credit and the Virginia Commission ordered a future credit in the amount of the $550,000 settlement less the lien reimbursement, or $308,784.17.

It approved Old Republic making no additional medical or indemnity payments until the credit was exhausted. Stowers filed a request for review with the Virginia Commission.