§10.19 Amounts Included as Applicable to Subrogation Interest

• Library: Workers' Compensation Law Deskbook Vol. 2 (2020 Ed.)

F. (§10.19) Amounts Included as Applicable to Subrogation Interest

An employee may not defeat the right of subrogation if a third-party recovery is accomplished in a structured settlement and the purchase of an annuity. In Vallejo-Davila v. Osco Drug, Inc., 872 S.W.2d 511 (Mo. App. W.D. 1994), the court held that, when a third-party recovery is based on the purchase of an annuity for a widow and child, the employer’s subrogation interest extends to and is entitled to credit for the entire cost of the annuity.

See also William H. Pickett, P.C. v. American States Family Insurance Co., 857 S.W.2d 309 (Mo. App. W.D. 1993), which dealt with an interpleader action to determine the extent of a workers’ compensation insurance carrier’s subrogation interest in an employee’s settlement of a third-party recovery. The court held that the employer was entitled to recover...