Court: Supreme Court of Hawaii
Opinion Date: January 11, 2022
Judge: Michael D. Wilson
Areas of Law: Insurance Law, Personal Injury
This case law update is brought to you by Freeway Law auto accident and personal injury lawyers in Orange County. The following is not one of our cases, but it is of some significance, and we thought we should share it with our readers for informational purposes. The information above is for informational purposes only and not to be construed as legal advice.
In this case, the Supreme Court clarified the proper timing of Alvarado calculations, which determines the reimbursement due to the insurer from a third-party settlement, and the reimbursement process for an insurer when the amount of workers’ compensation (WC) benefits the insurer has already dispensed to the employee is less than the amount it owes the employee for its share of attorney’s costs and fees for the third-party action.
Petitioner received WC benefits from Respondent. Petitioner brought suit against the owner of the building in which she was injured and reached a settlement. Respondent then sought reimbursement of the WC benefits it had paid to Petitioner under Haw. Rev. Stat. 386-8 and Alvarado v. Kiewit Pacific Co., 993 P.2d 549 (Haw. 2000). At issue was whether certain WC benefits that Respondent owed Petitioner were properly classified as “paid compensation” and whether the process of Respondent’s reimbursement of WC benefits exceeded the amount it had previously contributed to Petitioner as “paid compensation.” The Supreme Court held (1) Alvarado calculations shall be performed based on the date on which the employee receives the third-party recovery; and (2) an insurer’s “share” of the attorney’s fees and costs the employee incurs while pursuing third-party recovery is based on the insurer’s total WC liability.