Hizey Well Service & Supply (employer) and U.S.F.&G. Insurance
Company (insurer), appeal from the trial court's decision denying
their motion to intervene in a malpractice action in which David
E. Roberts was the plaintiff and John J. Krupka, a physician, and
other health care providers were the defendants.
As we view this appeal, there is one substantive issue and one
procedural issue with which this court must deal. The sole
substantive issue is whether an employer and its insurer who have
paid additional disability benefits and medical expenses under
the express order of an administrative law judge (ALJ) in a
workers' compensation case are entitled to intervene in the
malpractice action filed by an employee against his physician for
the purpose of asserting subrogation rights to the proceeds of
that lawsuit. A resolution of this particular question depends
upon whether this case is controlled by a 1916 Kansas Supreme
Court decision, Ruth v. Witherspoon-Englar Co., 98 Kan. 179,
157 P. 403 (1916).
The facts which underlie this controversy are not in serious
dispute. The result that is dictated, however, by the application
of the doctrine set forth in Ruth is bizarre and catapults the
court and the litigants into a kind of "Alice in Wonderland"
world in which logic becomes illogic, fiction becomes fact, and
success becomes potentially fatal to certain claims by the
plaintiff which are the result of an injury sustained in the
course of his employment and compensable under the Workers'
Compensation Act (Act). In short, we believe the application of
Ruth to the facts of this case will give us the type of result
that causes laymen to scratch their heads and roll their eyes in
bewilderment at what our legal system sometimes dictates. It
calls to mind the Dickensian statement that "if the law supposes
that, the law is a ass."
Roberts was employed by Hizey when he was injured on the job in
November 1982. He filed a claim under the Act and appellants
began to make regular disability and medical payments to and on
behalf of Roberts. Subsequent to, but as a direct result of his
job-related injury, Roberts sought treatment from Dr. John
Krupka, a physician, who performed surgery on Roberts. Roberts
alleges this surgery was not performed successfully or
skillfully, and that it aggravated and prolonged his original
disabilities. He thereupon sued Krupka and eleven other medical
care providers for medical malpractice.
We pause to note that, because of the legal doctrines which we
will deal with in this case, it was necessary for Roberts, in
order to maximize his recovery, to file two legal proceedings and
employ two sets of lawyers. On the one hand, Roberts had and
still has his workers' compensation case in which he is
represented by one set of lawyers and insists his ailments and
disabilities were not caused by malpractice. On the other hand
and simultaneously, he has his malpractice lawsuit in which he is
represented by another set of lawyers in which he insists those
same ailments and disabilities were, indeed, caused by
malpractice of his physicians. The fact that Roberts was required
retain two different law firms to maximize damages all directly
traceable to one job-related injury while employed by appellant
Hizey is one of those "through the looking glass" features of
this case that will be discussed later in this opinion.
Even though Roberts had sued several physicians for
malpractice, saying they were responsible by their negligent
treatment for aggravating and prolonging his present
disabilities, the ALJ in the workers' compensation action ordered
appellant U.S.F.&G. to continue to make medical and disability
payments to Roberts for those conditions which Roberts was by
then claiming were caused by medical malpractice. This left
appellants, particularly U.S.F.&G., in a difficult position with
little choice but to obey the order of the ALJ and pay out
benefits which may have been wrongfully ordered since that order
was not appealable but was certainly enforceable. U.S.F.&G. has
paid medical and disability benefits on behalf of Roberts, which
have accumulated as of August 1988 to an amount in excess of
$176,000, for a condition which originated with his on-the-job
injury but was aggravated by his medical treatment.
In its brief, U.S.F.&G. argues it had entered into an
agreement with Roberts that it would continue to make all
disability and medical payments in consideration of the agreement
on Roberts' behalf to repay all amounts received from U.S.F.&G.
after January 30, 1985, from the proceeds of Roberts' malpractice
action. The existence of this agreement and its binding effect is
disputed by Roberts. Had the existence of the agreement been
proven, we would be inclined to consider issues such as unjust
enrichment and estoppel. However, we do not believe the existence
of the alleged agreement was adequately proven, and, as a result,
it forms no part of our final decision.
In August 1988, 38 months after Roberts filed the malpractice
suit, appellants moved to intervene. Appellants also moved to
implead the Workers' Compensation Fund (Fund) on the theory that
the Fund would ultimately be responsible to reimburse appellant
U.S.F.&G. for any compensation which it had wrongfully paid by
reason of the ALJ's order should it be determined it had no
subrogation rights against any recovery or settlement by Roberts
in his malpractice action.
Shortly after the motions by appellants were filed, Roberts
settled the malpractice action. The trial court, in a written
denied the motion of appellants to intervene on the basis of the
doctrine set forth in Ruth, 98 Kan. 179, and on the grounds
that the motion to intervene was not timely filed.
Appellants have timely appealed that decision to this court,
and the Fund has filed an amicus curiae brief supporting the
position taken by appellants. The Fund argues that appellants
should have been permitted to intervene and should have had
subrogation rights to and a lien against any recovery by Roberts
in the malpractice action because U.S.F.&G. had paid medical and
disability expenses necessitated by aggravation of the original
job-related injury by malpractice of the physicians involved.
The first issue we wish to dispose of on this appeal is a
procedural one. Counsel for Roberts argues quite strenuously that
the trial court properly held the motion by appellants to
intervene was not timely filed and that we should affirm the
trial court on that issue, thereby disposing of the entire
lawsuit and avoiding a confrontation with the Ruth doctrine.
Upon examination of the record, it is our judgment that this case
was decided not on the issue of whether the motion was timely
filed but on the fact that, under the doctrine set forth in
Ruth, appellants had no right to intervene.
Although appellants waited 38 months while a malpractice suit
was being litigated before filing their motion to intervene, it
is difficult to see where substantial prejudice was caused to
Roberts by the failure of appellants to intervene at an earlier
time. From Roberts' point of view, the main thrust of the lawsuit
was whether his doctors were negligent in treating him and, if
so, what damages he sustained as a result. The interest of
U.S.F.&G. in the lawsuit had nothing to do with the nature and
extent of Roberts' injuries nor with the issue of malpractice.
The interest of U.S.F.&G. in the lawsuit was to attempt to
subrogate against the proceeds of the settlement, and, under
those circumstances, there was no reason for U.S.F.&G. to act any
earlier than it did. The fact is that, unless and until it was
determined that Roberts' disabilities were aggravated by
negligent medical treatment and he was entitled to recover sums
of money for such aggravation, U.S.F.&G. had no reason to even
consider intervention. To have attempted to intervene earlier
would have complicated the issues and needlessly increased the
cost of litigation. We believe that, under the circumstances and
facts of this case, the motion to
intervene, having been filed shortly before the lawsuit was
settled, was timely filed and the trial court erred in concluding
it was not. Accordingly, we reverse the ...