431 P.3d 1197
Ariz.2019Background
- Stephanie Jackson, a South Carolina resident, was injured in Arizona while a passenger in an Eagle-employed semi driven by Rachael Hender.
- Jackson was employed by Drivers Management, LLC (DM), a Nebraska company, and received Nebraska workers’ compensation benefits paid by DM.
- Jackson sued Eagle, Hender, and Werner in Arizona state court within Arizona's two-year statute of limitations for personal-injury claims; DM was named as a defendant per Nebraska subrogation law.
- Eagle moved for dismissal/summary judgment, arguing Arizona’s automatic-assignment statute, A.R.S. § 23-1023(B), stripped Jackson of any legal interest because she did not sue the third party within one year.
- The superior court granted summary judgment for Eagle; the court of appeals reversed based on Quiles v. Heflin Steel Supply Co., holding the law of the state that paid benefits governs third-party subrogation/assignment.
- The Arizona Supreme Court granted review to decide whether Arizona’s automatic-assignment provision applies when compensation was paid under another state’s law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which state’s law governs assignment/subrogation rights for a third-party claim when worker received out-of-state compensation? | Quiles rule: law of the state that paid compensation (Nebraska) governs; Nebraska allows employee to sue in own name. | Arizona statutes (post-2009), particularly § 23-904(C) and § 23-1023(B), mean Arizona law should apply and § 23-1023(B) automatically assigns claims to the employer/insurer. | Arizona Supreme Court affirmed Quiles: law of the state paying benefits (Nebraska) governs; § 23-1023(B) does not apply to benefits paid under another state's law. |
Key Cases Cited
- Quiles v. Heflin Steel Supply Co., 145 Ariz. 73 (App. 1985) (law of the state that paid compensation governs third-party subrogation and assignment rights)
- Kolberg v. Sullivan Foods, Inc., 644 N.E.2d 809 (Ill. App. Ct. 1994) (applying law of state where workers’ compensation was paid to govern third-party action)
- Langston v. Hayden, 886 S.W.2d 82 (Mo. Ct. App. 1994) (same)
- Harris v. Ballard, 953 N.Y.S.2d 366 (N.Y. App. Div. 2012) (same)
- Am. Interstate Ins. Co. v. G & H Serv. Ctr., Inc., 884 N.E.2d 1228 (Ohio Ct. App. 2005) (same)