Luze v. New Fb Co., 952 N.W.2d 264

Charles Luze died in a workplace motor-vehicle collision; his employer New FB was insured by Zurich for workers’ compensation and automobile (including UIM) coverage.
Zurich paid workers’ compensation benefits to Charles’s surviving spouse Jeanette (as personal representative) and funeral expenses; total WC lien amount (past benefits plus present value of future benefits) was asserted at about $719,537.
Jeanette sued the tortfeasor (Miller) and settled that claim for $898,000; she also litigated and then settled a coverage/UIM claim against Zurich for $230,000, producing total recoveries to the estate of $1,128,000.
Zurich claimed a statutory workers’ compensation lien under SDCL 62-4-38/39 against the portion of the settlement constituting “like damages” (economic losses) and sought to subrogate against the $230,000 UIM payment it made.
The circuit court awarded Zurich a 50% lien on the total settlement and allowed subrogation against the UIM payment; Jeanette appealed the 50% allocation and the subrogation ruling.
The Supreme Court remanded on the allocation issue (insufficient factual findings to review the 50% lien) and affirmed on the subrogation issue (insurer may subrogate against UIM proceeds it paid).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Zurich is entitled to a 50% statutory WC lien on the $1,128,000 settlement	Luze: court lacked evidentiary basis; Zurich presented no independent proof of income/economic loss and court should consider the claim’s "true value" when allocating like vs. non-like damages	Zurich: burden to show allocation rests with Luze; insurer could rely on record evidence presented by Luze and court may discount uncontroverted testimony	Remanded: allocation decision reversed for insufficient findings of fact; circuit court must enter specific findings valuing economic (like) and non-economic damages and may reconsider allocation
Whether Zurich may subrogate against the $230,000 UIM payment it made to the estate	Luze: SDCL 62-4-38 offsets apply only to damages recovered "from some other person than the employer," so Zurich (as both WC and UIM payor) cannot subrogate against its own UIM payment	Zurich: precedent permits a WC lien/offset against UIM proceeds even when the employer or its insurer paid them; public policy bars double recovery	Affirmed: insurer may subrogate against UIM proceeds it paid; court relied on prior South Dakota precedent and public-policy prohibition on double recovery

Zoss v. Dakota Underwriters, 575 N.W.2d 258 (S.D. 1998) (party seeking allocation of "like damages" bears burden to obtain express allocation or judicial determination)
Zoss v. Dakota Underwriters, 590 N.W.2d 911 (S.D. 1999) (spouse may present evidence of amount of settlement representing pecuniary loss)
Liberty Mut. Ins. Co. v. Garry, 574 N.W.2d 895 (S.D. 1998) (examined extent of insurer’s statutory lien against settlement proceeds)
National Farmers Union Prop. & Cas. Co. v. Bang, 516 N.W.2d 313 (S.D. 1994) (self-insured employer entitled to statutory lien against self-insured UIM benefits)
Kaiser v. North River Ins. Co., 605 N.W.2d 193 (S.D. 2000) (employer’s WC carrier may offset/subrogate against UIM proceeds; public policy prevents double recovery)
Dakota Plains AG Ctr., LLC v. Smithey, 772 N.W.2d 170 (S.D. 2009) (trial court must separate like damages after a full evidentiary hearing)
AgFirst Farmers Co-op v. Diamond C Dairy, LLC, 827 N.W.2d 843 (S.D. 2013) (findings must be specific enough to permit meaningful appellate review)