The Insurance Company of the State of Pennsylvania v. Lavonne Neese
Dallas Court of Appeals, No. 05-12-00062-CV (July 24, 2013)
Justices Lang (Opinion), Myers, and Evans

The Court of Appeals affirmed a trial court’s order striking an insurance company’s petition in intervention, in which the insurer attempted to assert subrogation rights against a plaintiff in a wrongful death action. The Court concluded Oklahoma law applied rather than Texas law, and because Oklahoma provided no right of subrogation for the insurer, the trial court acted within its discretion when it struck the insurer’s intervention.

James Neese, an Oklahoma resident, was killed in Texas by a pipeline explosion. Neese’s employer, C&H Power Line Construction Co., was headquartered in Oklahoma and bought its worker’s compensation insurance policy from The Insurance Company of the State of Pennsylvania (“ICSP”). The Oklahoma Workers’ Compensation Court ordered ICSP to pay death benefits to Neese’s widow and children, all of whom were Oklahoma residents.

Neese’s estate later brought a wrongful-death suit in Dallas County against several Texas companies connected to the pipeline explosion. ICSP filed a petition in intervention, claiming subrogation against the Neeses in the amount of the workers’ compensation benefits it had paid. The Neeses moved to strike ICSP’s intervention, arguing the subrogation claim was controlled by Oklahoma law, which provided ICSP no subrogation rights with respect to death benefits. ICSP contended Texas law, which provided for subrogation, applied.

The parties argued their respective positions about which state had the most significant relationship with the dispute under sections 6 and 145 of the Restatement (Second) of Conflict of Laws. But the Court of Appeals looked instead to the more specific guidance of section 185, which provides: “The local law of the state under whose workmen’s compensation statute an employee has received an award for an injury determines what interest the person who paid the award has in any recovery for tort or wrongful death that the employee may obtain against a third person.” The Court applied the rule of this section and held that Oklahoma law governs ICSP’s subrogation claim because it is the state under whose workers’ compensation statute the Neeses received their award.

The Court agreed with the Neeses that, at the time of the injury, Oklahoma law did not afford subrogation rights to insurers that paid workers’ compensation death benefits. The Court therefore affirmed the trial court’s order striking ICSP’s intervention.