William W. Watts, III and Jeffery Hartley Win Reversal of Trial Court Judgment on Subrogation Claim

In March of 2021, firm members William W. Watts, III and Jeffery J. Hartley, representing the Chapter 13 Trustee for the United States Bankruptcy Court for the Southern District of Alabama, obtained an order from the Court of Civil Appeals reversing a trial court’s judgment awarding reimbursement to the employer of workman’s compensation benefits paid to the debtor out of proceeds collected by the debtor in satisfaction of a judgment against an underinsured motorist insurer.  The Court held that employers are not entitled to be reimbursed their payment of worker’s compensation benefits out of the proceeds collected by the employee on a claim for underinsured motorist benefits arising out of an automobile accident which occurred in the course and scope of the employee’s employment.  The Court rejected the argument that the employer should be entitled to be reimbursed UM proceeds if they are collected under a policy of uninsured motorist benefits that the employer itself obtained for the benefit of its employees while driving in the course and scope of their employment.