If the matter had gone to trial and the plaintiff would have been assessed a percentage of fault, the calculation would be modified according to cases similar to Kerperien v. Lumberman’s Mutual, above. Basically, the employer still gets the same ratio of the amount due to the employee after attorney’s fees and expenses are deducted. If 50% fault was assessed in the above example and the employee was receiving $90,000.00 rather than $180,000.00, the settlement would be apportioned as follows:
- The attorney’s fees would then be $30,000.00 + $10,000.00 in expenses or $40,000.00;
- The balance of the settlement after the attorney’s fees and expenses were deducted under this scenario would be $90,000.00 - $40,000.00 = $50,000.00;
- The employer would receive 0.5277777 of $50,000.00 or $26,388.88 of the balance.
It makes little difference if the employee receives nothing after the Ruediger Formula, as the employee actually becomes the trustee of an express trust for the benefit of the employer for the part of the third-party recovery that is subject to subrogation. Missouri Highway and Transportation Commission v. Merritt, 204 SW3d. 278 (Mo. App. E.D. 2006). However, the statute specifically states that “the balance of the recovery may be divided between the employer and the employee or his dependents as they may otherwise agree.” § 287.150.3 RSMo. In other words, the law does not prevent the parties from reaching a settlement agreement. Because the results of the Ruediger Formula can be harsh to either party, it makes a lot of sense to get an agreement with the workers’ compensation carrier on a subrogation amount prior to resolving a third-party case.
Make sure to talk to a St. Louis MO Workers' Compensation attorney before you settle your third-party case if you have received workers' compensation benefits for your injuries.
