Overview of the MITF


III. The Special Indemnity Statutes

¶13 The Fund was originally created in the Special Indemnity Fund Act, 1943 Okla. Sess. Laws, p. 258-260, now codified at 85 O.S.2001, §§ 171-176, as amended.2 The special indemnity statutes were enacted to encourage employment of physically impaired persons defined in § 171. The statutes protect employers from the responsibility to compensate a physically impaired person for disability resulting from the combination of the previous impairment and the subsequent impairment caused by an on-the-job injury. Special Indemnity Fund v. Bonner, 1947 OK 144, ¶7, 180 P.2d 191,192; Special Indemnity Fund v. Figgins, 1992 OK 59, ¶6, 831 P.2d 1379, 1382-1383.

¶14 The applicable version of § 1723 provided:

A. If an employee who is a "physically impaired person" receives an accidental personal injury compensable under the Workers' Compensation Act which results in additional permanent disability so that the degree of disability caused by the combination of both disabilities is materially greater than that which would have resulted from the subsequent injury alone, the employee shall receive compensation on the basis of the combined disabilities… . Provided the employer shall be liable only for the degree of percent of disability which would have resulted from the latter injury if there had been no preexisting impairment. After payments by the employer or his insurance carrier, if any, have ceased, the remainder of such compensation shall be paid out of the Special Indemnity Fund … .

85 O.S.Supp.1986, § 172(A). These provisions apportion between the employer and the Fund the responsibility for compensating a physically impaired person who sustains a work-related injury. They assure the employer will be responsible only for the disability resulting from the injury and the Fund will be responsible for the disability resulting from the combined previous impairment and the subsequent impairment. The above-quoted provisions remain, in substance, in the most current version of § 172, although the class of employees entitled to receive Fund benefits has been reduced.4

IV. The Derivative Nature of the Fund's Liability

¶15 The special indemnity statutes do not impose a primary or original obligation upon the Fund. As Levi v. Special Indemnity Fund, 1964 OK 32, ¶7, 389 P.2d 620, 621-622, explained:

The Special Indemnity Fund Act does not undertake to cast upon the Fund prime liability which could be viewed as original and wholly distinct, independent and disconnected from that of the last employer. What that law does contemplate is rather characterized as an apportionment or division of obligation between the employer and the Fund in accordance with the statutory formula. Special Indemnity Fund v. Farmer, et al., 195 Okl. 262, 156 P.2d 815.

¶16 The Fund's obligation is derived from the anterior obligation of the employer, it merely supplements the employer's obligation, and it does not attach until the extent of the employer's primary liability for the subsequent work-related injury has been judicially determined. J. C. Penney Co. v. Crumby, 1978 OK 80, ¶10, 584 P.2d 1325, 1329. We have repeatedly recognized the derivative nature of the Fund's liability. Id.; Levi v. Special Indemnity Fund, 1964 OK 32 at ¶9, 389 P.2d at 622; Special Indemnity Fund v. Mickey, 1977 OK 38, ¶6, 563 P.2d 123, 125; Reynolds v. Special Indemnity Fund, 1986 OK 64 at ¶11, 725 P.2d at 1268.

V. The Derivative Nature of a Claim against the Fund
within the Primary Claim against the Employer

¶17 A claim against the Fund has not been treated as an independent action or proceeding separate and apart from the claim against the employer. Rather, our workers' compensation law has charted a course for proceedings on claims against the Fund within the proceedings on the primary claim against the employer. The WCC Rules require that the Form 3 commencing a claim against the employer identify the claimant as a "physically impaired person," if applicable, and that the Form 3-f commencing a claim against the Fund be filed under the same court case number as the claim against the employer.5 The special indemnity statutes require the Administrator of the WCC to notify the Fund of any claim identifying the claimant as a physically impaired person because it is a proceeding that may affect the Fund. Special Indemnity Fund v. Hulse, 1967 OK 219 at ¶14, 434 P.2d at 369.

¶18 Our decisional law has consistently folded claims against the Fund into proceedings on the claims against employers. Cameron & Henderson v. Franks, 1947 OK 232, ¶28, 184 P.2d 965, 970, recognized the employer's pecuniary interest in having the Fund's liability decided in the claim against the employer and reversed the order of the State Industrial Commission (now the Workers' Compensation Court) dismissing the Fund as a party to the proceeding. Reynolds v. Special Indemnity Fund, 1986 OK 64 at ¶¶6, 8, 725 P.2d at 1268-1269, recognized the derivative nature of the Fund's liability and characterized the claim against the Fund as being derived from and supplemental to the claim against the employer. J. C. Penney Co. v. Crumby, 1978 OK 80 at ¶16, 584 P.2d at 1330-1331, reversed the WCC because neither the medical evidence nor the judge's order rated the claimant's prior physical impairment in deciding the claim filed against the employer. Hammons v. Oklahoma Fixture Company, 2003 OK 7, ¶5, n.11, 64 P.2d 1108, 1110, n.11, explained that Crumby required the trial judge to "rate (1) claimant's pre-existing unrelated impairments as well as (2) the impact, if any, the compensable injuries may have had upon claimant's pre-existing disability."

¶19 Further, we have implicitly recognized the derivative nature of claims against the Fund in our determinations that: 1) the right of an employee who is physically impaired to pursue a claim against the Fund arises when the employee sustains a work-related compensable injury, Loftis v. Multiple Injury Trust Fund, 2003 OK CIV APP 30, ¶16, 67 P.3d 924, 927 (approved for publication by the Oklahoma Supreme Court); 2) the Fund's payment obligation is triggered by the last payment of the employer's liability for the claimant's permanent disability, Multiple Injury Trust Fund v. Pullum, 2001 OK 115, ¶17, 37 P.3d 899, 907; and 3) the term "action" in the phrase "for actions filed after October 31, 1999" in the 1999 amendment to §172 referred to the claim filed against the employer on the subsequent injury and did not refer to the filing of a claim against the Fund. Autry v. Multiple Injury Trust Fund, 2001 OK 79, ¶13, 38 P.2d 213, 218. Accordingly, a claim against the Fund is a part of the primary claim against the employer and it is derivative in nature.

Multiple Injury Trust Fund v. Wade, 2008 OK 15, __ P.3d __

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