Beyond Workers’ Compensation: How Strategic Thinking Protected a Catastrophically Injured Worker’s Recovery
When a tire changing machine malfunctioned at an Ontario auto shop, a dual liability strategy ensured our client received full compensation without reduction from workers’ comp liens.
A Routine Day Turned Catastrophic
On November 7, 2019, our client was doing what he had done thousands of times before. As a certified master technician with 14 years of experience working at an auto shop in Ontario, California, he was using a tire changing machine—standard equipment in the automotive industry.
But on this day, something went terribly wrong.
The machine’s clamps, designed to hold a wheel and rim assembly securely during tire changes, failed. Metal-on-metal wear had degraded the clamps’ grip, and without warning, the rimmed tire was propelled with tremendous force directly into our client’s abdomen and groin area. The impact threw him several feet from the machine.
The injuries were catastrophic and life-altering: loss of his right testicle, complete permanent loss of use of his left arm, Complex Regional Pain Syndrome (CRPS), chronic pain requiring a spinal cord stimulator implant, and cognitive impairments affecting memory and processing speed. Medical experts ultimately concluded he had zero earning capacity—at age 47, a skilled technician with nearly 15 years of experience was deemed permanently unable to work in any capacity in the open labor market.
His medical care needs were projected at over $8.7 million over his lifetime.
The Workers’ Compensation Limitation
Like most workplace injuries in California, our client was covered by workers’ compensation insurance. His employer’s carrier paid approximately $160,000 in past medical expenses and provided temporary and permanent disability payments, ultimately totaling around $260,000.
But workers’ compensation, while providing important benefits, has significant limitations. It doesn’t fully compensate for pain and suffering, and the wage replacement benefits are capped well below actual lost earnings. For someone facing millions in future medical care and the complete loss of their livelihood, workers’ compensation alone would be inadequate.
This is where third-party liability becomes crucial. When a workplace injury is caused by a defective product or the negligence of someone other than the employer, an injured worker may be able to pursue additional compensation beyond workers’ comp benefits.
However, there’s a critical complication: under California law, if a workers’ compensation carrier pays benefits and the injured worker later recovers from a third party, the carrier may have a right to be reimbursed from that recovery. This is called a workers’ compensation lien.
In our client’s case, we needed to not only establish liability against the tire changer manufacturer—we needed to structure the case in a way that protected our client’s recovery from being significantly reduced by the workers’ comp lien.
Two Paths to Liability
From the beginning, we saw two distinct theories of liability in this case.
The Product Defect Claim
The first was straightforward product liability. The tire changing machine had fundamental design flaws:
- The clamps suffered from consumable wear due to metal-on-metal contact, yet the manufacturer provided no adequate warnings about this wear pattern
- There was no fail-safe mechanism to shut off power if the clamps failed to grip properly
- Critical safety equipment (an inflation guard kit) was only offered as an optional accessory rather than standard equipment
- Users received no guidance that clamps would require periodic inspection and replacement
This machine had a documented history of recurring clamp problems, requiring service two to three times per year over a seven to eight year period. Our engineering experts concluded the design did not meet basic consumer expectations—an ordinary user would not expect clamps to catastrophically fail during routine operation.
The Strategic Agency Theory
We also developed a second theory of liability, one that would prove crucial to protecting our client’s full recovery.
Just two days before the accident—on November 5, 2019—an authorized service representative had serviced this exact machine. They inspected it, performed maintenance, and cleared it as “OK” for operation. Yet they failed to replace the worn clamps or even advise that replacement was necessary.
When a piece of equipment fails within 48 hours of being serviced and cleared as safe, that’s not just a product defect—that’s also a service failure.
We contended that the service company was acting as an agent of the equipment manufacturer. If we could establish this agency relationship, the manufacturer would be vicariously liable not just for the defective product design, but also for the negligent service and inspection that cleared a dangerous machine for use.
This wasn’t just about adding another defendant. This was about establishing our client’s employer’s own potential liability through their authorized service provider, which would have significant implications for the workers’ compensation lien.
Why the Agency Theory Mattered
Under California law, when an employer shares liability for a workplace injury with a third party, the workers’ compensation carrier’s right to reimbursement can be significantly affected. If we could prove that our client’s employer bore some responsibility for the injury (through their authorized service provider’s negligence), it would limit or potentially eliminate the carrier’s ability to recover from our client’s settlement with the third-party manufacturer.
The Defendants initially underestimated this theory. Defense counsel later acknowledged they learned of our agency claim as the primary theory only about 36 hours before our first mediation in September 2024. They had evaluated the case primarily as a product liability claim and needed additional time to fully assess the agency liability exposure.
But that was exactly the point. By developing a comprehensive liability theory that connected multiple parties and legal relationships, we created a stronger position for our client—both in terms of the overall recovery and in protecting that recovery from reduction.
Building the Case
Establishing both theories required extensive expert testimony and investigation.
For the product liability claim, we retained engineering experts who analyzed the machine’s design flaws and the metal-on-metal wear pattern in the clamps. We documented the machine’s service history showing recurring problems. We obtained the manufacturer’s service records and warranty information.
For the agency theory, we investigated the relationship between the service company and the equipment manufacturer, examining service agreements, authorization documentation, and the nature of their business relationship. We obtained Cal-OSHA’s investigation file, which included a citation against our client’s employer for failing to maintain the tire changing machine in safe operating condition—evidence that corroborated the negligent maintenance claim.
We also worked with medical experts to document the full extent of our client’s injuries and future needs:
- Dr. David Fish, Director of Physiatry and Interventional Pain Management at UCLA Pain Center, developed a comprehensive life care plan
- Dr. Joshua Prager, a specialist in Complex Regional Pain Syndrome, evaluated our client’s chronic pain condition
- Dr. Rick Sarkisian, a vocational rehabilitation expert, assessed our client’s earning capacity (concluding it was zero)
- Dr. Peter Formuzis, an economist, calculated total economic losses exceeding $8.3 million
The evidence painted a clear picture: a defectively designed machine, negligently serviced and cleared as safe, had destroyed our client’s career and caused permanent, severe injuries requiring millions in lifetime care.
Resolution Through Strategic Mediation
We approached mediation with both liability theories fully developed. The initial mediation session in September 2024 did not result in immediate settlement—the Defendants needed time to fully evaluate the agency negligence theory and its implications.
Ultimately, the case was resolved through a confidential global settlement that addressed both the product liability and negligence claims. Critically, because we established the employer’s potential shared liability through the agency theory, our client was able to accept responsibility for the workers’ compensation lien without it substantially diminishing his recovery.
The strategic approach worked: our client received compensation that reflected the full extent of his injuries and losses, not a recovery reduced by hundreds of thousands in workers’ comp reimbursement.
Lessons for Injured Workers
This case illustrates an important principle: when you’re catastrophically injured at work, the question isn’t just “who is liable?”—it’s “who is liable, and how do those liability relationships affect my ultimate recovery?”
Many injured workers don’t realize that:
- Third-party claims (against equipment manufacturers, contractors, or other non-employers) can provide compensation beyond workers’ comp limits
- Workers’ compensation carriers may have lien rights against third-party recoveries
- Strategic case development can sometimes limit these lien rights, protecting more of the recovery for the injured worker
- The legal theories you pursue and how you structure liability can be just as important as establishing that someone was at fault
This requires thinking beyond the obvious claims. It requires understanding not just tort law and product liability, but also workers’ compensation law, agency law, and how these different areas of law interact. It requires developing a comprehensive strategy before entering settlement negotiations.
When Workplace Injuries Involve Defective Equipment
At Adamson Ahdoot, we handle serious workplace injury cases throughout California, from Los Angeles to San Bernardino County and beyond. While workers’ compensation provides important benefits, it’s often not enough when catastrophic injuries are caused by defective equipment or third-party negligence.
If you or a loved one has been seriously injured at work by defective machinery or equipment, you may have claims beyond workers’ compensation. These cases require careful analysis of multiple potential defendants, complex liability theories, and strategic planning to maximize and protect your recovery.
Our approach is thorough: we investigate all potential sources of liability, develop comprehensive legal theories, work with top experts in relevant fields, and structure our cases to achieve the best possible outcome for our clients—not just the most obvious one.
Your workplace injury case deserves that level of strategic thinking.
This case resolved with a confidential settlement in 2025. This article presents the case in general terms consistent with settlement agreement provisions and California Rules of Professional Conduct. No confidential settlement terms are disclosed.
About Adamson Ahdoot LLP
Adamson Ahdoot LLP is a personal injury law firm based in Los Angeles, serving clients throughout California. Our attorneys handle complex workplace injury cases, product liability claims, and catastrophic injury matters requiring strategic legal analysis and expert collaboration.
Contact us for a free consultation:
Phone: (310) 888-0024
Website: aa.law
Address: 1122 S. La Cienega Blvd., Los Angeles, CA 90035
