Can a third party defendant in a motor vehicle accident claim reduction in damages by the amount of compensation benefits paid by a negligent employer?

In Witt v. Jackson, supra, though the court stated that a third party defendant would be entitled to a reduction in damages by the amount of compensation benefits paid by a negligent employer, the court did not describe the procedural vehicle by which such reduction would be obtained. Two possibilities come to mind: (1) the third party defendant raises as a defense that it is responsible only for the excess above compensation benefits paid by an allegedly negligent employer, or (2) the third party defendant cross-complains against the employer to require him to defend against the claim of negligence.

In City of Sacramento v. Superior Court (1962) 205 Cal.App.2d 398, 23 Cal.Rptr. 43, decided seven months after Witt v. Jackson, the court concluded that a cross-complaint could be filed against the employer. The court explained: "Obviously, in a case where the employer's concurrent negligence is a potential but unasserted issue, neither the employer nor his insurer will be likely to join in the suit voluntarily. Equally obvious is the disinterest of plaintiff who has no financial stake in the presence or absence of these parties. He cannot enjoy a double payment by retaining the workmen's compensation payments on top of his damages. (Witt v. Jackson, supra, 57 Cal.2d at p. 73, 17 Cal.Rptr. 369, 366 P.2d 641.) If the employer[127 Cal.App.3d 1054] was negligent the third party gets credit for the workmen's compensation benefits. If the employer was not negligent his insurer recovers them as a result of his lien. The defendant third party, therefore, does have a vital interest in having the issue determined; because his monetary liability will be reduced by the amount of said benefit payments upon proof of the employer's concurrent contributing negligence.