Kasel v. Union Pacific RR. Co.
291 Neb. 226
| Neb. | 2015Background
- John A. Kasel (Union Pacific engineer) was injured at an Oak Tree Inn while on duty; he sued both Union Pacific and the motel under FELA and premises liability theories.
- Liberty Mutual insured Oak Tree Inn, accepted defense tenders for both defendants, and funded a global $4,000,000 settlement.
- UPREHS (a third-party administrator administering the Challenger Health Plan) paid Kasel’s medical bills and, under the Plan’s Article XI (Subrogation), claimed assigned subrogation rights and a lien for reimbursement against any recovery except recoveries from Union Pacific for on‑duty injuries.
- The parties executed a broad Release that resolved all claims against Union Pacific and Oak Tree Inn and included waivers of claims benefiting Union Pacific beyond the motel incident.
- The trial court ordered Liberty Mutual to interplead funds; after dispute over UPREHS’s subrogation claim, the court released the remaining interpleaded funds to Kasel, ruling UPREHS/Union Pacific had no lien. Union Pacific appealed.
Issues
| Issue | Plaintiff's Argument (Kasel) | Defendant's Argument (Union Pacific/UPREHS) | Held |
|---|---|---|---|
| Whether UPREHS (and its assignee Union Pacific) has a contractual lien/right of reimbursement against the settlement funds | UPREHS only had the contractual rights permitted by the Plan, and the Release was a global settlement that extinguished those rights as to Union Pacific | UPREHS (and by assignment Union Pacific) argues the Plan granted a lien against any recovery from a third party and Liberty Mutual funded the settlement on behalf of a third party (Oak Tree Inn), so UPREHS/Union Pacific is entitled to reimbursement | The Plan unambiguously excepts recoveries from Union Pacific for on‑duty injuries; because the Release was a global settlement benefiting Union Pacific, Union Pacific/UPREHS have no lien or right to reimbursement |
| Whether ambiguity in the Plan or other FELA principles entitle Union Pacific to recovery despite the Plan’s language | N/A (Kasel defends Plan text and Release) | Union Pacific contends holding strictly to the Plan would circumvent FELA-related equitable setoff principles (relying on Strasburg) | Court found the contract unambiguous and Strasburg distinguishable; contractual language controls, so no lien |
Key Cases Cited
- Weber v. North Loup River Public Power Dist., 288 Neb. 959, 854 N.W.2d 263 (Neb. 2014) (principles for interpreting unambiguous contract language)
- Strasburg v. Union Pacific RR. Co., 286 Neb. 743, 839 N.W.2d 273 (Neb. 2013) (discusses setoff for medical payments where employee recovered separately from third party and railroad)
- Spanish Oaks v. Hy‑Vee, 265 Neb. 133, 655 N.W.2d 390 (Neb. 2003) (assignment principles: assignee stands in assignor’s shoes)
- Gibbons Ranches v. Bailey, 289 Neb. 949, 857 N.W.2d 808 (Neb. 2015) (contract interpretation rules reiterated)
- Hansen v. E. L. Bruce Co., 162 Neb. 759, 77 N.W.2d 458 (Neb. 1956) (assignor/assignee limitations and effect of assignment)