Kroemer v. Omaha Track Equip.
296 Neb. 972
Neb.2017Background
- Norman Kroemer, a Ribbon Weld employee, suffered a severe eye injury while using tools in Omaha Track Equipment’s (OTE) shop; Ribbon Weld paid workers’ compensation and obtained court-approved lump-sum benefits leaving a subrogation lien of $207,555.01.
- Kroemer sued OTE (and related entities) for negligence; Kroemer and OTE mediated and agreed to a $150,000 third-party settlement without Ribbon Weld’s contribution.
- Ribbon Weld contested the settlement under Neb. Rev. Stat. § 48-118.04, asserting its statutory subrogation right to reimbursement from the third-party recovery.
- At the § 48-118.04 hearing, the district court found the $150,000 settlement fair and reasonable but allocated $94,834.27 to Kroemer, $55,165.73 to attorney fees/expenses, and $0 to Ribbon Weld.
- Ribbon Weld appealed; the Nebraska Supreme Court affirmed settlement fairness but reversed the zero allocation to Ribbon Weld, remanding for a fair and equitable distribution of the remaining $94,834.27.
Issues
| Issue | Plaintiff's Argument (Kroemer) | Defendant's Argument (Ribbon Weld) | Held |
|---|---|---|---|
| Was the $150,000 third-party settlement fair and reasonable under § 48-118.04(1)? | Settlement appropriate given high risk of defense verdict and comparative negligence. | Settlement undervalued given damages and likelihood of plaintiff verdict. | Affirmed: trial court did not abuse discretion in approving $150,000 settlement. |
| Was allocation of $0 to employer/insurer fair and equitable under § 48-118.04(2)? | (Implied) Employee should receive majority given his damages and collection risk; court relied on equities. | Employer entitled to reimbursement of compensation paid; allocation of zero ignores statutory subrogation. | Reversed: allocation of $0 was an abuse of discretion; remanded to allocate some portion to Ribbon Weld. |
| Are premium payments, insurer risk, or lack of insurer contribution appropriate factors to deny subrogation recovery? | (Implied) These factors support favoring employee recovery. | Such factors should not defeat statutory subrogation rights. | Court rejected consideration of premiums and comparative insurer risk as basis for denying subrogation. |
| Is subrogation under § 48-118 an equitable doctrine or a statutory right? | (Implied) Court may exercise equitable considerations in distribution. | Subrogation is statutory and must be honored; distribution must still be fair to both parties. | Held statutory: subrogation is statutory, not purely equitable; distribution must be fair to both employee and employer/insurer. |
Key Cases Cited
- Burns v. Nielsen, 273 Neb. 724 (discusses § 48-118 subrogation and allocation discretion)
- Bacon v. DBI/SALA, 284 Neb. 579 (policy favors liberal construction in favor of employer subrogation rights)
- Turco v. Schuning, 271 Neb. 770 (rejects requirement that employee be "made whole" before subrogation recovery)
- Turney v. Werner Enters., 260 Neb. 440 (historical discussion of employer dollar-for-dollar subrogation and 1994 amendment)
- Estermann v. Bose, 892 N.W.2d 857 (statutory interpretation principle cited)
- In re Estate of Evertson, 23 Neb. App. 734 (Court of Appeals decision disapproved to extent it used premiums and comparative risk to deny insurer recovery)