Kroemer v. Omaha Track Equip.
296 Neb. 972
Neb.2017Background
- Norman Kroemer, a Ribbon Weld employee, suffered a severe eye injury while using Omaha Track Equipment’s (OTE) shop tools; Ribbon Weld paid workers’ compensation and obtained a subrogation interest of $207,555.01 after an $80,000 lump-sum compensation approved by the Workers’ Compensation Court.
- Kroemer sued OTE (and related entities) for negligence; Kroemer and OTE mediated and agreed to a $150,000 third-party settlement, which Ribbon Weld contested because it received none of the recovery.
- The district court held a § 48-118.04 hearing, found the $150,000 settlement fair and reasonable, and allocated $94,834.27 to Kroemer, $55,165.73 to Kroemer’s attorneys, and $0 to Ribbon Weld.
- Ribbon Weld appealed the zero allocation, arguing the court ignored its statutory subrogation right under Neb. Rev. Stat. § 48-118 and misapplied factors (e.g., premiums, comparative risk) to justify awarding it nothing.
- The Nebraska Supreme Court affirmed the fairness/reasonableness of the settlement but reversed the zero-allocation, holding the district court abused its discretion by denying any recovery to Ribbon Weld and remanded for a fair and equitable allocation of the remaining $94,834.27.
Issues
| Issue | Plaintiff's Argument (Kroemer) | Defendant's Argument (Ribbon Weld) | Held |
|---|---|---|---|
| Whether the $150,000 third-party settlement was fair and reasonable under § 48-118.04 | Settlement fair given high trial risk, potential for a defense verdict due to comparative negligence | Settlement undervalued given damages and likelihood of plaintiff verdict | Court: Settlement was fair and reasonable; no abuse of discretion in approval |
| Whether allocating $0 to employer/insurer (Ribbon Weld) from settlement was fair and equitable under § 48-118.04(2) | Zero allocation justified by employee’s significant uncompensated damages and insurer’s premium payment/assumed risk | Zero allocation improperly ignores statutory subrogation right; premiums/insurer risk not proper factors to deny recovery | Court: Allocation of $0 was an abuse of discretion; Ribbon Weld entitled to a portion; remand to allocate remaining proceeds fairly |
Key Cases Cited
- Burns v. Nielsen, 273 Neb. 724 (discusses distribution and appellate review under § 48-118.04)
- Bacon v. DBI/SALA, 284 Neb. 579 (explains liberal construction favoring employer subrogation rights under the Act)
- Turney v. Werner Enters., 260 Neb. 440 (discusses pre-1994 subrogation and legislative changes)
- Turco v. Schuning, 271 Neb. 770 (rejects requirement that employee be made whole before subrogation applies)
- In re Estate of Evertson, 23 Neb. App. 734 (Court of Appeals decision allocating zero to carrier; disapproved in part by Supreme Court here)