Kroemer v. Omaha Track Equip.
296 Neb. 972
| Neb. | 2017Background
- Norman Kroemer, an employee of Ribbon Weld, suffered a severe eye injury while using OTE’s shop/tools; Ribbon Weld paid workers’ compensation and obtained a subrogation interest of $207,555.01.
- Kroemer settled his third-party negligence suit against Omaha Track Equipment (OTE) for $150,000 after mediation; Ribbon Weld did not contribute to the settlement and objected to the proposed allocation.
- The Nebraska district court held a § 48-118.04 hearing, found the $150,000 settlement fair and reasonable, awarded $55,165.73 for attorney fees/expenses, $94,834.27 to Kroemer, 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 (premiums, comparative risk) used to justify denying any recovery.
- The Nebraska Supreme Court affirmed the court’s finding that the settlement was fair and reasonable but reversed the zero allocation as legally untenable and remanded for a fair and equitable division of the remaining $94,834.27 between Kroemer and Ribbon Weld.
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(1) | Settlement was reasonable given high risk of jury verdict for defendants and uncertainty from comparative negligence | Settlement undervalued the claim given high damages and likelihood of plaintiff verdict | Court: Settlement approval was not an abuse of discretion — affirmed |
| Whether allocating $0 to Ribbon Weld (employer/insurer) was "fair and equitable" under § 48-118.04(2) | Zero allocation was justified by plaintiff’s need and circumstances of settlement | Ribbon Weld is statutorily entitled to reimbursement/subrogation and should receive some portion despite premiums or insurer risk | Court: Allocation of $0 was an abuse of discretion; reversed and remanded for a fair, equitable allocation |
Key Cases Cited
- Burns v. Nielsen, 273 Neb. 724, 732 N.W.2d 640 (2007) (statutory subrogation and § 48-118.04 distribution principles)
- Bacon v. DBI/SALA, 284 Neb. 579, 822 N.W.2d 14 (2012) (policies favor liberal construction of employer subrogation rights)
- Turney v. Werner Enters., 260 Neb. 440, 618 N.W.2d 437 (2000) (discussion of amendment to subrogation allocation)
- Turco v. Schuning, 271 Neb. 770, 716 N.W.2d 415 (2006) (rejecting "made whole" requirement before subrogation recovery)
- Travelers Indem. Co. v. Int’l Nutrition, 273 Neb. 943, 734 N.W.2d 719 (2007) (employer’s statutory subrogation rights encourage prompt payment and recovery)
- In re Estate of Evertson, 23 Neb. App. 734, 876 N.W.2d 678 (2016) (Court of Appeals allocation of zero to carrier; disapproved in part by this Court)