Kroemer v. Omaha Track Equip.
296 Neb. 972
| Neb. | 2017Background
- Norman Kroemer, a Ribbon Weld employee, suffered a severe eye injury while using equipment in Omaha Track Equipment (OTE)’s shop; Ribbon Weld paid workers’ compensation and obtained a subrogation lien of $207,555.01.
- Kroemer settled his workers’ compensation claim with Ribbon Weld for $80,000 (approved by the WC Court) before pursuing a third-party tort suit against OTE and related entities for negligence.
- Kroemer and OTE negotiated a $150,000 settlement of the third-party claim; Ribbon Weld did not contribute to litigation costs and opposed the settlement, asserting its § 48-118 subrogation right.
- The district court held a § 48-118.04 hearing, found the $150,000 settlement fair and reasonable, awarded $55,165.73 for attorney fees and expenses, $94,834.27 to Kroemer, and $0 to Ribbon Weld.
- Ribbon Weld appealed the zero allocation; the Nebraska Supreme Court affirmed the settlement’s fairness but reversed the $0 allocation to Ribbon Weld and remanded 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 reasonable given high risk of defense verdict due to comparative negligence; avoid losing recovery. | Settlement undervalued given strong damages and likelihood of plaintiff verdict according to some experts. | Court: Affirmed — district court did not abuse discretion; liability risk justified settlement. |
| Was allocating $0 to Ribbon Weld a fair and equitable distribution under § 48-118.04(2)? | Allocation acceptable because employee should receive most given severity of damages and insurer paid premiums/assumed risk. | Zero allocation improperly ignores Ribbon Weld’s statutory subrogation right to reimbursement of compensation paid. | Court: Reversed — allocation of $0 was legally untenable; remanded to allocate a fair and equitable portion to Ribbon Weld. |
Key Cases Cited
- Burns v. Nielsen, 273 Neb. 724 (explains § 48-118.04 distribution is within trial court discretion and subrogation principles)
- Bacon v. DBI/SALA, 284 Neb. 579 (interprets Act to favor employer’s statutory subrogation rights; policies favor liberal construction for employer recovery)
- Turco v. Schuning, 271 Neb. 770 (rejects requirement that employee be "made whole" before subrogation recovery)
- In re Estate of Evertson, 23 Neb. App. 734 (Court of Appeals affirmed zero allocation to carrier; disapproved by this Court insofar as it relied on premiums and comparative risk)