Kroemer v. Omaha Track Equip.
296 Neb. 972
| Neb. | 2017Background
- Kroemer, an employee of Ribbon Weld, sustained a serious eye injury at OTE's shop, using OTE tools; Ribbon Weld had paid workers’ compensation previously, totaling over $200,000.
- Kroemer and Ribbon Weld settled the third-party claim with OTE for $150,000; Kroemer then pursued litigation against OTE, The Tie Yard of Omaha, and Ribbon Weld for negligence.
- Ribbon Weld, though not sharing litigation expenses, contested the proposed settlement and asserted its subrogation rights.
- The district court approved the $150,000 settlement as fair but allocated $0 of the proceeds to Ribbon Weld, allocating $94,834.27 to Kroemer and $55,165.73 to attorney fees and costs.
- Nebraska’s statute § 48-118.04(2) requires a “fair and equitable distribution” of third-party settlement proceeds, and the court must consider liability, damages, and the ability to satisfy any judgment.
- The Nebraska Supreme Court later reversed the zero-allocation to Ribbon Weld, remanding to make a fair and equitable distribution of the remaining proceeds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement was fair and reasonable under § 48-118.04(1). | Kroemer's settlement reflects liability, damages, and risk. | OTE's liability and damages supported a fair value; risk favored settlement. | Settlement found fair and reasonable. |
| Whether the allocation to Ribbon Weld was fair and equitable. | Kroemer should bear most damages; employer gets proportionate recovery. | Allocation to Kroemer alone was sufficient; Ribbon Weld’s subrogation should be minimal. | Allocation to Ribbon Weld was unsupportable; remanded for fair distribution. |
Key Cases Cited
- Burns v. Nielsen, 273 Neb. 724 (2007) (subrogation rights and distribution principles under § 48-118)
- Bacon v. DBI/SALA, 284 Neb. 579 (2012) (liberal construction of subrogation rights; employer’s right to subrogate favored)
- Turco v. Schuning, 271 Neb. 770 (2006) (made whole and equitable considerations in distribution)
- In re Estate of Evertson, 23 Neb. App. 734 (2016) (allocation of zero to insurer reversed; disapproved to extent considered premiums and risk)
- Burns v. Nielsen, 273 Neb. 733 (2007) (stating that subrogation is not meant to undermine employee recovery)