Kroemer v. Omaha Track Equip.
296 Neb. 972
| Neb. | 2017Background
- Norman Kroemer, an employee of Ribbon Weld, suffered a severe eye injury while using Omaha Track Equipment (OTE) tools at OTE’s shop; Ribbon Weld paid workers’ compensation and received court-approved lump-sum benefits, leaving a subrogation interest 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, which Ribbon Weld opposed and did not fund.
- The district court held a hearing under Neb. Rev. Stat. § 48-118.04 and found the $150,000 settlement fair and reasonable, allocating $94,834.27 to Kroemer, $55,165.73 to attorneys/expenses, and $0 to Ribbon Weld.
- Ribbon Weld appealed the zero allocation, arguing the court ignored its statutory subrogation right under § 48-118 and improperly applied factors like insurer premiums and comparative risk.
- The Nebraska Supreme Court affirmed the fairness of the settlement amount but reversed the zero allocation as an abuse of discretion and remanded with direction to make a fair and equitable allocation of the remaining $94,834.27 between Kroemer and Ribbon Weld.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the $150,000 third-party settlement fair and reasonable under § 48-118.04? | Kroemer: settlement reasonable due to high risk of zero recovery at trial (comparative negligence exposure). | Ribbon Weld: settlement undervalued case given large damages and likelihood of plaintiff verdict. | Court: Affirmed — district court did not abuse discretion; liability risk justified settlement. |
| Was allocating $0 of the settlement to Ribbon Weld (employer/insurer) fair and equitable under § 48-118.04(2)? | Kroemer: distribution acceptable given plaintiff’s needs and circumstances. | Ribbon Weld: statutory subrogation entitles it to reimbursement; zero allocation wrongly considered insurer premiums and comparative risk. | Court: Reversed — allocation of $0 was legally untenable; must allocate some portion to Ribbon Weld and remand for a fair division. |
Key Cases Cited
- Burns v. Nielsen, 273 Neb. 724 (statutory interpretation and review standard for § 48-118.04 distributions)
- Bacon v. DBI/SALA, 284 Neb. 579 (policies favor liberal construction of employer subrogation rights)
- Turney v. Werner Enters., 260 Neb. 440 (discussion of subrogation pre-amendment and change in 1994)
- Turco v. Schuning, 271 Neb. 770 (rejecting requirement that employee be "made whole" before subrogation recovery)
- In re Estate of Evertson, 23 Neb. App. 734 (Court of Appeals decision disapproved insofar as it considered premiums and comparative risk to justify zero allocation)