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 (OTE) tools in OTE’s shop.
- Kroemer and Ribbon Weld settled workers’ compensation for a lump sum approved by the WC Court; Ribbon Weld’s resulting subrogation interest totaled $207,555.01.
- Kroemer sued OTE (and others) for negligence; Kroemer and OTE mediated a third-party settlement of $150,000, to which Ribbon Weld did not contribute and which Ribbon Weld contested.
- 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 attorneys, and $0 to Ribbon Weld.
- Ribbon Weld appealed; the Nebraska Supreme Court affirmed the settlement’s fairness but held the zero allocation to Ribbon Weld was legally untenable under § 48-118 and § 48-118.04, reversed that portion, and remanded for a fair and equitable allocation of the remaining $94,834.27.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the $150,000 third-party settlement was fair and reasonable under § 48-118.04(1) | Kroemer: settlement reasonable given high trial risk and potential for 50%+ comparative negligence finding | Ribbon Weld: settlement undervalued the claim (experts valued >$500k–$850k+) and appeared structured to avoid payback of subrogation | Court: Affirmed — district court did not abuse discretion; liability risk justified settlement amount |
| Whether allocating $0 of settlement proceeds to Ribbon Weld was fair and equitable under § 48-118.04(2) | Kroemer: argued employee deserved majority given severity of damages and policy considerations | Ribbon Weld: statutory subrogation entitles employer/insurer to reimbursement; $0 allocation improperly ignores statutory right | Court: Reversed — allocation of $0 was an abuse of discretion; remand to make a fair and equitable distribution to both employee and Ribbon Weld |
Key Cases Cited
- Burns v. Nielsen, 273 Neb. 724 (discusses § 48-118 subrogation and distribution under § 48-118.04)
- Bacon v. DBI/SALA, 284 Neb. 579 (explains policy favoring employer subrogation rights and liberal construction of § 48-118)
- Turney v. Werner Enters., 260 Neb. 440 (describes pre-1994 employer-first subrogation and statutory change effect)
- Turco v. Schuning, 271 Neb. 770 (rejects requirement that employee be "made whole" before employer recovers)
- Travelers Indemnity Co. v. International Nutrition, 273 Neb. 943 (notes mandatory nature of workers’ compensation insurance and related principles)