Lawrence Mickey v. BNSF Railway Company and Safeco Insurance Company of America
437 S.W.3d 207
Mo.2014Background
- Lawrence Mickey, a long‑time BNSF yard conductor, sued BNSF under the Federal Employers’ Liability Act (FELA) for physical injuries, emotional harm, medical expenses, and lost wages/benefits; jury returned a general verdict awarding $345,000.
- Judgment entered for verdict plus costs and interest; BNSF posted a $500,000 supersedeas bond with Safeco as surety while appeal was pending; judgment was affirmed on appeal.
- When tendering payment after appeal, BNSF withheld $12,820.80, asserting it was required to withhold Railroad Retirement Tax Act (RRTA) taxes by treating the entire award as wages subject to withholding.
- BNSF voluntarily remitted the withheld amount to the IRS via interpleader litigation; Mickey moved to hold Safeco liable on the supersedeas bond for the unpaid $12,820.80.
- Trial court held BNSF had not satisfied the judgment and entered judgment against Safeco for the withheld amount; BNSF and Safeco appealed; Supreme Court of Missouri granted transfer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RRTA withholding applies to a FELA personal‑injury judgment | Mickey: personal‑injury damages are excluded from income and thus not subject to RRTA withholding | BNSF: RRTA taxes apply because “compensation” includes lost wages and RRA §231(h)(2) deems awards including time‑lost as entirely for time lost | Held: RRTA withholding does not apply; personal‑injury awards are excluded from taxable compensation under RRTA similar to FICA/exclusion under IRC §104(a)(2) |
| Whether RRA §231(h)(2) should be used to treat the award as wages for RRTA purposes | Mickey: RRA provision is part of a separate remedial statute and cannot be imported into RRTA withholding analysis | BNSF: RRA presumption that payments including time lost are entirely for time lost means entire FELA award is taxable under RRTA | Held: RRA and RRTA serve different purposes and are distinct; §231(h)(2) does not control RRTA withholding; cannot incorporate RRA provision into RRTA analysis |
| Whether a general verdict must be presumed to include lost wages so RRA §231(h)(2) would apply | Mickey: Missouri law does not require presuming allocation of a general verdict and jury’s allocation is unknowable and within the jury’s province | BNSF: Because lost wages were claimed, courts must presume some portion of the general verdict is for lost wages, triggering RRA presumption | Held: No presumption under Missouri law that a general verdict allocates amounts to every claimed damage; verdict makeup is "in the bosom of the jury," so presumption fails |
| Whether Safeco is liable on the supersedeas bond for the unpaid amount | Mickey: BNSF failed to satisfy the judgment; bond surety must cover unpaid portion | BNSF/Safeco: Tender plus withholding satisfied judgment because withholding was legally required | Held: Safeco liable for the $12,820.80 withheld because withholding was not required and judgment was not satisfied by BNSF’s tender |
Key Cases Cited
- Comm’r of Internal Revenue v. Schleier, 515 U.S. 323 (personal‑injury awards excluded from gross income under IRC §104(a)(2))
- Norfolk & Western Ry. Co. v. Liepelt, 444 U.S. 490 (recognizing tax treatment of certain tort awards)
- Central Illinois Public Service Co. v. United States, 435 U.S. 21 (distinguishing wages from gross income for FICA purposes)
- CSX Corp. v. United States, 518 F.3d 1328 (FICA "wages" and RRTA "compensation" construed similarly)
- Anglim v. Mo. Pac. R.R. Co., 832 S.W.2d 298 (Mo. banc) (general‑verdict allocation of damages is for the jury)