That’s according to the attorneys for the plaintiff in Fish v. Ramler Trucking, et al., decided on Nov. 27 by the Supreme Court. It said, as was decided in Lambertson v. Cincinnati Welding Corp. in 1977, that a third-party tortfeasor’s liability to an injured employee for a workplace injury is not reduced by the employer’s fault.
In a unanimous opinion written by Justice David Lillehaug, the court said that its result is dictated by the plain language of Minn. Stat. Sec. 604.02, subd. 1, rejecting the opposite reading of the statute advocated by the defense. The court said that an employer and a third party are not severally liable for a workplace injury, as required to invoke the statute, and therefore the tortfeasor’s liability is not reduced by the employer’s fault. (See sidebar for text of statute.)
The decision addresses the complex and controversial topic of apportionment of damages among tortfeasors and/or employers.
“Under the grand bargain of the workers’ compensation regime, injured employees gave up common law rights to sue their employers for negligence in exchange for guaranteed but limited compensation for workplace injuries. This case reaffirmed decades of precedent that does not allow a third-party tortfeasor — who gave up nothing in the workers’ compensation grand bargain — to have its liability drastically reduced simply because it committed a tort against a plaintiff who happened to be working at the time,” said attorney Daniel Cragg in an email to Minnesota Lawyer. Cragg was the author of an amicus brief for the Minnesota Association of Justice.
The respondent, Frederick Fish, was injured while working aboard a flatbed trailer being pulled by a semi-tractor driven by an employee of the appellant, Ramler Trucking. He was employed by Albany Manufacturing and on loan to Wells Concrete. Fish received approximately $269,344 in workers’ compensation benefits, including his attorney fees. Ramler, Albany and Albany’s insurer settled their subrogation and contribution claims before trial.
At trial, the jury apportioned fault 75% to Wells, 20% to Ramler and 5% to Fish. The jury awarded $125,000 in past pain and emotional distress, $108,288 in past medical, $105,000 in lost wages, $72,500 in future pain, disability and emotional distress, $16,552 in future health care and $100,000 in loss of earning capacity, for a total of $527,340. After offsets for workers’ compensation paid, the trial court reduced the verdict by 5%, leaving $278,913. It then ordered Ramler to pay 20%, or $55,782. The Court of Appeals reversed and the Supreme Court affirmed the Court of Appeals.
Under Lambertson, the third-party tortfeasor has an equitable right of contribution from the employer, up to its percentage of fault, but limited by the workers’ compensation payments. Fish preserves that equitable right.
No several liability
The court said that the first clause of the statute decided the case. It provides that the percentages of fault apply only when two or more persons are severally liable. The employer is not severally liable because its liability is governed exclusively by the workers’ compensation statute, Minn. Stat. Sec. 176.031 et seq. That statute codified Lambertson in section 176.061, subdivision 11, which presumes that a third party must pay more than its share of fault, but provides that this disproportion may be offset, to some extent, by contribution from the employer.
It rejected the appellant’s argument that employers are severally liable because several liability is determined at the time a tort occurs, per the 2012 Supreme Court decision Staab v. Diocese of St. Cloud. “As we made clear [in prior case law], employers liable in workers’ compensation and third parties liable in tort are not commonly liable, either jointly or severally, because the employer is shielded from tort liability. [Cite omitted.] Staab did not overrule this long-standing precedent and said nothing about employer liability. After all, Staab involved an accident at a place of worship, not a place of work,” Lillehaug.
This reading of the statute supports the public policy of the workers’ compensation act because it does not allow an employer to become jointly and severally liable for the whole award, the court said. “Ramler’s interpretation would take a sledgehammer to the Workers’ Compensation Act’s tort immunity for employers, a cornerstone in the Act’s foundation. That cannot be what the Legislature intended when it amended section 604.02,” the court said.
Outgrowth of tort reform
Attorneys have litigated Lambertson’s contribution practically since the case was decided in 1977, said Scott Wilson, who represented Fish for the appeals. However, it was more or less settled law until an opinion by U.S. District Court Judge Joan Ericksen in 2014, Gaudreault v. Elite Line Servs.
In that case, Ericksen wrote (in what respondent’s lawyers call dicta) that where the employer has no exposure in tort to the injured plaintiff by operation of the Workers’ Compensation Act, Minn. Stat. § 604.02, subd. 1 may be applied. That gave the defense bar a “toehold,” Wilson said, and the “defense just kept at it.”
But the Supreme Court simply said that Gaudreault is not persuasive.
The defense position is an “outgrowth of tort reform,” said Michel Krug, respondent’s attorney. The defense bar wanted to keep third-party cases at bay, if not wholly out of court, he said. The injuries in cases involving a third-party tend to be quite severe and thus have high damages.
But now, Fish provides an “island in the sea of tort reform,” and appropriately so given that the plaintiffs tend to be severely injured, Wilson said.
The Minnesota Defense Lawyers Association argued in its amicus brief that the third-party tortfeasor and the employer are “severally” liable under Staab. “A third-party tortfeasor’s liability to an injured employee is separate and distinct from an employer’s liability to the same injured employee such that the injured employee may bring a separate action against the third-party tortfeasor without joining the employer,” the amicus argued. “[T]he exclusive remedy provision of the Workers’ Compensation Act does not extinguish common liability or, in this case, preclude a finding of several liability.”
The defense argued that its position was more fair than the Court of Appeals’ (and now the Supreme Court’s) decision in Fish. If the Court of Appeals decision stands, third parties will once again be “forced to subsidize a workers’ compensation system in a proportion greater than his own fault and at a financial level far in excess of the workers’ compensation schedule,” MDLA wrote, quoting Lambertson.
The result will make workplace injury lawsuits more difficult because it “puts nominally at-fault third-party tortfeasors in a Catch-22 as it forces them to either go to trial to try to establish that their percentage of fault is less than the employee’s percentage of fault … or overpay to settle the case and assume the risks and limitations of recovering from an at-fault employer,” MDLA concluded.
The ruling also creates a class of “super-plaintiffs” who are overly compensated by suffering their injury at work, wrote appellant’s attorney Teri Bentson. The super-plaintiff can recover 100% from a third-party tortfeasor, without regard to several liability. That turns the third party into the employer’s indemnitor, Bentson wrote.
Bentson could not be reached for comment and the MDLA declined to comment on the case.
Apportionment of damages
Minn. Stat. § 604.02, Subd 1
When two or more persons are severally liable, contributions to awards shall be in proportion to the percentage of fault attributable to each, except that the following persons are jointly and severally liable for the whole award:
(1) a person whose fault is greater than 50 percent;
(2) two or more persons who act in a common scheme or plan that results in injury;
(3) a person who commits an intentional tort; or [immaterial specific torts omitted].