Layman v. Braunschweigische Maschinenbauanstalt, Inc.

SAND, Justice,

concurring specially and dissenting.

I agree with many of the legal principles discussed and followed in the Erickstad opinion but I have reservations regarding the manner in which the conclusion was reached. The opinion states, “We conclude that any changes in the comparative negligence act or the exclusive remedy provisions and subrogation provision of the workmen’s compensation statutes are matters best left to our legislature,” citing Gernand v. Ost Services, Inc., 298 N.W.2d 500 (N.D.1980) and Sayler v. Holstrom, 239 N.W.2d 276 (N.D.1976). Nevertheless, the opinion disregards, as if repealed, pertinent provisions of North Dakota Century Code Ch. 32-38, particularly § 32-38-04 which was discussed and modified in Bartels v. City of Williston, 276 N.W.2d 113 (N.D.1979), but limited to the facts in that case. Furthermore, the opinion endorses the principles set forth in Tucker v. Union Oil Company of California, 100 Idaho 590 , 603 P.2d 156 (1979), but then disregards a major holding that the “third-party tortfeasor was entitled to have judgment against it reduced by the amount of Workmen’s Compensation benefits paid to plaintiff.” The Idaho workmen’s compensation act on the features involved here are substantially similar to the North Dakota Workmen’s Compensation Act. The Tucker case gave full recognition to the legal principles stated in NDCC § 32-38-04(2) stating:

“When a release or a covenant not to sue or not to enforce judgment is given in good faith to one of two or more persons liable in tort to the same injury or the same wrongful death:

1. It does not discharge any of the other tort-feasors from liability for the injury or wrongful death unless its terms so provide; but it reduces the claim against the others to the extent of any amount stipulated by the release or the covenant, or in the amount of the consideration paid for it, whichever is the greater.

2. It discharges the tort-feasor to whom it is given from all liability for contribution to any other tort-feasor.”

This provision and the corresponding holding of the Tucker court was disregarded.

By following the rationale that any modification or change must come from the *353 legislature, which implies that we accept the statutes and give each full force and effect, the following pari materia statutes must be considered, applied, and reconciled if the need exists.

NDCC § 32-38-04, stated above.

NDCC § 9-10-07, comparative negligence, provides if two or more persons who are jointly liable, “contributions to awards shall be proportioned to percentage of negligence attributable to each; provided, however, that each shall remain severally and jointly liable for the whole award.”

NDCC § 65-01-08 provides that a contributing employer shall not be subject to any action brought by the employee. The employee must look solely to the Fund for compensation. It provides, basically, that the contributing employer is protected from any actions against him by any employee and that the employee must look solely to the Fund for compensation. The contributing employer may not be named a third-party defendant. Neither may a joint tortfeasor recover from the employer. This is also referred to as the exclusive remedy. See Stine v. Weiner, 238 N.W.2d 918 (N.D.1976); White v. McKenzie Electric Coop, Inc., 225 F.Supp. 940 (1964); and Gernand v. Ost Services, Inc., 298 N.W.2d 500 (N.D.1980).

NDCC § 65-01-09 provides that in a third-party action the Bureau is subrogated to any monies recovered by the claimant (injured employee) from the third party.

In reconciling statutory provisions, we give appropriate consideration to the basic principles stated in NDCC Ch. 1-02.

In addition to NDCC § 32-38-04(2), set out above, § 32-08-01(2) and (5) may have application and may have to be reconciled with § 9-10-07, if they cannot be harmonized. Without going into detail, they can be reconciled without disregarding their basic concepts. Just as NDCC § 65-01-08 and § 65-01-09 must be, and can be, reconciled with § 9-10-07. So can §§ 32-38-01(2), (5), and 32-38-04(2) be reconciled with NDCC § 9-10-07.

The Bureau, under its subrogation rights, as a matter of equitable principle, should share in the attorney’s fees which are not included or recovered in the judgment. The attorney’s fees customarily allowed in a tried case are one-third of the amount recovered. Thus the Bureau should reduce its subrogation in the amount equivalent to the attorney’s fees, or, in the alternative, pay its share of the attorney’s fees.

The employer in this case, by applying NDCC § 65-01-08 in effect became a released tortfeasor under NDCC § 32-38-04(1) and (2) by operation of law. In Bar-tels we modified the language in subsection (1) because of the possibility of manipulating a release from one at the expense of the other tortfeasors, but in this case the release is by operation of law rather than by the injured party, which eliminates the possibility of manipulation.

Applying the foregoing statutory provisions to the instant case, where the contributing employer was found 75% negligent and the other tortfeasor 25%, produces the following:

Total recovery is $71,851.37, reduced by $18,779.74, the amount the injured employee received from the Bureau representing the “consideration paid” or “amount stipulated” for the release (NDCC § 65-01-08 and § 32-38-04) which leaves $53,071.63. The Bureau, pursuant to NDCC § 65-01-09 is subrogated in the amount of $18,779.74, less attorney’s fees which generally are in the neighborhood of one-third when the case is tried, amounting to $6,259.91, reducing the Bureau’s subrogation to $12,591.83. This would leave a complete recovery to claimant in the amount of $40,550.80. The employee, however, would have to pay the agreed-upon attorney’s fees.

I am not unsympathetic toward the employee and recognize that this results in some inequities. The irony is that the contributing employer, who was 75% negligent even though, according to some authorities, cannot be treated as a joint tortfeasor, receives the greatest protection, or benefit, at the expense of the other tortfeasor or tortfeasors. In fact, such employer does *354 not even suffer a rate increase in premiums.

In Bartels we observed that NDCC § 9-10-07 was enacted to overcome the grave inequity of prohibiting or preventing a recovery if the plaintiff was 1% negligent. However, technically now a joint tortfeasor only 1% negligent can become 100% liable for the full amount of the judgment because the other tortfeasor or tort-feasors are either protected by law or judgment-proof. This raises some interesting constitutional questions which have not been raised, and consequently were not implicitly considered or put to rest.

A further inequity exists. The compensation benefits for injuries do not cover pain and suffering, whereas a tort action recovery for damages includes pain and suffering. To make appropriate adjustments on subrogation matters the trier of fact, jury or judge, would have to make special findings or render special verdicts, specifying the damages separately from pain and suffering. Any subrogation would be limited to the recovery for damages but not for pain and suffering. However, some may argue that any claimant-employee receiving a definite benefit regardless of fault should not be entitled to have any recovery for pain and suffering excluded from the subrogation provision.

A problem also exists by the release of one joint tortfeasor, whether by voluntary action by the plaintiff or by operation of law can, because this will frequently produce a tendency to put the blame — negligence — fault on the party that has settled or has been released who, in this instance is the contributing employer under the Workmen’s Compensation Act. As between joint tortfeasors, the end result under NDCC § 9-10-07 would be the same except the joint tortfeasor has no recourse against a contributing employer, but because additional evidence may be submitted or prosecuted more effectively, the difference between the plaintiffs negligence and the joint tortfeasor may be affected. See my concurring opinion in Schwartz v. Ghaly, 318 N.W.2d 294, 392 (N.D.1982). No one really represented the employer in this case, yet the negligence of the employer must be borne by the other tortfeasor.

These are only the apparent inequities resulting from the current statutes. I am aware that the Forty-seventh Legislative Assembly had under consideration Senate Bill 2340 which was a product of the Legislative Judiciary “A” Committee. This Bill rewrote NDCC § 9-10-07, but was amended by the Senate and then defeated. The Bill, as amended by the Senate, would have deleted the following language in § 9-10-07: “provided, however, that each shall remain jointly and severally liable for the whole award.” A similar Bill was defeated the next year. But without the given reason this is not of much value according to St. Vincent’s Nursing Home v. Department of Labor, 169 N.W.2d 456 (N.D.1969), which held that an attempted amendment does not indicate legislative intent of statutes sought to be amended. A contributing employer, by statutory construction, is excluded from NDCC § 9-10-07 as a liable tortfeasor by reason of the provisions of NDCC § 65-01-08. Other inequities can also be resolved by statutory construction.

These inequities are mentioned so that if the Legislature is so inclined appropriate changes can be made. We, as a Court, have applied some modifications by statutory construction and probably will continue to do so.

We have held that where the trial court applied inappropriate law the findings of fact are also improper. Diemart v. Johnson, 299 N.W.2d 546 (N.D.1980). The trial judge apparently relied upon Bartels , which had limited application. I do not know for certain if the findings of fact as to percentage of negligence of each party involved would remain the same. Nevertheless, under the circumstances of this case I would not eliminate a remand for a new trial with directions regarding the appropriate laws to be applied. I am aware that judicial economy is a matter which should be considered, yet it should not be the deciding factor in promoting justice.

*355 Another solution I could support would be to deny the subrogation under NDCC § 65-01-09 and reduce the judgment in accordance with NDCC § 32-38-04(2). Liberty Mutual Ins. Co. v. Adams, 91 Idaho 151 , 417 P.2d 417 ; 82 Am.Jur.2d Workmen’s Compensation § 437, p. 204. This would require the employer, over a period of time, to pay a premium on the employment classifications equal, or nearly equal, to the benefits paid to the employee. This would bring about the most equitable solution under the circumstances of this case. In my opinion, equal or more justification exists proceeding in this manner than to ignore the provisions of NDCC § 32-38-04(2).

Justice Gierke’s opinion states that he does not equate the Bartels case with NDCC § 65-01-08. Neither do I. My opinion in substance states that NDCC § 32-38-04(2) should be applied as it reads without the modification placed upon that section in Bartels . In my opinion, a release is a release whether it is voluntary or by operation of law.

The Tucker case, in addition to the part quoted in Justice Gierke’s opinion, also states:

“We find the rationale of Associated to be persuasive. The defendant-appellant Collier Carbon is entitled to have the judgment against it reduced by the amount of workmen’s compensation benefits paid to Tucker. As to that portion of the Associated decision relating to the right of the employer to be subrogated to a portion or all of the workmen’s compensation benefits dependent upon the extent to which negligence has been assessed against the employer, we find such to be unnecessary to our decision today.3 [Footnote omitted.]

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“We hold that the jury instruction here does not adequately safeguard against a double recovery to the Tuckers. Therefore, we remand this case to the trial court solely for a reduction of the judgment by the amount of the workmen’s compensation benefits received by Tucker. Since that said instruction was erroneous, the Tuckers may decline to accept that reduction in the judgment, and in that event, the district court is directed to grant a new trial solely on the issues of damages.” 603 P.2d 156 at 170-171 .

This clearly indicates that the subrogation provision was not settled in the Tucker case.