Summary
holding that a worker's compensation insurer is entitled to share in a third-party settlement under the statutory formula unless it stipulates otherwise
Summary of this case from Ceria M. Travis Acad., Inc. v. EversOpinion
February 3, 1966. —
March 1, 1966.
APPEAL from an order of the circuit court for Milwaukee county: RONOLD A. DRECHSLER, Circuit Judge. Affirmed.
For the appellant there was a brief and oral argument by Walter J. Steininger, attorney, and Thomas P. Maroney of counsel, both of Milwaukee.
For the respondent there was a brief by Moore, Moore Crivello of Milwaukee, and oral argument by Frank T. Crivello.
On November 12, 1959, the appellant, Charles Rice, while an employee of Hennes Trucking Company, sustained injuries at the Milwaukee auditorium when a punch press being loaded onto the back of a truck by means of a forklift toppled over upon him. The forklift was being operated by Orville Gruetzmacher, a coemployee of Mr. Rice, at the time of the accident.
The respondent, Maryland Casualty Company, was the workmen's compensation carrier for Hennes Trucking Company, and it had also issued a comprehensive automobile and general liability policy to Hennes Trucking Company.
Maryland Casualty Company, in its capacity as the workmen's compensation carrier for Hennes Trucking Company, paid compensation benefits to Mr. Rice in the amount of $10,393 and, in addition, paid medical expenses in the sum of $15,462.61.
Mr. Rice commenced an action on November 8, 1962, against Mr. Gruetzmacher; the Pivot Punch Die Corporation, owner of the punch press in question, and its insurer, Zurich Insurance Company; the National Truck Leasing Company, the owner of the truck involved, and its insurer, American Fidelity Casualty Company; the Milwaukee Auditorium Company; and Maryland Casualty Company, as the alleged insurer of Mr. Gruetzmacher under its liability policy issued to Hennes Trucking Company.
After filing its answer, Maryland Casualty Company won its motion to be dismissed as a party in the action which Mr. Rice had commenced on the ground that direct action against it could not be had. See Rice v. Gruetzmacher (1965), 27 Wis.2d 46, 133 N.W.2d 401. Mr. Rice subsequently settled his claim with the remaining defendants for $17,000.
Mr. Rice moved to estop Maryland Casualty Company from sharing in the settlement of the appellant's third-party claim pursuant to sec. 102.29, Stats. In support of his motion, he argues that when Maryland Casualty Company entered into a defense of the personal-injury claim by way of conducting an adverse examination and filing an answer denying liability and asserting affirmative defenses, it estopped itself from recovery under sec. 102.29.
To prove that Maryland Casualty Company's conduct was detrimental to the appellant's claim, the appellant points to the fact that the issue of drunkenness on the part of the appellant at the time of the accident was first alluded to at the adverse examination conducted by Maryland Casualty Company; this issue subsequently appeared in the answers of the other defendants. The appellant argues that this allegation would not have appeared had not Maryland Casualty Company raised it and that it was instrumental, in conjunction with the affirmative defenses also raised by Maryland Casualty Company, in reducing the appellant's chances of obtaining his rightful compensation for his personal-injury claim and forcing him into accepting a smaller sum in settlement.
The circuit court denied the appellant's motion and entered an order distributing the funds pursuant to sec. 102.29, Stats., by which Maryland Casualty Company would receive $7,455.60. This is the order appealed from.
Because of the peculiar factual scenery, Maryland Casualty Company was called upon to perform in a chameleonic capacity; this is because it was both the workmen's compensation carrier and also the liability insurer of Mr. Rice's employer, Hennes Trucking Company.
Mr. Rice, the plaintiff, has objected to having the Maryland Casualty Company share in the proceeds which were derived from the settlement of Mr. Rice's third-party action. His position is that it is inequitable for the workmen's compensation carrier, Maryland Casualty Company, to share in the proceeds after it had thrown mountainous roadblocks in Mr. Rice's path. The appellant contends that his claim was really worth $75,000 but that he was obliged to settle for the far lesser figure of $17,000 because of the several defenses which were made known by Maryland Casualty Company to the other defendants.
The alleged inequity would seem greater if the record established that Maryland Casualty Company utilized confidential or privileged data that had come into its possession in its capacity as the workmen's compensation carrier. However, the record does not support the appellant's charge that Maryland Casualty Company disclosed defensive techniques which it had learned only by reason of its status as the workmen's compensation carrier.
An even more serious flaw in the appellant's position arises when one reads the relevant Wisconsin statutes. The directness of the legislative pronouncements in the case at bar brings to mind the comment of Mr. Justice HOLMES in United States v. Wurzbach (1930), 280 U.S. 396, 398, 50 Sup. Ct. 167, 74 L.Ed. 508:
". . . there is no warrant for seeking refined arguments to show that the statute does not mean what it says."
After reciting the manner in which the proceeds of a third-party action are to be divided, sec. 102.29, Stats., asserts the following in sub. (4):
"If the insurance carrier of the employer and of the third party shall be the same, or if there is common control of the insurer of each, the insurance carrier of the employer shall promptly notify the parties in interest and the industrial commission of that fact; likewise, if the employer has assumed the liability of the third party he shall give similar notice; and, in default of such notice, any settlement with an injured employe or beneficiary shall be void. Nothing contained in this subsection shall prevent the employer or compensation insurer from sharing in the proceeds of any third party claim or action, as set forth in subsection (1)." (Emphasis added.)
It is thus clear that the legislature affirmatively recognized that an insurer might have a dual capacity; nevertheless, the statute provides that this fact will not bar such an insurer from enjoying a share of the proceeds. In Huck v. Chicago, St. P., M. O. R. Co. (1961), 14 Wis.2d 445, 450, 111 N.W.2d 434, sec. 102.29 (4), Stats., was before this court, and it was said:
"Sec. 102.29 (4), Stats., indicates that the legislature had in mind the possibility that the insurance carrier of the employer and of the third party might be the same, or that the employer might have assumed the liability of the third party. It merely requires notice to be given in such event and provides further: `Nothing contained in this subsection shall prevent the employer or compensation insurer from sharing in the proceeds of any third-party claim or action, as set forth in subsection (1).'"
Once we determine that Maryland Casualty Company was by statute entitled to share in the proceeds, we must consider whether equitable considerations permit the court to strike out or reduce the amount of such share. An answer is given in the Huck Case, where, at page 449, the court said:
"We assume that in many situations, persuasive arguments could be advanced that a particular division would be more just and equitable than that decreed by the legislature. Nevertheless, the formula does channel a portion of the net proceeds after costs of collection to each of the interested parties, and the legislature evidently considered it better policy to divide the funds by the formula it devised than to commit the matter to the discretion of court or commission."
While the litigants can by a consensual stipulation provide for a division of the proceeds different from that directed by the statute, the mandate of the statute is fully controlling in the absence of such a stipulation. Huck v. Chicago, St. P., M. O. R. Co., supra, at page 450. See Pagel v. Kees (1964), 23 Wis.2d 462, 127 N.W.2d 816.
Thus, it would be possible for an insurer to estop itself from recovery of its statutory share by entering into an agreement or by giving a release. This was not done by the Maryland Casualty Company in the case at bar.
The burden of establishing that the Maryland Casualty Company has estopped itself from enjoying its statutory recovery rests on Mr. Rice, since he is the one who asserts such estoppel. Wisconsin Telephone Co. v. Lehmann (1957), 274 Wis. 331, 336, 80 N.W.2d 267; Estate of Smith (1938), 226 Wis. 556, 561, 277 N.W. 141; Delaney v. Canning (1881), 52 Wis. 266, 267, 8 N.W. 897. The proof of estoppel must be clear, satisfactory and convincing, and not rest upon mere inference. Eckstein v. Northwestern Mut. Life Ins. Co. (1937), 226 Wis. 60, 70, 275 N.W. 916.
Mr. Rice relies heavily on Arendas v. Rich Co. (D.C. Pa. 1963), 220 F. Supp. 957, 958, but we observe that the Pennsylvania statute (Pennsylvania Workmen's Compensation Act of June 2, 1915, P. L. 736, sec. 319, as amended 77 P.S. sec. 671) does not specifically state that a carrier in a dual capacity is nevertheless entitled to share in the proceeds. In this respect, the statute is significantly different from the Wisconsin legislative pronouncements. The Pennsylvania statute gives a right of subrogation to the workmen's compensation carrier, while the Wisconsin statute gives such carrier a statutory right and a fixed formula for a monetary recovery.
By the Court. — Order affirmed.