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Miller v. York6/11/1999
Miller v. M.F.S. York/Stormor, S-97-1138, 257 Neb. 100
Miller v. M.F.S. York/Stormor,
Petition for further review from the Nebraska Court of Appeals, Hannon, Irwin, and Inbody, Judges, on appeal thereto from the Nebraska Workers' Compensation Court. Judgment of Court of Appeals reversed, and cause remanded with directions to dismiss.
This case presents the question whether the Nebraska Workers' Compensation Court has jurisdiction to determine the amount of credit to which an employer is entitled on an injured employee's present and future workers' compensation benefits and expenses when the injured employee's related third-party suit has been settled in a different forum.
FACTUAL BACKGROUND
On August 23, 1990, Kevin Miller attempted to repair a punch press in the scope of his employment at M.F.S. York/Stormor (MFS). The Ward & Garrison Company, a dissolved Missouri corporation, had previously modified the punch press by installing certain safety guards. The safety equipment failed, and the punch press crushed Miller's right hand and arm.
Miller sued Ward & Garrison Company and its president, George Ward (collectively W&G;, for personal injury in the U.S. District Court for the District of Nebraska. Because MFS had paid workers' compensation benefits to Miller, MFS joined Miller's suit against W&G;as required by Neb. Rev. Stat. § 48-118 (Reissue 1993) of the Nebraska Workers' Compensation Act. W&G;contested liability, but settled with Miller for $400,000 shortly before trial on February 17, 1995. As such, Miller and MFS asked the federal court to resolve the issue of MFS' subrogation claim.
Section 48-118, as it existed prior to amendments in 1994, would have mandated that the court award MFS a dollar-for-dollar recovery for workers' compensation benefits paid to Miller, whereas the amended version permits courts to make a "fair and equitable" allocation of the settlement proceeds. Although this court had not yet decided whether the 1994 amendments to § 48-118 effected procedural or substantive changes, the federal court ruled that the changes were procedural in nature. Applying the 1994 amendments retroactively to the subrogation dispute between Miller and MFS, the federal court opted to make a "fair and equitable" allocation of the settlement proceeds between the parties.
In deciding what a fair and equitable distribution would be, the federal court considered testimony and affidavits of counsel for the various parties concerning their estimations on Miller's potential verdict range and chances for a favorable verdict. The federal court calculated the midpoint of Miller's potential verdict range at $835,000 and found that Miller had a 50-percent chance of obtaining a favorable verdict on W&G;s liability. Based on that calculation, the federal court concluded that the settlement value of Miller's claim against W&G;was $417,000, or one-half its real value if liability was not disputed. Thus, the federal court determined that the $400,000 settlement was fair and reasonable.
Reasoning that Miller received only 50 percent of the value of his claim against W&G; the federal court found that awarding MFS 50 percent of its subrogation claim would be a "fair and equitable" allocation under § 48-118. The federal court entered a final order to that effect on July 20, 1995, and modified it in ways not pertinent to the present dispute on October 27. The parties did not raise, and the federal court did not determine, the amount of credit to which MFS would be entitled on disability benefits and medical and other expenses that accrued after the order.
Thereafter,
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