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MATTER OF ESTATE OF SYLVESTER2/19/1997
This is an appeal by a workers' compensation insurance carrier from an order by the district court approving a settlement between the family of a deceased employee and a third-party tortfeasor. The insurer, Cincinnati Insurance Company, contends that the district court lacked jurisdiction to approve the proposed settlement because Iowa Code section 85.22(3) (1993) vests such authority exclusively in the industrial commissioner. We affirm.
Dennis Sylvester, an employee of AR-JAY Building Products, Inc., was killed in a collision with Lester Lauer, who also died as a result of the accident. Several suits followed. Lauer's estate (Lauer) sued Sylvester's estate (Sylvester). Sylvester's wife and son sued Lauer for loss of consortium, and Cincinnati, on behalf of the decedent Sylvester, sued Lauer hoping to recover, as a subrogee, for workers' compensation benefits furnished for Sylvester. See Iowa Code § 85.22.
The parties entered into a global settlement in which Sylvester's insurer paid Lauer $800,000 for wrongful death (it is undisputed in the appeal that Sylvester crossed the centerline and struck Lauer), and Lauer's insurer paid $35,000 on the consortium claim. It is this $35,000 settlement that is in dispute here.
The settlement matter was set for hearing, and notice was served on all parties, including Cincinnati. Cincinnati filed a resistance in which it stated:
1. That the Cincinnati Insurance Company has no objection to a claim being settled on behalf of the Estate of Dennis Raymond Sylvester, Kimberly Kay Sylvester and Cody Raymond Sylvester in the above-referenced matter, however, the Cincinnati Insurance Company does not consent to the distribution of funds pending resolution of the workers' compensation lien/credit issues in this matter.
2. That the Cincinnati Insurance Company claims a lien as a result of the weekly benefits made to Kimberly Kay Sylvester since the date of death of Dennis Raymond Sylvester on 06-23-92 in excess of the settlement proceeds in this case.
(Emphasis added.)
Although Cincinnati wanted the settlement proceeds to be held in trust pending disposition of its subrogation claim, its original resistance did not challenge the district court's authority to rule on the settlement. It did raise that issue, however, in its supplemental resistance, and it now argues that it is a matter of subject matter jurisdiction. Cincinnati's supplemental resistance stated that Iowa Code section 85.22(3) "requires the approval of the Industrial Commissioner before any third-party settlement involving a workers' compensation claimant becomes effective." (Emphasis added.) See Shirley v. Pothast, 508 N.W.2d 712, 717 (Iowa 1993); Iowa Code § 85.22(3) (if parties do not agree on distribution of proceeds from third party, when workers' compensation benefits have been paid, distribution issue shall be determined by industrial commissioner).
I. Jurisdictional Issue.
We disagree with Cincinnati's characterizations of Shirley and section 85.22(3). It is not the identity of a claimant, but the nature of the res, that determines whether the industrial commissioner becomes involved [559 NW2d Page 287]
under Iowa Code section 85.22(3). If the settlement proceeds cannot be subjected to indemnity claims of an insurer, and we conclude that they cannot in this case, there is no reason to require submission of the issue to the industrial commissioner. In this connection, Iowa Code section 85.22(1) provides:
If compensation is paid the employee or dependent or the trustee of such dependent under this chapter, the employer by whom the same was paid, or the employer's insu
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