Amos v. Stroud

• Decision Date: 17 July 1972
• Docket Number: No. 5--5886,5--5886
• Citation: 252 Ark. 1100,482 S.W.2d 592
• Parties: Pauline AMOS, Administratrix of the Estate of George L, Amos, Deceased, Appellant, v. Raymond STROUD and Pat Salmon, Appellees.
• Court: Arkansas Supreme Court

Page 592

482 S.W.2d 592

252 Ark. 1100

Pauline AMOS, Administratrix of the Estate of George L Amos, Deceased, Appellant, v. Raymond STROUD and Pat Salmon, Appellees.

No. 5--5886.

Supreme Court of Arkansas.

July 17, 1972.

Pearce, Robinson & McCord, Ft. Smith, J. Marvin Holman, Clarksville, for appellant.

Wright, Lindsey & Jennings, Little Rock, for appellee.

FOGLEMAN, Justice.

Pauline Amos, widow of George L. Amos, as administratrix of his estate, brought an action against Raymond Stroud and Pat Salmon, seeking to recover damages for medical bills, loss of earnings and conscious pain and suffering for the estate and for her loss of consortium and her mental anguish and that of other survivors suffered injuries in an automobile suffered injuries in an autombile collision caused by negligence of appellees, which ultimately caused his death. Commercial Union Insurance Company of America intervened, claiming subrogation rights as the workmen's compensation carrier for the employer of George Amos. When the tort action came on for trial, appellees conceded their liability, and the only issues were whether the injuries received by Amos caused or contributed to his death and the amount of the damages. The trial resulted in a judgment for $5,000 in favor of the estate for damages sustained by appellant's decedent prior to his death, but the jury found for appellees as to all other liability.

Appellant relies upon the following points for reversal:

I. The Trial Court erred in overruling the Plaintiff's motion in limine to prevent the subrogation claim of Commercial Union Insurance Company of America being presented to the jury.

II. The Trial Court erred in overruling the objections and motion to strike of the plaintiff in regard to the opinion of Dr. Ben O. Price stated in response to a hypothetical question.

Commercial Union Insurance Company, by permission of the court, filed its complaint in intervention, seeking a first lien to the extent of $697.50 on any recovery by appellant by right of subrogation under Ark.Stat.Ann. § 81--1340 (Repl.1960). No allegations of liability were asserted against appellees. No answer to this pleading was filed by any party. Prior to the selection of a jury, appellant offered to stipulate that the compensation carrier would be entitled to receive $697.50 out of any judgment against appellees. This was done at a pretrial hearing during which appellees refused to admit the correctness of the amount claimed by the carrier, even though their attorney stated that they would offer no contradictory evidence. Appellant then made a motion to prohibit mention to the jury of the payment of workmen's compensation. The ground for the motion was that these payments were from a collateral source and had no bearing on the amount appellant was entitled to recover from appellees. The circuit judge denied this motion.

The record does not reflect any evidence offered by the intervenor in support of its claim and the forms of verdict submitted to the jury do not mention its claim in any way. Still, the judgment makes this claim a first lien on appellant's recovery for the amount alleged in the intervention and stipulated by appellant. It is admitted that the carrier's counsel made an opening statement to the jury, but it does not appear that he participated in the trial in any other manner or that any other mention was made of the compensation payments. However, on direct examination of a physician called as a witness by appellant, the doctor stated that a summary of his opinion as to the disability of Amos was contained in a letter to Amos' employer. On cross-examination appellees showed that this witness submitted reports to Commercial Union relating to Amos' injuries.

Appellant argues that the compensation carrier, having joined in her action against the third-party tortfeasors, was only entitled to a lien on the net proceeds of her recovery, and not to a separate claim against the tortfeasors. Appellees, on the other hand, contend that permitting intervenor's attorney to appear in the courtroom and make an opening statement was proper because they had declined to admit the amount of Commercial Union's claim. They also contend that our decision in St. Paul Fire and Marine Insurance Co. v. Wood, 242 Ark. 879, 416 S.W.2d 322, clearly establishes that the causes of action of the compensation carrier and the injured employee are separate and distinct. This position is clearly contrary to that implied by intervenor's complaint.

First, we should say that appellees misconstrue our holding in Wood. There we did not hold that there were two separate and distinct causes of action. We expressly stated that there was but one. We held that the single cause of action could be split with the consent of the defendant in the tort action, the sole beneficiary of the prevailing rule against splitting causes of action. ¹ We should also note that no objection was made to the carrier's intervention here. The objection was directed to mention of the compensation payment before the jury. We think appellant's objection was well taken. The question has not heretofore been presented to us. The matter is treated by Professor Larson, who says:

The right of the carrier to intervene in the employee's suit does not necessarily carry with it the right to participate in the conduct of the suit without the consent of the employee. This issue may be related to the bugaboo of prejudicing the employee's case by revealing to the jury that an insurance company is going to profit by any damage award the jury might make. 2 Larson, Workmen's Compensation Law 226.135, § 74.41 (1970).

In other jurisdictions where the question has been presented it has usually been held that an intervening employer or carrier which has paid workmen's compensation benefits should not be permitted to participate in the trial of a suit against a third-party tortfeasor, without the consent of the injured employee. In Sjoberg v. Ryerson & Son, Inc., 8 Ill.App.2d 414, 132 N.E.2d 56 (1956), in commenting on an employee's objection to the carrier's participation in the conduct and trial of his suit against an alleged tortfeasor, the court appropriately said:

We think there is merit in plaintiff's position. Conceivably, there could be such conflict which might seriously jeopardize a recovery in the action. The primary object of the statute is to afford the employer the protection of his lien for the amount the employer is obligated to pay the employee under the Workmen's Compensation Act and no more.

He would have no interest in any recovery beyond that amount, whereas the employee's objective is more substantial, since he would be seeking to recover full damages for his injury, which could be much more than that allowed by the Workmen's Compensation Act. No lien of the employer could attach to the amount in excess of that paid or to be paid by the employer. No case has been cited to us which defines the right of the employer to participate in the trial of the suit. It may well be that no one has seriously considered that an employer has a right to participate in the trial of the suit, and therefore the question seems never to have been raised or dicided. Our search has not revealed any decision upon that particular question.

We believe the proper and just rule to apply in this type of situation is to allow the employer to join the action by intervention for the purpose allowed by the statute, and provide in the order that such intervention shall not extend to the intervening petitioner the right no participate in the conduct or trial of the suit, without the consent of plaintiff.

In Gorrell v. Kansas Power & Light Co., 189 Kan. 374, 369 P.2d 342 (1962), the court held that it was error for the trial court to permit the active participation of an intervening workmen's compensation carrier, saying:

The applicable statute, G.S.1959 Supp. 44--504, provides that when the injury for which compensation is payable was caused under circumstances creating a legal liability against some person other than the employer to pay damages, the injured workman shall have the right to take compensation under the act and pursue his remedy by proper action in a court of competent jurisdiction against such third party, and that in the event of recovery from such third party by judgment, settlement or otherwise, the employer shall be subrogated to the extent of the compensation and medical aid provided by him to date of such recovery and shall have a lien therefor against such recovery, and the employer may intervene in any action to protect and enforce such line.

We believe that portion of the statute providing that the employer shall be subrogated to the extent of the compensation and medical aid provided by him to the date of recovery, and that he shall have a lien therefor against such recovery and may intervene in the action to protect and enforce such lien, means that the employer or the insurance carrier is given the right to file with the court a notice of its lien so as to protect its subrogation rights in the event of recovery by judgment, settlement, or otherwise, but that it does not mean that the employer or insurance carrier may actively participate in the injured workman's action.

Notwithstanding the fact that it was to the insurance carrier's interest that a large verdict--at least to the extent of $22,500--be recovered, and thus the 'interests' of plaintiff and the insurance carrier may be deemed to have been the 'same,' we believe that it...