Boyer v. Travelers Indemnity Company, 13909.

• Decision Date: 06 July 1960
• Docket Number: No. 13909.,13909.
• Citation: 280 F.2d 289
• Parties: Martin BOYER, dba Martin Boyer & Company, The Exchange Insurance Association, Defendants-Appellants, v. TRAVELERS INDEMNITY COMPANY, The Shell Oil Company, Plaintiffs-Appellees, Laura Anderson, Admx. etc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

280 F.2d 289 (1960)

Martin BOYER, dba Martin Boyer & Company, The Exchange Insurance Association, Defendants-Appellants, v. TRAVELERS INDEMNITY COMPANY, The Shell Oil Company, Plaintiffs-Appellees Laura Anderson, Admx. etc., Defendant-Appellee.

No. 13909.

United States Court of Appeals Sixth Circuit.

July 6, 1960.

Harley J. McNeal, Cleveland, Ohio, for appellants.

Eugene Bleiweiss, Payer, Bleiweiss & Crow, Cleveland, Ohio, for appellee.

Before MILLER and WEICK, Circuit Judges, and THORNTON, District Judge.

THORNTON, District Judge.

The opinion of the lower court is short and contains a simple statement of the factual picture here present. We therefore preface our review with said opinion. It reads as follows:

"This is an interpleader action which arose as follows: On January 9, 1953, Walter Anderson, a resident of Ashtabula County, Ohio, and an employee of Spector Motor Service, Inc., was killed while engaged in his employment in Schodack, N. Y., when a vehicle operated by the Shell Oil Company struck said Walter Anderson. His widow, Laura Anderson, as administratrix of his estate, brought a wrongful death action in Cuyahoga County, Ohio, against the Shell Oil Company, which action was for the benefit of Walter\'s dependents. In addition, Laura in her individual capacity applied to the Illinois Workmen\'s Compensation Board, under which both Spector and Shell were qualified, for benefits due her and Walter\'s minor children by a former marriage.

"The Workmen\'s Compensation award totalled $8,235.44, which was paid by Spector and its insurer the Exchange Insurance Association to Laura Anderson in part and in part to Miriam McClimans, legal guardian of the minor children.

"Shell and its insurer The Travelers Indemnity Corporation, settled the wrongful death action for $40,000.00, of which, pursuant to court order, $8,235.44 was paid into the registry of this court and this interpleader of the claimants to the fund filed. The matter is now submitted to the court for decision on the briefs, exhibits and an agreed statement of facts.

"Claimants Martin Boyer and Exchange Insurance Association rely upon Section 5 of the Illinois Workmen\'s Compensation Act. This section, formerly Section 29, provides that if a third party is responsible for the injury or death for which compensation has been paid, the employer may bring suit to recover such amount against the negligent third party or, if the injured employee or his personal representative should bring suit against the third party, the employer is entitled to share in the recovery to the extent of the compensation paid by the employer.

"Thus, the issues seem not difficult to resolve. Section 5 of the Illinois Workmen\'s Compensation Act would settle this question: (1) if this were an Illinois cause of action; and (2) if Section 5 had not been declared unconstitutional by the Illinois Supreme Court in Grasse v. Dealer\'s Transport Co., 412 Ill. 179, 106 N.E. 2d 124 (1952).

"The cases cited by Boyer and Exchange relate to situations in which the action is brought in Illinois under Illinois law. This action, however, was brought in Ohio under the New York wrongful death law, and is thus more comparable to cases such as Anderson v. Miller, 176 Wis. 521, 182 N.W. 852 187 N.W. 746; and Bernard v. Jennings, 209 Wis. 116, 244 N.W. 589.

"Thus the claim of Laura Anderson must be held valid as against the claims of Martin Boyer and Exchange Insurance, subject to a lien in favor of the attorneys who aided in the creation of the fund.

"The stipulated facts filed by the parties are adopted as the findings of fact and together with the conclusions of law in the foregoing memorandum are considered adequate compliance with Rule 52(a) 28 U.S.C.A.."

We will commence with the rationale of the court below where the court states that "the issues seem not difficult to resolve." The court below says that Section 5 of the Illinois Workmen's Compensation Act, Ill.Rev.Stat. 1959, c. 48, § 138.5 would settle the question but for (1) and (2) as above stated. The fact that this is not an Illinois cause of action is a point whose determinative quality escapes us. Section 5 contains a subrogation provision common to many workmen's compensation statutes providing for reimbursement to the employer out of the proceeds of the recovery for tortious action, to the extent of workmen's compensation paid. New York law appears to be not materially different in this respect:

"It will be noted that under this statute the employer has a lien on the proceeds of recovery after the deduction of reasonable and necessary expenditures, including attorney\'s fees, incurred in effecting such recovery, but to the extent of the total amount of compensation paid. We think that language controlling to provide full reimbursement of all compensation paid, without any deduction, up to the net proceeds as here defined. That is, the attorney\'s fees are deductible in determining the maximum amount the employer may receive back, but do not otherwise affect or limit the reimbursement." Ocean S. S. Co. v. Lumbermen\'s Mut. Casualty Co., 2 Cir., 1942, 125 F.2d 925, 926.

The theory of allowance to the employer (or its insurance carrier) of reimbursement does not do violence to the basic philosophy of either workmen's compensation or of wrongful death actions. It has not been pointed out to this Court that it does violence to the New York wrongful death act, nor to that of Ohio. We are not apprised whether a subrogation provision similar to Section 5, above adverted to, prevails under the law of Ohio, in which state this action was brought in enforcement of a cause of action which arose in the state of New York. We do not think it a prerequisite that this be an Illinois cause of action in order for Section 5 of the Illinois Workmen's Compensation Act to be applicable

1. Where the workmen's compensation benefits...