Duffy Bros. Const. Co., Inc. v. Pistone Builders, Inc.

• Decision Date: 01 December 1980
• Docket Number: No. 42982,42982
• Citation: 299 N.W.2d 170,207 Neb. 360
• Parties: DUFFY BROTHERS CONSTRUCTION CO., INC., and Western Casualty and Surety Co., Appellants, v. PISTONE BUILDERS, INC., Appellee.
• Court: Nebraska Supreme Court

Page 170

299 N.W.2d 170

207 Neb. 360

DUFFY BROTHERS CONSTRUCTION CO., INC., and Western Casualty and Surety Co., Appellants, v. PISTONE BUILDERS, INC., Appellee.

No. 42982.

Supreme Court of Nebraska.

Dec. 1, 1980.

Syllabus by the Court

1. Workmen's Compensation: Contractors and Subcontractors: Joint and Several Liability. Under the provisions of Neb.Rev.Stat. § 48-116 (Reissue 1978), when a contractor fails to require a subcontractor to carry workmen's compensation insurance and an employee of the latter sustains a job-related injury, the contractor shall be included within the term employer and, with the immediate employer-subcontractor, shall be jointly and severally liable to pay compensation under the terms of the workmen's compensation act.

2. Workmen's Compensation: Contractors and Subcontractors: Joint and Several Liability. The joint and several liability imposed by Neb.Rev.Stat. § 48-116 (Reissue 1978) is for the sole benefit of the injured workman; the statute in no way determines whether it is the statutory or actual employer who is primarily liable.

3. Workmen's Compensation: Contractors and Subcontractors: Joint and Several Liability. Between the statutory employer and the actual employer, under the provisions of Neb.Rev.Stat. § 48-116 (Reissue 1978), the liability of the latter should be regarded as primary and that of the former as secondary.

4. Workmen's Compensation: Contractors and Subcontractors: Indemnity. Under the Nebraska workmen's compensation act, a statutory employer is entitled to indemnity from the actual employer with the amount being limited to all sums which the former has paid in good faith upon a matured obligation, or has been forced to pay in satisfaction of a compensation award.

5. Workmen's Compensation: Contractors and Subcontractors: Indemnity. Generally speaking, an employer paying an injured workman his wages in lieu of compensation is entitled to credit for such benefits computed by the number of weeks paid, rather than the dollar amount.

Dustin & Tighe, Omaha, for appellants.

No appearance for appellee Pistone.

Heard before KRIVOSHA, C. J., McCOWN, BRODKEY, and HASTINGS, JJ., and STUART, District Judge.

HASTINGS, Judge.

Duffy Brothers Construction Co., Inc. (Duffy), has appealed from an order of the District Court for Douglas County, Nebraska, dismissing its petition which sought indemnity from Pistone Builders, Inc. (Pistone). Duffy sued for indemnification for workmen's compensation benefits paid by Duffy to an injured employee of Pistone, Harry N. Spencer, after an award by the Workmen's Compensation Court which found Duffy and Pistone jointly liable for benefits, pursuant to Neb.Rev.Stat. § 48-116 (Reissue 1978). Duffy assigns that the court was in error in failing to find that the plaintiff was entitled to be indemnified for the benefits paid to the injured employee. We reverse and remand.

Spencer was injured while employed as a carpenter for Pistone on a job site where Pistone was a subcontractor for Duffy. Spencer injured the index and middle fingers of his right hand when they were caught in a radial saw, and he was not able to work from February 18, 1978, until June 5, 1978. During this period Pistone paid Spencer his regular wages of $240 per week. After the injury, Spencer was informed that Pistone was not covered by workmen's compensation insurance, and he then brought suit against both Pistone and Duffy. The Workmen's Compensation Court entered an award in favor of Spencer for medical benefits in the amount of $2,140.33, and found that he was entitled to temporary total disability of $140 per week for the 15 weeks that he was off work, and that since Pistone had paid Spencer his regular wages, it should be given credit to offset the disability payments due. The court further found that the defendants were jointly and severally liable for the award. No finding with regard to permanent partial disability to the hand was made because a doctor's report had not been received by the court.

Duffy entered into an agreement with Spencer in which it paid the medical bills previously ordered by the compensation court, as well as a lump sum amount to Spencer of $3,339. The agreement, entitled "Receipt and Assignment," purported to be a satisfaction of the Workmen's Compensation Court award "for a workmen's compensation injury and claim occurring on February 18, 1978"; an assignment to Duffy of Spencer's claim against Pistone; and a subrogation to Duffy and its insurer of all rights and claims to which Spencer was entitled under the workmen's compensation act that arose from the aforementioned injury. The "Receipt and Assignment" did not explain the lump sum payment. Duffy then brought suit against Pistone for indemnification for the amount paid by Duffy to Spencer in settlement of the claim. It is from a finding for Pistone, and a dismissal of the petition, that Duffy has appealed.

Section 48-116 states, in pertinent part: "Any person, firm or corporation creating or carrying into operation any scheme, artifice or device to enable him, them or it to execute work without being responsible to the workmen for the provisions of this act, shall be included in the term employer, and with the immediate employer shall be jointly and severally liable to pay the compensation herein provided for and be subject to all the provisions of this act."

Duffy was held liable in the Workmen's Compensation Court under this section as a contractor which let part of its contract to Pistone, as subcontractor, but did not require Pistone to procure workmen's compensation insurance. The statute imposed joint and several liability upon the general contractor, in this instance, along with the immediate employer, Pistone. Duffy's position is that it should be allowed to recover under a theory of indemnity for the amounts paid. Duffy argues that the immediate employer, Pistone, is primarily liable for the judgment and it, Duffy, is only secondarily liable; therefore, under the principles of indemnity, Pistone should be obligated to reimburse Duffy for the amount of its loss. Pistone did not appear in this court.

In most of the 41 states with statutes imposing liability upon a general contractor in a case like this one, the statute provides that the general contractor is entitled to reimbursement from the subcontractor. 1C Larson, Workmen's Compensation Law § 49-11 (1980). Nebraska has no such statutory provision, and, therefore, it is necessary to examine various legal principles contained in the case law and legal encyclopedias.

"A person who, in whole or in part, has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to indemnity from the other, unless the payor is barred by the wrongful nature of his conduct." Restatement of Restitution § 76 (1937).

"The obligation to indemnify may grow out of an implied contractual relation or out of a liability imposed by law. Thus, where one is compelled to pay money which in justice another ought to pay, or has agreed to pay, the former may recover from the latter the sums so paid, unless the one making the payment is barred by the wrongful nature of his conduct." 42 C.J.S. Indemnity § 20 (1944). See, also, National Indem. Co. v. United States, 444 F.Supp. 1356 (C.D.Cal.1977).

"The right of indemnity rests upon a difference between the primary and the secondary...