Heckman v. Burlington N. Santa Fe Ry. Co.

• Decision Date: 16 August 2013
• Docket Number: No. S–12–335,S–12–335
• Citation: 837 N.W.2d 532,286 Neb. 453
• Parties: Eddie Heckman, Appellee, v. Burlington Northern Santa Fe Railway Company, Appellant.
• Court: Nebraska Supreme Court

286 Neb. 453

837 N.W.2d 532

Eddie Heckman, Appellee,

v.Burlington Northern Santa Fe Railway Company, Appellant.

No. S–12–335

Supreme Court of Nebraska.

Filed August 16, 2013

Appeal from the District Court for Box Butte County: Travis P. O'Gorman, Judge. Reversed and remanded with directions.

Nichole S. Bogen and Thomas C. Sattler, of Sattler & Bogen, L.L.P., for appellant.

Andrew W. Snyder and Maren L. Chaloupka, of Chaloupka, Holyoke, Snyder, Chaloupka, Longoria & Kishiyama, P.C., L.L.O., for appellee.

Kathryn Keneally, Assistant Attorney General, Deborah R. Gilg, U.S. Attorney, Robert L. Homan, Assistant U.S. Attorney, and Jonathan S. Cohen and Marion E.M. Erickson, of U.S. Department of Justice, Tax Division, Appellate Section, for amicus curiae United States of America.

Heavican, C.J., Wright, Connolly, Stephan, McCormack, Miller-Lerman, and Cassel, JJ.

Syllabus by the Court

[286 Neb. 453]1. Statutes: Appeal and Error. Statutory interpretation is a question of law, which an appellate court resolves independently of the trial court.

2. Juries: Verdicts. A jury, by its general verdict, pronounces upon all or any of the issues either in favor of the plaintiff or the defendant.

3. Juries: Verdicts: Presumptions. Because a general verdict does not specify the basis for an award, Nebraska law presumes that the winning party prevailed on all issues presented to the jury.

4. Federal Acts: Railroads: Claims: Courts. In disposing of a claim controlled by the Federal Employers' Liability Act, a state court may use proceduralrules applicable to civil actions in the state court unless otherwise directed by the act, but substantive issues concerning a claim under the act are determined by the provisions of the act and interpretative decisions of the federal courts construing the act.

5. Federal Acts: Railroads: Pensions: Words and Phrases. For purposes of the Railroad Retirement Act, the definition of compensation includes payments for time lost.

6. Employer and Employee: Wages. An employee is deemed to be paid “for time lost” the amount he is paid by an employer for an identifiable period of absence, including absence on account of personal injury.

7. Federal Acts: Railroads: Pensions: Presumptions: Damages. The Railroad Retirement Act presumes that payments for personal injury are compensation for time lost unless they are specifically apportioned otherwise.

8. Federal Acts: Railroads: Pensions. The Railroad Retirement Board treats the total Federal Employers' Liability Act award as pay for time lost if the payment for personal injury is based in part on pay for time lost.

[286 Neb. 454]9. Employer and Employee: Contracts: Wages. Employers and employees can negotiate settlement agreements and allocate portions of a settlement award to lost wages and other compensatory categories.

Wright, J.

I. NATURE OF CASE

Pursuant to the Federal Employers' Liability Act (FELA), Eddie Heckman was awarded $145,000 in damages for on-the-job injuries sustained while working for Burlington Northern Santa Fe Railway Company (BNSF). BNSF paid the judgment, but withheld $6,202.70 as Heckman's share of Railroad Retirement Tax Act (RRTA) payroll taxes on the entire general verdict award. The district court overruled BNSF's “Motion for Satisfaction and Discharge of Judgment” and ordered BNSF to pay the $6,202.70 directly to Heckman. It also required the parties to agree in writing that no amount of the award would be considered lost wages, so as to avoid any obligations under the RRTA.

BNSF appealed, claiming that the court's order conflicted with federal tax and railroad laws. We granted BNSF's petition to bypass the Nebraska Court of Appeals. The issue is whether the general verdict award in favor of Heckman is an award of compensation from which BNSF is required to withhold a portion of the award in order to pay RRTA payroll taxes. For the reasons set forth herein, we reverse the judgment and remand the cause with directions.

II. SCOPE OF REVIEW

Statutory interpretation is a question of law, which an appellate court resolves independently of the trial court. United States Cold Storage v. City of La Vista, 285 Neb. 579, 831 N.W.2d 23 (2013).

III. FACTS

Heckman was injured in the course and scope of his employment with BNSF. Because he was a railroad employee, he filed a claim for personal injury damages pursuant to FELA, 45 U.S.C. § 51 et seq. (2006). Heckman's pleadings included claims for lost earnings and benefits. He testified at trial regarding his lost wages and argued lost wages as part of his request for damages. The court instructed the jury to consider awarding Heckman damages to compensate for his injury, including lost wages, if it returned a verdict in his favor. Neither party requested a special verdict instruction. The court instructed the jury as follows:

I am about to give you a list of the things you may consider in making this decision. From this list, you must only consider those things you decide were in whole or in part caused by [BNSF's] negligence:

1. The nature and extent of the injury, including whether the injury is temporary or permanent and whether any resulting disability is partial or total;

2. The reasonable value of the medical, hospital, nursing, and similar care and supplies reasonably certain to be needed and provided in the future;

3. The physical pain and mental suffering [Heckman] has experienced and is reasonably certain to experience in the future;

4. The wages [Heckman] has lost because of his inability or diminished ability to work.

The jury returned a general verdict in favor of Heckman and awarded him $290,000 less 50 percent for his contributory negligence. The jury did not specify how it attributed damages. The district court approved the verdict and entered judgment in favor of Heckman for $145,000.

On October 19, 2011, BNSF deposited $127,256.70 with the clerk of the district court for Box Butte County, Nebraska, and filed its motion for satisfaction and discharge of judgment. The amount deposited consisted of the judgment amount of $145,000 plus 45 days of accrued postjudgment interest and $1,974.24 in costs. Withheld from that amount was $20,089.53, which was calculated as follows:

(1) $7,868.53 to satisfy the Railroad Retirement Board's lien for [Heckman's] short-term sickness and unemployment benefits that he received;

(2) $6,018.83 to satisfy a lien ... for short-term disability benefits that [Heckman] received; and

(3) $6,202.70 to satisfy [BNSF's] purported obligation to withhold and pay the Internal Revenue Service for [Heckman's] share of [RRTA] payroll taxes on his general verdict award.

Heckman does not contest the offsets for the liens.

At the hearing on the motion for satisfaction and discharge of judgment, BNSF offered evidence to show how it determined the amount of taxes due on Heckman's general verdict award. Relying upon U.S. Railroad Retirement Board (RRB) program letter No. 2011–01 and Internal Revenue Service (IRS) 2010 instructions for IRS Form CT–1, the rate of taxes for compensation paid to Heckman in 2011 were determined as follows:

Tier 1: Employee pays 4.2% of the first $106,800 of compensation. Railroadpays 6.2% of the first $106,800 of compensation.

Tier 1 Medicare: Employee and railroad each pay 1.45% of compensation.

Tier 2: Employee pays 3.9% of the first $79,200 of compensation. Railroad pays 12.1% of the first $79,200 of compensation[.]

At the time of the judgment, Heckman's year-to-date income was $42,891.32. This amount was deducted from the capped amount of earnings for calculating withholding amounts. BNSF calculated the withholding by using the entire amount of the judgment, $145,000, as lost wages. Based on this amount and using the withholding chart, it calculated the taxes as follows:

Tier 1 $2,684.16 ($106,800 less earnings through October 11, 2011, $42,891.32, equals $63,908.68 multiplied by 4.2%)

Tier 2 $1,416.04 ($79,200 less earnings through October 11, 2011, $42,891.32, equals $36,308.68 multiplied by 3.9%)

Medicare $2,102.50 ($145,000 multiplied by 1.45%)

Total: $6,20[2].70 [ ($2,684.16 + $1,416.04 + $2,102.50) ]

The total, $6,202.70, is the amount BNSF claims it is required to withhold and pay to the IRS. Heckman does not dispute the accuracy of the computations but claims the law does not require BNSF to withhold the $6,202.70.

The district court overruled BNSF's motion for satisfaction and discharge of judgment and ordered that “no portion of the general verdict shall be attributable to [Heckman's] wage loss claim.” The court concluded that because a general verdict was rendered, it had no way of knowing what portion, if any, of the verdict the jury apportioned for wage loss and that the issue could not be relitigated. It directed BNSF to pay $6,202.70 to the clerk of the district court for Box Butte County for distribution to Heckman.

BNSF moved for rehearing. The district court revised its order and directed the parties to agree in writing that no portion of the award would be considered lost wages, “so as not to place BNSF at odds with the statutory requirement to pay the [RRTA] Taxes to the IRS as permitted by the rules.”

BNSF appealed, and we granted the petition to bypass.

IV. ASSIGNMENTS OF ERROR

BNSF claims, summarized and restated, that the district court erred in not entering a satisfaction and discharge of the judgment against BNSF and ordering the parties to agree in writing that no portion of the verdict was for lost wages.

V. ANALYSIS

Heckman claims that BNSF has not presented evidence it paid the $6,202.70 to anyone and that, therefore, the district court did not err in refusing to enter a satisfaction of the judgment. In the interest of judicial economy, we proceed to examine BNSF's assignments of error.

The first question is whether in Nebraska a general jury verdict is presumed to rule in favor of the successful party on all issues presented to the jury. The second question is whether any portion of the general...