Jay v. Chicago Bridge & Iron Co.

• Decision Date: 27 June 1945
• Docket Number: No. 3042.,3042.
• Citation: 150 F.2d 247
• Parties: JAY v. CHICAGO BRIDGE & IRON CO. et al.
• Court: U.S. Court of Appeals — Tenth Circuit

150 F.2d 247 (1945)

JAY v. CHICAGO BRIDGE & IRON CO. et al.

No. 3042.

Circuit Court of Appeals, Tenth Circuit.

June 27, 1945.

A. H. Nebeker, of Salt Lake City, Utah (Robert L. Judd, Paul H. Ray, and S. J. Quinney, all of Salt Lake City, Utah, on the brief), for appellant.

Daniel C. Smith, of Chicago, Ill. (Walker B. Davis, of Chicago, Ill., and E. C. Jensen, of Salt Lake City, Utah, on the brief), for appellees.

Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.

BRATTON, Circuit Judge.

Perry A. Jay, an employee of Midwest Piping and Supply Company, sustained personal injuries in the course of his employment at Geneva, Utah. He elected to take compensation benefits under the Workmen's Compensation Act of the state, Utah Code 1943, 42-1-1 et seq.; the insurance carrier for Midwest Piping and Supply Company commenced the payment of compensation benefits in accordance with the Act; and the payments were accepted. Jay executed a written instrument in which it was recited that he elected to take the compensation benefits, and that because the injuries resulted from third-party negligence he assigned to the insurance carrier any cause of action he might have against the third party; and the insurance carrier executed a written instrument reciting that it assigned, transferred, and set over to Jay its right, title, and interest in and to any cause of action which it might hold by virtue of the assignment from him and also by virtue of the right of subrogation. Jay later brought this suit against Chicago Bridge & Iron Company, and Fred C. Jacobs, its agent and employee, to recover damages. It was alleged in the complaint that the negligence of the defendants was the proximate cause of the injuries. Answers and replies were filed, and defendants then interposed a motion for judgment on the pleadings, or in the alternative, for the dismissal of the action. The court dismissed the action without prejudice. For convenience, reference will be made to the parties as they appeared in the trial court.

The action was dismissed for prematurity. The basis on which the court rested the dismissal was that there was no cause of action against the defendants until the amount of the compensation due under the Workmen's Compensation Act had been paid in full. Section 42-1-58, Utah Code Annotated 1943, provides: "When any injury for which compensation is payable under this title shall have been caused by the wrongful act of another person not in the same employment, the injured employee, or in case of death his dependents, may at their option claim compensation under this title or have their action for damages against such third person; and, if compensation is claimed and awarded, the employer or insurance carrier having paid the compensation shall be subrogated to the rights of such employee or his dependents to recover against such third person; provided, if such recovery shall be in excess of the amount of the compensation awarded and paid, then such excess, less the reasonable expenses of the action, shall be paid to the employee or his dependents. Before being required to pay any compensation or other benefits as provided in this title the employer or insurance carrier may require the employee or in case of death his dependents to make a written assignment of any cause of action existing against the third person to such employer or insurance carrier as the case may be." In Johanson v. Cudahy Packing Co., 101 Utah 219, 120 P.2d 281, it was held that payment of compensation by the employer or the insurance carrier, within the purview of the statute, meant payment in full of the award; and that the insurance carrier could not maintain the action until payment in full had been made. That case was undisturbed in its controlling effect at the time the court below dismissed this action, and it was expressly followed. But the controversy involved in that case was again reviewed on appeal; and, expressly departing from the earlier conclusion, it was held that payment in full of the compensation award was not a condition precedent to the maintenance of an action against a third party whose negligence was the proximate cause of the injury or death. Johanson v. Cudahy Packing Co., Utah, 152 P.2d 98. It therefore is clear that under the law of Utah as last enunciated by the supreme court of the state, the dismissal of this action on the ground of prematurity was improvident.

Endeavoring to sustain the judgment, defendants assert that plaintiff assigned to the insurance carrier that part of his cause of action which had not already been transferred to it by subrogation; that the attempted assignment from the insurance carrier to plaintiff was without effect; and that therefore plaintiff was not the real party in interest vested with the right to maintain the action. As already indicated, the trial court rested its judgment on a different basis, but it is well settled that a judgment which is correct in...