Kottka v. PPG Industries, Inc.

• Court: Wisconsin Supreme Court
• Writing for the Court: BABLITCH
• Citation: Kottka v. PPG Industries, Inc., 130 Wis.2d 499, 388 N.W.2d 160 (Wis. 1986)
• Decision Date: 25 July 1986
• Docket Number: No. 85-0933,85-0933
• Parties: William KOTTKA and Janet Kottka, Plaintiffs-Appellants, Aetna Insurance Company and Northern Insurance Company of New York, Subrogated Parties, Maryland Casualty Insurance Company and Wausau Insurance Companies, Subrogated Parties-Respondents, v. PPG INDUSTRIES, INC., a foreign corporation and Hidrite Chemical Company, Defendants. William KOTTKA and Janet Kottka, Plaintiffs-Appellants, Aetna Insurance Company and Northern Insurance Company of New York, Subrogated Parties, Maryland Casualty Insurance Company and Wausau Insurance Companies, Subrogated Parties-Respondents, v. KEPRO CIRCUIT SYSTEMS, INC., a foreign corporation, Defendant.

Page 160

388 N.W.2d 160

130 Wis.2d 499

William KOTTKA and Janet Kottka, Plaintiffs-Appellants,

Aetna Insurance Company and Northern Insurance Company of

New York, Subrogated Parties,

Maryland Casualty Insurance Company and Wausau Insurance

Companies, Subrogated Parties-Respondents, v. PPG INDUSTRIES, INC., a foreign corporation and Hidrite

Chemical Company, Defendants.

William KOTTKA and Janet Kottka, Plaintiffs-Appellants,

Aetna Insurance Company and Northern Insurance Company of

New York, Subrogated Parties,

Maryland Casualty Insurance Company and Wausau Insurance

Companies, Subrogated Parties-Respondents, v. KEPRO CIRCUIT SYSTEMS, INC., a foreign corporation, Defendant.

No. 85-0933.

Supreme Court of Wisconsin.

Argued April 1, 1986.

Decided June 4, 1986.

Motion for Reconsideration Denied July 25, 1986. ^*

James A. Olson, Madison, argued, for plaintiffs-appellants; Lawton & Cates, on brief.

John Koeppl, Madison, argued, for respondent, Maryland Cas. Ins. Co.; Stafford, Rosenbaum, Rieser & Hansen, on brief.

Peter L. Topczewski, Milwaukee, argued, for respondent, Wausau Ins. Companies; Law Offices of Straub and Schuch, on brief.

D.J. Weis, James A. Johnson and Johnson, Weis, Paulson & Priebe, S.C., Rhinelander, for amicus curiae Wisconsin Academy of Trial Lawyers.

BABLITCH, Justice.

Janet Kottka, the wife of the injured (now deceased) employe, William Kottka, appeals. She asks this court to determine whether the circuit court properly applied sec. 102.29(1), Stats., of the Worker's Compensation Act. Section 102.29(1) provides for the allocation of the proceeds of the settlement of a third party tort action. The statute directs how the proceeds are allocated between the person receiving the proceeds from a third party and the employer or the compensation insurer.

The circuit court set aside the formula for allocation provided in sec. 102.29(1), Stats., and approved an alternative allocation. We conclude that the court exceeded its authority under the section by allocating the proceeds of the third party action according to a nonstatutory formula without obtaining consent of all parties. We agree with the circuit court that the proceeds of the injured employe's claim for pain and suffering were subject to allocation. The circuit court also determined that the spouse of the injured employe was not entitled to bring a claim for loss of consortium which she suffered between the time of the employe's injury and the time of the employe's death. We conclude that a spouse is entitled to bring a claim for loss of consortium in these circumstances, and that the amount attributable to recovery on this claim is not subject to allocation.

The underlying facts are undisputed. In April, 1983, William Kottka (William) died of pancreatic cancer, a condition which doctors diagnosed nearly 15 months earlier. Prior to his death, he brought a worker's compensation action against his employer, alleging that his exposure to the chemical trichloroethylene in his workplace caused his cancer as well as other toxic effects. He also commenced third party actions against manufacturers and distributors of trichloroethylene, asserting that they were liable for his injury. His wife, Janet Kottka, (Janet) joined in the third party actions; she asserted a claim against the same parties for damages from loss of consortium caused by her husband's alleged injury. His employer and its worker's compensation insurers also joined as subrogated parties in these actions.

Following William Kottka's death, Janet Kottka continued her action for loss of consortium and added a claim for damages from wrongful death, pursuant to secs. 895.03 and 895.04(4), Stats. As personal representative of William's estate, she continued her husband's actions as survival actions, pursuant to sec. 895.01.

On March 16, 1984, the circuit court approved Janet Kottka's settlement of all claims against the manufacturers and distributors of trichloroethylene for a total of $232,500. In April, 1985, William Kottka's worker's compensation action was still pending before the Wisconsin Department of Industry, Labor and Human Relations (Department). On April 30, 1985, the circuit court allocated the proceeds of Janet Kottka's settlement. At this time the worker's compensation insurers of William's employer disagreed with Janet Kottka concerning the portion of the total settlement which must be credited, pursuant to sec. 102.29(1), Stats., against any payments which they would make if the Department determined that William's injury and death were work related. For this reason, Janet and the insurers asked the court to allocate the proceeds of the settlement, specifically determining the portion of the settlement for which the insurers would receive a credit against future payments.

The circuit court determined that Janet Kottka could unilaterally waive her rights under sec. 102.29(1), Stats., and elect an alternative allocation of the settlement. Following an evidentiary hearing, it allocated to Janet a total of $99,337, which included $25,000 to compensate her for damages for "loss of consortium," pursuant to sec. 895.04(4), and $74,337, to reimburse her for costs of collecting the balance of the settlement. It allocated the remainder of the settlement, $133,163, as a credit against the insurers' future payments. The court further determined that Janet was not entitled to recover on her claim for loss of consortium during the period between William Kottka's injury and his death.

Janet Kottka appealed from the court's allocation by petition to bypass the court of appeals. We dismissed the petition to bypass, but certified the case and accepted jurisdiction on our own motion pursuant to sec. 809.61, Stats. The worker's compensation insurers, Maryland Casualty Company and Wausau Insurance Companies, (the insurers) oppose the appeal. The Wisconsin Academy of Trial Lawyers (the amicus) supports Janet as amicus.

The issues on appeal are: 1) did the circuit court exceed its authority under sec. 102.29(1), Stats., by allocating the proceeds from Janet Kottka's settlement of the third party actions according to a nonstatutory formula without consent of all the parties; (2) are the proceeds of the settlement attributable to William Kottka's claim for pain and suffering subject to allocation under sec. 102.29(1); and (3) may Janet Kottka bring a claim for loss of consortium for the period of William Kottka's disability up to his death? If so, must the court exclude her recovery on this claim from the fund subject to allocation under sec. 102.29(1)?

To resolve the issues on appeal, we must construe sec. 102.29(1), Stats. Construction of statutes is a question of law. Sacotte v. Ideal-Werk Krug & Priester, 121 Wis.2d 401, 405, 359 N.W.2d 393 (1984). We need not defer to the trial court when deciding a question of law. Ball v. District No. 4, Area Board, 117 Wis.2d 529, 537, 345 N.W.2d 389 (1984).

Issue 1: Did the circuit court exceed its authority under sec. 102.29(1), Stats., by allocating the proceeds from Janet Kottka's settlement of the third party actions according to a nonstatutory formula without consent of all the parties?

When the circuit court allocated the proceeds of Janet Kottka's settlement of the actions against the manufacturers and distributors of trichloroethylene, it adopted standards for allocation set forth in a Minnesota case, Henning v. Wineman, 306 N.W.2d 550 (Minn.1981), discussed in the footnote below. ¹ As a result, the court permitted Janet to waive her rights under sec. 102.29(1), Stats., and to receive an allocation from a fund which the court defined according to standards which it derived from Henning. Janet Kottka agreed to this departure from the requirements of sec. 102.29(1); the insurers did not.

Janet Kottka argues that the circuit court correctly adopted standards from Henning in allocating the proceeds of the settlement, but erred in its application of the standards by including recoveries from certain claims in the fund subject to allocation. She contends that construing sec. 102.29(1), Stats., according to the standards of Henning constitutes a remedial reading of the section, rather than a deviation from its requirements. She further argues that the Minnesota court's approach in Henning is equitable and should apply in this case.

At issue throughout this appeal is the application of the Worker's Compensation Act, ch. 102, Stats. As this court has previously stated:

"... worker's compensation laws constitute an all-pervasive legislative scheme which attempts to effect a compromise between the employer and the employee's competing interests. The worker is benefitted by certain recovery irrespective of his own fault and irrespective of the employer's absence of fault. Additionally, the worker's compensation legislation abrogated an employer's common law defenses of contributory negligence, assumption of risk, and the fellow-servant rule. Although the employer's defenses were abrogated, simultaneously the worker was obliged to accept a limited and scheduled compensation award." Mulder v. Acme-Cleveland Corp., 95 Wis.2d 173, 180, 290 N.W.2d 276 (1980).

As part of this all-pervasive scheme, the legislature provides a formula in sec. 102.29(1), Stats., for the distribution of proceeds from a claim by an employe, the employer or certain other persons against a third party, based on the injury or death of the employe. In relevant part, sec. 102.29(1) provides:

"The making of a claim for compensation against an employer or compensation insurer for the injury or death of an employe shall not affect the right of the employe, the employe's personal representative, or other person entitled to bring action, to make claim or maintain an action in tort against any other party for such injury or death, hereinafter referred to as a 3rd party.... The employer or compensation insurer who shall have paid or is obligated to pay a lawful claim...