McGough v. McCarthy Improvement Co.
| Decision Date | 20 October 1939 |
| Docket Number | No. 32040.,32040. |
| Citation | 206 Minn. 1,287 N.W. 857 |
| Parties | McGOUGH v. McCARTHY IMPROVEMENT CO. et al. |
| Court | Minnesota Supreme Court |
Appeal from Industrial Commission.
Proceeding under the Workmen's Compensation Act by the McCarthy Improvement Company, employer, and its insurer, opposed by Charles P. McGough, employee, for an order of the commission determining that they were entitled to credit on compensation due to employee, or that they be held not responsible for disability of employee resulting from malpractice of physicians, and for an order authorizing and approving final discontinuance as compensation. The commission sustained the employee's demurrer to the petition, and the employer and its insurer bring certiorari.
Writ discharged and commission's order affirmed.
1. The employer is liable for all legitimate consequences following an accident, including unskillfulness or error of judgment of the physician furnished as required, and the employe is entitled to recover under the schedule of compensation for the extent of his disability, based on the ultimate result of the accident, regardless of the fact that the disability has been aggravated and increased by the intervening negligence or carelessness of the employer's selected physician.
2. The rights granted and obligations imposed by the workmen's compensation act are limited as granted or imposed by it, and are in their nature contractual.
3. The liability of a malpracticing physician to his patient is predicated upon negligence, and responsibility in the way of damages has for its sole basis personal fault. As between the employer and his employe, the compensation act provides the measure for determining their rights and obligations, but it (1 Mason Minn.St.1927, § 4291[2]) does not abridge the remedies which an employe of one person may have at law against a third person for a tort which such third person commits against him.
4. Where the physician selected by the employer was guilty of malpractice so that the employe's original injuries were thereby aggravated, held that employer's responsibility to pay compensation under the act continues to rest upon him. Such liability is not based upon tort or other wrongful conduct on the employer's part but because it is an incident to the relationship and a part of his contractual liability under the act.
5. Where an employee was awarded compensation for injuries arising out of and in the course of his employment and he also recovered damages from the physicians selected by the employer for malpractice in treating such injuries, held that the employer and its insurer may not deduct from the compensation awarded the amount recovered from the physicians.
STONE, J., dissenting. Lawrence Hazen, Compensation Atty., of St. Paul, for respondent.
Orr, Stark & Kidder, of St. Paul, for relators.
Certiorari brings for review an order of the industrial commission refusing to grant the employer and its insurer any relief upon their joint petition seeking such, the facts alleged and assumed to be true being as follows: McGough, the employe, was seriously injured by an accident arising out of and within the course of his employment on June 22, 1934. He was at once removed to a hospital by his employer, his injuries being such that he was wholly helpless. Compensation under the act was promptly assumed by petitioners, and pursuant thereto there has been paid a total sum, in the way of compensation, hospital and medical care and treatment, of something over $5,000. The employe's disability continues. But it is averred that his present disability is not due to the original accident and would have been cured long since were it not for the malpractice of the physicians employed to treat him.
About June 17, 1936, the employe commenced an action for malpractice against these physicians and on May 4, 1937, settled the case for $1500 at an expense of $250 for attorney's fees and other items. Petitioners claim credit upon the compensation otherwise payable to the employe of the net sum, $1250, so collected. They gave notice of discontinuance of compensation and asked (1) for an order of the commission determining that the employer and insurer are entitled to credit on compensation due from and after April 21, 1938, in the mentioned sum; (2) that if such credit be denied a finding be made that the employer and insurer were not responsible for the disability resulting from the malpractice, and a determination that the present disability of the employe was the result of the malpractice and not due to the original injury; and (3) for an order authorizing and approving the final discontinuance of compensation.
The employe demurred to the petition as failing to state facts sufficient to warrant the granting of any relief thereunder. The commission sustained that view.
While a demurrer is neither authorized nor recognized by the compensation act, we have concluded, in view of the special circumstances here appearing (as did the commission), to accept the claims made in the petition as being established. We may therefore proceed to discussion of the legal problems presented.
Relators' claim is ‘that the true rule of law should be and is that the employer is liable under the [compensation] act for the results of the malpractice but is subrogated to the employe's claim against the physicians and entitled to payment or credit of the net proceeds of the recovery up to the amount of compensation paid or payable.’ Respondent concurs to the extent ‘that the results of malpractice flow directly and proximately from the original injury and so are compensable, and that malpractice is not an independent intervening cause.’
1. As Sarber v. AEtna Life Ins. Co., 9 Cir., 23 F.2d 434, 435, and the cases there cited, are relied upon by counsel for both sides of the controversy, we quote from that opinion as follows: ‘Under the great weight of authority the employer is liable for all legitimate consequences following an accident, including unskillfulness or error of judgment of the physician furnished as required, and the employee is entitled to recover under the schedule of compensation for the extent of his disability, based on the ultimate result of the accident, regardless of the fact that the disability has been aggravated and increased by the intervening negligence or carelessness of the employer's selected physician.’ (Citing numerous cases.)
2. Adopting the rule quoted as a correct statement of applicable law, our next concern is whether the employer is ‘subrogated to the employe's claim against the physicians and entitled to payment or credit of the net proceeds of the recovery up to the amount of compensation paid or payable’ as relators contend. They rely, as they must, upon 1 Mason Minn.St.1927, § 4291 (2), the material portions of which read: ‘ Where an injury * * * for which compensation is payable under part 2 of this act is caused under circumstances also creating a legal liability for damages on the part of any party other than the employer, such party also being subject to the provisions of part 2 of this act but where the provisions of subdivision 1 of this section do not apply or where said party or parties other than the employer are not subject to the provisions of part 2 of this act legal proceedings may be taken by the employee * * * against such other party or parties to recover damages, notwithstanding the payment by the employer or his liability to pay compensation hereunder, but in such case if the action against such other party or parties is brought by the injured employee, * * and a judgment is obtained and paid or settlement is made with such other party either with or without suit, the employer shall be entitled to deduct from the compensation payable by him, the amount actually received by such employee * * after deducting costs, reasonable attorney's fees and reasonable expenses incurred by such employee * * * in making such collection or enforcing such liability.’ (Italics supplied.)
The rights and obligations created by the compensation act are contractual. the rights granted and the obligations imposed necessarily rest upon the statute and are limited as granted or imposed by it. Tierney v. Tierney & Co., 176 Minn. 464, 223 N.W. 773. Hence it follows that the employer's liability has for its foundation the existence of employer-employe relation. The question is not whether ‘the cause of the accident is referable to a tortious or a blameless act, or whether if tortious the employer or some third person is blameworthy, or even that the employé is at fault if not willfully so.’ State ex rel. Chambers v. District Court, 139 Minn. 205, 207, 166 N.W. 185, 186, 3 A.L.R. 1347. ‘A basic thought underlying the compensation act is that the business or industry shall in the first instance pay for accidental injuries as a business expense or a part of the cost of production.’ Id., 139 Minn. page 209, 166 N.W. page 187, 3 A.L.R. 1347. It is therefore manifest that when an employe enters upon the performance of his work and is exposed to the dangers and risks of injury together with the attendant risk of malpractice in necessary medical care, he is protected under the act if injury arising out of and in the course of his employment happens to befall him. This is by virtue of his employment and the relationship obligation created by the act. Thus, when an injury is received during the course of and within the scope of his employment, medical care being needed, the risk of improper treatment is a natural incident of the employment and directly traceable to it.
3. The liability of the malpracticing physician on the other hand is predicated upon negligence, a tort. His responsibility is based solely on personal fault. It is not founded upon the basis of the employer's relationship liability. The injured workman suing the malpracticing physician must...
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