Smith v. Trapp
| Decision Date | 31 March 1967 |
| Citation | 249 Cal.App.2d 929,58 Cal.Rptr. 229 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Mildred SMITH and Robert J. Smith, Plaintiffs nd Respondents, v. Otto John TRAPP, Defendant and Respondent, Industrial Indemnity Company, a corporation, Plaintiff-In-Intervention and Appellant. Civ. 8242. |
An action for wrongful death was initiated against defendant Otto John Trapp by plaintiffs Mildred Smith and Robert J. Smith for the wrongful death of Charles Smith. The plaintiff, Mildred Smith, is the widow of the decedent, and the plaintiff, Robert J. Smith, is the father of the deceased. The decedent was employed by R. J. Noble Company, and the death occurred while the decedent was acting within the course and scope of his employment with such firm. The defendant Trapp, in backing a dump truck filled with asphalt, ran over the decedent who was positioned behind the truck.
Before the initiation of the wrongful death action, the plaintiff-widow filed a claim for death benefits with the Industrial Accident Commission (predecessor of Workmen's Compensation Appeals Board). The application for benefits stated that her spouse's death was occasioned by injury arising out of and occurring in the course of his employment by Noble, which company was insured for workmen's compensation benefits by Industrial Indemnity Company, plaintiff-in-intervention herein.
In June 1963 an award issued in favor of the plaintiff-widow against the compensation carrier in the total sum of $18,100.00, representing a widow's allowance of $17,500.00 and a burial allowance of $600.00, which award was payable in installments of $70.00 weekly, commencing eight days after April 18, 1963, the date of injury and death.
After the filing of the wrongful death suit, a complaint-in-intervention was filed by the carrier seeking reimbursement for benefits paid the widow. Answers were filed to the dual complaints wherein, Inter alia, the affirmative defenses of contributory negligence of decedent and the concurrent negligence of the employer-Noble were placed in issue.
Plaintiffs and defendant-Trapp agreed to a settlement of plaintiffs' claim in the sum of $20,000. Apparently negotiations proved to be fruitless between defendant-Trapp and the employer's carrier with respect to the settlement value of the intervenor's subrogation claim. A written settlement agreement was executed between plaintiffs and defendant-Trapp whereby the $20,000 figure was payable in the following manner: (1) $6,666.66 to plaintiffs' counsel; (2) $125.46 as reimbursement to plaintiffs' counsel for costs advanced; and (3) $11,892.00 to the plaintiff-widow and $1,315.88 to the plaintiff-father.
A motion was thereafter filed, and subsequently amended, which sought approval of the compromise, and which clearly indicated that the intervenor-carrier could proceed with its complaint-in-intervention against defendant, thereby preserving the carrier's right to collect its lien if it could prevail in the subsequent litigation. Intervenor filed objections to the proposed settlement and filed a counter-motion requesting that the court enjoin the contemplated compromise between the principal parties or, in the alternative, praying that it be reimbursed from the settlement proceeds for its attorney fees, costs, and the amount of its claim in the event the settlement should be approved. A further motion was then presented, wherein the heirs and defendant-Trapp requested that intervenor be enjoined from discontinuing payments to plaintiff-widow pursuant to the terms of the Industrial Accident Commission award.
The court thereafter approved the settlement, denied the counter-motions of the intervenor, and enjoined the intervenor from terminating further payments to the widow under the Industrial Accident Commission award.
No issue is involved on appeal with respect to the propriety of the allowance of attorney fees and court costs authorized by the court; similarly, there is no dispute relative to the validity of the settlement between the defendant-Trapp and the plaintiff-father inasmuch as the latter never received any prior monetary benefits as a result of his son's demise, which would be subject to any claim for reimbursement on the part of the employer. Consequently, the sole dispute concerns the validity of the proviso approving payment to the plaintiff-widow of the net settlement in the sum of $11,892.00.
The paramount issue involved is whether the court erred in approving the settlement between the employee's widow and the third party without the carrier's written consent, or without providing for payment of the amount of the insurer's claim from the net proceeds paid to the dependent widow. The insurer maintains that no settlement can be effected between an employee's dependents and a third party tortfeasor without the written consent of the employer, where the latter enjoys a right of subrogation. Conversely, the third party tortfeasor urges that the reimbursement provisions of the Labor Code are not available to a negligent employer or his insurer (Witt v. Jackson, 57 Cal.2d 57, 17 Cal.Rptr. 369, 366 P.2d 641), and that inasmuch as the employer's negligence was raised as an affirmative defense in the answer to the complaint-in-intervention, it necessarily follows that the written consent of the employer is not a prerequisite to a valid settlement.
Section 3852 of the Labor Code establishes the right of a workmen's compensation insurance carrier to make a claim or file an action against a third party tortfeasor so as to recover any amounts paid pursuant to the provisions of the Workmen's Compensation Laws, and provides as follows:
Section 3850 of the Labor Code defines 'employee' and 'employer' in the following manner:
'(a) 'Employee' includes the person injured and any other person to whom a claim accrues by reason of the injury or death of the former.
'(b) 'Employer' includes insurer as defined in this division.'
In the event the employee, his dependents, or the employer files an action against a third party tortfeasor, the following procedure is prescribed in section 3853 of the Labor Code:
If a compromise is negotiated by the employer, or the employee, of any claim against a third party where the employer enjoys the right of subrogation, sections 3859 and 3860 of the Labor Code provide the methods by which such claim may be settled, the employer reimbursed, and payment authorized of attorney fees and court costs of the employee and the employer.
Section 3859 of the Labor Code states:
Section 3860 of the Labor Code specifies, Inter alia, as follows:
'(a) No release or settlement * * *, with or without suit, is valid or binding as to any party thereto without notice to both the employer and the employee, with opportunity to the employer to recover the amount of compensation he has paid or become obligated to pay and any special damages to which he may be entitled under Section 3852, and opportunity to the employee to recover all damages he has suffered and with provision for determination of expenses and attorney's fees as herein provided.
'(b) The entire amount of such settlement, with or without suit, is subject to the employer's full claim for reimbursement for compensation he has paid or become obligated to pay and any special damages to which he may be entitled under Section 3852, together with expenses and attorney fees, if any, subject to the limitations in this section set forth.
'(c) Where settlement is effected with or without suit, solely through the efforts of the employee's attorney, then prior to the reimbursement of the employer, as provided in subdivision (b) hereof, there shall be deducted from the amount of the settlement the reasonable expenses incurred in effecting such settlement, including costs of suit, if any, together with a reasonable attorney's fee to be paid to the employee's attorney, for his services in securing and effecting settlement for the benefit of both the employer and the employee.'
The employee's right to sue a third party tortfeasor has been long recognized. (Limited Mutual etc. Ins. Co. v. Billings, 74...
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...authority would be to render subdivision (f) mere ineffective surplusage. Such a construction must be avoided. (Smith v. Trapp (1967) 249 Cal.App.2d 929, 938, 58 Cal.Rptr. 229; County of Los Angeles v. Emme (1940) 42 Cal.App.2d 239, 242, 108 P.2d Moreover, "[i]t is well settled ... that a g......
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CHAPTER 6
...could have been effective, at any time, without the fund’s written consent. (Lab. Code, §§ 3859, 3860, subd. (a); Smith v. Trapp, 249 Cal. App. 2d 929, 938, 940 (1967).) As appellant points out, when the approval of a third party is necessary for a contract to take effect, there is no contr......