Threshermens Mut. Ins. Co. v. Page

• Decision Date: 05 May 1998
• Docket Number: No. 95-2942,95-2942
• Citation: 217 Wis.2d 451,577 N.W.2d 335
• Parties: THRESHERMENS MUTUAL INSURANCE COMPANY, Plaintiff-Appellant, Dorothy Gross, Involuntary-Plaintiff-Respondent, v. Robert PAGE, National Building Service and CNA Insurance Companies, Defendants-Respondents-Petitioners.
• Court: Wisconsin Supreme Court

Page 335

577 N.W.2d 335

217 Wis.2d 451

THRESHERMENS MUTUAL INSURANCE COMPANY, Plaintiff-Appellant, Dorothy Gross, Involuntary-Plaintiff-Respondent, v. Robert PAGE, National Building Service and CNA Insurance

Companies, Defendants-Respondents-Petitioners.

No. 95-2942.

Supreme Court of Wisconsin.

Argued Dec. 2, 1997.

Decided May 5, 1998.

For the defendants-respondents-petitioners there were briefs by David M. Victor and Law Offices of Mark H. Miller, Brookfield and oral argument by David M. Victor.

For the plaintiff-appellant there was a brief by James C. Ratzel and Otjen, Van Ert, Stangle, Lieb & Weir, S.C., Milwaukee and oral argument by James C. Ratzel.

¶1 JANINE P. GESKE, Justice

We are faced with one question in this review: Whether the Worker's Compensation Act permits a worker's compensation insurer to assert a claim for an injured worker's pain and suffering in an action against a

                third party, when the employee has specifically declined to participate in the action?   The court of appeals reversed a circuit court order barring the compensation insurer from presenting evidence of the injured worker's pain and suffering. 1  We conclude that the Worker's Compensation Act, specifically Wis.  Stat. § 102.29(1) (1993-94), 2 [217 Wis.2d 456] does not prohibit a worker's compensation insurer from seeking reimbursement from an alleged third-party tortfeasor for the payments it has or will make to the employee by claiming all of the worker's damages flowing from the work-related injury including pain and suffering.  We therefore affirm the order of the court of appeals
                

FACTS AND PROCEDURAL HISTORY

¶2 On January 22, 1993, Dorothy Gross fell in her employer's parking lot and sustained injuries. The parties do not dispute that Gross was injured in the course and scope of her employment and that Threshermens Mutual Insurance Company (Threshermens), the worker's compensation insurer, made payments to Gross for her injuries resulting from the fall. On October 21, 1994, Threshermens sued Robert Page, National Building Service, and CNA Insurance Companies (collectively Page) claiming that Page was negligent and seeking to recover the amount of the payments Threshermens made or will make to Gross as a result of her injury.

¶3 Gross was notified of Threshermens' lawsuit against Page but declined to actively participate in it. She did not file an independent action against Page. Consequently, Threshermens joined Gross as an involuntary plaintiff in its complaint, pursuant to Wis. Stat. § 102.29. In the course of pre-trial preparation, Threshermens included Gross on its witness list filed with the circuit court on June 21, 1995.

¶4 On September 25, 1995, Threshermens filed a motion to amend its pleadings. Page opposed the motion, viewing it as Threshermens' attempt to assert a cause of action on behalf of the involuntary plaintiff Gross for recovery of pain and suffering and other damages. The circuit court denied Threshermens' motion to amend its complaint, and precluded Threshermens from offering any argument or evidence regarding Gross's pain and suffering. Threshermens appealed this non-final order.

¶5 The court of appeals reversed. The court of appeals concluded that because it is undisputed that an employee can recover pain and suffering from a third party, the worker's compensation insurer must also be permitted to seek this amount even if the insurer did not pay those damages to the employee. We accepted Page's petition for review of the court of appeals' determination. ³

STANDARD OF REVIEW

¶6 This case requires us to interpret and apply Wis. Stat. § 102.29(1), a provision of the Wisconsin Worker's Compensation Act, to a set of undisputed facts. Interpretation of a statute is a question of law which appellate courts review independently, aided by the analysis of the circuit court. See Johnson v. ABC Ins. Co., 193 Wis.2d 35, 43, 532 N.W.2d 130 (1995). "Where the statutory language is clear, no judicial rule of construction is permitted, and we must arrive at the intent of the legislature by giving the language its ordinary and accepted meaning." Guyette v. West Bend Mut. Ins. Co., 102 Wis.2d 496, 501, 307 N.W.2d 311 (Ct.App.1981) (citing City of West Allis v. Rainey, 36 Wis.2d 489, 496, 153 N.W.2d 514 (1967)). In Berna-Mork v. Jones, 174 Wis.2d 645, 651, 498 N.W.2d 221 (1993), this court held that the language of Wis. Stat. § 102.29(1) is clear and unambiguous. The statute clearly grants an insurer the same right as an injured employee to make a claim or to maintain an action in tort. See id.

¶7 A compensation insurer must establish three elements to recover damages under Wis. Stat. § 102.29(1). As this court set forth in Johnson, 193 Wis.2d at 45, 532 N.W.2d 130, (1) the action must be grounded in tort; (2) the action must be one for the employee's injury or death; and (3) the injury or death must be one for which the employer or its insurer has or may have liability. The court of appeals determined that Threshermens had satisfied all three elements. See Threshermens, 212 Wis.2d at 7, 568 N.W.2d 1.

¶8 The court of appeals dispensed with the first two elements briefly. There was no dispute that Threshermens has satisfied the first element. Threshermens' claim for reimbursement under the compensation statute is an action grounded "in tort." Threshermens' complaint alleges that Page negligently maintained the parking lot at Gross's workplace. Second, Threshermens' claim is a claim "for the employee's injury." The compensation insurer's suit is predicated on Gross's underlying claim for the injuries she received when she fell in her employer's parking lot, and is not apart from that claim. See id.

¶9 Addressing the third element, the court of appeals relied on Kottka v. PPG Indus., 130 Wis.2d 499, 511-15, 388 N.W.2d 160 (1986), to conclude that pain and suffering damages fall within the category of claims to which Wis. Stat. § 102.29(1) applies. See Threshermens, 212 Wis.2d at 7, 568 N.W.2d 1. The court of appeals observed that Threshermens had complied with the notice provisions of ch. 102, and because the statute specifically provided that "the liability of the tortfeasor shall be determined as to all parties having a right to make a claim, and irrespective of whether or not all parties join in prosecuting such claim," Threshermens was entitled to seek recovery of Gross's pain and suffering. Id.

I.

¶10 To adequately interpret and apply the statute at issue here, some background is helpful. Under Wisconsin's Worker's Compensation Act, the benefit to an injured employee, like the benefit for the work-related death of an employee, does not compensate only for lost earnings.

Instead, the ... benefit [for injury] is part of an all-pervasive legislative scheme which attempts to effect a compromise between the employer and the employee's competing interests by granting the worker a certain award in lieu of all common law remedies he may otherwise have had against the employer in exchange for abrogation of the employer's defenses. (Emphasis added.)

Johnson, 193 Wis.2d at 48, 532 N.W.2d 130. Likewise, the compromise abrogates any common law defenses, such as contributory negligence, that the employer or its insurer might raise.

¶11 Under the compromise reached by the legislature, the sole liability of the employer or its insurer to the employee is liability under the Compensation Act. Because the employer's liability is solely statutory, there is no common liability of the employer and a third-party tortfeasor to the injured employee, even though their concurring negligence may have caused the injury. See Wisconsin Power and Light Co. v. Dean, 275 Wis. 236, 241, 81 N.W.2d 486 (1957).

¶12 The statute also provides for claims against third parties when a person suffers a work-related injury. The employee, the employer, the compensation insurer and/or any other representative of the injured employee can seek recovery against a third party.

[T]he 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 ... The employer or compensation insurer who shall have paid or is obligated to pay a lawful claim under this chapter shall have the same right to make claim or maintain an action in tort against any other party for such injury or death.

Wisconsin Stat. § 102.29(1). Once recovery is obtained from the third party, whether by settlement or court judgment, the statute dictates how the recovery is distributed. ⁴

¶13 The legislature enacted a distribution scheme that effects the original compromise underlying the Act. See Nelson v. Rothering, 174 Wis.2d 296, 303, 496 N.W.2d 87 (1993). The scheme of Wis. Stat. § 102.29(1) specifies a reasonable apportionment of proceeds between the parties involved. Specifically, the statutory formula ensures that the employee receives at least one-third of any third-party proceeds after costs of collection, and that "the compensation insurer be reimbursed as fully as possible from the remainder of the sum collected, with any balance going to the employee." Id.

¶14 Although the employer's or compensation insurer's recovery rights under the statute are often referred to as rights of subrogation, they are not. We recognized in Nelson, 174 Wis.2d at 306, 496 N.W.2d 87, that reimbursement under the Act was not a matter of equity. The court of appeals has commented on the differences between common law subrogation principles and the reimbursement avenues available to employers and insurers under the Act on several occasions. See, e.g., Campion v. Montgomery Elevator Co., 172 Wis.2d 405, 493 N.W.2d 244 (Ct.App.1992), and Martinez v. Ashland Oil, Inc., 132 Wis.2d 11, 390 N.W.2d 72 (Ct.App.1986). In Campion, the court of appeals concluded that the rights granted by Wis. Stat. § 102.29(1) are distinct from subrogation, and even though the...