Vanderpool v. Fidelity & Cas. Ins. Co.

• Decision Date: 24 February 1997
• Docket Number: No. 96-1198,96-1198
• Citation: 327 Ark. 407,939 S.W.2d 280
• Court: Arkansas Supreme Court
• Parties: Curtis F. VANDERPOOL, Jr., Appellant, v. FIDELITY & CASUALTY INSURANCE COMPANY, Appellee.

Page 280

939 S.W.2d 280

327 Ark. 407

Curtis F. VANDERPOOL, Jr., Appellant, v.FIDELITY & CASUALTY INSURANCE COMPANY, Appellee.

No. 96-1198.

Supreme Court of Arkansas.

Feb. 24, 1997.

[327 Ark. 410] Jeffrey M. Graham, Little Rock, for appellant.

Brian A. Brown, Walter Kendel, Jr., Little Rock, for appellee.

THORNTON, Justice.

This is a second appeal following an appeal previously decided by this court, Vanderpool v. Fidelity & Casualty Ins. Co., 322 Ark. 308, 908 S.W.2d 653(1995).Ark. Sup.Ct. R. 1-2(a)(11).The action arose after appellantCurtis F. Vanderpool, Jr., was injured in an automobile accident in which his work vehicle collided with a car driven by Vicki Kaiko.Vanderpool and appelleeFidelity & Casualty Insurance Company, his employer's workers' compensation carrier, entered into a joint petition for approval of settlement that was approved by the Workers' Compensation Commission.He also received a settlement from Kaiko.The Pulaski County Circuit Court ordered Vanderpool to pay $22,133.97, with interest, to Fidelity in satisfaction of Fidelity's statutory lien against the settlement he received from Kaiko.

Vanderpool makes the following arguments on appeal: (1) the joint-petition settlement extinguished any right Fidelity had to a statutory lien; (2) a legal dispute existed as to whether the lumpsum payment of $17,000.00 ordered pursuant to the joint-petition settlement constituted "compensation" as used in Ark.Code Ann. § 11-9-410;(3)the trial court lacked subject-matter jurisdiction to adjudicate the dispute as to the size and existence of a statutory lien on benefits paid as workers' compensation.The development of the issues before us has been procedurally challenging, but we have considered the issues raised by appellant, and we affirm the order of the trial court.We first review the procedural history of the case.

PROCEDURAL HISTORY

On May 11, 1993, Vanderpool entered into the joint-petition settlement with Fidelity under the terms of which Fidelity paid Vanderpool's medical expenses, attorney's fees, and $17,000.00 in exchange for a release of liability of Fidelity and its insured on the workers' compensation claim.The Workers' Compensation Commission approved the petition.SeeArk.Code Ann. § 11-9-805(1987).Nearly a year after the approval of the joint petition, Fidelity sued Kaiko asserting subrogation rights to any recovery by Vanderpool for injuries caused by Kaiko's negligence, and on May 25, 1994, Vanderpool filed a personal-injury action against Kaiko.The matters were consolidated by the trial court, and Vanderpool moved for declaratory judgment that Fidelity's rights to a statutory lien had been extinguished by the joint petition.The trial court denied the motion on November 30, 1994, and on December 16, Vanderpool filed notice of appeal of the denial of the motion for declaratory judgment.

On March 14, 1995, the transcript was lodged with this court.At that point, the trial court was divested of jurisdiction of the case, as it then became a matter under review by this court.Glick v. State, 283 Ark. 412, 415, 677 S.W.2d 844, 846(1984).Notwithstanding this divestiture of jurisdiction, on March 28, 1995, the trial court entered an "Agreed Order" in which it attempted to resolve the dispute whether the statutory lien had been extinguished by Ark.Code Ann. § 11-9-805, holding in pertinent part: "This court's ruling in favor of Fidelity and Casualty Insurance Company resolves that issue for the purposes of appeal."This attempt to finally resolve the question whether the joint petition barred Fidelity's rights to a statutory lien was beyond the jurisdiction of the trial court because that issue was central to the appeal from the motion for declaratory judgment already lodged in this court.We have held that "[i]t is the filing of the transcript in an appellate court or the placing of the sentence into execution that deprives a trial court of jurisdiction, not the filing of the notice of appeal."Sherman v. State, 326 Ark. 153, 158, 931 S.W.2d 417, 420(1996).

The March 28"Agreed Order" also attempted to approve settlement agreements between Kaiko and Vanderpool and between Kaiko and Fidelity.These issues were not directly involved in the appeal from the motion for declaratory judgment then under review in this court, and the trial court's approval of the settlement of personal-injury litigation, as requested by all parties to that settlement, is not challenged by any party.In the order, the court also directed Vanderpool to retain disputed funds pending the result of the appeal in lieu of an appeal bond.The damages paid by Kaiko under the settlement agreement resolved the issue of Kaiko's liability, and provided for the establishment of a fund the disposition of which would be conditioned upon this court's decision on appeal of the motion for declaratory judgment.We have decided that the approval of the settlement agreements in the context of the factual and procedural circumstances of this case was not so directly involved in the appeal from the denial of a motion for declaratory judgment that we are required to declare the March 28 proceedings a nullity.In the circumstances of this case, approval of a settlement of damage claims against a third party was within the trial court's jurisdiction, because these matters were not included in the appeal that had been lodged in this court.We have previously held:

The rule that an appeal divests the trial court of jurisdiction applies only to matters necessarily or directly involved in the matter under review.It does not stay further proceedings with respect to rights not passed on or affected by the judgment or decree from which the appeal is taken.Matters which are independent of, or collateral or supplemental, are left within the jurisdiction and control of the trial court.

Sherman v. State, 326 Ark. at 158, 931 S.W.2d at 421(quotingBleidt v. 555, Inc., 253 Ark. 348, 350-51, 485 S.W.2d 721, 723(1972)(per curiam));see alsoMarsh & McLennan of Arkansas v. Herget, 321 Ark. 180, 900 S.W.2d 195(1995).

The appeal from the trial court's denial of the motion for declaratory judgment did not contain any record of the "Agreed Order" or the settlement of disputes between Kaiko and the other parties, and there was no appeal from the "Agreed Order" of March 28.On November 6, 1995, we dismissed the appeal from the denial of the motion for declaratory judgment for lack of a final judgment.Vanderpool v. Fidelity & Casualty Ins. Co., 322 Ark. 308, 908 S.W.2d 653(1995).When the mandate was entered, jurisdiction was restored in the trial court to resolve the issues of the case.

Fidelity filed a Motion to Enforce Mandate, upon which the court held a hearing on March 6, 1996.Regrettably, at this time attorneys for Fidelity erroneously advised the trial court that our November 6 decision had considered the trial court's March 28"Agreed Order," which had never been before this court, and had ruled that it was not a final order; they also told the trial court that all Fidelity was required to do was to implement the portion of the trial court's March 28 order which ruled that Fidelity's statutory lien had not been extinguished by the joint-petition settlement under Ark.Code Ann. § 11-9-805.Fidelity advised the trial court that "the only thing left is to direct [appellant] to turn over $22,133.97, with any interest that has accrued...."

However, during the March 6, 1996, hearing, the trial court orally renewed and ratified its findings and rulings from the March 28, 1995, order, stating: "I directed Curtis Vanderpool to retain a portion of the settlement sufficient to satisfy the lien of Fidelity and Casualty Insurance Company in an interest bearing account.So he should have done that or he's in contempt of court."The court added: "Well, then I'll order it turned over to you, and settle the case.And that's a final order, I suppose, at that point in time."

The trial court entered its order enforcing the mandate on March 15, 1996, making the following findings:

1.On November 29, 1994, the Court entered an Order denying Curtis Vanderpool's Motion for Declaratory Judgment against Fidelity & Casualty Insurance Company.Curtis Vanderpool appealed to the Arkansas Supreme Court from that ruling.

2.In lieu of an appeal bond, Curtis Vanderpool was directed to retain a portion of settlement funds received from Vicki Lynn Kaiko sufficient to satisfy the lien of Fidelity & Casualty Insurance Company in an interest bearing account.

3.On November 6, 1995, the Arkansas Supreme Court dismissed the appeal of Curtis Vanderpool.

4.Fidelity & Casualty Insurance Company has a statutory lien against the settlement proceeds in the sum of $22,133.97.

It is clear that the court adopted, ratified, and confirmed its ruling in favor of Fidelity on the issue of the statutory lien, and ordered Vanderpool to pay to Fidelity the sum of $22,133.97, together with interest from the time of the approval of the settlement with Kaiko.The March 15, 1996, order by the trial court is a final order determining the issue whether the statutory lien is barred by the joint petition.Vanderpool has appealed from this order, and we proceed to our examination of the merits of the appeal.

MERITS OF APPEAL

Vanderpool argues that because his claim for workers' compensation benefits was settled pursuant to Ark.Code Ann. § 11-9-805, Fidelity is no longer entitled to pursue an action in tort against the negligent third party pursuant to § 11-9-410.Section 11-9-410(b)(1) provides in part that "an employer or carrier liable for compensation under this chapter for the injury or death of an employee shall have the right to maintain an action in tort against any third party responsible for the injury or death."(emphasis added)The purpose of these provisions is articulated in Ark.Code Ann. § 11-9-410(b)(5), which provides that "the purpose and intent of...