# FILED

December 22, 1997 Cecil Crowson, Jr. Appellate Court Clerk December 22, 1997 1 FOR PUBLICATION 2 3 IN THE SUPREME COURT OF TENNESSEE 4 5 AT JACKSON 6 7 8 9 10 BILLY CASTLEMAN, ( 11 ( 12 Plaintiff-Appellant, ( Madison Circuit 13 ( 14 ( Hon. Franklin Murchison, 15 ( Judge 16 v . ( 17 ( Appeal No. 02S01-9703-CV-00018 18 ( 19 ( 20 ROSS ENGINEERING, INC., ( 21 ( 22 Defendant-Appellee. ( 23 24 25 26 For Plaintiff-Appellant : For Defendant-Appellee : 27 28 T. Robert Hill William B. Walk, Jr. 29 Randall J. Phillips John R. Cannon, Jr. 30 Hill, Boren, P.C. The Hardison Law Firm, P.C. 31 Jackson Memphis 32 33 34 35 36 37 38 39 40 41 O P I N I O N 42 43 44 45 46 47 48 49 JUDGMENT OF TRIAL COURT AFFIRMED; 50 JUDGMENT OF COURT OF APPEALS 51 AFFIRMED; CASE REMANDED TO TRIAL COURT. REID, J. 52-2- This case presents for review the issue of whether, in 1 a tort action for personal injuries, an employer’s workers’ 2 compensation insurance carrier is entitled to enforcement of a 3 subrogation claim for benefits paid to the employee, where at 4 trial, fault was attributed to the employee and to the employer. 5 The trial court allowed reimbursement for the entire amount of 6 the benefits paid to the employee and the Court of Appeals 7 affirmed. The judgment of the Court of Appeals and the trial 8 court allowing enforcement of the subrogation claim pursuant to 9 Tenn. Code Ann. § 50-6-112 (1991) is affirmed. 10 11

I 12 13 On November 3, 1989, the plaintiff, Billy Castleman, an 14 employee of a subcontractor, Jack Castleman d/b/a J.E.C. Electric 15 Company, sustained a compensable injury under the workers’ 16 compensation law, for which the general contractor’s workers’ 17 compensation insurance carrier, Hartford Accident and Indemnity 18 Company, paid the plaintiff benefits in the approximate amount of 19 $100,000. 20 21 A tort action for personal injuries was filed by the 22 plaintiff against a third party, Ross Engineering, Inc., on 23 April 3, 1990. Hartford filed an intervening petition, asserting 24 a subrogation right and a lien pursuant to Tenn. Code Ann. § 50- 25 6-112(c)(1)(1991) on any recovery by the plaintiff from Ross 26 Engineering. 271In McIntyre v. Balentine , 833 S.W.2d 52 (Tenn. 1992), the “all-ornothing rule of contributory negligence” was replaced with principles of comparative fault so that “so long as a plaintiff’s negligence remains less than the defendant’s negligence the plaintiff may recover; in such a case, plaintiff’s damages are to be reduced in proportion to the percentage of the total negligence attributable to the plaintiff.” I d . at 57.

-3- The case was tried on March 4, 1993, 10 months after 1 the release of the decision in McIntyre v. Balentine , 833 S.W.2d 2 52 (Tenn. 1992). 1The case was submitted to the jury on 3 instructions that fault could be apportioned among the plaintiff, 4 Castleman, the defendant, Ross Engineering, and the employer, 5 J.E.C. Electric. The jury found damages of $l,500,000, and 6 attributed 68 percent of the fault to the defendant, 16 percent 7 of the fault to the plaintiff, and 16 percent of the fault to the 8 employer. The court entered judgment against Ross Engineering 9 for $1,020,000, 68 percent of the $l,500,000. The plaintiff did 10 not appeal from the judgment on the jury verdict. 11 12 On May 26, 1993, the plaintiff acknowledged full 13 satisfaction of the judgment, and the plaintiff received from 14 Ross Engineering full payment of the amount of the judgment less 15 $100,000, which was retained by consent pending resolution of 16 Hartford’s subrogation claim. By order entered on July 7, 1995, 17 Hartford was awarded the $100,000 claimed, less attorneys fees 18 and expenses incurred in pursuing the third-party claim, a net 19 amount of $68,489. 20 21 On appeal to the Court of Appeals, the plaintiff 22 contested the subrogation award to Hartford, insisting that 23 Hartford’s right to subrogation was conditioned on the 242“When the injury or death for which compensation is payable under the

Workers’ Compensation Law was caused under circumstances creating a legal liability against some person other than the employer to pay damages, the injured worker, or such injured worker’s dependents, shall have the right to take compensation under such law, and such injured worker, or those to whom such injured worker’s right of action survives at law, may pursue such injured worker’s or their remedy by proper action in a court of competent jurisdiction against such other person.” Tenn. Code Ann. § 50-6-112(a)(1991).

-4- plaintiff’s recovery of the damages for fault attributed to the 1 employer as well as fault attributed to Ross Engineering. The 2 Court of Appeals rejected the plaintiff’s contention and affirmed 3 the trial court’s decision. 4 5

I I 6 7 The plaintiff does not deny that Hartford has a 8 subrogation claim against the third party judgment for the total 9 amount of workers’ compensation benefits paid to the plaintiff. 10 Section 50-6-112 (1991) provides that when the injury compensated 11 under the Workers’ Compensation Law was caused by the negligence 12 of a third party, the injured employee may pursue an action 13 against the third party. 2Subsection (c)(1) provides as follows: 14 15 In [the] event of such recovery against 16 such third person by the worker, or by those 17 to whom such worker’s right of action 18 survives, by judgment, settlement or 19 otherwise, and the employer’s maximum 20 liability for workers’ compensation under 21 this chapter has been fully or partially paid 22 and discharged, the employer shall have a 23 subrogation lien therefor against such 24 recovery, and the employer may intervene in 25 any action to protect and enforce such lien. 26 27 28 29 The plaintiff insists, however, that the enforcement of that 303"The exclusive remedy provision of the Workers’ Compensation Act, Tenn.

Code Ann. §50-6-108(a), eliminates any tort liability on the part of the employer.” Ridings v. Ralph M. Parsons Co. , 914 S.W.2d 79, 81, n. 2 (Tenn. 1996).

-5- right is conditioned upon the employee, as the subrogor, being 1 “made whole.” The plaintiff defines “made whole” as being able 2 to recover for all damages found by the jury except damages 3 representing fault attributed to him. In this case, recovery 4 making the plaintiff whole would include the approximately 5 $240,000,000 for damages attributed to the fault of the employer, 6 J.E.C. Electric. 3 7 8 Analysis of the plaintiff’s contention requires 9 consideration of the plaintiff’s alternative position, that this 10 is a transitional case (which previously has meant a case 11 commenced before the opinion in McIntyrewas released) in which 12 his rights should not be unfairly compromised by the adoption of 13 the principles of comparative fault. The Court has held that 14 “transitional case[s] . . . must be tried according to the 15 principles of comparative fault to the extent that the 16 application of those principles [do] not impose upon any party a 17 substantial injustice.” Ridings v. Ralph M. Parsons Co. , 914 18 S.W.2d 79, 80 (Tenn. 1996). The plaintiff asserts that in this 19 case, application of “post-McIntyre” principles would work a 20 substantial injustice to him. He relies upon the decisions in 21 Owens v. Truckstops of America, 915 S.W.2d 420 (Tenn. 1996) and 22 Ridings v. Ralph M. Parsons Co. , 914 S.W.2d 79 (Tenn. 1996). 23 24-6- The cases of Owens v. Truckstops of Americaand Ridings 1 v. Ralph M. Parsons Co. , illustrate the Court’s approach to 2 transitional cases. In Owens v. Truckstops of America, the case 3 had been pending for more than three years when the opinion in 4 McIntyrewas released. The plaintiff then sought to amend his 5 complaint to add two additional alleged tortfeasors as 6 defendants; those parties claimed that the plaintiff was barred 7 from suing them by the statutes of limitations. The Court noted 8 that “application of comparative fault principles in this case 9 would limit the plaintiff’s recovery to that portion of the 10 damages corresponding to the fault attributable to [the 11 originally named defendant] without granting to the plaintiff the 12 benefit of other rights recognized in McIntyre , and, therefore, 13 could impose upon him a significant unfairness.” Owens v. 14 Truckstops of America, 915 S.W.2d at 426. The Court held that 15 “fairness and efficiency must be the controlling principles in 16 adjudicating those cases commenced prior to the decision in 17 McIntyrewhich cannot be conformed to all of the procedures 18 contemplated by the doctrine of comparative fault.” I d. at 424. 19 The Court devised a remedy to prevent injustice to the parties, 20 finding, “the equitable results contemplated by the doctrine of 21 comparative fault can be best accomplished in this case by not 22 relieving [the named defendant] of the joint and several 23 liability which existed when the plaintiff’s cause of action 24 against [it] accrued, and by allowing [the named defendant] to 25 pursue its third-party claims against [the other two 26 tortfeasors].” I d. at 434. 274The complaint in Ridingswas filed over a year before the opinion in

McIntyrewas released.

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In the case of Ridings v. Ralph M. Parsons Co. , the 1 tort defendants sought to assert as an affirmative defense that 2 the employer contributed to the employee’s injuries. The 3 defendants argued that under McIntyre , “fault can be attributed 4 to the employer, and the liability of the defendants [could] be 5 decreased accordingly, without the imposition of liability upon 6 the employer.” Ridings v. Ralph M. Parsons Co. , 914 S.W.2d at 7 81. Though Ridingswas a transitional case, 4the Court found 8 that “application of comparative fault principles to this case 9 requires no transitional procedure [because] the acts and 10 omissions of an employer covered by the worker’s compensation law 11 neither enlarge nor limit the rights or liabilities of any party 12 to a tort action by an employee governed by the doctrine of 13 comparative fault.” I d. at 80-81. The Court concluded that 14 “fault may be attributed only to those persons against whom the 15 plaintiff has a cause of action in tort.” Id.at 81. 16 17 This holding was affirmed in Snyder v. LTG 18 Lufttechnische GmbH, ___ S.W.2d ___ (Tenn. 1997), where the Court 19 stated: 20 21 . . . [T]he employer cannot be found to 22 be the proximate, or legal, cause of the 23 plaintiff’s injuries because the employer is 24 immune from tort liability under Tenn. Code 25 Ann. § 50-6-108(a). By enacting Tenn. Code 26 Ann. § 50-6-108(a), the legislature has 27 already determined that for policy reasons 28 the employer may not be the legal cause of 29-8- the plaintiff’s injuries. 1 2 3 4 I d. at ___ [slip op. at 11]. 5 6 A review of the proceedings in this case shows that, 7 like in Ridings , the plaintiff’s rights have not been adversely 8 affected by the principles of comparative fault. The plaintiff, 9 because he was covered by the workers’ compensation law, did not 10 have a right to sue his employer in tort prior to or subsequent 11 to the adoption of comparative fault. SeeTenn. Code Ann. § 50- 12 6-108(a). His right to sue a third party tortfeasor was not 13 affected by the comparative fault requirement that the jury 14 reduce the award against a third party tortfeasor by the percent 15 of the total fault attributed to the plaintiff. In fact, a 16 finding by the jury that he was partially at fault would have 17 precluded any recovery by him prior to McIntyre . See McIntyre v. 18 Balentine , 833 S.W.2d at 54. 19 20 The only way in which the plaintiff’s right to recover 21 has been affected adversely in this case was by the attribution 22 of a portion of the fault to the employer. As discussed 23 previously, this issue was specifically resolved in Ridings , an 24 opinion which was released after the trial in this case. Under 25 Ridings , the trial court erred in instructing the jury that fault 26 could be attributed to the employer, and the plaintiff would have 27 been entitled to relief from that error on appeal. However, the 28 plaintiff did not appeal, but instead accepted payment of the 29-9-

judgment awarded against Ross Engineering as satisfaction in full 1 for his cause of action. Of course, this Court cannot provide 2 relief for errors that are not preserved on appeal. 3 4 The decisions governing the application of comparative 5 fault principles have sought to achieve fairness to the parties 6 within the constraints of statutory law providing immunity in 7 particular situations: 8 9 Limiting the parties to whom fault may 10 be attributed to those subject to liability, 11 accomplishes the policy objectives of 12 fairness and efficiency. Since liability is 13 several and is in direct proportion to legal 14 fault, each defendant will be liable only for 15 the percentage of the damages caused by it. 16 Since fault is limited to the plaintiff and 17 those against whom the plaintiff has a cause 18 of action, the plaintiff is not denied the 19 right to recover those damages to which it is 20 entitled. However, the plaintiff will bear 21 the loss for any liability that it fails or 22 is unable to assert and any judgment that 23 cannot be enforced. 24 25 26 27 Ridings v. Ralph M. Parsons Co. , 914 S.W.2d at 83. 28 29 The plaintiff’s rights as they existed prior to the 30 release of the decision in McIntyrehave not been adversely 31 affected by the adoption of the principles of comparative fault; 32 consequently, this is not a transitional case entitled to special 33 consideration. 34 35 This conclusion also resolves the plaintiff’s primary 365Plaintiff relies primarily on rules set forth in Castleman Construction

Co. v. Pennington , 432 S.W.2d 669 (Tenn. 1968).

6Tenn. Code Ann. § 50-6-112(c) provides: (1) In [the] event of such recovery against such third person by the worker, or by those to whom such worker’s right of action survives, by judgment, settlement or otherwise, and the employer’s maximum liability for workers’ compensation under this chapter has been fully or partially paid and discharged, the employer shall have a subrogation lien therefor against such recovery, and the employer may intervene in any action to protect and enforce such lien. (2) In the event the net recovery by the worker, or by those to whom such worker’s right of action survives, exceeds the amount paid by the employer, and the employer has not, at the time, paid and discharged the employer’s full maximum liability for workers’ compensation under this chapter, the employer shall be entitled to a credit on the employer’s future liability, as it accrues, to the extent the net recovery collected exceeds the amount paid by the employer. (3) In the event the worker, or those to whom such worker’s right of action survives, effects a recovery, and collection thereof, from such other person, by judgment, settlement or otherwise, without intervention by the employer, the employer

-10- contention, that the insurer is not entitled to enforce its right 1 of subrogation because the plaintiff has not been “made whole.” 2 The plaintiff acknowledges that Hartford has a subrogation claim 3 for benefits paid under the workers’ compensation law but, 4 asserting principles of equitable subrogation, 5insists that the 5 subrogation claim is not enforceable unless the employee has 6 recovered the full amount of the damages not attributed to his 7 own fault. 8 9 The statute creating the subrogation claim does not by 10 its terms condition the claim upon the employee obtaining a full 11 recovery of damages sustained. The subrogation lien attaches to 12 “the net recovery collected” and secures the amount “paid” by the 13 employer or the amount of the employer’s “future liability, as it 14

accrues.” 6It appears that, under the statute, the subrogation 15shall nevertheless, be entitled to a credit on the employer’s future liability for workers’ compensation, as it accrues under this chapter, to the extent of the net recovery.

-11- lien attaches to any recovery from the tortfeasor “by judgment, 1 settlement or otherwise.” I d. Consequently, even if under 2 equitable principles of subrogation the employer was not entitled 3 to assert the subrogation lien, the statute specifically creates 4 that right. 5 6 The record does not support the premise on which the 7 plaintiff bases his argument, that he has not been made whole. 8 Further, the plaintiff has asserted no basis on which the 9 subrogation claim created by statute should be denied. 10 11 The judgment of the Court of Appeals is affirmed. 12 13 The case is remanded to the trial court. 14 15 16 Costs will be paid by the plaintiff. 17 18

_____________________________ 19 Reid, J. 20 21 Concur: 22 23 Anderson, C.J., Drowota, Birch, 24 and Holder, JJ. 25