FILED

December 22, 1997

Cecil Crowson, Jr.

Appellate C ourt Clerk

1 December 22, 1997

2 FOR PUBLICATION

3

4 IN THE SUPREME COURT OF TENNESSEE

5

6 AT JACKSON

7

8

9

10

11 BILLY CASTLEMAN, (

12 (

13 Plaintiff-Appellant, ( Madison Circuit

14 (

15 ( Hon. Franklin Murchison,

16 ( Judge

17 v . (

18 ( Appeal No. 02S01-9703-CV-00018

19 (

20 (

21 ROSS ENGINEERING, INC., (

22 (

23 Defendant-Appellee. (

24

25

26

For Plaintiff-Appellant 27 : For Defendant-Appellee :

28

29 T. Robert Hill William B. Walk, Jr.

30 Randall J. Phillips John R. Cannon, Jr.

31 Hill, Boren, P.C. The Hardison Law Firm, P.C.

32 Jackson Memphis

33

34

35

36

37

38

39

40

41

42 O P I N I O N

43

44

45

46

47

48

49

50 JUDGMENT OF TRIAL COURT AFFIRMED;

51 JUDGMENT OF COURT OF APPEALS

52 AFFIRMED; CASE REMANDED TO TRIAL COURT. REID, J.
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1 This case presents for review the issue of whether, in

2 a tort action for personal injuries, an employer’s workers’

3 compensation insurance carrier is entitled to enforcement of a

4 subrogation claim for benefits paid to the employee, where at

5 trial, fault was attributed to the employee and to the employer. 

6 The trial court allowed reimbursement for the entire amount of

7 the benefits paid to the employee and the Court of Appeals

8 affirmed. The judgment of the Court of Appeals and the trial

9 court allowing enforcement of the subrogation claim pursuant to 

10 Tenn. Code Ann. § 50-6-112 (1991) is affirmed.

11

12 I

13

14 On November 3, 1989, the plaintiff, Billy Castleman, an

15 employee of a subcontractor, Jack Castleman d/b/a J.E.C. Electric

16 Company, sustained a compensable injury under the workers’

17 compensation law, for which the general contractor’s workers’

18 compensation insurance carrier, Hartford Accident and Indemnity

19 Company, paid the plaintiff benefits in the approximate amount of

20 $100,000. 

21

22 A tort action for personal injuries was filed by the

23 plaintiff against a third party, Ross Engineering, Inc., on

24 April 3, 1990. Hartford filed an intervening petition, asserting

25 a subrogation right and a lien pursuant to Tenn. Code Ann. § 50-

26 6-112(c)(1)(1991) on any recovery by the plaintiff from Ross

27 Engineering. 
1

In 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.

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1 The case was tried on March 4, 1993, 10 months after

2 the release of the decision in McIntyre v. Balentine , 833 S.W.2d

52 (Tenn. 1992). 13 The case was submitted to the jury on

4 instructions that fault could be apportioned among the plaintiff,

5 Castleman, the defendant, Ross Engineering, and the employer,

6 J.E.C. Electric. The jury found damages of $l,500,000, and

7 attributed 68 percent of the fault to the defendant, 16 percent

8 of the fault to the plaintiff, and 16 percent of the fault to the

9 employer. The court entered judgment against Ross Engineering

10 for $1,020,000, 68 percent of the $l,500,000. The plaintiff did

11 not appeal from the judgment on the jury verdict. 

12

13 On May 26, 1993, the plaintiff acknowledged full

14 satisfaction of the judgment, and the plaintiff received from

15 Ross Engineering full payment of the amount of the judgment less

16 $100,000, which was retained by consent pending resolution of

17 Hartford’s subrogation claim. By order entered on July 7, 1995,

18 Hartford was awarded the $100,000 claimed, less attorneys fees

19 and expenses incurred in pursuing the third-party claim, a net

20 amount of $68,489.

21

22 On appeal to the Court of Appeals, the plaintiff

23 contested the subrogation award to Hartford, insisting that

24 Hartford’s right to subrogation was conditioned on the
2

“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).

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1 plaintiff’s recovery of the damages for fault attributed to the

2 employer as well as fault attributed to Ross Engineering. The

3 Court of Appeals rejected the plaintiff’s contention and affirmed

4 the trial court’s decision. 

5

6 I I

7

8 The plaintiff does not deny that Hartford has a

9 subrogation claim against the third party judgment for the total

10 amount of workers’ compensation benefits paid to the plaintiff. 

11 Section 50-6-112 (1991) provides that when the injury compensated

12 under the Workers’ Compensation Law was caused by the negligence

13 of a third party, the injured employee may pursue an action

against the third party. 214 Subsection (c)(1) provides as follows:

15

16 In [the] event of such recovery against

17 such third person by the worker, or by those

18 to whom such worker’s right of action

19 survives, by judgment, settlement or

20 otherwise, and the employer’s maximum

21 liability for workers’ compensation under

22 this chapter has been fully or partially paid

23 and discharged, the employer shall have a

24 subrogation lien therefor against such

25 recovery, and the employer may intervene in

26 any action to protect and enforce such lien.

27

28

29

30 The plaintiff insists, however, that the enforcement of that
3

"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).

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1 right is conditioned upon the employee, as the subrogor, being

2 “made whole.” The plaintiff defines “made whole” as being able

3 to recover for all damages found by the jury except damages

4 representing fault attributed to him. In this case, recovery

5 making the plaintiff whole would include the approximately

6 $240,000,000 for damages attributed to the fault of the employer,

J.E.C. Electric. 37

8

9 Analysis of the plaintiff’s contention requires

10 consideration of the plaintiff’s alternative position, that this

11 is a transitional case (which previously has meant a case

commenced before the opinion in McIntyre 12 was released) in which

13 his rights should not be unfairly compromised by the adoption of

14 the principles of comparative fault. The Court has held that

15 “transitional case[s] . . . must be tried according to the

16 principles of comparative fault to the extent that the

17 application of those principles [do] not impose upon any party a

18 substantial injustice.” Ridings v. Ralph M. Parsons Co. , 914

19 S.W.2d 79, 80 (Tenn. 1996). The plaintiff asserts that in this

20 case, application of “post- McIntyre ” principles would work a

21 substantial injustice to him. He relies upon the decisions in

22 Owens v. Truckstops of America , 915 S.W.2d 420 (Tenn. 1996) and

23 Ridings v. Ralph M. Parsons Co. , 914 S.W.2d 79 (Tenn. 1996).

24
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1 The cases of Owens v. Truckstops of America and Ridings

2 v. Ralph M. Parsons Co. , illustrate the Court’s approach to

3 transitional cases. In Owens v. Truckstops of America , the case

4 had been pending for more than three years when the opinion in 

5 McIntyre was released. The plaintiff then sought to amend his

6 complaint to add two additional alleged tortfeasors as

7 defendants; those parties claimed that the plaintiff was barred

8 from suing them by the statutes of limitations. The Court noted

9 that “application of comparative fault principles in this case

10 would limit the plaintiff’s recovery to that portion of the

11 damages corresponding to the fault attributable to [the

12 originally named defendant] without granting to the plaintiff the

13 benefit of other rights recognized in McIntyre , and, therefore,

14 could impose upon him a significant unfairness.” Owens v.

15 Truckstops of America , 915 S.W.2d at 426. The Court held that

16 “fairness and efficiency must be the controlling principles in

17 adjudicating those cases commenced prior to the decision in

18 McIntyre which cannot be conformed to all of the procedures

19 contemplated by the doctrine of comparative fault.” I d . at 424. 

20 The Court devised a remedy to prevent injustice to the parties,

21 finding, “the equitable results contemplated by the doctrine of

22 comparative fault can be best accomplished in this case by not

23 relieving [the named defendant] of the joint and several

24 liability which existed when the plaintiff’s cause of action

25 against [it] accrued, and by allowing [the named defendant] to

26 pursue its third-party claims against [the other two

27 tortfeasors].” I d . at 434. 
4

The complaint in Ridings was filed over a year before the opinion in

McIntyre was released.

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1 In the case of Ridings v. Ralph M. Parsons Co. , the

2 tort defendants sought to assert as an affirmative defense that

3 the employer contributed to the employee’s injuries. The

4 defendants argued that under McIntyre , “fault can be attributed

5 to the employer, and the liability of the defendants [could] be

6 decreased accordingly, without the imposition of liability upon

7 the employer.” Ridings v. Ralph M. Parsons Co. , 914 S.W.2d at

81. Though Ridings was a transitional case, 48 the Court found

9 that “application of comparative fault principles to this case

10 requires no transitional procedure [because] the acts and

11 omissions of an employer covered by the worker’s compensation law

12 neither enlarge nor limit the rights or liabilities of any party

13 to a tort action by an employee governed by the doctrine of

14 comparative fault.” I d . at 80-81. The Court concluded that

15 “fault may be attributed only to those persons against whom the

16 plaintiff has a cause of action in tort.” Id. at 81. 

17

18 This holding was affirmed in Snyder v. LTG

19 Lufttechnische GmbH , ___ S.W.2d ___ (Tenn. 1997), where the Court

20 stated:

21

22 . . . [T]he employer cannot be found to

23 be the proximate, or legal, cause of the

24 plaintiff’s injuries because the employer is

25 immune from tort liability under Tenn. Code

26 Ann. § 50-6-108(a). By enacting Tenn. Code

27 Ann. § 50-6-108(a), the legislature has

28 already determined that for policy reasons

29 the employer may not be the legal cause of
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1 the plaintiff’s injuries.

2

3

4

5 I d . at ___ [slip op. at 11].

6

7 A review of the proceedings in this case shows that,

8 like in Ridings , the plaintiff’s rights have not been adversely

9 affected by the principles of comparative fault. The plaintiff,

10 because he was covered by the workers’ compensation law, did not

11 have a right to sue his employer in tort prior to or subsequent

12 to the adoption of comparative fault. See Tenn. Code Ann. § 50-

13 6-108(a). His right to sue a third party tortfeasor was not

14 affected by the comparative fault requirement that the jury

15 reduce the award against a third party tortfeasor by the percent

16 of the total fault attributed to the plaintiff. In fact, a

17 finding by the jury that he was partially at fault would have

18 precluded any recovery by him prior to McIntyre . See McIntyre v.

19 Balentine , 833 S.W.2d at 54.

20

21 The only way in which the plaintiff’s right to recover

22 has been affected adversely in this case was by the attribution

23 of a portion of the fault to the employer. As discussed

24 previously, this issue was specifically resolved in Ridings , an

25 opinion which was released after the trial in this case. Under

26 Ridings , the trial court erred in instructing the jury that fault

27 could be attributed to the employer, and the plaintiff would have

28 been entitled to relief from that error on appeal. However, the

29 plaintiff did not appeal, but instead accepted payment of the
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1 judgment awarded against Ross Engineering as satisfaction in full

2 for his cause of action. Of course, this Court cannot provide

3 relief for errors that are not preserved on appeal.

4

5 The decisions governing the application of comparative

6 fault principles have sought to achieve fairness to the parties

7 within the constraints of statutory law providing immunity in

8 particular situations:

9

10 Limiting the parties to whom fault may

11 be attributed to those subject to liability,

12 accomplishes the policy objectives of

13 fairness and efficiency. Since liability is

14 several and is in direct proportion to legal

15 fault, each defendant will be liable only for

16 the percentage of the damages caused by it. 

17 Since fault is limited to the plaintiff and

18 those against whom the plaintiff has a cause

19 of action, the plaintiff is not denied the

20 right to recover those damages to which it is

21 entitled. However, the plaintiff will bear

22 the loss for any liability that it fails or

23 is unable to assert and any judgment that

24 cannot be enforced.

25

26

27

Ridings v. Ralph M. Parsons Co. 28 , 914 S.W.2d at 83.

29 

30 The plaintiff’s rights as they existed prior to the

31 release of the decision in McIntyre have not been adversely

32 affected by the adoption of the principles of comparative fault;

33 consequently, this is not a transitional case entitled to special

34 consideration. 

35

36 This conclusion also resolves the plaintiff’s primary
5

Plaintiff relies primarily on rules set forth in Castleman Construction

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

6

Tenn. 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

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1 contention, that the insurer is not entitled to enforce its right

2 of subrogation because the plaintiff has not been “made whole.” 

3 The plaintiff acknowledges that Hartford has a subrogation claim

4 for benefits paid under the workers’ compensation law but,

asserting principles of equitable subrogation, 5

5 insists that the

6 subrogation claim is not enforceable unless the employee has

7 recovered the full amount of the damages not attributed to his

8 own fault. 

9

10 The statute creating the subrogation claim does not by

11 its terms condition the claim upon the employee obtaining a full

12 recovery of damages sustained. The subrogation lien attaches to

13 “the net recovery collected” and secures the amount “paid” by the

14 employer or the amount of the employer’s “future liability, as it

accrues.” 615 It appears that, under the statute, the subrogation
shall 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.

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1 lien attaches to any recovery from the tortfeasor “by judgment,

2 settlement or otherwise.” I d . Consequently, even if under

3 equitable principles of subrogation the employer was not entitled

4 to assert the subrogation lien, the statute specifically creates

5 that right. 

6

7 The record does not support the premise on which the

8 plaintiff bases his argument, that he has not been made whole. 

9 Further, the plaintiff has asserted no basis on which the

10 subrogation claim created by statute should be denied. 

11

12 The judgment of the Court of Appeals is affirmed. 

13

14 The case is remanded to the trial court.

15

16

17 Costs will be paid by the plaintiff.

18

19 _____________________________

20 Reid, J.

21

22 Concur:

23

24 Anderson, C.J., Drowota, Birch,

25 and Holder, JJ.