Opinion ID: 460105
Heading Depth: 2
Heading Rank: 2

Heading: Green's and Stacker's cross claims against each other.

Text: 23 Green argues on appeal that the district court erred in granting summary judgment in favor of Stacker on its claim for indemnity or contribution from Green and in denying Green's cross-claim against Stacker, finding as a matter of law that Stacker was not negligent in handling Green's state court action. In its September Order, the district court noted that Mr. Green admitted that he was primarily liable to the government. The district court thus determined that Stacker was entitled to contribution or indemnity for any amounts it was required to reimburse the government. The court summarily disposed of Green's claim that Stacker, and not Green, should be ultimately liable to reimburse the government because of Stacker's alleged negligence in representing Green in the state court action. Instead, the district court determined that Green's failure to recover medical expenses and lost wages was due to the state trial court's ruling that Green was not the real party in interest as to those damages, rather than to Stacker's negligence. The court therefore entered summary judgment in favor of Stacker on its claim against Green for indemnity or contribution and on Green's claim against Stacker for negligence. 24
25 Although the district court did not explain its determination that, absent negligence on the part of Stacker, Green must indemnify Stacker, 8 we think it clear that if the government has a right of reimbursement the beneficiary of the FECA payments and the third party recovery must ultimately bear the burden of reimbursement. Section 8132 implicitly provides for this result. Since 1916, the FECA has required the beneficiary to reimburse the United States out of the proceeds of a third party recovery. See Federal Employees' Compensation Act, ch. 458, Sec. 27, 39 Stat. 747 (1916) (current version at 5 U.S.C. Sec. 8132 (1982) ). Only in 1974, in an attempt to expedite the reimbursement process, did Congress amend that section of the FECA to give the United States a lien against the proceeds of a third party recovery. See 5 U.S.C. Sec. 8132 (1982); see also S.Rep. No. 93-1081, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Ad.News 5341, 5351. Clearly, Congress intended that the beneficiary of the FECA payments and the third party recovery must bear the ultimate burden of reimbursement. We therefore agree with the district court that a party liable to the United States under the lien language of section 8132 is generally entitled to indemnity from the ultimate beneficiary. 9 26
27 A finding in favor of Stacker on its claim against Green, however, is premature in the present case. Green has cross-claimed against Stacker alleging that he was denied recovery from the third party tortfeasor General Electric for his lost wages and medical expenses (covered by the FECA payments) because of Stacker's negligence in handling Green's state court action. The district court granted summary judgment on Green's claim in favor of Stacker. We disagree with this ruling. In reviewing a district court decision granting summary judgment, this court applies the same standard as that used by the district court in granting the motion. Mandel v. United States, 719 F.2d 963, 965 (8th Cir.1983). It is well established that summary judgment is proper only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see, e.g., Mandel v. United States, 719 F.2d at 965. In determining whether a genuine issue of material fact exists, the court must view the facts and all reasonable inferences derived therefrom in the light most favorable to the nonmoving party. McGee v. Hester, 724 F.2d 89, 91 (8th Cir.1983). 28 In support of its conclusion that the state court's ruling, and not Stacker's negligence, precluded Green from recovering medical expenses and lost wages, the district court relied on the affidavit of a Stacker attorney and notes taken by a Stacker attorney at a pretrial conference. Several other facts, however, support a conflicting inference that Green may have been precluded from recovering those damages because of Stacker's negligence. For example, the affidavit of an attorney for General Electric states that the state court excluded evidence of lost wages and medical expenses because Stacker failed to lay the necessary foundation for the admission of this evidence. This is supported by the government's claim that Stacker did not attempt to obtain a breakdown of Green's FECA payments until January 28, 1980, the first day of trial. Additionally, a Stacker attorney admits in an affidavit that he did not attempt to introduce evidence of Green's wage loss. Whether this is because of General Electric's successful objection to evidence of medical expenses or because the Stacker attorney failed to obtain the necessary documentary support from the government in time for trial is unclear. Furthermore, although a Stacker attorney promised on February 21, 1980, to send the United States Department of Labor a letter by Green authorizing Stacker to obtain information from the Department of Labor on Green's behalf, Green's authorization was apparently not obtained until May 28, 1980. This may in part explain the government's failure to supply Stacker with a breakdown of Green's FECA benefits in time for a pretrial conference before the Minnesota Supreme Court on June 3, 1980. Finally, although General Electric appealed the state jury verdict in favor of Green, Stacker apparently did not appeal on behalf of Green the trial court's exclusion of evidence of Green's medical expenses. 10 29 Viewing the facts and inferences drawn therefrom in the light most favorable to Green, a factual controversy exists as to Green's claim that Stacker was negligent. To establish a prima facie case of attorney negligence in Minnesota, the client must show the existence of the attorney-client relationship, the acts constituting the alleged negligence, that those acts were the proximate cause of the damage, and that but for such negligence, the plaintiff would have been successful in the prosecution or defense of the action. See Blue Water Corp., Inc. v. O'Toole, 336 N.W.2d 279, 281 (Minn.1983); Christy v. Saliterman, 288 Minn. 144, 150, 179 N.W.2d 288, 293-94 (1970). Clearly, Green and Stacker had an attorney-client relationship. Furthermore, Green was injured by his failure to recover medical expenses and lost wages from General Electric because Green is now required to reimburse the government for these amounts. As discussed above, Green also alleged several facts that suggest Stacker was negligent. Although Green did not submit an affidavit of an expert stating that such conduct constitutes negligence, expert evidence is not required where the conduct complained of can be adequately evaluated by a layperson. See Hill v. Okay Constr. Co., Inc., 312 Minn. 324, 336-37, 252 N.W.2d 107, 116 (1977). A layperson is competent to determine whether Stacker's failure to obtain needed information prior to trial was negligent. Thus, Green's failure to submit an expert's affidavit attesting to that fact does not preclude a finding that there was a question of material fact on this issue. Finally, although the district court did find that Green did not recover medical expenses and lost wages from General Electric because the state trial court ruled that Green was not the real party in interest as to those damages, several facts before the district court suggest that Green failed to recover those damages because of Stacker's negligence. 30 Because there were several issues of material fact as to Stacker's negligence, we find the trial court erred in granting summary judgment in favor of Stacker. We therefore reverse the district court's holding that Green has no action over against Stacker and remand to the district court for trial on the merits the question of Stacker's negligence in pursuing Green's state court action. If the district court determines that Stacker was negligent, Stacker is liable to Green for the $63,765.56 Green now owes to the government because had Stacker diligently pursued Green's claim for medical expenses and lost wages against General Electric, Green would have received an increased award from General Electric from which the government would have received reimbursement for the FECA payments. 31 In order to avoid inconsistent judgments, we reverse the grant of summary judgment on the cross-claims of Stacker against Green and Green against Stacker and remand those cross-claims to the district court with the following directions. A plenary trial is required on Green's cross-claim for negligence against Stacker. If the trier of fact finds that Stacker was not negligent, judgment in favor of Stacker should be entered on Green's cross-claim against Stacker. Correspondingly, the district court's grant of summary judgment in favor of Stacker against Green should be reentered with the result that, if Stacker is required to pay any part of the government's joint and several judgment against Green and Stacker, Stacker is entitled to judgment on its cross-claim for indemnity against Green for the amount of the monies paid. 32 On the other hand, if the trier of fact finds that Green's failure to recover his lost wages and medical expenses (represented by the FECA payments) from General Electric in the state court action was proximately caused by Stacker's negligence, the court shall then enter judgment as follows: Green shall be awarded these damages from Stacker on his cross-claim with the understanding that the monies should be paid to the government as reimbursement for the FECA payments; once the government's reimbursement claim against Green and Stacker is satisfied, the court shall find that Green's judgment against Stacker is also satisfied. In this event, Stacker's cross-claim against Green shall be denied as moot.