Opinion ID: 1827161
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Heading Rank: 4

Heading: workers' compensation act and kaiser's liability for indemnification or contribution

Text: In claiming immunity from liability for indemnification or contribution pertaining to Union Pacific's settlement of Blomenkamp's personal injury claim, Kaiser directs our attention to the Nebraska Workers' Compensation Act and then points out that this court, in Vangreen v. Interstate Machinery & Supply Co., 197 Neb. 29, 246 N.W.2d 652 (1976), left undecided the question whether an employer may contractually waive an employer's exclusive liability existing as the result of the Worker's Compensation Act. Kaiser contends an employer cannot waive the exclusive liability provision found in § 48-148 of the Nebraska Workers' Compensation Act, which provides: If any employee, or his dependents in case of death, of any employer subject to the provisions of sections 48-109 to 48-147 files any claim with, or accepts any payment from such employer, or from any insurance company carrying such risk, on account of personal injury, or makes any agreement, or submits any question to the court under said sections, such action shall constitute a release to such employer of all claims or demands at law, if any, arising from such injury. Section 48-118 of the Nebraska Workers' Compensation Act provides an employer's subrogation interest in a recovery from a third-party tort-feasor concerning a claim for injury or death of an employee of the subrogated employer. As construed by Kaiser, § 48-148 releases an employer from all claims or demands at law arising from an employee's injury. Therefore, Kaiser argues, it cannot be held liable to Union Pacific for indemnification or contribution on account of the settlement with Blomenkamp, Kaiser's employee. In Vangreen v. Interstate Machinery & Supply Co., supra , Vangreen sued Interstate to recover for bodily injury sustained when Vangreen injured his hand while installing glass in a building. In view of its subrogation interest under the Workers' Compensation Act, Vangreen's employer was a party to the action. Interstate settled with Vangreen and filed a cross-claim against Vangreen's employer, seeking indemnification or contribution on the ground that the employer's negligence was the proximate cause of Vangreen's damages. Holding that Interstate's action was barred as a result of the Workers' Compensation Act, this court stated in Vangreen: The great majority of the various jurisdictions dealing with the question have held that a third person tort-feasor, who is liable for injuries to, or for the death of, a workman, is not entitled to recover contribution from the workman's employer, notwithstanding the latter's negligence concurred in causing the injury or death, where the employer, the employee, and the injury or death are covered by the provisions of a workmen's compensation act. The decisions are based on two theories. First, that an employer covered by a compensation act does not have a common liability with a third party tort-feasor which is a necessary requisite to securing contribution. Second, that compensation acts must be construed as specifically limiting the liability of the employer, not only to the employee, but as to third persons as well. This proposition has, in some circumstances, been applied to the theory of indemnity as well as that of contribution. 197 Neb. at 31, 246 N.W.2d at 653-54. In considering whether Interstate was entitled to indemnity, the Vangreen court stated: Interstate does not urge a right to recover under an express or implied contract of indemnity but seeks recovery on the theory that PPG is a joint tort-feasor. Under such circumstances, is the exclusive-remedy provision contained in the Nebraska statutes circumvented? The statute, § 48-148, R.R.S.1943, provides that a workmen's compensation action shall constitute a release to such employer of all claims or demands at law, if any, arising from such injury. Section 48-118 ... awards to the employer subrogation rights against third parties. It is evident that the exclusive-remedy provision is not confined to the injured party but is designed to cover all claims arising from such injury. Interstate's cross-claim is based on negligence and necessarily arises from the injury. The statute is not limited to claims for damages and it will not avail to assert that this is a claim for indemnity rather than damages. The majority rule holds that, when the relation between the parties involves no contract or special relation capable of carrying with it an implied obligation to indemnify, the basic exclusiveness rule generally cannot be defeated by dressing the remedy itself in contractual clothes, such as indemnity, since what governs is not the delictual or contractual form of the remedy but the question: is the claim `on account of' the injury, or on account of a separate obligation running from the employer to the third party? 197 Neb. at 32-33, 246 N.W.2d at 654 (quoting 2A A. Larson, The Law of Workmen's Compensation § 76.44 (1975)). Unlike the situation in Vangreen v. Interstate Machinery & Supply Co., 197 Neb. 29, 246 N.W.2d 652 (1976), the case before us involves an action based on an agreement for indemnification or contribution for a loss sustained by Union Pacific as a result of any act or omission of Kaiser, including a loss from the joint or concurring negligence of Union Pacific and Kaiser. The exclusive liability provision of workers' compensation acts, such as the provision contained in § 48-148 of the Nebraska Workers' Compensation Act, is discussed in 2A A. Larson, The Law of Workmen's Compensation § 76.42 at 14-734 (1988): The clearest exception to the exclusive-liability clause is the third party's right to enforce an express contract in which the employer agrees to indemnify the third party for the very kind of loss that the third party has been made to pay to the employee. As Larson explains: [T]he immunity conferred is only against actions for damages on account of the employee's injury; a third party's action for indemnity is not exactly for damages but for reimbursement, and it is not on account of the employee's injury, but on account of breach of an independent duty owed by the employer to the third party. 2A A. Larson, supra, § 76.41 at 14-733 and 14-734. Accordingly, the vast majority of jurisdictions have adopted the rule that, as a consequence of an agreement for indemnification or contribution, an employer within the purview of a workers' compensation act may be liable to a third party concerning injuries to the employer's employee; for example, see, Barsness v. General Diesel & Equipment, 422 N.W.2d 819 (N.D.1988) (majority rule: An express contract of indemnification is an exception to the workers' compensation act's exclusive remedy rule); Ramos v. Browning Ferris Industries, 103 N.J. 177, 510 A.2d 1152 (1986) (New Jersey's workers' compensation act did not preclude an employer from assuming a contractual duty to indemnify a third party); Espaniola v. Cawdrey Mars Joint Venture, ___ Hawaii ___, 707 P.2d 365 (1985) (an employer covered by the workers' compensation law may be liable to a third party for a loss indemnified by an agreement with the employer); Manson-Osberg Company v. State, 552 P.2d 654 (Alaska 1976). We find nothing in the Nebraska Workers' Compensation Act, by express provision or implication, and nothing in the public policy of the State of Nebraska, which prevents an employer's contractual obligation to indemnify a third party concerning a loss sustained through the third party's payments to the indemnitor's employee. Therefore, we now hold that when an employer, liable to an employee under the Nebraska Workers' Compensation Act, agrees to indemnify a third party for a loss sustained as the result of the third party's payment to the indemnitor's employee, the employer's exclusion from liability accorded by the Workers' Compensation Act does not preclude the third party's action to enforce the indemnity agreement with the indemnitor-employer. The Union Pacific-Kaiser agreement contains no specific provision or language which excludes, exempts, or exonerates Kaiser from liability for indemnification or contribution as a contractual duty. We decline to rewrite the agreement between Union Pacific and Kaiser and insert a contractual provision precluding Kaiser's liability for indemnification or contribution concerning Union Pacific's settlement with Kaiser's employee, Blomenkamp. Kaiser's claim that the Nebraska Workers' Compensation Act provides exclusive liability and, therefore, immunizes Kaiser from Union Pacific's action to enforce the agreement for indemnification or contribution is without merit.