Court Opinion

ID: 9674219
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:25:02.898375+00
Date Added: 2024-06-11T18:16:26.190240
License: Public Domain

Carleton Harris, Chief Justice, dissenting. I very much disagree with the holding by the majority. Statutes are designed to give fair play to all parties in a controversy and, in my view, this result is certainly not reached iri this litigation. Ark. Stat. Ann. § 81-1340 (Repl. 1960), set out in full in the majority opinion, in sub-section (a) sets out the requirements to be met by an employee when he institutes suit against a third party tortfeasor. Sub-section (b) sets out what an employer, or carrier, shall do when he institutes suit. Very clearly, paragraph (1) under sub-section (a) provides that an employee has a right to make a claim or maintain an action in court against the third party for his injury, But the employer or carrier shall be entitled to reasonable notice and an opportunity to join in the action. Paragraph (2) provides that the “commencement of an action” (which has to be the action mentioned in paragraph [1]) or the adjustment of the claim, shall not affect the right of the employee or his dependents to recover compensation, and the statute then provides how the proceeds of the monies obtained through the action that has been commenced, or by settlement, shall be disbursed. Sub-section (b) permits the employer or carrier to maintain the action in tort against a third party, but provides that reasonable notice and opportunity to be represented must be given to the compensation beneficiary. Apparently, the majority are holding that it is not necessary to give notice to the employer or carrier if the claim is settled before institution of a suit. I think this holding is absolutely contrary to the intention of the statute, and is completely unfair to the compensation carrier. If a carrier instituted suit against a third party and obtained a judgment, or settlement, without ever giving any notice to the employee that such a suit had been instituted, a court, upon complaint by the employee, would not hesitate to set aside any such judgment, and this court would affirm. I merely say “What is sauce for the goose, is sauce for the gander”. Here, the employee settled his third party claim before he ever made any claim for workmen’s compensation benefits to the carrier, and accordingly, the carrier neither knew of any claim for compensation against it nor of any settlement made by the employee with the third party. Accordingly, there was no way for appellant to protect itself. I also definitely have the view that sub-section (c) requires approval of this settlement. Admittedly, approval was not obtained. Now, I do not mean that the commission has any jurisdiction over the third party. I agree that it has no authority to make the third party do anything— 4 ut it does have jurisdiction over the employee and certainly, in my view, has the power to disapprove a settlement which it deems improvident. In Winfrey & Carlil v. Nickles, Admr., 223 Ark. 894, 270 S. W. 2d 923, this court held that sub-section (c) was designed for compromise settlements only, (rather than when a case is brought to trial and results in a verdict), stating: “There is, however, good reason to require that a compromise settlement be so approved, for it is a basic theory of workmen’s compensation legislation that neither the injured employee nor his dependents are to be allowed to sacrifice their rights by improvident settlements.” I submit that the commission also has a right to protect the employer or carrier from the effect of an improvident settlement between any employee and a third party. Let me give an example of what could happen. An employee, in the course of his employment, has a serious wreck with his brother, the fault being entirely with the brother, in which the employee is severely injured. Because of the relationship, he settles the tort claim with the brother by accepting a small amount of money, much less than his tort claim is worth, without giving any notice to the employer or carrier. He then files his claim for compensation and draws maximum benefits. The employer or carrier accordingly pays out a large sum of money, but, under the holding today, is precluded from recovering from the third party (brother) because of the settlement made. The majority say: “To hold subsection (c) applicable to third party tortfeasors would leave the adequacy or inadequacy of a compromise settlement approved by both the employer and the employee to the discretion of a court or the commission. There is nothing in the Workmen’s Compensation Law to indicate that any such far reaching result was intended.” In the first place, we are not here dealing with a settlement which has been approved by the employer (carrier) In fact, this is basically the complaint of appellant, i. e., that a settlement was made without its approval — or even knowledge. The statement of the majority, just quoted, is particularly confusing to me since we have already followed the procedure of the commission approving settlements between an employee and a third party. In Maxcy v. John F. Beasley Construction Co., 228 Ark. 253, 306 S. W. 2d 849, this court set out the facts as follows: “The facts appear not to be in dispute. Appellant Maxcy, while in the course of his employment with John F. Beasley Construction Company, suffered injuries by a third party, the Ditmars, Dickmann, Pickens Construction Company (succeeded by Dickmann, Pickens, Bond Construction Company). Maxcy employed attorney, Whetstone, under a contract whereby he agreed to pay Whetstone 50 per cent of any recovery. Suit was filed in the federal court with the result that a settlement was effected, without trial, for $10,016.50. Because of his injuries, Maxcy was paid benefits by his employer’s compensation carrier, the Liberty Mutual Insurance Company, in the total amount of $3,780.56. It appears that there was never any controversy between Maxcy and Liberty Mutual as to its liability to Maxcy for his injuries. On March 5, 1956, appellant Maxcy filed a petition with the Workmen’s Compensation Commission in which he asked for approval of a settlement and for an order of distribution of the $10,016.50. Later, in an amended petition, he asked that distribution be made in the following manner: To Liberty Mutual Insurance Company, $2,250 (5/9ths of its payment of $3,730.56); to Bernard Whetstone, $5,142.40 (attorney’s fee plus $142.50 costs expended); and the balance to the employee, Robert Maxcy. In the alternative, he prayed for a distribution as follows: To Liberty Mutual Insurance Company, $1,865.28; to Bernard Whetstone, attorney, $5,142.40; to Robert Maxcy, employee, $3,008.82. Following a hearing before a single commissioner, on the question of distribution and approval of the settlement with the third party, the commissioner approved the settlement of $10,016.50 and that attorney Whetstone was entitled to a fee of $5,000 to be deduced from the total recovery and that he should be reimbursed in the amount of $142.40 for certain expenses incurred by him in procuring the settlement. Of the remaining $4,851.60, $3,234.40 was ordered paid to Liberty Mutual Insurance Company and the remainder amounting to $1,617.20 paid to the employee, Maxcy. The full commission, on a hearing, approved the findings of the single commissioner and on appeal to the Circuit Court of Garland County, that Court affirmed the findings of the commission on November 2, 1956. This appeal followed.” We mentioned that the settlement was effected without the suit being contested, was a voluntary compromise settlement, and the commission had acted under the authority of § 81-1340 (c). The majority state, that under the view of the appellant in this case, a third party would have to pay twice for the same obligation. That certainly is not my view. If a settlement had been made, and the settlement taken before the commission before any money was paid — and the commission disapproved the settlement — there simply would have been no settlement. If, on the other hand, the settlement had already been effected, and the commission would not approve because of its inadequacy, the third party would be credited with what had already been paid when a settlement was made which met with the approval of the commission. Of course, from a practical standpoint, any settlement with a third party which had been approved by both employee and employer, would, in 99% of the cases, be approved also by the commission. I respectfully dissent to the affirmance. I am authorized to state that Fogleman, J. joins in this dissent.