Court Opinion

ID: 9632036
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:59:28.106202+00
Date Added: 2024-06-11T12:31:11.894126
License: Public Domain

BISTLINE, Justice,
concurring in part, dissenting in part.
As is sometimes my wont, I obtained a copy of the entire file from the clerk’s office and initiated an opinion of my own for reasons which appear below in short order. It is gratifying to have a majority of the Court reach the same conclusion that there is something amiss in the Commission’s outright award of Mrs. Presnell’s net return on the malpractice claim to her employer’s surety, USF & G. I concur in reversing that award, but do not agree with the directions on remand.
Had I never attended law school, and had I never practiced law in the field of workmen’s compensation law, and had I not participated in appellate review of the many cases appealed from the Industrial Commission, or, in short, were I wholly uninformed on the subject, logic and common sense would tell me that we would be perpetrating a gross miscarriage of justice on Mrs. Presnell if we upheld the Industrial Commission’s taking away from her the sum of $4,500 plus.
What this case is not is a replay of Tucker v. Union Oil Co., 100 Idaho 590, 603 P.2d 156 (1979). Tucker, an employee of Feed Services (a non-party to the litigation), was severely injured in an industrial accident and had received compensation benefits and also past and future medical expenses from his employer’s surety. Tucker and his wife brought a tort damage action for the personal injuries suffered. The jury affixed causative negligence to Tucker at 10 percent, to his employer at 30 percent, and to Carbon Collier at 60 percent. Damages were set at $350,000 to Tucker, and $12,000 to his wife. A final judgment was entered against Carbon Collier in the sum of $325,000. The trial court, the Honorable Edward J. Lodge, denied Carbon Collier’s motion to reduce the judgment by the amount that had been paid Tucker in workmen’s compensation benefits. This Court, not bothering to specifically overrule Liberty Mutual Ins. Co. v. Adams, 91 Idaho 151, 417 P.2d 417 (1981), adopted some of the reasoning of a Califor*8nia court and held that “Carbon Collier is entitled to have the judgment against it reduced by the amount of workmen’s compensation benefits paid to Tucker.” 100 Idaho at 604, 417 P.2d at 170.1 This Court did not in turn, so far as I know and understand it, then in turn reimburse Tucker’s employer/surety in the amount of that reduction.
Boiled down, the essence of the Tucker holding was that it centered on a single industrial accident — one happening where there was employer negligence (independent of the vicarious liability for employee negligence) as well as contributing third party negligence, i.e., that of Carbon Collier. While I was adamantly opposed to the holding that a workmen’s compensation award would be a deductible item from any third-party recovery, nevertheless, on the basis of giving stare decisis effect to Tucker, and no constitutional issue being involved, I joined the majority opinion in Schneider v. Farmers Merchant, Inc., 106 Idaho 241, 678 P.2d 33 (1983), as witnessed by my special concurrence, 106 Idaho at 246, 678 P.2d at 38. That case, too, was in a context similar to Tucker, i.e., one industrial injury.
Tucker is, however, wholly inapplicable to this case. Here, we again have a single happening, but in this instance, the single happening is an industrial injury which involves no contention of employee negligence (which of course is impermissibly irrelevant), no contention of third-party negligence in the occurrence, and in turn, no contention of an independent employer negligence. The provisions of I.C. § 72-223 have no applicability. That statute is clear. The third-party liability there discussed comes into play only “when the injury ... is caused under circumstances creating in some person other than the employer a legal liability to pay damages therefor, such person so liable being referred to as the third party____” § 72-223(1), Vol. 11A, Idaho Code, p. 109 (emphasis added).
In Mrs. Presnell’s case, the only industrial injury which she suffered, concerning which there is no doubt nor dispute, was a herniated disc suffered while she was at work on employer’s premises — occasioned suddenly at a precise time when she was doing some heavy lifting after a dry cleaning machine failed mechanically. The surety has never disputed the occurrence of an industrial injury. It has only resisted Mrs. Presnell on the matter of physical impairment and disability, and affirmatively it successfully took away the $4,500 which she netted as a result of another later incident which did not occur at her work or on her employer’s premises.
Her herniated disc was so readily pronounced that she had laminectomy surgery less than two weeks later — which is rather expeditious scheduling when it is taken into account that this was all during the 1979 Christmas and ensuing New Year’s holidays.
All of the compensation benefits awarded to Mrs. Presnell flowed directly from the residual disability following repair of the herniated disc laminectomy. She was at the time 56 years of age, and according to the neurologist, Dr. Wilson, beset with nagging, fairly constant, largely nonradiating low back pain. Coupled with the back pain was “bilateral leg pain, worse on the left.” The surety’s brief nicely summarizes the findings and conclusions of the various doctors who either treated her and/or evaluated her. Not one of those doctors pointed to any residual impairment resulting from the successful repair to the severed artery — likewise with the decision of the Commission.
A Commission finding, No. II, accurately provides the factual circumstance which in turn misled the Commission to docking from Mrs. Presnell’s moderate award for back impairment and disability the aforesaid sum of $4,500:
A complication occurred during the surgery [to repair a herniated disc], resulting in arterial bleeding, and a second *9surgical procedure was performed the same day to repair an artery. R., p. 64.
A close reading of the record makes it abundantly clear that the repair to the artery was successful, and that that surgical mishap was not any factor in Mrs. Presnell’s recovery from the disc surgery, or in the evaluations by the various doctors of Mrs. Presnell’s impairment. It was without doubt a terrifying experience, not only for the surgeons, but for Mrs. Presnell. It was described by her counsel, with medical records before him, as “a negligent cutting of one of her great vessels (the iliac artery), in the retroperitoneal area.” It required immediate surgery, and immediate surgery was performed, which involved another specialist.
The final finding of the Commission, and one which certainly should have alerted the attention of any trained legal mind, is this:
IX
Prior to the hearing the Claimant had made a malpractice claim against Dr. [John Doe] and had received a total settlement on her claim in the amount of $10,000. The Claimant’s net recovery, after costs and attorney fees, amounted to $4,543.13. The Surety and Claimant’s attorney in her malpractice action had an understanding that the Surety would not exercise its subrogation rights against any of the $10,000 recovery based upon compensation which had been paid to that time. However, it was understood that should the Claimant recover any additional compensation for permanent disability and non-medical factors, the Surety would not waive its subrogation rights with respect to such future recovery. (Emphasis added.)
The underscoring above is mine. Anytime an attorney hears a witness testify that something was “understood,” first of all it will be seen as a conclusion, and not a statement of any evidence. Second of all, the attorney will want to know who obtained the understanding and from whom. Thirdly, it will be insisted that the witness testify as to what was written or what was said, and from which the understanding was gathered. Here, the Commission decision has failed to favor us with the source of this understanding which takes away most of Mrs. Presnell’s $7,000 plus award. The record reflects no “additional compensation for permanent disability.”
On the first page of the surety’s brief, where after mentioning the laminectomy, the statement of the case goes on to mention the basis of the “understanding”:
In the course of that surgery, a blood vessel was accidentally severed, which was repaired. As a result of that procedure, the claimant filed a malpractice claim against Dr. [John Doe] and in that third-party proceeding, settled the same for $10,000. (Deposition of E.G. Kirkpatrick, p. 7, LL. 23-25.) It has been stipulated by the parties through their respective attorneys of record that the claimant received a net recovery in the third-party malpractice suit in the amount of $4,500 after deduction of expenses and attorney fees. (Tr., p. 4, L. 24 to p. 5, L. 8.) The parties have also stipulated that the surety, United States Fidelity & Guaranty Company, paid all of the medical expenses incurred relative to the repair of the damage caused by the alleged malpractice. (Tr., p. 5, LL. 14-20.) The parties had stipulated that the exact amount recovered by the claimant after attorney fees and costs in the malpractice claim amounted to $4,534.13. (Tr., p. 6, L. 7 to p. 7, L. 3.) Respondent’s Brief, pp. 1-2 (emphasis added).
Not in the context of reciting a further stipulation, that statement continues with this sentence: “The surety at no time waived its right of subrogation for amounts paid.” R., p. 2.
Touching first upon the “stipulation,” it is readily reproduced from the transcript of the hearing which took place before Chairman Geddes on at least prior to March 31, 1985, that being the date of the Reporter’s Certificate. Following is the transcript relative to the “stipulation”:
MR. BARRETT: Also, if we might, preliminarily, Your Honor, we would offer stipulation with Counsel that there has been third party proceedings in re*10gard to this matter, a claim made by the claimant against, I believe it was, Dr. [John Doe.] Is that correct?
MR. PIKE: That’s correct.
MR. BARRETT: For malpractice in conjunction with surgery which was performed upon her in the form of a laminectomy following this accident, and that the claimant had realized a net recover of — that is, a recovery to her above and beyond attorney fees and costs in the amount of $4500.
We would offer a stipulation that upon any recovery the claimant may make in these proceedings that there would be an offset for a credit to the surety in that amount; that is, the net recovery only, the $4500.
MR. PIKE: Mr. Geddes, what Mr. Barrett says is correct as far as the amount that is recovered, the net to the client. That is a correct figure. As to whether or not I would stipulate that the surety is entitled to an offset, I am not prepared to do that.
MR. BARRETT: Your Honor, may I inquire as to what the issue may be in regard to that so that we will know in what manner we are to proceed? In other words, do you agree that the surety has paid all of the medical expenses that were incurred relative to the repair of the damage that was caused by the malpractice?
MR. PIKE: Yes, I would stipulate to that.
MR. BARRETT: And that they have paid any extended income benefits resulting from that procedure included in the payments that they have made?
MR. PIKE: Here is what I don’t know: I have not seen the figures as to how much the surety has paid with reference to the additional medical procedure that was required. I have not been furnished that information. And I also do not know how much actual extension of care this lady needed because of the alleged malpractice of Dr. [John Doe]. If I could have that information, perhaps then I could enter into a stipulation.
MR. BARRETT: Your Honor, we would request that if there is an issue on this that we be, of course, permitted to, in our case in chief, after the claimant has proceeded with theirs, that we be permitted to produce any evidence by way depositions or documentary evidence in order to establish the right to a setoff for a credit.
MR. GEDDES: I think that would be the way to proceed. What was the result of the third party settlement?
MR. BARRETT: It was a $10,000 recovery, gross; but after attorney fees and costs, I understand that the claimant received a net of $4500. Is that correct, Mr. Pike? I believe that was in an answer to an interrogatory.
MR. PIKE: I do have the exact figure right to the penny. I will look that up.
MRS. PRESNELL: $4534.13.
MR. BARRETT: $4538.14.
MR. GEDDES: We have a stipulation, as I understand it, that that was the amount that the claimant received?
MR. PIKE: That’s correct. Tr., pp. 4-7.
Even though the Commission did not set forth the only stipulation (understanding) which was mutually agreed to, i.e., a finding that counsel were agreed that Mrs. Presnell would reimburse USF & G for the medical expenses attendant to repairing the severed artery, the transcript suggests such a finding.
The deposition of a Mr. Kirkpatrick supposedly was taken to provide the surety’s opportunity to prove what it had actually expended in expenses repairing the severed artery, if in fact it did so. The deposition was not taken until June 13, 1985. Because it only encompasses ten pages, rather than supply an understanding of what I make of it, a better course seems to first expose its pertinent content verbatim, other than to first point out that Mr. Kirkpatrick identified himself as a Boise resident and retired after 35 years of employment for the USF & G:
“Q. ... And directing your attention to the Dorothy Mae Presnell file, this involves an accident which occurred on or about *11December 26, 1979 involving a back injury; is that your understanding?
“A. That’s correct.
“Q. And is it your understanding this lady was treated by an orthopedic surgeon in the form of Dr. [John Doe]____?
“A. Yes, that’s correct.
“Q. During the course of that surgery, what was your understanding as to what occurred during the surgery to her back and laminectomy?
“A. In the surgery to her back, that the surgeon, Dr. [John Doe], slipped and cut some major artery.
“Q. All right. And what is your understanding as to what then occurred after that happened?
“A. That they got with — Dr. [John Doe] and, I presume, his assistant located Dr.—
“Q. that would be Dr. McCain?
“A. Dr. McCain, and they took her into another operating room and within a short period of time — and I’m talking about the same day — repaired the cut or injury to the artery, Dr. McCain did.
“Q. Okay. At this time, Mr. Pike, would you — or let me ask a few more questions so that makes sense.
“At some time subsequent thereto, what is your understanding of whether or not there was a claim made against Dr. [John Doe] as a third party claim? Yes, against Dr. [John Doe].
“A. State that — what was the question? I missed it.
“Q. What was your understanding in reference to a claim by the claimant as against Dr. [John Doe] for malpractice? Did she make such a claim?
“A. On, yes, she made — I—
“Q. Who was her lawyer?
“A. For that purpose?
“Q. For that purpose.
“A. It was—
“Q. Would it be Walt Bithell?
“A. Walt Bithell.
“Q. Here in Boise; is that correct?
“A. That s correct.
“Q. Now, have you been acquainted with Mr. Bithell for some time?
“A. I’ve met Mr. Bithell and he has represented us in one matter before.
“MR. BARRETT: All right. Now, Mr. Pike, may we stipulate that the amount expended by USF & G in compensation benefits at least equals the amount of the net recovery that the claimant made in the malpractice case against Dr. [John Doe], which amount is $4,543.13?
“MR. PIKE: Yes. I’d stipulate to that.
“Q. BY MR. BARRETT: All right. Were you informed as to a settlement that was reached in conjunction with the third party case as between Mrs. Presnell and the carrier for Dr. [John Doe]?
“A. Yes, I was so informed.
“Q. And what was your understanding as to the total amount of that settlement?
“A. The total settlement was $10,000.
“Q. All right. Now, at the outset, that is, after the laminectomy had been performed, Dr. McCain had treated the claimant, had you had a discussion with the claimant or anyone else in conjunction with a potential third party claim as against Dr. [John Doe]?
“A. I’m not sure that I understand your question. I discussed this case with Mrs. Presnell and some other members of her family, and Mr. Berry and Mr. Pike, lawyers, and which discussion took place in Mrs. Presnell’s home, and I remember that there was some anguish expressed by her and members of her family about the treatment that they had received in this case, the medical treatment.
“Q. All right. Do you remember approximately when that discussion took place?
“A. It would be sometime in the spring of 1980.
“Q. All right.
“A. I do have a memo that I made from there. I could tell you I think exactly if I could find it.
*12“Q. You think it was sometime in the spring of 1980?
“A. April 24, 1980.
“Q. All right. At that time, was there any discussion concerning a subrogated interest for the USF & G?
“A. My notes do not reflect any discussion on that—
“Q. Okay.
“A. —question.
“Q. Do you recall any discussion at that time?

“A. I do not recall any discussion at that time.

“Q. All right. Now, at a later date, did you have a further discussion with either Mr. Bithell or Mr. Pike or anyone concerning the settlement of the third party claim and the subrogated interest of USF & G?
“A. I would think that it would be sometime in 1984. It was done at the time that Mr. Bithell was in Mr. Pike’s office. I was so informed, and the settlement was to be achieved at that time.
“Q. Had the settlement been finalized or were they discussing it with you?
“A. The amount had been finalized.
“Q. Okay.
“A. The discussion was whether I would allow the settlement to go through or whether I would insist upon entering into an agreement and receiving part of the money.
“Q. All right. Do I understand that the settlement has been finalized or was it subject to your approval?
“A. Been finalized.
“Q. That had already been agreed upon?
“A. As to amount, yeah.
“Q. Okay. Tell me as best as you can remember the discussion that you had with Mr. Pike on the telephone at that time.
“A. Well, my recollection was that for one thing, I felt that it struck me that the settlement made by Bithell was cheap.
“I didn’t think he got enough. Be that as it may, I agreed to let the thing go. We would not be involved in that settlement, and that Mr. Pike was going to pursue a comp claim and was going to make a claim for physical disability as distinguished from impairment, and that we would argue our share of any recovery out of that amount of money, whatever it was.
“In other words, we would — we would use that as a source of money for our subrogation interest.
“Q. Rather than taking it at that time?
“A. Rather than taking it at this time and holding up this settlement, which apparently they wanted to get done properly.
“Q. Well, now, I need some clarification. You talk about holding up the settlement. My question is was it your understanding that $10,000 had been agreed upon subject to no contingency with a third party, or was the settlement between the claimant and the third party in some way contingent upon your okaying it because of your subrogated interests? You understand my question?
“A. I’m not sure whether I do understand it. I will say this. It is my understanding that Walt Bithell wanted to get this matter cleared up.
“We orally agreed then that we would not insist that any money paid by Dr. [John Doej’s carrier be paid to us, so that — that malpractice action could be settled and payment could be made then and there or however fast they could do it without any payment or signing of any drafts or anything by the USF & G.
“Q. All right.
“A. And my understanding was that we would discuss this later with Mr. Pike, and he agreed to that and that was enough for me.
“Q. All right. So do I understand that if there would be no recovery by Mrs. Presnell in the Worker’s Compensation case over and above what she has received to date, that is, the 10 percent rating, that USF & G would not make a claim back against Mrs. Presnell worth $4,500?
“A. We would not attempt to get any recovery from what we have paid to—
*13“Q. Well, let us assume in the Presnell case that she recovered an additional $5,000 over and above what she’s been paid because of “disability over and above the impairment.”
“What was your understanding of what would be the result insofar as the 4,500 subrogated interest is concerned?
“A. That we would be able to take credit for our subrogated interest against anybody that we might have to pay subject to a negotiated amount.
“Q. Did you at any time agree with Mr. Pike or Mr. Bithell to waive your subrogated interest?
“A. No.
“Q. Was it your understanding under the Worker’s Compensation law that any subrogated interest of the surety was automatically carried with the claimant’s case against the third party, subject to attorneys’ fees and costs?
“A. Yes.
“MR. BARRETT: I have no further questions. Thank you.
EXAMINATION
BY MR. PIKE:
“Q. Mr. Kirkpatrick, did you ever make any arrangements with Mr. Bithell concerning the interest of USF & G as related to the interest of Mrs. Presnell as far as the medical malpractice case was concerned?
“A. No specific arrangements.
“Q. I mean, did you ever even have a discussion with him about the case?
“A. I discussed it with him at one time a long time ago that we were involved with the case, we had paid medical bills and— at which time he said he would keep us informed.
“Now, he never did, but then that’s Bit-hell for you.
“Q. Did you have any arrangement with Mr. Bithell to assist in the cost of that prosecution as against Dr. [John Doe]?
“A. No.
“Q. Did USF & G have any—
“A. We had no arrangement with him financially or otherwise, other than what I understood was the statutory arrangement.
“Q. Did you discuss the statutory arrangement with him specifically?
“A. No.
“Q. The only discussion that you had with Mr. Bithell, then, as I understand it, is that you did talk to him on the telephone, advised that you had a financial — USF & G had a financial interest in the case; is that what it was?
“A. Yes, that we were involved in the comp case as to our understanding of what happened.
“Q. And that would be—
“A. I mean, what — what was allegedly the malpractice.
“Q. That would be the extent of it?
“A. That was the extent of our conversation, right.
“Q. Was there any arrangement between you and Mr. Bithell that he would not settle the case, medical malpractice case, without checking with you and getting your permission or advising you—
“A. No.
“Q. —as to what he was going to do?
“A. We didn’t discuss it, no.
“Q. In other words, as far as you were concerned, he could handle that case in any way he wished at his discretion?
“A. Essentially, yes. He was a — I would assume that he’s a good lawyer. He tells me he is, and that he knows the law on Workmen’s Comp subrogation.” Deposition of Gene Kirkpatrick, June 13, 1985, pp. 5-14 (emphasis added).
The very best that could be said of the source of the “understanding” — Commission Finding No. XIV, is that any subrogation rights of USF & G would be respected and that the only claims which Mr. Pike recognized on behalf of his client were any medical expenses paid for repairing the artery, with Mr. Kirkpatrick saying that USF & G had paid medical bills. The record, however, shows that USF & G claimed, and the Commission gave away, a lump sum *14which was all that Mrs. Presnell had left to her following settlement of the malpractice claim. Nothing in the record sustains that USP & G paid out $4,500 or any amount whatever in repairing the artery. Factually, there is in the record no evidence of any amount actually being paid out. Mr. Kirkpatrick did say that medical expenses had been paid out, but no amount was stated, no bills were submitted in evidence, leaving the evidence insufficient.
Accordingly, I whole-heartedly agree with the majority’s statement that “the record is devoid of any findings or testimony [or exhibits, I would add] as to the medical expense. I see nothing in the record which I have incorporated herein to sustain the majority in adding “and convalescence” to medical expenses incurred in the iliac artery repair, and strongly protest against the majority’s opening up something on remand that was never mentioned between counsel, never “understood,” never stipulated to, and also highly unlikely.
Mrs. Presnell’s $4,500 has been in USF & G’s bank account for a long, long time. This Court should be insisting that she receive judgment interest on that amount. Moreover, she should receive that amount and interest forthwith, and she should also be awarded attorney’s fees so that the amount wrongfully withheld from her comes to her intact.
Above all, she is entitled to the sure and certain relief promised all claimants by the Workmen’s Compensation Act — meaning now, not years down the road, and without the surety being gratuitously allowed a second opportunity to prove medical expenses paid in repairing the repair to the iliac artery. Although Mr. Kirkpatrick and Mr. Pike seemed to be in accord that there was such an agreement, pure surmise on my part is that Dr. McCain most likely donated those surgical services as a brotherly gesture to a fellow doctor. Why else, one wonders, did the surety, ably represented, not place in evidence the bills for that artery repair? Remember, Mr. Pike, at the hearing before Commissioner Geddes, said that if he were to be furnished a statement of those expenses, he would stipulate as requested by counsel for USF & G.
Back of it all, in considering attorney’s fees for Mrs. Presnell, and all of this Court’s many cases talking about frivolous or nonmeritorious claims, the claim which USF & G laid on Mrs. Presnell’s $4,500, whether based on a statutory provision which does not exist, or a give-away stipulation which never took place, is an all-time high in overreaching an assured, to whom some authority says USF & G stands in a fiduciary relationship. Its claim to that $4,500 was factually unsupported and grounded on no principles of law.
Justice Bakes in footnote 1 of his opinion set forth Mrs. Presnell’s statement of what Justice Bakes calls the sole issue. The first sentence states one issue. The second sentence stated the second issue, and it is that issue alone which has caused my concern as to the commission’s decision. Not to his credit, Justice Bakes can not say that the parties did not recognize the issue — not where the surety’s brief at page 3 recognizes it as an additional issue.
4. Whether defendants are entitled to an offset for recovery made by claimant against a third party under the provisions of Idaho Code § 72-223 to the extent of the net recovery of claimant in said third-party action, that is, recovery of amounts less her attorney fees and costs.
The discussion of what Justice Bakes sees as an issue not before us begins at page 29 and encompasses the remaining seventeen pages of the brief. Moreover, the surety’s brief in opening discussion of the $4,500 setoff problem refers to it as “The further issue involved in this case ...,” used in the brief of Mrs. Presnell, as set forth in Justice Bakes’ footnote 2.

. For an assessment of the validity of the windfall which Judge Lodge did not give to Carbon Collier, see the dissenting opinion which would have affirmed Judge Lodge. 100 Idaho at 605, 603 P.2d at 171.