This opinion will be unpublished and may
not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Geyer Rental, Inc., et al.,
Landwehr Construction, et al.,
Stearns County District Court
File No. C4971469
Dyan J. Ebert, Kevin A. Spellacy, Quinlivan & Hughes, P.A., 400 South First Street, Suite 600, St. Cloud, MN 56302 (for appellants)
Mark Chapin Hall, Lynn, Scharfenberg & Associates, P. O. Box 9470, Minneapolis, MN 55440-9470 (for respondents)
Considered and decided by Randall, Presiding Judge, Lansing, Judge, and Willis, Judge.
Geyer Rental, Inc., and Serenity Development appeal from partial summary judgment limiting Landwehr Construction, Inc.’s, contribution liability on a wrongful-death judgment to the amount of workers’ compensation benefits Landwehr’s compensation insurer paid under a settlement with the trustee for Landwehr’s employee’s next of kin. We affirm.
Kenneth Bergerson, an employee of Landwehr Construction, Inc., was killed while working on a building owned by Geyer Rental, Inc., and Serenity Development (collectively “Geyer”). Ellen Bergerson, as trustee for Kenneth Bergerson’s next of kin, brought a wrongful-death action against Geyer. The jury returned a special verdict apportioning 10% of fault to Kenneth Bergerson, 35% to Geyer, and 55% to Landwehr, which was not a party to the action. The parties stipulated to damages of $950,000. After Geyer’s posttrial motions and appeal failed, Geyer settled with Bergerson for $855,000.
Bergerson and State Fund Mutual Insurance Company, Landwehr’s compensation insurer, later settled Bergerson’s workers’ compensation claim for $82,885.03, the amount of benefits State Fund had paid up to that point. The settlement released State Fund from the obligation to pay additional benefits. The workers’ compensation judge approved the settlement.
Geyer then brought this action against Landwehr and State Fund, seeking contribution toward the wrongful-death settlement that followed the verdict. The parties stipulated that although Landwehr was not legally bound by the jury’s apportionment of fault in the wrongful-death action, Landwehr was at fault and its percentage of fault was sufficient to create contribution liability to Geyer. Although they agreed that Geyer’s liability was equal to the maximum amount permitted under the contribution formula the supreme court fashioned in Lambertson v. Cincinnati Corp., 312 Minn. 114, 257 N.W.2d 679 (1977), they disagreed on the maximum amount permitted under Lambertson.
As a result, Landwehr and State Fund moved for partial summary judgment, seeking to limit their contribution liability to $82,885.03, the amount of workers’ compensation benefits State Fund had paid Bergerson under the settlement. Geyer opposed the motion, claiming that $82,885.03 represented only the amount of benefits paid and that it was entitled to $145,000 in additional benefits payable in the future. The district court granted Landwehr and State Fund’s motion, reasoning that no additional benefits remained to be paid. This appeal followed.
D E C I S I O N
Contribution is the statutory remedy that secures the right of one who has discharged more than his fair share of a common liability to recover from another who is also liable. Lambertson v. Cincinnati Corp., 312 Minn. 114, 123-24, 257 N.W.2d 679, 685-86 (1977). A third-party tortfeasor is entitled to contribution from a negligent employer. Johnson v. Raske Bldg. Sys., Inc., 276 N.W.2d 79, 80 (Minn. 1979). But the right to recover contribution is not absolute. Peterson v. Little-Giant Glencoe Portable Elevator Div. of Dynamics Corp. of Am., 366 N.W.2d 111, 116 (Minn. 1985). An employer is liable for contribution “in an amount proportional to its percentage of negligence, but not to exceed its total workers’ compensation liability.” Lambertson, 312 Minn. at 130, 257 N.W.2d at 689. The employer’s workers’ compensation liability includes benefits the employer has paid and benefits payable in the future. Peterson, 366 N.W.2d at 116-17. “This approach allows the third party to obtain limited contribution, but substantially preserves the employer’s interest in not paying more than [its] workers’ compensation liability.” Lambertson, 312 Minn. at 130, 257 N.W.2d at 689. The supreme court has explained that “[w]hile this approach may not allow full contribution recovery to the third party in all cases, it is the solution * * * most consistent with fairness.” Id.
Landwehr and State Fund do not dispute that an employer’s contribution liability includes workers’ compensation benefits that remain to be paid in the future. They claim, however, that because of the settlement, no benefits remain to be paid. Geyer, on the other hand, claims that while Landwehr is not obligated to pay additional benefits under the settlement, benefits remain to be paid according to the Lambertson formula because the amount of the settlement did not include future benefits. Relying on Wilken v. International Harvester Co., 363 N.W.2d 763 (Minn. 1985), Geyer argues that an employer may not manipulate a third-party tortfeasor’s contribution rights by settling a workers’ compensation claim for less than its total present value.
The employer in Wilken claimed that, because it had a sizable credit against future compensation benefits resulting from its employee’s tort recovery, it had no further liability under the Workers’ Compensation Act. 363 N.W.2d at 766. The supreme court disagreed, holding that the credit had not extinguished the employer’s liability for future payments. The court noted that “it [was] only because underlying liability exist[ed] that there [was] a credit.” Id. at 767.
Geyer’s reliance on Wilken is misplaced. The facts in this case are distinguishable from those in Wilken because the settlement State Fund reached with the trustee covered both the amounts previously paid and amounts the trustee could claim in the future. As such, the settlement reduced any future claims to a present value of $82,885.03 and eliminated Landwehr’s underlying liability. Unlike the settlement in this case, the credit in Wilken did not eliminate the employer’s liability; instead, as the court noted, it existed because of it. Id.
We recognize that in some circumstances an employer may use a settlement of a workers’ compensation claim to unfairly manipulate a third-party tortfeasor’s contribution claim. But the record in this case contains no evidence that Landwehr settled the decedent’s claim to diminish Geyer’s contribution benefits. The district court found that the settlement constituted an arm’s-length agreement under which each party received something of value. Although the parties’ briefs and argument have not directly addressed the value or lack of value the parties received in the settlement, on this record we cannot say that the district court’s finding was clearly erroneous.
We reject Geyer’s argument that employers and their carriers may not reduce an employer’s contribution liability by settling workers’ compensation claims and thereby “collaps[ing] the dollar amount of the ‘benefits payable.’” Geyer’s argument mischaracterizes the settlement of a claim for its present value as an impermissible reduction in the amount of benefits payable, rather than an acceleration of the payment. We also reject Geyer’s argument for reversal based on his claim that the present contribution scheme is inherently unfair because it subjects third-party tortfeasors to liability in excess of their actual percentage of fault. The supreme court addressed and rejected that argument in Lambertson, concluding that while the Lambertson formula may not allow full contribution recovery to the third party in all cases, it provides the fairest balancing of interests. Lambertson, 312 Minn. at 130, 257 N.W.2d at 689.
Because the workers’ compensation claim’s present value, for which the parties settled with the workers’ compensation division’s approval, includes the value of future benefits, no additional benefits remain to be paid. The district court thus properly granted Landwehr and State Fund partial summary judgment limiting their contribution liability to benefits paid under the settlement.