Braun v. Hassenstein Steel Co.

21 F.R.D. 343, 1958 U.S. Dist. LEXIS 4338
CourtDistrict Court, D. South Dakota
DecidedFebruary 3, 1958
DocketCiv. No. 1119
StatusPublished
Cited by5 cases

This text of 21 F.R.D. 343 (Braun v. Hassenstein Steel Co.) is published on Counsel Stack Legal Research, covering District Court, D. South Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Braun v. Hassenstein Steel Co., 21 F.R.D. 343, 1958 U.S. Dist. LEXIS 4338 (D.S.D. 1958).

Opinion

MICKELSON, Chief Judge.

The plaintiff, John Braun, has brought this action by his father as guardian ad litem to recover from the defendant, Hassenstein Steel Company, damages for personal injuries, loss of earnings and medical expenses arising out of an accident allegedly caused by the negligence of the defendant. At the time plaintiff was injured he was in the employ of the Standard Construction Company at Worthington, Minnesota. According to [344]*344the undisputed facts set forth in an affidavit of counsel for the defendant, the employer’s workmen’s compensation insurance carrier, the United States Fidelity and Guaranty Company, has expended considerable amounts for the medical treatment of the plaintiff. Upon application by the defendant, the court has ordered the plaintiff to show cause why the insurance carrier should not be joined as a party plaintiff, and further, why the plaintiff should not be ordered to amend his complaint to separately state as a separate cause of action the amount sought to be recovered for medical treatment of the plaintiff. This is the matter now before the court.

No jurisdictional questions are involved should joinder be required.

Counsel for both parties agree that Rules 17(a) and 19 of the Federal Rules of Civil Procedure, 28 U.S.C.A. must determine the procedural aspect of the joinder question, and that the substantive interests which the insurance carrier has in this suit are governed by Minnesota statutes M.S.A. § 176.135, and M.S.A. § 176.061, subd. 5 and. subd. 7, as amended by Laws 1953, c. 755.

M.S.A. § 176.135, establishes the employer’s liability for furnishing all medical, surgical and hospital treatment that may be required by an injured employee, with no limitation other than that which the industrial commission determines is reasonable.

M.S.A. § 176.061, subd. 5, provides that where a third party may be liable for the damages caused by injury to the employee, the employee may institute legal proceedings against such third party notwithstanding the employer’s liability to pay compensation. The interest of the employer is then protected by allowing him to deduct from the compensation payable by him the amount received by the employee in the suit against the third party, and by allowing him to intervene under certain circumstances. The employer is further protected by being permitted, when subrogated within the meaning of the statute, to maintain an action in his own name or in the employee’s name, with the requirement that he pay to the employee all sums collected from the third party in excess of the amount of compensation for which he is liable.

M.S.A. § 176.061, subd. 7, provides an additional cause of action for the employer to recover amounts paid for medical treatment by stating in pertinent part:

“ * * * but the employer shall have a separate additional cause of action against such third party to recover any amounts paid by him for medical treatment under this section resulting from the negligence of such third party. This separate cause of action of the employer may be asserted in a separate action brought by the employer against such third party or in the action commenced by the employe or the employer under this chapter, but in the latter case the cause of action shall be separately stated, the amount awarded thereon shall be separately set out in the verdict, and the amount recovered by suit or otherwise as reimbursement for medical expenses shall be for the benefit of the employer to the extent that the employer has paid or will be required to pay for medical treatment of the injured employe and shall not affect the amount of periodic compensation to be paid.”

The defendant argues that the insurance carrier has two interests which require its joinder in this case: first, as an insurer subrogee under subd. 5; and,, secondly, as the owner of a cause of action under subd. 7.

If this were a case in which the insurance carrier’s interests were entirely those of a subrogee, we would be inclined to agree with the position taken by the plaintiff in his resistance to the proposed joinder. While the decisions are somewhat in conflict on the general [345]*345proposition of compulsory joinder of insurer subrogees, we attach much significance to the recent case of Braniff Airways, Inc. v. Falkingham, D.C.Minn. 1957, 20 F.R.D. 141. Judge Donovan, in his refusal to compel joinder in that case, had before him all of the principal authorities relied upon by the defendant in the instant case, namely, United States v. Aetna Casualty & Surety Co., 1949, 338 U.S. 366, 70 S.Ct. 207, 94 L.Ed. 171; Gas Service Co. v. Hunt, 10 Cir., 1950, 183 F.2d 417; National Garment Co. v. New York, C. & St. L. R. Co., 8 Cir., 1949, 173 F.2d 32; Koepp v. Northwest Freight Lines, D.C.Minn. 1950, 10 F.R.D. 524. The Braniff opinion, in distinguishing these authorities, points out that the statement in the Aetna case favoring joinder of insurer subrogees was a dictum addressed to a different factual situation; that is, where actions had been brought by insurer subrogees under the Tort Claims Act, 28 U.S.C.A. §§ 1346, 2671-2680, and the government was confronted with a real possibility of a multiplicity of suits. The Hunt and Koepp decisions rely heavily on this dictum in Aetna, and both are extremely broad extensions of the Aetna case. The Koepp case is further limited to the construction of a Wisconsin statute making the employer and the employee joint parties in interest in the prosecution of the action. The matter of joinder was not raised by the parties in the National Garment case, and the statement of the court on joinder is merely dictum. While this court is in no position to ignore the dictum of our higher courts, a close study of these cases convinces us that there is no clear mandate to district courts to join insurer subrogees in actions which are brought by either the employee or the insured to recover for the full loss. Moreover, and making the above authorities less controlling than in the Braniff case, the employee here is specifically authorized by subd. 5 of M.S.A. § 176.061, to bring the subrogation action in his own name. This is the type of specific statutory authorization that is referred to by the following language of Rule 17(a):

“Every action shall be prosecuted in the name of the real party in interest; but * * * a party authorized by statute may sue in his own name without joining with him the party for whose benefit the ac- . tion is brought * *

In this case the employee is the real party in interest except for the claim for medical expenses because it is he who possesses the primary right to be enforced and the major portion of the ad damnum is sought for his benefit. Rule 17(a), therefore, is all the more forceful in its application here because the employee, as the real party in interest and as statutory plaintiff, is bringing the action for his own benefit and for the benefit of the lesser and subrogated interest of the insurance carrier.

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Bluebook (online)
21 F.R.D. 343, 1958 U.S. Dist. LEXIS 4338, Counsel Stack Legal Research, https://law.counselstack.com/opinion/braun-v-hassenstein-steel-co-sdd-1958.