Clifford v. Eacrett

183 P.2d 861, 163 Kan. 471, 1947 Kan. LEXIS 368

• Court: Supreme Court of Kansas
• Decided: July 12, 1947
• Docket: No. 36,908
• Status: Published

Opinions

The opinion of the court was delivered by

Wedell, J.

This is an appeal by the employer and his insurance carrier in a workmen’s compensation case.

Appellee, the workman, was employed by Allan B. Eacrett, doing business as the Central Aviation Engineering Company. While so employed on March 24,1945, he was on a mission to get some empty apple boxes for his employer from the basement of the North End Market in Wichita. While waiting in the rear of the building for the boxes to be brought from the basement for loading onto a truck, located in the alley, an explosion of natural gas occurred in the building due to leaks in the pipes of the Gas Service Company which was supplying gas to the North End Market. The explosion resulted in serious injuries to appellee.

Prior to February 1, 1946, appellants had paid compensation to appellee in the sum of $774 and thereafter had also incurred medical expenses for and on his behalf in the sum of $531.60. Appellee instituted a common law action for damages against the Gas Service 'Company in which he sought damages in the total sum of $47,956.60. The items of damage claimed covered doctor bills, medicine, nurse, hire, probable future expenses for all of the items previously mentioned, physical injuries, disfigurement, shock to his nervous system, pain and suffering. On February 1, 1946, appellee obtained a judgment in that case for all damages sustained in the sum of $6,000, which was paid on February 6, 1946. Appellants had notice of the pendency of the damage action for some period of time prior to February 1, 1946, -but neither of them intervened in that action. Both the appellee and the Gas Service Company had notice prior to rendition of the judgment in the damage action that the appellant insurance carrier had paid compensation and had incurred medical expenses for and on behalf of appellee. After the date of judgment against the Gas Service Company no further compensation was paid. Appellants made demand on appellee and the Gas Service Company for reimbursement of compensation paid and the amount of medical expenses incurred on behalf of appellee but the demand was refused by each of them. After the rendition of judgment in the damage action appellee filed his application for additional compensation under the workmen’s compensation act. On September 12,1946, the commissioner made his findings and award allowing appellee temporary total disability in the sum of $774 and permanent partial disability for 372 weeks in the sum of $5,088.96, or for the total sum of $5,862.96. Against that amount the commissioner credited appellants with the amount of $774 previously paid and rendered an award in favor of appellee for the balance in the sum of $5,088.96. The commissioner held that under the present law, G. S. 1945 Supp. 44-504, the claimant was not required to elect whether he would pursue his remedy under the workmen’s compensation act or his remedy by an action for damages against a negligent third party, but could recover compensation from his employer and damages from the negligent third party, in the event respondent and his insurance carrier had knowledge of the'third party damage action and failed to make timely intervention. The findings and award of the commissioner were adopted by the district court and judgment was rendered accordingly. From that judgment respondent and his insurance carrier have appealed to this court.

As stated, appellants did not exercise their statutory privilege of intervening in the damage action in order to have their rights, whatever they may have been, protected. No judgment establishing their rights was rendered in the damage action. We, therefore, have no judgment rendered in that action, affecting their rights, before us for review. The only judgment here for review is the one rendered in the subsequent compensation case.

The sole question before us now is whether appellee was precluded from obtaining compensation under the workmen’s compensation act after February 1,1946, by reason of the judgment he alone recovered against the negligent third party on that date. Appellee contends he is not so precluded and appellants contend he is. The parties also agree this precise question has not been decided by this court and that the answer thereto depends upon a proper interpretation of G. S. 1945 Supp. 44-504 which provides:

“When the injury or death for which compensation is payable under this act was caused under circumstances creating a legal liability against some person other than the employer to pay damages, the injured workman, his dependents or personal representatives shall have 'the right to take compensation under the act and pursue his or their remedy by proper action in a court of competent jurisdiction against such other person. In the event of recovery from such other person by the injured workman, or the dependents or personal representatives of a deceased employee by judgment, settlement or otherwise, the employer shall be subrogated to the extent of the compensation and medical aid provided by him to date of such recovery and shall have a lien therefor against such recovery and the-employer may intervene in any action to protect and enforce such lien. Such action against the other party, if prosecuted by the workman, must be instituted within one year from the date of the injury, and, if prosecuted by the dependents or personal representatives of a deceased workman, must be instituted within eighteen months from the date of such injury. Failure on the part of the injured workman, or the dependents or personal representatives of a deceased workman to bring such action within the time herein specified, shall operate as an assignment to the employer of any cause of action in tort which the workman or the dependents or personal representatives of a deceased workman may have against any other party for such injury or death, and such employer may enforce same in his own name or in the name of the workman, dependents or personal representatives by proper action in any court of competent jurisdiction.”

This statute is the result of amendments to the Laws of 1911 and 1927. As originally enacted the 1911 section read:

“Where the injury for’ which compensation is payable under this act was caused under circumstances creating a legal liability against some person other than the employer to pay damages in respect thereof: (a) The workman may take proceedings against that person to recover damages and against any person liable to pay compensation under this act for such compensation, but shall not be entitled to recover both damages and compensation; and (b) if the workman has recovered compensation under this act, the person by whom the compensation was paid, or any person who has been called on to indemnify him under the section of this act relating to subcontracting, shall be entitled to indemnity from the person so liable to pay damages as aforesaid, and shall be subrogated to the rights of the workman to recover damages therefor.” (R. S. 1923, 44-504, Laws l9ll, ch. 218, § 5.) (Our italics.)

The 1927 amendment provided:

“When the injury .or death for which compensation is payable under .this act was caused under circumstances creating a legal liability against some person other than the employer to pay damage, the injured workman or his personal representative shall within ninety (90) days of the date of receiving said injury elect whether to take compensation under this act or to pursue his remedy against such other person. Such election must be in writing and must be delivered to the employer in person or by registered mail, and the acceptance of compensation by an injured workman shall be construed as a positive election to accept compensation under this section. Failure on the part of the injured employee or his personal representative'to file a written election with the employer within ninety (90) days that he will pursue his remedy against the negligent third party shall operate as an election to accept compensation and as an assignment of any cause of action in tort which1 the employee or his personal representative may have against any other party for such injury or death, and such employer may enforce in his own name, or the name of the workman, the liability of such other party jor their benefit as their interests may appear,” (G. S. 1935, 44-504, Laws 1927j ch. 232, § 4.) (Our italics.)

Our function is to ascertain the legislative intent and purpose, by all legitimate methods, to the end that its will may be made effective. (Jones v. State, ex rel., 1 Kan. 273; Prohibitory-Amendment Cases, 24 Kan. 700, 716; Denton v. West, 156 Kan. 186, 188, 131 P. 2d 886.) Workmen’s compensation statutes are to be liberally construed with the view of making effective the legislative intent and not for the purpose of nullifying it. (Mendel v. Fort Scott Hydraulic Cement Co., 147 Kan. 719, 78 P. 2d 868; Abbott v. Southwest Grain Co., 162 Kan. 315, 326, 176 P. 2d 839.)

Before we discuss the rights of the employer under the present act we shall endeavor to ascertain what remedy, or remedies, the workman was granted thereby. It will be observed that under the 1911 act the workman was expressly denied the right to recover both damages and workmen’s compensation. Under 'the 1927 act he was required to elect which of those remedies he would pursue. Under that act failure to elect- to pursue the remedy against the negligent third party or the acceptance of compensation under the compensation act was construed as an election to take compensation under the act. With respect to the workman’s rights against the negligent third party the 1938 amendment, the present law, provides:

“. . . the injured workman, his dependents or personal representatives shall have the right to take compensation under the act and pursue 'his or their remedy by proper action in a court of competent jurisdiction against such other person.” (G. S. 1945 Supp. 44-504.) (Our italics.)

Appellants argue if the 1938 legislature intended to grant the workman both1 remedies it would have employed in the above quotation the word “rights” instead of the word “right.” They concede the section provides the workman shall have the right to “pursue” an action against the negligent third party but they contend it does not grant him the right to retain the fruits of such an action and also recover compensation under the act. We think both contentions 1 constitute a strained construction of the legislative intent. And in this conclusion we- are aided by the provisions of the 1911 and 1927 acts which have been amended as previously indicated. We think the legislature clearly intended to retain for the workman his right to take compensation from his employer under the' workmen’s compensation act and to grant him the additional remedy- of a damage action against the negligent third party.

Where the legislative intent to grant more than one remedy clearly appears we need not search for the reason, or reasons, which may have prompted such intent. Appellants emphasize the fact that the judgment in the damage action was for all damages sustained. They argue it would constitute double recovery to permit the workman to also recover compensation for the same injury. If some double compensation actually results we know of nothing to prevent the legislature from authorizing its recovery from two parties where the liability of one party arises under the compensation law, which is a- liability arising on contract (Moeser v. Skunk, 116 Kan. 247, 226 Pac. 784), and the other from an invasion of common-law rights. Moreover while there is only one injury the items of damage recoverable under each remedy are not entirely identical. There are various items of actual and serious damage resulting from an accident such as that here involved which are in nowise recoverable under the workmen’s compensation act. For example, $500 is the maximum allowance in extreme cases under the act for medical, surgical and hospital treatment. (G. S. 1945 Supp. 44-510.) In many cases that amount is wholly inadequate. Nor does the compensation act provide any recovery for the most serious forms .of bodily or facial disfigurement, for embarrassment occasioned by disfigurement, or for shock to the nervous system, except as it results in disability to perform the particular labor in question. The act provides no compensation for the most excruciating pain and suffering. Moreover, the workman cannot retain the full amount of his judgment for damages. He is obliged to pay the expenses and at*torney’s fees incident to the recovery of such a judgment. Manifestly, we cannot arbitrarily say the legislature was unmindful of these various facts. On the contrary we are obliged to believe it was conversant with the inadequacy of the compensation law to provide full and complete recovery for all damages sustained. The workmen’s compensation act was designed to compensate the workman only for such injuries, and to the limited extent, for which the legislature believed the industry should be responsible as a part of the costs incident to the operation thereof. Why should a workman, simply because he is employed in an industry covered by that act, be penalized by being denied the right to recover damages resulting from the negligent acts of a third party when the workman has inadequate relief under the compensation act for injuries suffered? We are persuaded the legislature intended he should not be so penalized. With the wisdom of such legislative policy courts are not concerned. (Denton v. West, 156 Kan. 186, 131 P. 2d 886.)

The fact a workman has received compensation from his employer for the same injury constitutes no defense, or partial defense, to a negligent third party in an action against him by the workman for.damages. (Moeser v. Skunk, supra; Long v. American Employers Ins. Co., 148 Kan. 520, 525, 83 P. 2d 674.) By the same token, in the absence of a statute to the contrary, why should it be a defense to an employer that the workman has been compensated for damages caused by a negligent third party.

Having determined it was intended to grant the workman the additional remedy to pursue his rights against the third party tortfeasor,-what limitation, if any, does the present act impose upon his right to retain his recovery in such action? Here again it is well to observe that under the 1911 and 1927 acts equitable adjustment was required to be made between the employer and employee in case of récovery of' damages against a negligent third party. (Long v. American Employers Ins. Co., supra, 525, 526; Krol v. Coryell, 162 Kan. 198, 202, 175 P. 2d 423.) It has been seen the 1927 act con•tained an express provision for equitable adjustment between the employer and employee where the employee elected to take under the-compensation act and the employer was authorized to proceed against the negligent third party. That act provided:

'. . and such employer may enforce in his own name, or the name of the.workman; the liability of such other party jor their benefit as their interests may appear.” (G. S. 1935, 44-504.) (Our italics.)

. --No: such provision for equitable distribution is made in the present law for the protection of the employee, as his interest may. appear, out' of the recovery had by an employer, in 'an" action for damages: against the'tortfeasor! For this reason it has been determined that if the employee fails to institute the damage action and the employer-does so the employer may now recover-only what:he has been1 required' to pay- out in the form of compensation and medical aid. (Krol v. Coryell, supra, 205.) .....

The instant action was instituted by the workman. The only provision in the present law pertaining to the employer’s rights in the recovery made by the workman is— ■—

“In the event of recovery from such other person by the injured workman, or the- dependents or personal representatives of a deceased employee by judgment, settlement or otherwise, the employer shall be subrogated, to the extent of the compensation and medical aid provided by him to date of such recovery and shall have a lien therefor against such recovery and the employer may intervene in any action to protect and enforce such lien.” (G. S, 1045 Supp. 44-504.) (Our italics.)

As previously stated, the employer did not intervene in that action. No order, right or wrong, determining the employer’s rights in the recovery was made in that action and hence no such judgment is now before us for review. Appellants concede no medical aid had been furnished by them until after the workman obtained his judgment in the damage action. In the compensation case, the only case now before us, the district court determined the total compensation due for the injury sustained and credited appellants with the full amount of compensation previously paid in the sum of $774.

It appears the district court approved the decision and the theory of the commissioner, which were:

“. . . there is nothing which prevents the claimant from recovering both compensation from his employer and damages from the negligent third party, in the event that the respondent and insurance carrier have knowledge of the third party action and do not make a timely intervention.” (Our italics.)

We approve the first portion of the above quotation but not the italicized reason therefor. We approve the decision with respect to the workman’s right to recover compensation subsequent to the damage judgment for the reason that to hold otherwise would be tantamount to saying the damage action by the workman constituted an election of remedies. To hold such action constituted an election of. remedies would violate the intent of the present law.

Appellants concede decisions under statutes of other states are not sufficiently similar to be helpful. While the instant decision is, of course, based on our own statute, parties interested in the subject generally will find it ably discussed in Horovitz on Workmen’s Compensation, pp. 339-341, and 3 Schneider’s Workmen’s Compensation Text, §§ 834, 835.

While the instant case is governed by G. S. 1945 Supp. 44-504, it may be well to call atténtion to the fact that this statute was again amended in 1947 (senate bill 322) in such mánner as to again permit the employer, where no damage action is brought by the workman, to enforce the damage action in his own name or in the name of the workman’s dependents or personal representatives for their benefit as their interest may appear. No change, however, was made in that portion of the 1938 law now before us pertaining to the right of the workman to recover both workman’s compensation and damages from a negligent third party. In the instant case the workman brought the damage action. In ordér to avoid any room for misunderstanding it may be well to state appellants have expressly informed us that the question of the enforcement of their statutory lien on the recovery of damages by the workman is now being litigated in another action and that the only question involved in the instant appeal is whether:

“The court erred in awarding claimant compensation for disability subsequent to February 1, 1946, for the reason that on said date claimant recovered a judgment against a negligent third party for damages for the identical personal injuries which resulted in the disability for which the court awarded compensation.”

As previously indicated, we think the trial court did not err. If we held otherwise a workman might in some cases realize less than he could recover-under the compensation law alone. Such a result would be clearly indicated in the instant case if the workman had recovered a judgment for damages in the sum of only $1,000 or any other amount less than is recoverable under the compensation act. We think the legislature did not intend such a result.

The judgment is affirmed.

Hoch, J., not participating.