Kroemer v. Omaha Track Equip. , 296 Neb. 972 ( 2017 )


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    www.nebraska.gov/apps-courts-epub/
    08/04/2017 09:08 AM CDT
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    296 Nebraska R eports
    KROEMER v. OMAHA TRACK EQUIP.
    Cite as 
    296 Neb. 972
    Norman K roemer, appellee, v. Omaha Track
    Equipment, L.L.C., and The Tie Yard of Omaha,
    now known as Omaha Track, I nc., appellees,
    and R ibbon Weld, LLC, appellant.
    ___ N.W.2d ___
    Filed June 16, 2017.    No. S-16-856.
    1.	 Statutes: Appeal and Error. Statutory interpretation presents a ques-
    tion of law, for which an appellate court has an obligation to reach
    an independent conclusion irrespective of the decision made by the
    court below.
    2.	 Workers’ Compensation: Judgments: Appeal and Error. Distribution
    of the proceeds of a judgment or settlement under Neb. Rev. Stat.
    § 48-118.04 (Reissue 2010) is left to the trial court’s discretion and
    reviewed for an abuse of that discretion.
    3.	 Judges: Words and Phrases. A judicial abuse of discretion requires
    that the reasons or rulings of a trial judge be clearly untenable, unfairly
    depriving a litigant of a substantial right and a just result.
    4.	 Workers’ Compensation: Subrogation. Neb. Rev. Stat. § 48-118
    (Reissue 2010) grants an employer who has paid workers’ compensation
    benefits to an employee injured as a result of the actions of a third party
    a subrogation interest against payments made by the third party.
    5.	 Workers’ Compensation. A settlement of a third-party claim is void
    under Neb. Rev. Stat. §48-118.04(1) (Reissue 2010) unless the settle-
    ment is either agreed upon in writing by the employee and employer or
    its insurer or determined by the court to be fair and reasonable.
    6.	 Workers’ Compensation: Insurance. In determining the fairness and
    reasonableness of a settlement of a third-party claim under the Nebraska
    Workers’ Compensation Act, a court considers liability, damages, and
    the ability of the third person and his or her liability insurance carrier to
    satisfy any judgment.
    7.	 Workers’ Compensation: Subrogation. The policies behind the
    Nebraska Workers’ Compensation Act favor a liberal construction in
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    favor of an employer’s statutory right to subrogate against culpable
    third parties.
    8.	 Workers’ Compensation: Insurance: Case Disapproved. In re Estate
    of Evertson, 
    23 Neb. Ct. App. 734
    , 
    876 N.W.2d 678
    (2016), is disapproved
    to the extent that the court considered payment of premiums and com-
    parative risk in allocating none of the proceeds of a workers’ compensa-
    tion settlement to the insurer.
    9.	 Workers’ Compensation: Subrogation: Equity. Although Neb. Rev.
    Stat. § 48-118.04(2) (Reissue 2010) calls for a fair and equitable distri-
    bution, subrogation in workers’ compensation cases is based on statute,
    and not in equity.
    10.	 Workers’ Compensation: Insurance: Equity. A distribution of the pro-
    ceeds of a judgment or settlement under Neb. Rev. Stat. § 48-118.04(2)
    (Reissue 2010) must be fair and equitable to both the employee and the
    employer or its insurer.
    Appeal from the District Court for Douglas County: J
    Russell Derr, Judge. Affirmed in part, and in part reversed
    and remanded with direction.
    Julie A. Jorgensen, of Morrow, Willnauer, Klosterman &
    Church, L.L.C., for appellant.
    Ronald L. Brown, of Brown & Theis, L.L.P., for appellee
    Norman Kroemer.
    Gregory F. Schreiber and Albert M. Engles, of Engles,
    Ketcham, Olson & Keith, P.C., and, on brief, Brock S.J.
    Hubert, for appellee Omaha Track Equipment, L.L.C.
    Wright, Miller-Lerman, Cassel, Stacy, K elch, and
    Funke, JJ.
    Cassel, J.
    I. INTRODUCTION
    An injured employee proposed to settle his third-party suit
    for $150,000. His employer, which had a subrogation interest
    of over $200,000, contested the settlement. The district court
    determined that the settlement was fair and reasonable but
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    allocated none of it to the employer. Because of the disputed
    litigation risk, approval of the settlement was not an abuse of
    discretion. But under our statutory scheme, the allocation of
    zero to the employer was legally untenable. We affirm in part
    and in part reverse, and remand with direction.
    II. BACKGROUND
    At the relevant time, Ribbon Weld, LLC, and Omaha Track
    Equipment, L.L.C. (OTE), were both wholly owned subsid­
    iaries of The Tie Yard of Omaha, now known as Omaha Track,
    Inc. Ribbon Weld’s employees occasionally used OTE’s shop
    to service their equipment and, while doing so, used OTE’s
    tools. Norman Kroemer, a Ribbon Weld employee, sustained
    an eye injury in connection with the use of OTE’s tools at
    OTE’s shop.
    Kroemer and Ribbon Weld entered into a compromise lump-
    sum settlement for $80,000, which the Nebraska Workers’
    Compensation Court approved. After payment of the lump
    sum, Ribbon Weld’s subrogation interest totaled $207,555.01.
    Kroemer then sued OTE, The Tie Yard of Omaha, and
    Ribbon Weld. The suit alleged negligence. Kroemer made
    Ribbon Weld a party “for the limited purpose provided by
    [Neb. Rev. Stat. §] 48-118 [(Reissue 2010)].” OTE asserted
    numerous affirmative defenses, including comparative negli-
    gence. In Ribbon Weld’s answer, it asked that any recovery by
    Kroemer be subject to its subrogation right.
    Kroemer and OTE engaged in mediation to settle the third-
    party claim. Ultimately, they negotiated a compromise settle-
    ment of claims in the amount of $150,000. Although Ribbon
    Weld did not contribute or share in litigation expenses, it con-
    tested the proposed settlement.
    The district court held a settlement and allocation hearing
    under Neb. Rev. Stat. § 48-118.04 (Reissue 2010). Kroemer
    testified about the accident and injury, which occurred as he
    and a coworker endeavored to cut through a “spot-weld on
    [an] Allen wrench.” Kroemer planned to hold the Allen wrench
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    and socket with a pair of pliers as his coworker ­       operated
    a “Milwaukee grinder with the wheel.” When Kroemer’s
    coworker started the grinder, the wheel exploded, sending
    shrapnel into Kroemer’s face and left eye. Kroemer was wear-
    ing safety glasses but not a face shield. After undergoing three
    surgeries, Kroemer ultimately sustained a 95-percent loss of
    vision in his eye. Due to the injury, Kroemer no longer physi-
    cally qualified for a commercial driver’s license. He returned
    to work with Ribbon Weld, but had restrictions of light-duty
    work and no dusty conditions. Ribbon Weld subsequently
    sold its business, and Kroemer lost his employment a short
    time later.
    The district court received evidence concerning the value
    of Kroemer’s case. One expert opined that “there was a very
    substantial probability (80%-90%) of a jury verdict for the
    defendants were the case to proceed to trial.” He stated that
    a jury could have easily determined that Kroemer’s compara-
    tive fault was greater than 50 percent. Another expert valued
    Kroemer’s claim in the range of $850,000 to $1,250,000,
    before consideration of comparative negligence. But he also
    opined that the settlement of $150,000 was in Kroemer’s best
    interests, due to the high probability of a jury verdict for the
    defendants. Ribbon Weld’s expert opined that it was “more
    than likely (70-80% chance) that a Plaintiff’s verdict would
    be reached,” that a jury would likely assess “contributory neg-
    ligence” in the range of 25 to 35 percent, and that Kroemer
    would have likely recovered in excess of $500,000 if the case
    proceeded to trial. Ribbon Weld’s expert believed that the
    settlement was inadequate given the value of the case and that
    the settlement appeared to have been accepted with the inten-
    tion of no, or very minimal, payback to Ribbon Weld of the
    subrogation amount.
    The district court determined that the settlement of $150,000
    was reasonable. It made the following allocation: $94,834.27
    to Kroemer, $55,165.73 for attorney fees and expenses, and
    $0 to Ribbon Weld.
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    KROEMER v. OMAHA TRACK EQUIP.
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    Ribbon Weld appealed, and we granted its petition to bypass
    review by the Nebraska Court of Appeals. We subsequently
    ordered supplemental briefing, which we have considered in
    resolving this appeal.
    III. ASSIGNMENTS OF ERROR
    Ribbon Weld assigns that the district court erred in (1) find-
    ing the settlement to be fair and reasonable and (2) finding that
    an allocation of $0 to Ribbon Weld was fair and equitable.
    IV. STANDARD OF REVIEW
    [1] Statutory interpretation presents a question of law, for
    which an appellate court has an obligation to reach an inde-
    pendent conclusion irrespective of the decision made by the
    court below.1
    [2,3] Distribution of the proceeds of a judgment or settle-
    ment under § 48-118.04 is left to the trial court’s discretion
    and reviewed for an abuse of that discretion.2 A judicial abuse
    of discretion requires that the reasons or rulings of a trial judge
    be clearly untenable, unfairly depriving a litigant of a substan-
    tial right and a just result.3
    V. ANALYSIS
    1. Overview
    [4,5] We first set forth two principles of law under the
    Nebraska Workers’ Compensation Act (the Act).4 First,
    § 48-118 grants an employer who has paid workers’ compensa-
    tion benefits to an employee injured as a result of the actions
    of a third party a subrogation interest against payments made
    by the third party.5 Second, a settlement of a third-party claim
    1
    Estermann v. Bose, ante p. 228, 
    892 N.W.2d 857
    (2017).
    2
    Burns v. Nielsen, 
    273 Neb. 724
    , 
    732 N.W.2d 640
    (2007).
    3
    Id.
    4
    Neb. Rev. Stat. §§ 48-101 to 48-1,117 (Reissue 2010 & Cum. Supp. 2016).
    5
    Burns v. Nielsen, supra note 2.
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    is void under § 48-118.04(1) unless the settlement is either
    agreed upon in writing by the employee and employer (or its
    insurer) or determined by the court to be fair and reasonable.
    We now turn to the assigned errors.
    2. Fairness R easonableness
    and
    Settlement
    of
    [6] Ribbon Weld first challenges the amount of the settle-
    ment. In determining the fairness and reasonableness of a set-
    tlement of a third-party claim under the Act, the court consid-
    ers “liability, damages, and the ability of the third person and
    his or her liability insurance carrier to satisfy any judgment.”6
    We examine these factors in reverse order.
    (a) Ability to Satisfy Judgment
    The record does not contain much evidence as to OTE’s
    ability to satisfy the judgment. Kroemer testified that the
    proposed settlement of $150,000 did not reflect the limits of
    OTE’s insurance policy. Accordingly, the ability of OTE and
    its liability insurance carrier to pay was not an impediment to
    a greater settlement.
    (b) Damages
    The estimated damages in this case were significant.
    Kroemer sustained a 95-percent loss of vision in his left eye.
    Kroemer’s expert valued Kroemer’s claim between $850,000
    to $1,250,000. Ribbon Weld’s expert agreed with an assess-
    ment of damages set forth in a demand letter valuing the case
    at $858,989.86.
    (c) Liability
    Under the facts of this case, the deciding factor on the
    reasonableness of the settlement is the issue of liability.
    Kroemer’s two experts opined that there was a high probability
    6
    § 48-118.04(1)(b).
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    of a jury verdict in favor of OTE. Ribbon Weld’s expert, on
    the other hand, opined that it was “more than likely” a jury
    would return a verdict in Kroemer’s favor and that the jury
    would assess contributory negligence in the range of 25 to
    35 percent.
    Evidence reflected negligence on Kroemer’s part. Kroemer
    planned to hold the Allen wrench with pliers because the vice
    on the table was in use. He knew that using the vice would
    have been safer, and he testified that he would not have been
    injured if a vice were used. Kroemer believed Ribbon Weld’s
    rules or regulations required use of safety glasses and a face
    shield when using a hand grinder. But he was not wearing
    a face shield. As the supervisor, it was Kroemer’s responsi-
    bility to make sure his crew wore safety glasses and a face
    shield. Kroemer testified that when a member of his crew
    used a hand grinder, a guard was required to be affixed to
    the grinder. He did not recall seeing a Ribbon Weld grinder
    without a guard. A guard protects the operator from being
    struck by flying debris generated from using the grinder. But
    the grinder selected by Kroemer’s coworker did not have
    a guard.
    Other evidence lessened the effect of Kroemer’s own neg-
    ligence. On an earlier occasion, an OTE shop foreman told
    Kroemer that OTE employees used the same grinder without
    a guard. That foreman also told Kroemer that they used a
    7-inch wheel on a 4-inch grinder. Although a person using a
    hand grinder should wear a face shield, Kroemer was not the
    person doing the grinding. Further, Kroemer did not select
    the grinder. And Ribbon Weld points out that a guard may
    not have prevented the injury because Kroemer was injured
    as a result of the tool’s exploding—not by any debris result-
    ing from grinding. Kroemer testified that it was possible he
    would have been injured even if the grinder had a guard, but
    that his injury would have been less likely if the grinder had
    a guard.
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    (d) Resolution
    After consideration of the relevant factors, we cannot say
    that the district court abused its discretion in finding the settle-
    ment to be fair and reasonable. Although there was potential
    for a large verdict in Kroemer’s favor, he accepted a greatly
    reduced settlement due to concerns that he would receive noth-
    ing if a jury determined that his comparative negligence was
    50 percent or more. We cannot fault him for declining to take
    this gamble.
    3. A llocation of
    Settlement Proceeds
    Ribbon Weld argues that the district court abused its discre-
    tion in allocating none of the proceeds of Kroemer’s $150,000
    settlement to Ribbon Weld. We observe at the outset that
    Ribbon Weld does not contend the court abused its discre-
    tion in awarding $55,165.73 for attorney fees and expenses.
    At the hearing, Ribbon Weld’s counsel stated that “whatever
    the settlement level is, we do believe that it was obtained by
    [Kroemer’s counsel], and attorney fees and costs are simply
    not an issue in this case.” Thus, our review in this case focuses
    on the allocation of $94,834.27 to Kroemer and of $0 to
    Ribbon Weld.
    (a) Overview
    When an employee injured as a result of a third per-
    son’s tortious conduct receives compensation from his or her
    employer and from the tort-feasor, an issue arises as to how to
    divide any proceeds obtained from the third party. “The obvi-
    ous disposition of the matter is to give the employer so much
    of the negligence recovery as is necessary to reimburse it for
    its compensation outlay, and to give the employee the excess.”7
    7
    10 Arthur Larson et al., Larson’s Workers’ Compensation Law § 110.02 at
    110-3 (2016).
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    Doing so prevents a double recovery by the employee. “Under
    most subrogation statutes the payor of compensation gets
    reimbursement for the amount of its expenditure as a first
    claim upon the proceeds of the third-party recovery, and the
    employee gets the excess.”8 But since 1994, our Legislature
    has rejected that approach. Our statute clearly mandates that
    proceeds in excess of the employer’s subrogation interest must
    be paid forthwith to the employee.9 But how the remaining
    proceeds should be divided does not automatically allocate first
    claim to the employer.
    At least two states have statutes that reject the employer-
    first approach and yet provide for a fully or partially guar-
    anteed allocation to the employee. Wisconsin mandates that
    after deducting the reasonable cost of collection, the injured
    employee receives, at a minimum, one-third of the amount
    recovered.10 In Georgia, a statute provides that an employer or
    insurer may recover on its subrogation lien only “if the injured
    employee has been fully and completely compensated, taking
    into consideration both the benefits received under this chapter
    and the amount of the recovery in the third-party claim, for all
    economic and noneconomic losses incurred as a result of the
    injury.”11 We have described the latter concept as the “made
    whole” doctrine.12
    Nebraska’s current statute rejects both the “first claim” and
    the “made whole” doctrines. Under § 48-118.04(2), the trial
    court is required to “order a fair and equitable distribution of
    the proceeds of any judgment or settlement.” The distribution
    is left to the court’s discretion and “simply requires the court
    to determine a reasonable division of the proceeds among the
    8
    
    Id., § 117.01[1]
    at 117-2.
    9
    See § 48-118.
    10
    See Wis. Stat. Ann. § 102.29(1)(b) (West Cum. Supp. 2016).
    11
    Ga. Code Ann. § 34-9-11.1(b) (2008).
    12
    See Turco v. Schuning, 
    271 Neb. 770
    , 
    716 N.W.2d 415
    (2006).
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    parties.”13 Prior to a 1994 amendment to § 48-118,14 “employers
    and insurers were subrogated ‘dollar for dollar’ in any recovery
    against a third-party tort-feasor.”15 But through the amend-
    ment, employers and insurers were “subrogated for the amount
    judicially determined to be a fair and equitable division of the
    settlement under the circumstances.”16 We have determined that
    “[t]here is no indication, either in the statutory language or the
    legislative history, that § 48-118.04 was intended to infringe
    on the right of subrogation guaranteed by § 48-118 beyond the
    extent necessary to effectuate a reasonable settlement.”17 We
    have also stated that a fair and equitable distribution does not
    require that an employee be “made whole” or that tort proceeds
    be split proportionately.18
    (b) Bacon v. DBI/SALA
    [7] We discussed the purposes of the Act vis-a-vis work-
    ers’ compensation subrogation in Bacon v. DBI/SALA.19 We
    explained that “the beneficent purposes of the Act concern
    the employee’s ability to promptly obtain workers’ compensa-
    tion benefits—not the employee’s ability to additionally retain
    recovery against negligent third parties in tort actions.”20 We
    found “no reason to conclude that the beneficent purposes
    of the Act require us to narrowly interpret the employer’s
    statutory subrogation rights.”21 Rather, we determined that “the
    13
    See Burns v. Nielsen, supra note 
    2, 273 Neb. at 735
    , 732 N.W.2d at 650.
    14
    See 1994 Neb. Laws, L.B. 594.
    15
    Turney v. Werner Enters., 
    260 Neb. 440
    , 446, 
    618 N.W.2d 437
    , 441
    (2000).
    16
    
    Id. at 446,
    618 N.W.2d at 442.
    17
    Burns v. Nielsen, supra note 
    2, 273 Neb. at 732
    , 732 N.W.2d at 648.
    18
    See Turco v. Schuning, supra note 12.
    19
    Bacon v. DBI/SALA, 
    284 Neb. 579
    , 
    822 N.W.2d 14
    (2012).
    20
    
    Id. at 588,
    822 N.W.2d at 24.
    21
    
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    policies behind the Act favor a liberal construction in favor of
    the employer’s statutory right to subrogate against culpable
    third parties.”22 In an effort to balance the rights of injured
    employees against the costs to employers, most workers’ com-
    pensation acts “liberally allow employers to shift liability onto
    third parties whenever possible.”23 We iterated that “§ 48-118
    was enacted ‘for the benefit of the employer’”24 and that
    where a third party negligently causes the employee’s injury,
    “‘employers who are required to compensate employees for
    injuries are intentionally granted a measure of relief equivalent
    to the compensation paid and the expenses incurred.’”25
    (c) In re Estate of Evertson
    Recently, the Court of Appeals affirmed an allocation of
    zero to a workers’ compensation carrier in In re Estate of
    Evertson.26 In that case, the carrier claimed a subrogation inter-
    est in the entire $250,000 settlement allocated to the victim’s
    surviving spouse. The county court found that a fair and equi-
    table distribution was for the spouse to receive $207,416.69,
    for the attorneys to receive $42,583.31, and for the carrier to
    receive nothing.
    In affirming the county court’s distribution, the Court of
    Appeals set out the factors considered by the county court.
    The Court of Appeals noted that the county court considered
    the victim’s lengthy marriage and “factors such as that [the
    workers’ compensation carrier] had charged and received the
    necessary premiums to provide workers’ compensation cov-
    erage . . . and that under all the circumstances, [the work-
    ers’ compensation carrier’s] financial risk was minimal and
    22
    
    Id. 23 Id.
    24
    
    Id. 25 Id.
    26
    In re Estate of Evertson, 
    23 Neb. Ct. App. 734
    , 
    876 N.W.2d 678
    (2016),
    vacated on other grounds 
    295 Neb. 301
    , 
    889 N.W.2d 73
    .
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    insurance companies are in the business of assuming risk.”27
    The Court of Appeals disagreed with the carrier’s “assessment
    that the county court was considering an equitable assessment
    in considering there was no evidence that [the workers’ com-
    pensation carrier] helped finance the settlement.”28 Instead,
    the Court of Appeals stated that “the county court’s language
    indicates that the court was considering that [the workers’
    compensation carrier] did not expend any funds in securing the
    settlement.”29 Ultimately, the Court of Appeals could not say
    that the county court abused its discretion in distributing the
    settlement proceeds.
    We granted further review in In re Estate of Evertson. But
    because we determined that the county court lacked subject
    matter jurisdiction to hear and decide the subrogation matter,
    we did not reach the merits of the appeal—which included the
    carrier’s assignment that the Court of Appeals erred in affirm-
    ing a distribution that was not fair and equitable.30
    In the instant case, the district court clearly relied on the
    Court of Appeals’ decision in In re Estate of Evertson in mak-
    ing its distribution. After reciting the above-quoted language
    from In re Estate of Evertson, the court stated that it considered
    the nature of Kroemer’s loss, the substantial damages he suf-
    fered, the insurer’s charging and receiving a premium of nearly
    $175,000 for the insurance coverage, and the “comparative
    risk to the insurance carrier versus Kroemer.” But neither the
    district court in the instant case nor the Court of Appeals in
    In re Estate of Evertson considered the effect of our decision
    in Bacon.
    The reasoning in In re Estate of Evertson is flawed for
    several reasons. First, the payment of premiums for workers’
    27
    
    Id. at 741,
    876 N.W.2d at 684.
    28
    
    Id. 29 Id.
    30
    See In re Estate of Evertson, 
    295 Neb. 301
    , 
    889 N.W.2d 73
    (2016).
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    compensation coverage is not an appropriate factor to con-
    sider in distributing proceeds recovered from a third party.
    “The . . . Act requires, with few exceptions, that every
    employer carry workers’ compensation insurance.”31 Thus, an
    employer (or its insurer) should not be stripped of its statu-
    tory subrogation right for obtaining such insurance.
    Second, the comparative risk between an insurance com-
    pany and employee is likewise an inappropriate factor. Every
    insurance company is in the business of assuming risk.
    Consideration of this factor would nearly always elevate the
    employee’s right to the proceeds over that of the employer or
    its insurer.
    Third, in making a distribution of the recovery, consider-
    ation of an employer’s or its insurer’s participation in obtain-
    ing the settlement is suspect. The statutes give the employer
    or its insurer the option to actively prosecute its subrogation
    claim or to allow the employee to prosecute the claim and then
    obtain a portion of the recovery and share in the expenses.32
    An employer’s (or its insurer’s) right to reimbursement is pre-
    served even if it selects the latter option.
    Fourth, the county court and Court of Appeals gave short
    shrift to the right of the employer or its insurer to recover
    on its subrogation interest. We have stated that § 48-118
    “encourag[es] prompt payment of benefits, even when a
    third party is liable for the injury, by providing an employer
    or insurer with the means to recover at least a portion of
    its payout.”33 The lower courts in In re Estate of Evertson
    did not allow the insurer to recover any of its payout.
    Frankly, it is difficult to imagine a situation in which an
    allocation of $0 to an employer or insurer with a sizable
    31
    Travelers Indemnity Co. v. International Nutrition, 
    273 Neb. 943
    , 945, 
    734 N.W.2d 719
    , 722 (2007).
    32
    See, generally, §§ 48-118 to 48-118.03 (Reissue 2010).
    33
    Burns v. Nielsen, supra note 
    2, 273 Neb. at 733
    , 732 N.W.2d at 649.
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    subrogation interest would be a fair and equitable distribution
    of proceeds.
    [8] We disapprove the Court of Appeals’ decision in In re
    Estate of Evertson34 to the extent that the court considered
    payment of premiums and comparative risk in allocating none
    of the proceeds of the settlement to the insurer.
    (d) Distribution in Instant Case
    [9] The district court’s distribution in this case ignored
    Ribbon Weld’s statutory right to subrogation. Under § 48-118,
    Ribbon Weld is entitled to “reimbursement, under the right
    of subrogation, of any compensation paid.” Instead, the court
    allocated nothing to Ribbon Weld. Although the court did not
    explicitly use “made whole” language, it essentially applied a
    “made whole” formulation when it denied Ribbon Weld any
    recovery. We have found error when a trial court concluded
    that the worker had to be “made whole” before the subrogated
    compensation carrier was entitled to any portion of the settle-
    ment.35 And although the statute calls for a “fair and equitable
    distribution,”36 subrogation in workers’ compensation cases is
    based on statute, and not in equity.37
    [10] The district court appeared to focus on a distribution
    that would be equitable only to Kroemer. But the distribu-
    tion must be “fair and equitable”38 to both the employee and
    the employer or its insurer. Although Kroemer’s damages
    may have been worth over $800,000, Ribbon Weld paid over
    $200,000 in workers’ compensation benefits to Kroemer for
    an accident for which OTE was liable. Ribbon Weld was
    34
    In re Estate of Evertson, supra note 26.
    35
    See Turco v. Schuning, supra note 12. See, also, Sterner v. American Fam.
    Ins. Co., 
    19 Neb. Ct. App. 339
    , 
    805 N.W.2d 696
    (2011).
    36
    § 48-118.04(2).
    37
    See Burns v. Nielsen, supra note 2.
    38
    § 48-118.04(2).
    - 986 -
    Nebraska Supreme Court A dvance Sheets
    296 Nebraska R eports
    KROEMER v. OMAHA TRACK EQUIP.
    Cite as 
    296 Neb. 972
    entitled to some portion of Kroemer’s settlement with OTE.
    The court’s denial of the same was untenable and must be
    reversed. But we review a district court’s allocation for abuse
    of discretion, and thus, it is not for us to dictate a fair and
    equitable distribution in the first instance.
    VI. CONCLUSION
    Under the circumstances, the district court did not abuse
    its discretion in determining that the amount of Kroemer’s
    settlement with OTE was fair and reasonable. We affirm that
    part of the court’s order. But we conclude that the district
    court did abuse its discretion in not allocating any of the
    settlement proceeds to Ribbon Weld. Accordingly, we reverse
    that portion of the court’s order and remand the cause to the
    district court with direction to make a fair and equitable dis-
    tribution between Kroemer and Ribbon Weld of the remaining
    $94,834.27 of the settlement proceeds.
    A ffirmed in part, and in part reversed
    and remanded with direction.
    Heavican, C.J., not participating.