Strasburg v. Union Pacific RR. Co.

Nebraska Advance Sheets
STRASBURG v. UNION PACIFIC RR. CO. 743
Cite as 286 Neb. 743
as the district court noted, this was a probation violation, we
conclude that the district court did not abuse its discretion in
sentencing Leibel to 90 days in jail.
CONCLUSION
For the foregoing reasons, we affirm the judgment of the
district court.
Affirmed.
Shawn T. Strasburg, appellee, v. Union Pacific
Railroad Company, a Delaware
corporation, appellant.
___ N.W.2d ___
Filed November 1, 2013. No. S-12-999.
1. Statutes: Appeal and Error. Statutory interpretation is a question of law that an
appellate court resolves independently of the trial court.
2. Contracts: Compromise and Settlement: Appeal and Error. Allocation of a
settlement agreement is reviewed for an abuse of discretion.
3. Torts: Damages. The collateral source rule provides that benefits received by the
plaintiff from a source wholly independent of and collateral to the wrongdoer will
not diminish the damages otherwise recoverable from the wrongdoer.
4. Torts: Damages: Tort-feasors: Liability. The theory underlying the collateral
source rule is to prevent a tort-feasor from escaping liability because of the act
of a third party, even if a possibility exists that the plaintiff may be compen-
sated twice.
5. Torts: Damages: Insurance: Tort-feasors. Under the collateral source rule, the
fact that the party seeking recovery has been wholly or partially indemnified for
a loss by insurance or otherwise cannot be set up by the wrongdoer in mitiga-
tion of damages. But if the tort-feasor contributed in some way to the benefits
provided to the injured person, then the tort-feasor might be entitled to mitigation
of damages.
6. Statutes: Appeal and Error. Absent anything to the contrary, an appellate court
will give statutory language its plain and ordinary meaning.
7. Federal Acts: Railroads: Employer and Employee: Liability: Compromise
and Settlement. Under the Federal Employers’ Liability Act (FELA), when an
injured employee has alleged that both a FELA and a non-FELA defendant are
responsible for the injury, the majority rule holds that a settlement with the non-
FELA defendant results in a dollar-for-dollar offset in the judgment against the
nonsettling FELA defendant.
8. Federal Acts: Railroads: Liability: Compromise and Settlement. There is no
loss of consortium recovery in an action under the Federal Employers’ Liability
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Act, and any settlement reached on a loss of consortium claim is not subject to
setoff against the defendant in such action.
9. Contracts: Compromise and Settlement: Proof. The burden to show that the
allocation set forth in a settlement agreement was not reasonable lies with the
party seeking credit against the settlement.
10. Judgments: Appeal and Error. As a general proposition, an appellate court does
not require a district court to explain its reasoning. Only in certain situations is
a court required to make findings of fact, typically by request, or as required by
statute or court rule.
Appeal from the District Court for Douglas County: Marlon
A. Polk, Judge. Affirmed.
Gary J. Nedved and Joel Bacon, of Keating, O’Gara, Nedved
& Peter, P.C., L.L.O., for appellant.
William Kvas, Richard J. Dinsmore, and Katie Figgins
for appellee.
Heavican, C.J., Wright, Connolly, Stephan, McCormack,
Miller-Lerman, and Cassel, JJ.
Heavican, C.J.
I. INTRODUCTION
Shawn T. Strasburg filed an action under the Federal
Employers’ Liability Act (FELA), 45 U.S.C. § 51 et seq.
(2006), against Union Pacific Railroad Company (Union
Pacific). Strasburg alleged that he was injured in the course
of his employment and that his injuries were caused by Union
Pacific’s negligence. A jury trial was held, and a verdict
was entered for Strasburg in the amount of $1,032,375.43.
Following trial, the district court allowed Union Pacific to
set off the verdict in the amount of $425,000 because of a
settlement reached with another defendant, and additionally
enforced a medical lien in the amount of $139,845.03 against
that settlement. Union Pacific appeals.
II. FACTUAL BACKGROUND
On March 12, 2009, Strasburg was employed as a carman for
Union Pacific. On that day, he was attending a Union Pacific
safety class taught by Union Pacific employees. That class
was held at a community college in North Platte, Nebraska,
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Cite as 286 Neb. 743
in a classroom which was solely dedicated to the instruction
of Union Pacific employees. Ironically, while Strasburg was
attending this safety class, the chair upon which Strasburg
was seated collapsed, causing injury to Strasburg’s back which
necessitated disk replacement surgery.
Strasburg filed a FELA action against Union Pacific and
also filed suit against the manufacturer of the chair, Steelcase
Inc. (Steelcase). In addition, Strasburg’s wife, Robin Strasburg,
filed suit against Steelcase, alleging loss of consortium.
Strasburg and Robin settled their case against Steelcase for
$725,000. Per the terms of the agreement, the settlement was
allocated at $425,000 for Strasburg’s claim and $300,000 for
Robin’s claim.
Prior to trial, Union Pacific filed for a medical lien against
the Steelcase settlement in the amount of $135,151.01, the
amount it had paid out on Strasburg’s behalf as of that time. A
hearing was held, but the district court declined to enforce the
lien at that time, concluding that the lien rights should not be
determined until after the conclusion of the FELA action.
A jury trial was held. The primary issue litigated at trial
was of causation. There was no dispute at trial regarding the
necessity or payment of Strasburg’s medical bills. The trial
court admitted exhibit 27, which was a list of Strasburg’s
medical and prescription expenses. That exhibit indicated that
Strasburg had total medical expenses of $261,413.43 as billed
by the providers. This exhibit was the only evidence pre-
sented at trial regarding medical expenses; Union Pacific
and Strasburg stipulated to its admissibility. But in fact,
Union Pacific had contracted with Strasburg’s medical pro-
viders to pay a reduced rate on Strasburg’s behalf, an amount
reflected in the various medical liens Union Pacific filed
against Strasburg.
The jury returned a general verdict for Strasburg in the
amount of $1,032,375.43. Neither party requested a special
verdict form.
Following the verdict, Union Pacific filed a motion for new
trial and a renewed motion to enforce the medical lien against
settlement proceeds. The latter motion requested a lien on
the Steelcase settlement in the amount of $139,945.03, or the
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amount that had been paid out to date in medical benefits on
Strasburg’s behalf. Though not entirely clear from the record,
it appears the difference in the lien amount sought prior to and
after trial was due to other bills that had been paid by Union
Pacific in the interim.
A hearing was held on these motions. Several issues were
discussed at that hearing. One issue was the motion for new
trial, which was later denied. Any issues relating to that denial
have not been appealed.
Also at issue at the hearing was the lien for medical
expenses and the appropriate amount of the medical expense
setoff. Union Pacific alleged that it was entitled to a lien
against the Steelcase settlement in the amount of $139,945.03
for medical expenses paid, and was also entitled to a setoff for
the difference between the total amount of Strasburg’s bills—
$261,413.43—and the amount actually paid to settle those
bills—$139,945.03—or $121,468.40. Explained simply, Union
Pacific argues that it was entitled to a setoff of the entire
amount of Strasburg’s medical expenses—$261,413.43—
and not just a setoff for the amount actually paid to settle
those bills.
Finally, Union Pacific sought a setoff for the amount of the
settlement with Steelcase that was attributable to Strasburg’s
claims. But Union Pacific alleged that the allocation reflected
in the settlement agreement—$425,000 for Strasburg and
$300,000 for Robin—should be modified to more accurately
reflect the relative injury suffered by each.
The district court granted the motion to enforce the medi-
cal lien for the amount paid by Union Pacific, but denied
Union Pacific’s request to set off the remainder of the medical
expenses as reflected in exhibit 27. (Note that the district court
allowed the lien in the amount of $139,845.03, although Union
Pacific had requested a lien in the amount of $139,945.03.
This $100 difference was apparently the result of an error by
the district court, with which the parties do not take issue on
appeal.) The district court declined to modify the allocation of
the Steelcase settlement, but allowed Union Pacific a setoff of
$425,000 against the jury verdict for that settlement.
Union Pacific appeals.
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Cite as 286 Neb. 743
III. ASSIGNMENTS OF ERROR
Union Pacific assigns that the district court erred in (1) not
allowing a setoff of the portion of Strasburg’s medical bills that
were written off by Strasburg’s medical providers as a result
of negotiations between Union Pacific and the providers and
(2) not modifying the allocation of the Strasburgs’ settlement
with Steelcase and setting off that reallocated amount from
the verdict.
IV. STANDARD OF REVIEW
[1] Statutory interpretation is a question of law that an
appellate court resolves independently of the trial court.1
[2] Allocation of a settlement agreement is reviewed for an
abuse of discretion.
V. ANALYSIS
1. Setoff for Medical Expenses
On appeal, Union Pacific assigns that the district court
erred in not permitting it to set off the portion of Strasburg’s
medical bills as reflected in exhibit 27 that were written off
by Strasburg’s medical providers as a result of negotiations
between Union Pacific and the providers, an amount referred
to herein as the “writeoff amount.” We note Strasburg’s medi-
cal expenses were paid by Union Pacific Railroad Employes
Health Systems, which is a third-party administrator for
Union Pacific’s health plan. Any rights Union Pacific Railroad
Employes Health Systems might have against Strasburg have
been assigned to Union Pacific, and accordingly, we refer to
Union Pacific Railroad Employes Health Systems as “Union
Pacific” for ease of comprehension.
There is no dispute that Union Pacific is entitled to a
lien for the amount actually paid; such a lien was requested
by Union Pacific and enforced by the district court. The
only issue on appeal is whether the district court erred
when it denied Union Pacific’s request to also set off the
writeoff amount.
1
DMK Biodiesel v. McCoy, 285 Neb. 974, 830 N.W.2d 490 (2013).
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(a) Legal Framework
[3-5] We begin with an explanation of the underlying legal
principles, in particular the collateral source rule and 45 U.S.C.
§ 55. The collateral source rule provides that benefits received
by the plaintiff from a source wholly independent of and collat-
eral to the wrongdoer will not diminish the damages otherwise
recoverable from the wrongdoer.2 The theory underlying the
adoption of this rule by a majority of jurisdictions is to prevent
a tort-feasor from escaping liability because of the act of a
third party, even if a possibility exists that the plaintiff may be
compensated twice.3 Under the collateral source rule, the fact
that the party seeking recovery has been wholly or partially
indemnified for a loss by insurance or otherwise cannot be
set up by the wrongdoer in mitigation of damages.4 But if the
tort-feasor contributed in some way to the benefits provided
to the injured person, then the tort-feasor might be entitled to
mitigation of damages.5
This common-law rule was codified, with modifications, by
45 U.S.C. § 55:
Any contract, rule, regulation, or device whatsoever,
the purpose or intent of which shall be to enable any com-
mon carrier to exempt itself from any liability created by
this chapter, shall to that extent be void: Provided, That
in any action brought against any such common carrier
under or by virtue of any of the provisions of this chap-
ter, such common carrier may set off therein any sum it
has contributed or paid to any insurance, relief benefit,
or indemnity that may have been paid to the injured
employee or the person entitled thereto on account of the
injury or death for which said action was brought.
2
Countryside Co-op v. Harry A. Koch Co., 280 Neb. 795, 790 N.W.2d 873
(2010).
3
Id.
4
Fickle v. State, 274 Neb. 267, 759 N.W.2d 113 (2007).
5
See Huenink v. Collins, 181 Neb. 195, 147 N.W.2d 508 (1966) (citing 25
C.J.S. Damages § 99(2) (1966)).
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This section has been interpreted to mean that if the intent
of “any sum . . . contributed or paid to any insurance, relief
benefit, or indemnity” was in exchange for indemnification
from FELA liability, then setoff is appropriate.6 If not, and if
the intent of the sum is to provide some type of benefit akin
to compensation, then setoff is impermissible.7 It is generally
accepted that although under 45 U.S.C. § 55 a railroad may
set off only the amount of the premiums and not what the pre-
miums bought, this “harsh result” can be avoided “by specific
provision in the collective bargaining agreement.”8
The collective bargaining agreement that governs the
employment relationship between Union Pacific and Strasburg
contains such a provision. As such, Union Pacific and
Strasburg’s union contracted for a limited waiver of FELA
liability. In return for the payment of certain benefits—in this
case, via a health plan which paid all expenses related to an
on-the-job injury—Union Pacific was entitled to indemnifica-
tion from FELA liability. The question remaining is the value
of that indemnification.
(b) Amount of Setoff
Union Pacific contends that in denying its request for a
setoff of the writeoff amount, Union Pacific was denied the
benefit of its bargain under the collective bargaining agreement
and Strasburg was granted a windfall. Strasburg disagrees and
argues that Union Pacific is entitled to set off only those funds
which it paid to settle his medical bills.
Resolution of this issue is a legal question involving the
interpretation of 45 U.S.C. § 55, namely whether the writeoff
amount is “any sum . . . contributed or paid to any insurance,
relief benefit, or indemnity that may have been paid to the
injured employee.”
6
See Folkestad v. Burlington Northern, Inc., 813 F.2d 1377 (9th Cir. 1987).
7
See id.
8
Blake v. Delaware and Hudson Railway Company, 484 F.2d 204, 207 (2d
Cir. 1973) (Friendly, J., concurring). See Folkestad v. Burlington Northern,
Inc., supra note 6.
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[6] Absent anything to the contrary, an appellate court will
give statutory language its plain and ordinary meaning.9 And
the plain meaning of the language used by Congress when
drafting 45 U.S.C. § 55 was that an employer may set off any
sum paid or contributed. Union Pacific did pay certain funds
on Strasburg’s behalf and is undisputedly entitled to a setoff
of $139,845.03 for that payment. But it did not pay or contrib-
ute the writeoff amount, and it is not entitled to set off such
amount under the plain language of 45 U.S.C. § 55.
Nor are we convinced by Union Pacific’s argument that
Strasburg received a windfall where the jury awarded the
medical expenses as billed, when in fact Strasburg paid none of
those expenses. The jury’s verdict was a general one, and thus
it is not possible to know what amount was actually awarded to
Strasburg for his medical expenses.
Moreover, Union Pacific did not object to exhibit 27, the
exhibit which listed all of Strasburg’s medical expenses, and
in fact, Union Pacific stipulated to its admission. Union Pacific
did not offer any other evidence contradicting the impression
left by exhibit 27 that the medical expenses in that exhibit were
actually incurred in full by Strasburg.
The plain language of 45 U.S.C. § 55 does not provide
for a setoff of the insurance writeoff amount. And the record
shows that Union Pacific failed to take actions that might have
prevented the award of medical expenses which Union Pacific
claims the jury made and with which Union Pacific now takes
issue. On these facts, the statute does not require, and equity
does not demand, that Union Pacific’s request be granted. As
such, we conclude that the district court did not err in denying
Union Pacific’s request for setoff of that amount.
Union Pacific’s first assignment of error is without merit.
2. Setoff of Steelcase Settlement
On appeal, Union Pacific assigns that the district court erred
in not closely scrutinizing the Strasburgs’ settlement with
Steelcase. Union Pacific contends the settlement overallocated
9
In re Interest of Zylena R. & Adrionna R., 284 Neb. 834, 825 N.W.2d 173
(2012).
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funds to Robin’s loss of consortium claim while underfund-
ing Strasburg’s claim in an effort to reduce the amount of that
settlement, which was subject to setoff by any verdict received
against Union Pacific.
(a) Factual and Procedural Background
Prior to trial, Strasburg and Robin settled their action against
Steelcase, the company that manufactured the chair on which
Strasburg was sitting when he was injured. The total settlement
was for $725,000. By the terms of the settlement, $425,000
was allocated to Strasburg’s claim and $300,000 was allocated
to Robin’s loss of consortium claim.
Following the verdict, Union Pacific filed for a setoff of
the settlement proceeds and additionally requested that the
district court reallocate more of the settlement to Strasburg. At
a hearing held postverdict on various motions, Union Pacific
introduced into evidence the settlement agreement, a loss of
earning capacity report on Strasburg, and a deposition taken
of Robin. Following the hearing at which the record was left
open, Strasburg filed an affidavit on the issue of the settle-
ment allocation.
The district court granted Union Pacific’s request for setoff
for the Steelcase settlement for $425,000, the amount allocated
to Strasburg’s claim in the settlement agreement. The district
court noted that it had reviewed the briefs and records, but did
not otherwise make any findings regarding the allocation.
(b) Analysis
[7,8] Under FELA, when an injured employee has alleged
that both a FELA and a non-FELA defendant are responsible
for the injury, the majority rule holds that a settlement with the
non-FELA defendant results in a dollar-for-dollar offset in the
judgment against the nonsettling FELA defendant.10 But there
is no loss of consortium recovery in a FELA action, and any
settlement reached on a loss of consortium claim is not subject
to setoff against the FELA defendant.11
10
See Schadel v. Iowa Interstate R.R., Ltd., 381 F.3d 671 (7th Cir. 2004).
11
See Dixon v. CSX Transp., Inc., 990 F.2d 1440 (4th Cir. 1993).
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Union Pacific directs us to case law suggesting, at least in
the workers’ compensation context, that a trial court has the
responsibility to closely scrutinize a settlement agreement to
ensure that an employer’s rights are not abused.12 Union Pacific
further contends that the district court wholly failed to scruti-
nize this settlement. While we agree with Union Pacific that a
district court should not simply rubberstamp a previous settle-
ment in this context, we disagree that the district court failed to
adequately scrutinize this settlement.
[9] The burden to show that the allocation set forth in
the Steelcase settlement was not reasonable lies with the
party seeking credit against the settlement, in this case Union
Pacific.13 In an attempt to meet its burden, Union Pacific intro-
duced an earning capacity report regarding Strasburg, and also
introduced Robin’s deposition testimony, in which Robin indi-
cated that at the time of the settlement, it was not expected that
Strasburg would ever work again. In addition, Robin testified
that it was expected Strasburg would need further surgery, and
that her duties as a parent had significantly increased because
she did many of those duties on her own—in addition to her
duties caring for Strasburg because of his injuries.
In response, Strasburg offered his affidavit indicating that
contrary to Robin’s testimony, Strasburg had submitted to
his physician for comment and review a list of jobs at Union
Pacific that he would be able to perform with his likely
physical restrictions. While it was not definitively decided,
Strasburg contends that at the time of settlement, it was likely
that he would be able to return to work.
[10] Union Pacific argues that the lack of specific find-
ings by the district court shows that the district court failed to
consider the reasonableness of the allocation set forth in the
settlement. As a general proposition, this court does not require
12
See, Rains v. Kolberg Mfg. Corp., 897 P.2d 845 (Colo. App. 1994); Blagg
v. Ill. F.W.D. Truck & Equip. Co., 143 Ill. 2d 188, 572 N.E.2d 920, 157 Ill.
Dec. 456 (1991).
13
See, Davis Erection Co. v. Jorgensen, 248 Neb. 297, 534 N.W.2d 746
(1995); Home Fed. Sav. & Loan v. McDermott & Miller, 243 Neb. 136,
497 N.W.2d 678 (1993).
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a district court to explain its reasoning. Only in certain situa-
tions is a court required to make findings of fact, typically by
request,14 or as required by statute15 or court rule.16 And our
review of the district court’s record does not suggest that the
district court failed to examine the settlement agreement sim-
ply because it did not make specific findings.
First, no request was made asking for such specific find-
ings. Further, the record, in particular the district court’s
order on this issue, shows that the district court presided
over the trial in this matter, received a motion regarding the
proper amount of setoff, and then held a hearing on the setoff
request. And the order disposing of Union Pacific’s motion
specifically noted that the district court had reviewed the
briefs and record.
We decline to presume that the district court simply failed
to consider the motion filed before it when it did not make
findings which no Nebraska case, statute, or rule required
of it, particularly in light of the fact that the language of
the order clearly shows that the request was considered. We
reject Union Pacific’s suggestion that the district court failed
to consider the reasonableness of the agreement. Rather, we
review the district court’s order for an abuse of discretion17
and find none.
The evidence presented at the hearing showed that Robin
was essentially a single parent to the Strasburgs’ four children.
At one point, Robin had a job to help support the family, but
was unable to both work and parent her children effectively.
Strasburg, particularly in the time following the accident and
subsequent medical care and surgery, was not able to provide
much assistance. More surgery was expected. The couple’s
14
Lindgren v. City of Gering, 206 Neb. 360, 292 N.W.2d 921 (1980) (district
court must make specific findings upon request of party).
15
See, In re Interest of Shaquille H., 285 Neb. 512, 827 N.W.2d 501 (2013)
(motion to discharge—speedy adjudication); State v. Williams, 277 Neb.
133, 761 N.W.2d 514 (2009) (motion to discharge—speedy trial); State v.
Constanzo, 235 Neb. 126, 454 N.W.2d 283 (1990) (postconviction).
16
Neb. Ct. R. § 4-203 (rev. 2011).
17
See 47 Am. Jur. 2d Judgments § 830 (2006).
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marriage was strained by the injury and by its emotional and
physical toll on Strasburg. Money was tight; Robin described
it as “living penny by penny.” The couple had to borrow from
Robin’s father, who was retired and on a fixed income, in order
to survive. The children were not able to participate in sports
or other activities.
Union Pacific makes much of the fact that Robin was not
employed during this time, while Strasburg’s injury meant that
the couple was without his wages. Union Pacific also notes
that when the Steelcase settlement was entered, the couple did
not believe that Strasburg would ever work again. But that was
contradicted by Strasburg’s affidavit, which suggested that it
was not a foregone conclusion that he would not work again.
And in fact, the record shows that Strasburg is back at work
as a carman for Union Pacific, admittedly with some physi-
cal restrictions.
Given this evidence, and the evidence presented at trial, it
cannot be said that the district court abused its discretion in
concluding that the settlement was allocated appropriately by
the settlement agreement. The fact that the district court did
not make findings or otherwise explain its decision does not
prevent us from reaching that decision.
Union Pacific’s second assignment of error is without merit.
VI. CONCLUSION
The decision of the district court is affirmed.
Affirmed.