William D. Hunley and wife, Brenda K. Hunley, and Velvac, Inc. v. Silver Furniture Mfg. Co. and Tab Service Corp. - Dissenting

IN THE COURT OF APPEALS OF TENNESSEE
FILED
November 8, 1999
Cecil Crowson, Jr.
Appellate Court Clerk
AT KNOXVILLE
WILLIE D. HUNLEY, JR., and wife ) C/A NO. 03A01-9902-CV-00049
BRENDA K. HUNLEY and )
VELVAC, INC., )
)
Plaintiffs-Appellants, )
)
)
) APPEAL AS OF RIGHT FROM THE
v. ) KNOX COUNTY CIRCUIT COURT
)
)
)
)
SILVER FURNITURE MANUFACTURING )
CO. and TAB SERVICE CORPORATION, )
) HONORABLE HAROLD WIMBERLY,
Defendants-Appellees. ) JUDGE
DISSENTING OPINION
I dissent from the majority’s holding that the
workers’ compensation carrier for Mr. Hunley’s employer is
subrogated, without further inquiry, to the proceeds of Mrs.
Hunley’s settlement of her loss of consortium claim that arose
out of the work-related injuries sustained by her husband.
I start by observing that the compensation carrier’s
subrogation rights under the relevant statute only extend to
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two types of recovery: a “recovery against [a third-party
tortfeasor] [1] by the worker, or [2] by those to whom such
worker’s right of action survives....” See T.C.A. §
50-6-112(c)(1)(1991). I will examine these two types of
recovery in the order stated.
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In my opinion, it goes without saying that Mrs.
Hunley’s recovery by way of settlement of her loss of
consortium claim is not a “recovery...by the worker [i.e., Mr.
Hunley]”; rather, and obviously, it is a recovery by Mrs.
Hunley. I recognize that Mrs. Hunley’s claim is a derivative
one in the sense that her husband’s “injuries or
incapacities...give rise to and establish [her] claim,” see
Jackson v. Miller, 776 S.W.2d 115, 117 (Tenn.Ct.App. 1989)
(Anderson, J.); but this does not change the basic fact that
Mrs. Hunley’s claim for loss of consortium “is a cause of
action separate from” her husband’s cause of action. Id. In
my judgment, Mrs. Hunley’s claim for loss of consortium
clearly does not fall within the “recovery...by the worker”
language of T.C.A. § 50-6-112(c)(1).
To buttress its holding in the instant case, the
majority cites and relies upon the unreported opinion of this
Court in the case of Sexton v. Tri-Cities Insulation, Inc.,
C/A No. 94, 1987 WL 7720 (Tenn.Ct.App., filed March 10, 1987).
I agree that Sexton holds that “an amount allocated to the
wife for loss of consortium [is not] outside the employer’s
subrogation rights[.]” Id., 1987 WL 7720 at **1. In my
judgment, Sexton is no longer — if it ever was — good law. As
Judge Goddard pointed out in his separate concurring opinion
in Sexton, there were, at that time, “no cases supportive of
the conclusion reached” in the majority opinion in Sexton. My
current research has not discovered any authority other than
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Sexton. It should also be noted that Sexton relied upon the
case of Beam v. Maryland Casualty Co., 477 S.W.2d 510 (Tenn.
1972), a Supreme Court case holding that the employer’s
subrogation rights under T.C.A. § 50-
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914 (now T.C.A. § 50-6-112) extend to that portion of a
settlement of a wrongful death claim that inures to the
benefit of the children of the deceased employee. I believe
that the holding in Beam was impliedly altered by the Supreme
Court’s decision in the recent case of Jordan v. Baptist Three
Rivers Hosp., 984 S.W.2d 593 (Tenn. 1999).
When Beam was decided, the Tennessee wrongful death
statutory provisions had basically been construed, for nearly
a century, as a survival type of wrongful death scheme. Jones
v. Black, 539 S.W.2d 123, 124-25 (Tenn. 1976). This being the
case, it was logical for the Supreme Court in Beam to hold
that the entire settlement of the wrongful death claim in that
case was subject to the employer’s subrogation rights. If the
wrongful death claim is authorized under “survival”
legislation, then it is clear that a wrongful death recovery
is, in the language of the subrogation statute, a “
recovery...by those to whom such worker’s right of action
survives.”
I believe that Jordan necessarily changes the ruling
in Beam because Jordan clearly holds that the Tennessee
wrongful death statutory scheme, in addition to authorizing a
survival action, “creates a cause of action that compensates
survivors for their losses.” Jordan, 984 S.W.2d at 598.
(Emphasis added). Interestingly enough, Jordan holds that the
damages suffered by the decedent’s next-of-kin, as
differentiated from the deceased’s cause of action which
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survives the latter’s death, include loss of consortium. I
conclude from this that if the Supreme Court were presented
today with the facts in Beam, it would hold that the
non-economic loss of consortium action by the widow and
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children in their own right, as opposed to the damages in the
survival action, does not fall within the survival language of
the subrogation statute. 1
Since I believe the holding in Jordan “trumps” the
holding in Beam, and since Sexton relied extensively on Beam,
I do not feel bound by Sexton. As I have previously
indicated, I am not aware of any Supreme Court authority
holding that a compensation carrier’s subrogation rights
extend to a loss of consortium claim of an injured employee’s
spouse.
In Jordan, the Supreme Court noted that loss of
consortium
consists of several elements, encompassing
not only tangible services provided by a
family member, but also intangible
benefits each family member receives from
the continued existence of other family
members. Such benefits include attention,
guidance, care, protection, training,
companionship, cooperation, affection,
love, and in the case of a spouse, sexual
relations.
Id. at 602. As can be seen, these losses, being non-economic
in nature, are totally unrelated to the wage-based
compensation entitlement involved in the workers’ compensation
statutory scheme. There is no “diminish[ing] [of] the employer
’s subrogation rights granted under [T.C.A. § 50-6-112(c)(1)],”
see Heggie v. Cumberland Electric Membership Corp., 790
S.W.2d 284, 286-87 (Tenn.Ct.App. 1990), by a ruling that
prevents the compensation carrier from reaching these
non-economic damages. This, coupled with the plain language
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of the statute, convinces
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me that a recovery of consortium damages does not fall within
the statutory language, “recovery...by the worker.”
It is clear that the second type of recovery
described in the subrogation statute — “recovery...by those to
whom such worker’s right of action survives” — has absolutely
no bearing on the decision in this case. As I have previously
noted, the claim of a spouse of an injured worker for loss of
consortium is not “the worker’s right of action.” In
addition, and more importantly, the concept of “surviv[al]” in
the language under discussion is obviously not relevant to a
worker, such as Mr. Hunley, whose injuries did not result in
death.
I would hold that neither of the two types of
recovery described in the subrogation statute are present in
this case.
My dissent is made with one caveat. While I would
reverse the judgment of the trial court holding that the
compensation carrier has an absolute right to pursue its
subrogation rights as to Mrs. Hunley’s settlement, I would
remand for a hearing by the court below to determine if the
allocation of $200,000 to settle Mrs. Hunley’s claim is a
reasonable allocation of the total settlement of $400,000.
Since a tortfeasor and its liability insurance carrier
typically do not care how multiple plaintiffs divide up a
total settlement as long as all of the claims are released, I
do not believe that the willingness of a defendant or his
carrier to pay a certain amount in settlement of a claim is
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prima facie evidence of its reasonableness. Therefore, it
seems to me that a compensation carrier should have the right
to question whether an allocation of a part of a total
settlement to the consortium claim is reasonably related to
the parties’ respective injuries and losses or is just a sham
to partially avoid the carrier’s subrogation rights with
respect to the injured employee’s third-party claim.
The sum and substance of my dissent can be reduced
to this finding: I believe the language of T.C.A. §
50-6-112(c)(1), given its ordinary and usual meaning and
construed so as to avoid an unreasonable result, does not
extend the statutory subrogation rights of the compensation
carrier to the reasonable settlement value of Mrs. Hunley’s
separate claim for loss of consortium.
__________________________
Charles D. Susano, Jr., J.
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