Lamson, Dugan and Murray, LLP, Attorneys at Law

Employer is not a "Released Person" for Purposes of Apportionment Under Nebraska's Comparative Fault Act

Posted in In-House Counsel

On January 6, 2012, the Nebraska Supreme Court decided the hotly contested issue of whether a court may apportion liability to an employer in a third-party action for peronsal injuries when the employer is immune from suit in tort under the Nebraska Workers’ Compensation Act in Downey v. Western Community College Area, 282 Neb. 97o, ___ N.W.2d ___ (2012).  Generally speaking, an apportionment of fault instruction and concomitant jury verdict form is provided by Nebraska’s courts when a potential at fault entity is a party to an action or the entity is a “released person” as provided in Neb.Rev.Stat. § 25-21,185.11.  

Downey arose when Mack Downey was injured in the course and scope of his employment with Ferguson Signs, Inc. (Ferguson).  Ferguson subcontracted to perform work on scoreboard replacement project at Western Community College (Western).   After collecting workers’ compensation benefits, Downey brought suit against Western to recover for his personal injuries.  Ferguson was a named party in the case to protect its subrogation rights against any payments made to Downey.  Western asserted both Downey and Ferguson were at fault for Downey’s injuries.  After a trial on liability, the court apportioned fault as follows: Downey 33%; Ferguson 33.5% ; and Western 33.5%.  The court made findings as to Downey’s damages.  The court then went on to determine Ferguson was a “released person” as that term is defined in Neb.Rev.Stat. § 25-21,185.11 and reduced Downey’s recovery accordingly.  All three parties appealed.

On appeal, Downey and Ferguson asserted the trial court erred in determinng Ferguson was a “released person”, apportionting negligence to Ferguson and reducing Downey’s recovery.  The Nebraska Supreme Court agreed Ferguson was not a “released person” as Ferguson was not “a person liable”  as provided in Neb.Rev.Stat. § 25-21,185.11 to Downey because Ferguson was never liable in tort for Downey’s injuries.  As a result, the Nebraska Supreme Court held the trial court was incorrect in apportioning negligence to Ferguson and reducing his recovery.  The Court went on to hold a defendant a civil tort suit may still raise an employer’s negligence if it is the sole cause of the plaintiff’s injuries. 

In considering the Court’s opinion, the Court appeared to be in-between two extreme positions due to the differences between the exclusive rememdy provided by workers’ compensation and apportioning fault between parties under comparative fault principles.  First, limiting a plaintiff’s recovery by an employer’s negligence when the plaintiff would not be able to recover the same damage against the employer through workers’ compensation.  Second, allowing a party to recovery damages against a third-party which may not have resulted from the third-party’s responsibility.  The Court noted the majority position was not to allow apportionment of fault to an employer and elected to follow the majority.  It is certain this case will evoke strong opinions from both sides of personal injury bar in Nebraska.  At this juncture, it will be interesting to see if legislative efforts are pursued to find a balance between the two extreme positions.

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