MN High Court Stands Firm: Employer and Third-Party are NOT “Severally Liable” for Employee's Injuries

The 2003 amendment to Minn. Stat. § 604.02, subd. 1, did not overturn a line of Minnesota decisions that had concluded that an employer and a third-party tortfeasor were not “severally liable” for a workplace injury, held the Supreme Court of Minnesota in Fish v. Ramler Trucking, Inc., 2019 Minn. LEXIS 699 (Nov. 27, 2019). The Court stressed that under the plain words of § 604.02, a tortfeasor’s liability to an injured employee was not reduced by the employer’s fault. The high court affirmed a decision of the state’s court of appeals that had limited the third-party tortfeasor’s benefit to a credit in the amount of the workers’ compensation benefits paid to the injured employee by the employer.

Background

On December 17, 2012, Fish sustained injuries when he was forced to jump from a semi-trailer platform where he had been helping load a large concrete beam because the driver of the truck began to pull forward. The truck driver was an employee of Ramler Trucking, Inc. (“Ramler”), while Fish worked for a separate employer.

Fish and his employer settled Fish’s workers’ compensation claim and Fish then filed a common-law negligence claim against Ramler. In turn, Ramler filed a third-party contribution claim against Fish’s employer. Ramler and the employer settled the contribution claim and the employer’s possible subrogation claim.

Jury Allocates Fault Predominantly to Employer

Fish’s lawsuit against Ramler proceeded to trial. Having settled with both Fish and Ramler, Fish’s employer did not participate in the trial. The special verdict form directed the jury to allocate fault among all persons involved, including the non-party employer. The jury found that the injury was caused by Fish, his employer, and Ramler, and allocated fault as follows: 5 percent to Fish; 75 percent to the employer; and 20 percent to Ramler.

Post-trial, Ramler, citing Minn. Stat. § 604.02, subd. 1, argued that its liability to Fish should be proportionate to its 20 percent fault. In other words, Ramler’s tort liability would be reduced, not just by Fish’s 5 percent fault, but also by the employer’s 75 percent fault.

Fish countered that, by its plain language, § 604.02 did not apply because Ramler and Fish’s employer were not both “severally liable.” Employers, Fish argued, were shielded from tort liability by Minnesota’s Workers’ Compensation Act. Absent two or more “severally liable” parties, Fish contended, Ramler was liable to Fish for the full damage award, reduced only by Fish’s 5 percent contributory fault and any damages duplicative of workers’ compensation benefits awarded to Fish.

The district court agreed with Ramler and applied § 604.02 to reduce the net damage award by an amount proportionate to the employer’s fault. The court of appeals reversed, however, concluding that it was error to apply § 604.02, in these circumstances, and remanded to the district court for recalculation of the judgment. The Supreme Court of Minnesota granted Ramler’s petition for review.

Supreme Court Analysis

The high court acknowledged that pursuant to § 604.02, subdivision 1,when two or more persons were severally liable, contributions to awards should be in proportion to the percentage of fault attributable to each. Contrary to Ramler’s argument, however, the Court said that the direction in § 604.02, subdivision 1 to apportion liability according to fault was triggered only when ‘two or more persons are severally liable.”

Lambertson Decision

The Court observed that in Lambertson v. Cincinnati Welding Corp., 312 Minn. 114, 257 N.W.2d 679 (1977), it had reaffirmed an earlier holding that there was no common liability between an employer and a third-party tortfeasor.Recognizing the injustice for third-party tortfeasors, however, in Lambertson, the Court established a common-law equitable right of contribution, allowing a third-party tortfeasor to receive contribution from an employer up to the employer’s percentage of fault, but the contribution amount could not exceed the workers’ compensation benefits payable.

2003 Amendment

The Court indicated that it still needed to deal with Ramler’s contention that the 2003 amendment to § 604.02, subdivision 1, limited an injured employee’s award against the tortfeasor to the tortfeasor’s percentage of fault when the employer was also at fault and the tortfeasor’s fault was not greater than 50 percent. The Court observed that the 2003 amendment made “several liability,” rather than “joint liability,” the default in tort cases. Ramler argued that nonparties, e.g., employers, were severally liable persons because several liability is determined at the time a tort occurs. Essentially, Ramler’s theory was that both Ramler and the employer were liable at the moment the tort occurred in this case, i.e., when Fish was injured.

Ramler’s Argument Would be a Sledgehammer

The Court was unconvinced. The Lambertson rationale still applied. The Court said Ramler’s interpretation would “take a sledgehammer to the Workers’ Compensation Act’s tort immunity for employers, a cornerstone in the Act’s foundation.” The Court concluded that such a reading could not be what the Legislature intended when it amended § 604.02. Accordingly, Ramler’s liability to Fish was not reduced by the fault of Fish’s employer