Heavican, C.J.
James E. Risor, an employee at a boiler manufacturing plant in Lincoln, Nebraska, sustained permanent hearing loss as a result of his employment. Between the time Risor was injured and the time he filed his workers' compensation claim, the plant changed ownership. Counsel representing the new owner's insurer, American Insurance Company (American), mistakenly believed American had insured the plant during the time of the injury. Twin City Fire Insurance Company (Twin City), which insured the plant for the previous owner, was not given notice of the claim until after entry of an award.
The new owner of the plant filed a declaratory judgment action against the previous owner and both insurers to determine who is liable for payment of the award. The district court determined that
The parties have entered into a stipulation, so the facts are not in dispute by any party.
Risor began working at a boiler manufacturing plant, colloquially referred to as "Nebraska Boiler," in Lincoln in 1973, and remained continuously employed at the plant until his retirement in 2004. During the course of Risor's employment, he suffered permanent hearing loss in both ears. Risor filed a claim against Nebraska Boiler in the Nebraska Workers' Compensation Court on January 20, 2004.
The plant has been owned by several different entities from 1973 to the present, although a company with the exact legal name of "Nebraska Boiler" has never owned the plant. In 1976, Daniel T. Scully, Roger L. Swanson, and Verlyn L. Westra purchased the plant and incorporated it as Nebraska Boiler Company, Inc. In 1989, Nebraska Boiler Company, Inc., merged with National Dynamics Corporation (National Dynamics), and after the merger, Nebraska Boiler Company, Inc., ceased to exist. Scully, Swanson, and Westra were shareholders of National Dynamics.
In 1998, Aqua-Chem, Inc., purchased various assets of National Dynamics, including the boiler manufacturing plant. Pursuant to the purchase agreement, National Dynamics agreed to indemnify Aqua-Chem for any liabilities not assumed by Aqua-Chem. No workers' compensation claims by Risor were mentioned in the agreement. After the sale, National Dynamics changed its name to SSW, Inc., and subsequently dissolved in 2003. The assets of the corporation were distributed to its three shareholders: Scully, Swanson, and Westra. In 2006, Aqua-Chem changed its name to Cleaver-Brooks, Inc. Cleaver-Brooks is the current legal owner of the boiler manufacturing plant.
Several companies have provided workers' compensation insurance coverage to the boiler manufacturing plant over the years.
At the time of the sale to Cleaver-Brooks, National Dynamics entered into an agreement with Twin City to provide workers' compensation insurance coverage to National Dynamics for claims made by employees working at the boiler manufacturing plant from 1992 to 1998.
Cleaver-Brooks contracted with Fireman's Fund Insurance Company, later renamed American, to provide workers' compensation insurance coverage from 1992 to 2002. The coverage did not extend back to claims arising from the boiler manufacturing plant before Cleaver-Brooks acquired it in 1998.
Liberty Mutual Group, Inc., provided workers' compensation insurance coverage to Cleaver-Brooks from 2002 through Risor's trial. Liberty Mutual is not a party to this action.
Nebraska Boiler was the only named defendant in Risor's workers' compensation claim. The compensation court provided only Cleaver-Brooks with notice of the claim. Neither National Dynamics nor any of the insurance companies were given notice by the court. After Cleaver-Brooks tendered the claim to its two insurance providers, each insurance company retained separate counsel to defend Cleaver-Brooks against Risor's claims. During the course of the litigation, counsel for American
On April 26, 2006, a single judge of the compensation court determined that Risor was permanently and totally disabled as a result of the hearing loss. The judge determined the date of the accident to be October 19, 1993. The date of the injury was apparently a surprise to both Risor and the defendants. In his complaint, Risor alleged that he had suffered injuries only as early as 2001. Despite the determination of October 19, 1993, as the date of the accident causing the hearing loss, the judge ordered payment from Nebraska Boiler to begin as of the date of Risor's retirement, February 12, 2004.
After the filing of this order, an adjuster for American realized that Cleaver-Brooks did not own the plant on the date of Risor's injury; therefore, American was not the plant's insurer at the time of the injury. Nebraska Boiler filed a motion for continuance in order to allow "`additional parties who may have an exposure to liability once a final determination has been made' be served and given an opportunity to present additional evidence to the court."
Twin City was given notice of the claim against Nebraska Boiler on August 1, 2006, and on October 25, Twin City filed a motion for leave to intervene to participate as a party in the appeal to the review panel. The review panel denied Twin City's motion, and Twin City appealed that decision to this court in Risor v. Nebraska Boiler (Risor I).
In Risor's separate appeal of the award to the review panel, Risor argued that the appropriate date for commencing payments was the date of the injury in 1993, rather than the date Risor retired in 2004. In May 2008, the review panel reversed the single judge's decision and determined that payment should start from the date Risor was permanently injured in 1993. Nebraska Boiler appealed that decision to this court in Risor v. Nebraska Boiler (Risor II).
In November 2012, Cleaver-Brooks filed this action for declaratory judgment in the district court for Douglas County to determine which party or parties were liable for Risor's claim. The named defendants were Twin City; American; SSW, Inc.; and Scully, Swanson, and Westra in their individual capacities. All parties filed motions for summary judgment. On June 21, 2013, the district court issued an order finding that Twin City was solely liable for the award. The district court determined that Twin City insured the plant at the time of Risor's injury and also found that the doctrines of laches and judicial estoppel did not apply and were not a defense to liability for Twin City. Further, the district court dismissed Twin City's counterclaims and cross-claims against Cleaver-Brooks and American for negligence, equitable subrogation, indemnification, contribution, and unjust enrichment. Finally, the district court held that the individual shareholders had no liability for the award, but did not address the claims by SSW, Inc.
Twin City appealed to this court, but the appeal was dismissed on the ground that the order from the district court was not a final order because it did not address the claims by SSW, Inc. On August 13, 2014, the district court issued a supplemental order which incorporated its previous order and disposed of any remaining claims related to SSW, Inc. Twin City now properly appeals from a final order.
Twin City assigns, consolidated and restated, that the district court erred in (1) finding that Twin City was solely liable for payment of the workers' compensation award; (2) applying Risor I to the merits of a subsequent contribution or indemnity claim; (3) finding that the delay by Cleaver-Brooks in giving notice to Twin City and in asserting that Risor was not its employee prior to 1998 was not inexcusable; (4) finding that judicial estoppel did not prevent the district court from finding that Twin City was solely liable for payment of the claim; and (5) finding that other parties to the suit did not breach their duty to exercise reasonable care with respect to Twin City.
An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.
An appellate court reviews a court's application of judicial estoppel to the facts of a case for abuse of discretion and reviews its underlying factual findings for clear error.
Twin City assigns that the district court erred in determining Twin City was
In Risor I, we referred to Cleaver-Brooks as Nebraska Boiler's "parent company."
That being said, we still correctly recognized in Risor I that Twin City could potentially face liability for the award. In Risor I, we held that Twin City was not deprived of its right to procedural due process when the review panel denied Twin City's motion to intervene in the proceedings.
We note the purpose of the Nebraska Workers' Compensation Act and the flexibility with which we have interpreted the act: "In light of [the] beneficent purpose of the [Nebraska Workers' Compensation Act, the appellate courts] have consistently given the act a liberal construction to `"`carry out justly the spirit of the [a]ct.'"'"
From Risor's perspective, he worked at the same plant (Nebraska Boiler) for his entire career, even though ownership of the plant changed several times over the course of his employment. Although filing a complaint against Nebraska Boiler was not technically accurate, Risor's intent was clear: to receive compensation for the injury incurred during his employment at the plant, regardless of who owned the plant at the time he suffered his injury.
Twin City's assignment of error is without merit.
Twin City assigns that the district court erred in finding that it was liable for the award because the doctrine of judicial estoppel precluded Cleaver-Brooks from claiming Twin City was responsible and because Cleaver-Brooks' claim was barred by the doctrine of laches.
Twin City argues that because Cleaver-Brooks, through the attorney retained by American, represented to the compensation court that American's coverage of the plant started in 1992, the doctrine of judicial estoppel now prevents Cleaver-Brooks and American from asserting an inconsistent position in this proceeding.
Judicial estoppel is an equitable doctrine that a court invokes at its discretion to protect the integrity of the judicial process.
This doctrine, however, is to be applied with caution so as to avoid impinging on the truth-seeking function of the court, because the doctrine precludes a contradictory position without examining the truth of either statement.
In this case, we find no evidence of any bad faith or an intent to mislead on the part of either Cleaver-Brooks or American. In fact, it was in neither Cleaver-Brooks' nor American's interest to initially represent to the compensation court that Cleaver-Brooks owned the plant or that American's policy covered the plant in 1993. At the time American's attorney made the misrepresentation, all parties involved believed that the earliest possible date of Risor's injury was 2001-3 years after the plant was sold. It was only after the compensation court determined the date of the injury to actually be 1993 that the attorney's inaccurate statement gained any significance. Further, American's attorney sought to correct the information once the mistake was uncovered. There is no reason to believe that Cleaver-Brooks or American intentionally misrepresented the facts in order to mislead or gain some type of advantage.
The district court did not abuse its discretion in rejecting this defense.
Twin City argues that recovery against Twin City should be barred by the doctrine of laches, because Cleaver-Brooks unjustifiably delayed notifying Twin City of the claim by Risor. The defense of laches is not favored in Nebraska.
Because the original dates of the alleged injuries in Risor's claim were all while Cleaver-Brooks owned the company, Cleaver-Brooks or American had no reason to notify Twin City until the compensation court determined the date of the injury to be in 1993. The facts indicate that the trial court entered its award on April 26, 2006, and Twin City was notified of the claim on August 1. Between those two dates the following occurred in the case: Risor appealed the award on May 9, Nebraska Boiler filed a cross-appeal on May 10, and Nebraska Boiler's motion for a continuance was denied on May 10. We find nothing in the stipulated facts suggesting any delay was inexcusable.
Even if Cleaver-Brooks had some reason to know before the trial court entered
Twin City's assignments of error are without merit.
Twin City assigns that the district court erred in dismissing Twin City's counterclaim and cross-claim that alleged Cleaver-Brooks and American negligently injured Twin City when they both failed to notify Twin City of the pending claim. For actionable negligence to exist, there must be a legal duty on the part of the defendant to protect the plaintiff from injury, a failure to discharge that duty, and damage proximately resulting from such undischarged duty.
We must determine whether Cleaver-Brooks or American owed a duty to Twin City in this situation. Whether a legal duty exists for actionable negligence is a question of law dependent on the facts in a particular case.
Further, there is no evidence that either Cleaver-Brooks or American breached any duty of care owed to Twin City if such a duty were to exist. In this case, the parties only had reason to believe that Twin City could potentially be exposed to liability after a single judge from the compensation court determined, to the surprise of all the parties, the date of the injury to be in 1993. Twin City was informed within a reasonable period of time after that judgment. The evidence established that Cleaver-Brooks and American acted reasonably in protecting any interests
Pursuant to Neb.Rev.Stat. § 48-125 (Cum.Supp.2014), the amount of a workers' compensation award is increased by 50 percent if payment is not made to the claimant within 30 days of entry of the award. In order to avoid the statutory penalty, Twin City paid the lump-sum award due to Risor and has been making monthly payments to Risor since that time.
All of Twin City's remaining assignments of error essentially allege the same thing under slightly different legal theories: Twin City was wrongfully forced to pay the award to Risor and either Cleaver-Brooks or American should compensate Twin City for all or part of what Twin City has already paid to Risor. These arguments necessarily fail, because we have found that Twin City, as the insurer of the plant at the time Risor was injured, is liable for payment of the award. Twin City's remaining assignments of error are without merit.
The district court did not err in determining Twin City was liable for Risor's workers' compensation award, in rejecting Twin City's equitable defenses, and in dismissing Twin City's counterclaims.
AFFIRMED.
Stephan, J., participating on briefs.
Wright, J., not participating.