Alice Decker, et al. vs. Marilyn Brunkow, defendant and third-party plaintiff, Appellant vs. Oak Ridge Homes, SLS, Inc., third-party defendant.

STATE OF MINNESOTA 
 IN COURT OF APPEALS 
 C3-96-1609

Alice Decker, et al.,
Respondents,

vs.

Marilyn Brunkow, defendant and third-party plaintiff,
Appellant,

vs.

Oak Ridge Homes, SLS, Inc., third-party defendant,
Respondent.

Filed December 31, 1996 
 Affirmed 
 Schumacher, Judge

Wadena County District Court
File No. C695129

Charles A. Krekelberg, Krekelberg Law Firm, 10 North Broadway, Pelican Rapids, MN 56572 (for Respondents Decker et al.)

Christopher D. Robinson, Askegaard & Robinson, P.A., 206 North Seventh Street, Post Office Box 826, Brainerd, MN 56401 (for Appellant Brunkow)

Gregory L. Wright, Stich, Angell, Kreidler, Brownson & Ballou, P.A., The Crossings, Suite 120, 250 Second Avenue South, Minneapolis, MN 55401-2122 (for Respondent Oak Ridge Homes)

Considered and decided by Klaphake, Presiding Judge, Schumacher, Judge, and Foley, Judge.*

S Y L L A B U S

Where an employer is immune from direct liability in a negligence action because of the Workers' Compensation Act, the limitation of a third-party tortfeasor's liability to four times her percentage of fault under Minn. Stat. § 604.02, subd. 1 (1996), does not apply.

O P I N I O N

SCHUMACHER, Judge

Marilyn Brunkow appeals from a judgment, arguing the trial court erred in not limiting her liability to respondent Alice Decker to four times her percentage of fault pursuant to Minn. Stat. § 604.02, subd. 1 (1996). We affirm.

FACTS

The facts of this case are undisputed. Brunkow was the owner of a building that was leased to respondent Oak Ridge Homes, SLS, Inc. (Oak Ridge). Decker was an employee of Oak Ridge.

On April 17, 1993, Decker was injured when she tripped and fell on the property while working for Oak Ridge. Decker brought an action against Brunkow who then commenced a third-party action against Oak Ridge for indemnification or contribution.

After a 3-day trial, the jury found Brunkow 5% and Oak Ridge 95% negligent. The jury awarded Decker $125,020.93 in damages.

Decker moved to allocate liability for the entire verdict to Brunkow because Oak Ridge was immune from direct liability under the Workers' Compensation Act. Brunkow argued that her liability was limited to four times her percentage of fault under Minn. Stat. § 604.02, subd. 1.

The trial court granted Decker's motion, declining to modify the contribution rule of Lambertson v. Cincinnati Corp., 312 Minn. 114, 257 N.W.2d 679 (1977), and holding that section 604.02 does not limit Brunkow's liability. Brunkow appeals.

ISSUE

Does the 1988 amendment to Minn. Stat. § 604.02, subd. 1, which limits the liability of a tortfeasor who is 15% or less at fault to no more than four times the percentage of fault, modify the contribution rule of Lambertson?

ANALYSIS

The construction of a statute is a question of law and thus fully reviewable by an appellate court. Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn. 1985). "The fundamental aim of an appellate court construing a statute is to ascertain and give effect to the legislative intent." In re Copeland, 455 N.W.2d 503, 506 (Minn. App. 1990), review denied (Minn. July 13, 1990).

Brunkow argues that her liability to Decker is limited to four times her percentage of fault because the 1988 amendment to Minn. Stat. § 604.02, subd. 1, modified the contribution rule of Lambertson v. Cincinnati Corp., 312 Minn. 114, 257 N.W.2d 679 (1977). This is an issue of first impression.

Prior to 1988, damages in multi-party negligence cases were statutorily apportioned:

When two or more persons are jointly liable, contributions to awards shall be in proportion to the percentage of fault attributable to each, except that each is jointly and severally liable for the whole award.

Minn. Stat. § 604.02, subd. 1 (1986). In situations where an employer who paid workers' compensation benefits and a third-party tortfeasor were both negligent, however, the Workers' Compensation Act provided the exclusive allocation method for damages and cut off the third-party tortfeasor's right to contribution from the employer. Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 374-75, 104 N.W.2d 843, 849 (1960), overruled in part by Tolbert v. Gerber Indus., 255 N.W.2d 362, 368 n.11 (Minn. 1977).

In Lambertson, the supreme court recognized the conflict between the third-party tortfeasor's contribution claim and the exclusive remedy of the workers' compensation law:

[The third-party tortfeasor] has been forced to bear the entire burden of plaintiff's recovery despite the fact that it was [less negligent] and has a [more negligent] employer joined in the action and available for contribution. In contrast, granting contribution would result in substantial employer participation in its employee's common-law recovery despite the exclusive-remedy clause.

Lambertson, 312 Minn. at 128-29, 257 N.W.2d at 688. As a compromise, Lambertson constructed a contribution rule whereby the third-party tortfeasor was entitled to contribution against the employer

in an amount proportional to its percentage of negligence, but not to exceed its total workers' compensation liability to plaintiff.

Id. at 130, 257 N.W.2d at 689. Lambertson noted its approach

allows the third party to obtain limited contribution, but substantially preserves the employer's interest in not paying more than workers' compensation liability.

Id.

In 1988, the legislature amended Minn. Stat. § 604.02, subd. 1 as follows:

When two or more persons are jointly liable, contributions to awards shall be in proportion to the percentage of fault attributable to each, except that each is jointly and severally liable for the whole award. Except in cases where liability arises under [a number of unrelated chapters], a person whose fault is 15 percent or less is liable for a percentage of the whole award no greater than four times the percentage of fault * * *.

1988 Minn. Laws ch. 503, § 3 (emphasis added). This new language has become known as the "15% x 4" rule. See Michael K. Steenson, Joint and Several Liability Minnesota Style, 15 Wm. Mitchell L. Rev. 969, 985 (1989).

The essential question, therefore, is whether the "15% x 4" rule of amended section 604.02 modifies the contribution rule in Lambertson. We hold that it does not.

Brunkow argues the legislative intent behind the "15% x 4" rule was to remedy the unfairness of holding a low-percentage at-fault tortfeasor responsible under joint and several liability for 100% of the award. See id. The amendment was primarily intended to remedy unfairness in tort actions. See id. at 986. The court in Lambertson, however, noted:

"Since workmen's compensation statutes provide that the obligations thereunder are the only liability of the employer to the employee, or his representatives, there is no common liability involving the employer and third party in such situations; and therefore, there is no ground for allowing contribution." While there is no common liability to the employee in tort, both the employer and the third party are nonetheless liable to the employee for his injuries; the employer through the fixed no-fault workers' compensation system and the third party through the variable recovery available in a common law tort action. Contribution is a flexible, equitable remedy designed to accomplish a fair allocation of loss among parties.

312 Minn. at 128, 257 N.W.2d at 688 (quoting Hendrickson, 258 Minn. at 374-75, 104 N.W.2d at 849). Moreover, the supreme court in Kempa v. E.W. Coons Co., 370 N.W.2d 414 (Minn. 1985), noted that "the statutory apportionment of damages, section 604.02, does not govern an employer's contribution" because a third-party tortfeasor and an employer "are neither jointly liable nor jointly and severally liable" to the employee. Id. at 420. According to Lambertson and Kempa, Brunkow and Oak Ridge are not jointly liable under traditional tort law concepts. Amended section 604.02, therefore, does not apply where the third-party tortfeasor seeks contribution from a negligent employer who is exclusively liable under workers' compensation law.

Neither party claims the legislative history of section 604.02 contemplated the conflict between the workers' compensation law and contribution actions as discussed in Lambertson. While Lambertson recognized the unfairness of its contribution rule, the court commented that any change should be made to the "workers'-compensation-third-party law." 312 Minn. at 130, 257 N.W.2d at 689. No such changes have been made. We hold that until the legislature chooses to address the conflict, the contribution rule in Lambertson applies.

We find no merit in Brunkow's argument that application of the Lambertson rule violates her constitutional right to equal protection. Brunkow is not treated differently than other third party tortfeasors who seek contribution from employers. See In re Harhut, 385 N.W.2d 305, 310 (Minn. 1986) (equal protection clauses of federal and state constitutions require that all persons similary situated be treated alike under law).

D E C I S I O N

The trial court properly refused to limit Brunkow's liability to four times her percentage of fault pursuant to Minn. Stat. §604.02, subd. 1.

Affirmed.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.