Worker’s comp. benefits cause employee waiver of right to jury trial

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By James Nicodemus

If a Rock County snowplow driver jars his spine on the job and collects more than $148,000 in worker’s compensation benefits, does he give up his right to a jury trial in a joint private action against the 3rd party tortfeasor?

In Russell Adams v. Northland Equipment Co. et al., 2012 AP 580, the 4th District Appellate Court of Wisconsin answered “yes” to this question, affirming a “compelled” settlement for $200,000 motioned up by the worker’s compensation insurance company and approved by Judge James Welker.

Although Article I, Section 5 of the state constitution does give certain litigants a right to jury trial, the appellate court said this right can be waived by an employee who accepts worker’s compensation benefits. That is well supported by precedent.

“The trial court found that Adams had a difficult case on the question of liability and cause,” the court explained, “and the risk of a ‘no-liability’ jury exceeded the possibility of receiving a $200,000 jury award.”

The incident

On February 21, 2009, Russell Adams was plowing snow for the village of Fontana, working on the village hall parking lot and drive.

The plow bottom on the front of Adams’ truck caught hard on a 1 ½ inch-high walkway bump in the pavement. The heavy plow blade failed to properly “trip,” allegedly stopping the heavy Fontana public works truck in its tracks.

The abrupt stop threw Adams forward and upward. He rammed his head against the cab ceiling, and the blow caused permanent spinal cord damage, according to Adams’ medical expert.

An investigation after the accident found that Northland had originally sold the plow to the village and repaired it 18 months earlier. After a rush request before a big storm, six springs had been added by Northland, taken from a different brand name plow. Yet the plow was used without incident until Adams was injured.

Before that repair, the truck plow had been repeatedly repaired for “tripping” too easily, according to court testimony, which deactivated the plow mechanism and prevented Fontana public works drivers from plowing heavy snow.

After the injury, Adams received almost $150,000 in worker’s compensation benefits. He later filed suit in Rock County against Northland and the Cincinnati Insurance Co. on counts of negligence and strict product liability, claiming that Northland’s repairs actually made the snowplow unreasonably dangerous.

The League of Wisconsin Municipalities Mutual Insurance Co. joined the suit, attempting to recoup some of the money already paid in worker’s compensation payments.

Case history

Following discovery, Northland filed a motion for summary judgment, which was heard less than 30 days before trial.

In his extensive response to Northland’s summary judgment motion, Adams filed a comprehensive affidavit which included deposition testimony from neurosurgeon Dr. Christopher Sturm, statements from several fellow public works employees — including the public works director — and deposition testimony from Adams’ mechanical engineer, Robert Wozniak.

Adams survived summary judgment, but Welker said Adams would have a difficult time at trial and was “spitting into an awfully strong wind.”
“It may be even that this case will get dismissed at the end of the plaintiff’s case,” the judge further cautioned after the summary judgment hearing.

Less than three weeks before the Feb. 6, 2012, trial date, LWMMIC accepted the $200,000 offer on the table from Northland and its insurance company. If the settlement was confirmed, the W/C carrier would walk away with a little more than $60,000.

Relying upon Wis. Stat. 102.29(1), LWMMIC filed a motion to compel Adams to accept the settlement.

Adams strongly objected to the motion, asserting among other things that the settlement figure was “grossly unfair” to Adams, and that the hearing violated Adams’ right to trial by jury as provided by Article I, Section 5 of the Wisconsin Constitution.

If the motion to compel did move forward, Adams asked the court to hear testimony from plaintiffs witnesses in a confidential evidentiary hearing, excluding Northland and its employer from the proceedings, and compel the w/c insurance company to show that settlement was in the employee’s best interests.

Wis. Stat. 102.29(1)(b) states in part: “Each shall have an equal voice in the prosecution of the claim, and any disputes arising shall be passed upon by the court before which the case is pending…..”

After a Feb. 2, 2012, hearing Welker granted the motion to compel settlement, saying that Adams had a difficult case on questions of causation and liability. The risk of a “no liability” jury exceeded the possibility of recovering $200,000, Welker said after reviewing the party admissions, statements and summary judgment documentation.

If Adams failed to accept the settlement, the court indicated that Adams’ case would be dismissed outright.

The appeal

Adams appealed on three basic issues. First, that Wis. Stat. 102.29(1) as currently interpreted by the courts violates Adams’ state and federal protected right to trial.

Second, the circuit court erred when it failed to conduct an adequate evidentiary trial before making its ruling on the motion to compel settlement.

Lastly, Adams believed that the circuit court erroneously exercised discretion when it ruled that the settlement was reasonable.

The appellate court first confirmed that both the more recent Dalka v. American Family Mutual Insurance, 2011 Wis. App. 90 case and the earlier Bergren v. Staples, 263 Wis. 467 (1953) were controlling, and found no reason to question either decision.

The appellate court described that, as in both Bergren and Dalka, it was appropriate for the circuit court here to step in and settle a dispute between claimants when they could not reach agreement on how to proceed, and due process did not require that a full evidentiary hearing be held.

In Bergren the circuit court also was asked to compel settlement on the eve of trial pursuant under provisions now found in Wis. Stat. 102.29(1)(b). The Wisconsin Supreme Court there found the court’s decision to compel settlement was not an unreasonable exercise of discretion, even in the lack of any extensive evidentiary hearing.

Through the circuit court’s review of the recent summary judgment documentation and other court records, Adams was “afforded the same opportunity as the opposing party in Bergren.”

In the Dalka case, even though the litigants were reversed, and the employer wanted to compel settlement, no due process violation occurred, the court found.

The idea of due process is flexible, explained the court, “and calls for procedural protection as the situation demands,” citing the U.S. Supreme Court in Morrissey v. Brewer.

“The court was not asked to adjudicate the disputed issues of fact that had precluded summary judgment,” the appellate court explained. “It was called to resolve the dispute between Adams and LWMMIC over settlement.”