Travelers Indem. Co. v. Wamsley (In re Estate of Evertson)

295 Neb. 301

889 N.W.2d 73

IN RE ESTATE OF Bruce F. EVERTSON, deceased.

Travelers Indemnity Company, appellant,

v.Julie A. Wamsley, Personal Representative of the Estate of Bruce F. Evertson, deceased, appellee.

No. S-15-104.

Supreme Court of Nebraska.

Filed December 16, 2016.

Gregory W. Plank, of Ray Lego & Associates, and Thomas D. Wulff, Omaha, and Thomas J. Freeman, of Wulff & Freeman, L.L.C., for appellant.

R. Kevin O'Donnell, of Law Office of R. Kevin O'Donnell, P.C., L.L.O., Ogallala, for appellee.

Dallas D. Jones, David A. Dudley, and Michael D. Sands, of Baylor, Evnen, Curtiss, Grimit & Witt, L.L.P., Lincoln, for amici curiae Nebraskans for Workers' Compensation Equity and Fairness et al.

Bradley D. Shidler, of Werner Enterprises, Inc., Omaha, and, of counsel, Gary L. Wickert, Matthew T. Fricker, and Alyssa A. Johnson, of Matthiesen, Wickert & Lehrer, S.C., for amicus curiae Werner Enterprises, Inc.

Steven L. Theesfeld, of Yost & Baill, L.L.P, and, of counsel, Vlad Kushnir, of VB Kushnir, L.L.C., for amicus curiae National Association of Subrogation Professionals.

Vincent M. Powers, of Vincent M. Powers & Associates, Lincoln, and Rodney J. Rehm, of Rehm Bennett Law Firm, PC., L.L.O., for amici curiae Nebraska Association of Trial Attorneys et al.

Heavican, C.J., Wright, Miller–Lerman, Cassel, Stacy, and Funke, JJ.

Funke, J.

NATURE OF CASE

This matter commenced as a probate proceeding filed for the sole and limited purpose of collecting wrongful death benefits exclusively for the widow and next of kin of the decedent, Bruce F. Evertson, under Neb. Rev. Stat. §§ 30-809 and 30-810 (Reissue 2016). Bruce was killed in a motor vehicle accident. The county court accepted a settlement from the insurer of the other driver for the wrongful death claim of the estate of Bruce F. Evertson (Estate) and allocated the proceeds among Bruce's widow and adult children.

As a result of Bruce's acting within the course and scope of his employment at the time of his death, Bruce's widow, Darla Evertson, received and continues to receive workers' compensation benefits from appellant, Travelers Indemnity Company (Travelers). Before distributing Darla's share of the wrongful death settlement, the county court held a fair and equitable distribution hearing and issued an order on Travelers' subrogation claim to Darla's proceeds.

The county court ordered that Travelers was not entitled to any distribution of Darla's proceeds. The order also did not provide Travelers any future credit against the workers' compensation benefits it owes Darla. Travelers appealed from this order. The Nebraska Court of Appeals affirmed.¹

The primary issue we address is the question of subject matter jurisdiction and whether the probate proceeding in the county court was the proper venue to decide Travelers' subrogation claim or whether the same should have been brought in a separate action in the district court. Further, because the issue of the availability of future credit for Travelers is likely to recur, we also clarify our precedent on that issue.

We hold that the county court lacked subject matter jurisdiction to hear and decide the subrogation matter. Because the county court lacked jurisdiction over the subrogation matter, the Court of Appeals also lacked subject matter jurisdiction to hear the merits of the appeal. Accordingly, we vacate the decision of the Court of Appeals and remand the cause to the Court of Appeals with directions to vacate the order of the county court which determined the fair and equitable distribution of Darla's settlement proceeds.

BACKGROUND

In February 2014, Bruce died in a motor vehicle collision while acting in the course and scope of his employment. Travelers, the insurer of Bruce's employer, began paying workers' compensation benefits to Darla of $728 per week, which will be paid until she dies or remarries.

In June 2014, the county court appointed a personal representative to pursue a wrongful death claim for the Estate. In the county court proceeding, Travelers filed a statement of claim to assert its subrogation right to Darla's distribution from the settlement against the third-party tort-feasor, under Neb. Rev. Stat. § 48-118 (Reissue 2010). Travelers claimed a lien for $26,208 in indemnity payments made to Darla and $10,000 in funeral expenses. It wanted the remaining balance distributed to Darla as "future credit" against the remaining benefits it owes Darla.

In October 2014, the personal representative filed a petition to settle its wrongful death claim against the tort-feasor's insurance carrier. The insurance carrier paid its policy limit of $1 million, of which $500,000 was paid to the Estate and the other $500,000 was paid to the estate of an occupant in Bruce's vehicle who was also killed in the accident. The county court approved the settlement's distribution to Bruce's dependents as follows: $125,000 to each of Bruce's two adult children and $250,000 to Darla.

In the personal representative's request for distribution of the wrongful death settlement proceeds, she stated Darla's portion was "subject to the lien for worker's [sic] compensation." Accordingly, the personal representative requested the county court set a date for a hearing on the subrogation issue. The county court held a hearing at which Travelers and Darla each presented evidence as to the fair and equitable division of Darla's proceeds between them and the amount, if any, of Traveler's future credit. After the hearing, the county court ordered $42,583.31 of the settlement proceeds be paid to the attorneys of the Estate and the remaining $207,416.69 be distributed to Darla. Travelers was awarded $0 of the proceeds and was given no consideration for payments that may be due in the future. Travelers appealed.

The appeal was litigated between Travelers and the Estate. The Court of Appeals affirmed the county court's subrogation distribution as fair and equitable. It also agreed that Travelers was not entitled to future credit. Regarding future credit, the Court of Appeals interpreted the second paragraph of § 48-118 as inapplicable in this case, because it states that an employer is entitled to future credit when there is a "recovery by the employer against [a] third person" and here it was the employee's estate that made the recovery. (Emphasis supplied.) Travelers petitioned for further review, which we granted.

ASSIGNMENTS OF ERROR

Travelers assigns, restated, the following errors:

(1) The county court lacked subject matter jurisdiction to hear and decide the subrogation matter;

(2) the Court of Appeals erred in affirming the county court's order, because the county court failed to consider the possibility of Darla's receiving underinsured motorist settlement funds;

(3) the Court of Appeals erred in affirming the county court's order, because it was not a fair and equitable distribution; and

4) the Court of Appeals erred by refusing to allocate any portion of Darla's settlement funds to Travelers' lien for benefits already paid to Darla or as future credit for the ongoing benefits it must continue to pay to Darla.

STANDARD OF REVIEW

Subject matter jurisdiction and statutory interpretation present questions of law.²

ANALYSIS

Subject matter jurisdiction is the power of a tribunal to hear and determine a case in the general class or category to which the proceedings in question belong and to deal with the general subject matter involved.³ Parties cannot confer subject matter jurisdiction upon a judicial tribunal by either acquiescence or consent, nor may subject matter jurisdiction be created by waiver, estoppel, consent, or conduct of the parties.⁴ Lack of subject matter jurisdiction may be raised at any time by any party or by the court sua sponte.⁵ A court action taken without subject matter jurisdiction is void.⁶

Travelers argues, for the first time in its petition for further review, that the county court lacked subject matter jurisdiction to conduct the subrogation hearing. Specifically, Travelers contends that the Nebraska Workers' Compensation Act expressly provides that the district court should handle these types of subrogation issues, as evidenced by the fact that the act references the "district court" four times in Neb. Rev. Stat. § 48-118.01 (Reissue 2010). Accordingly, "the court" in Neb. Rev. Stat. § 48-118.04 (Reissue 2010) should be interpreted in pari materia with § 48-118.01 to limit jurisdiction to the district court.

Absent contrary statutory language, a court gives statutory language its plain meaning; a court will not look beyond the statute to determine legislative intent when the words are plain, direct, and unambiguous.⁷ An appellate court does not consider a statute's clauses and phrases as detached and isolated expressions.⁸ Instead, the whole and every part of the statute must be considered in fixing the meaning of any of its parts.⁹ It is not within the province of a court to read a meaning into a statute that is not warranted by the language.¹⁰

Section 48-118.01 states, in relevant part, as follows:

[T]he district court before which the action is pending shall allow [the employee, personal representative. employer, or workers' compensation insurer] to intervene in [the action against a third party], and if no action is pending then the district court in which it could be brought shall allow either party to commence such action. Each party shall have an equal voice in the claim and the prosecution of such suit, and any dispute arising shall be passed upon by the court before which the case is pending and if no action is pending then by the district court in which such action could be brought.

If the employee or his or her personal representative or the employer or his or her workers' compensation insurer join in prosecuting such claim and are represented by counsel, the reasonable expenses and the attorney's fees shall be, unless otherwise agreed upon, divided between such attorneys as directed by the court before which the case is

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