Troup v. Fischer Steel Decided

The Tennessee Supreme Court decided the Troup case on Friday.  Troup is a case involving a third-party tort action arising from an on-the-job injury suffered by the employee of a sub-contractor on a construction site.  The Western Section of the Court of Appeals held that it was reversible error not to instruct the jury that the general contractor could be held at fault.  The trial judge instructed the jury that it could consider the conduct of the general contractor only if the conduct was the sole cause-in-fact of the plaintiff’s injuries.  The basis for the trial judge’s decision was that the general contractor was a statutory employer and thus the issue was controlled by the Synder decision.

The Tennessee Supreme Court agreed with the trial judge and reinstated the jury’s verdict.  Here is how Justice Holder’s opinion described and addressed Fischer’s argument:

Fischer’s argument requires an analysis of Tennessee Code Annotated section 50-6-113 (2005), which provides that a principal contractor (i.e., a general contractor) may be liable for injuries to employees of a subcontractor. Under this subsection, Belz, the general contractor, is liable for Troup’s injuries because Troup was injured while working for Jolly, Belz’s subcontractor. In exchange for this exposure to liability under the Workers’ Compensation Law, Belz receives immunity from suit in tort. See Tenn. Code Ann. § 50-6-108 (2005). In addition, if Belz paid compensation to Troup, then Belz would be entitled to a subrogation lien against any judgment Troup received against a third party such as Fischer. See Tenn. Code Ann. § 50-6-112(c)(1) (2005). Fischer, however, argues that Belz did not pay benefits to Troup and therefore does not have a subrogation interest in the instant case.  If Belz does not have a subrogation interest, then there is no actual threat that Troup’s recovery will be reduced a second time. Fischer argues that juries may apportion fault to employers when there is not an actual threat of a double reduction of a particular plaintiff’s recovery. We  disagree. 

In Carroll, we held that Ridings and Snyder continue to be uniquely applicable when a third party defendant attempts to allocate fault to an employer whose liability is governed by the Workers’ Compensation Law. 29 S.W.3d at 19; see also Dotson, 29 S.W.3d at 29-30 (Holder, J., concurring). Although our ruling was designed to prevent the unfairness of allowing an employer’s right to subrogation to defeat an employee’s tort recovery against a third party, we did not hold that Ridings and Snyder would be applicable only upon a showing that the plaintiff’s tort recovery was actually in danger of being defeated in this way. Rather, we explained that the potential for double reduction of a plaintiff’s recovery was prevalent enough to justify a special rule for cases when a plaintiff   injured on the job files a tort claim against a third party. Carroll, 29 S.W.3d at 19. In other words, Carroll established a bright-line rule rather than the case-by-case analysis suggested by Fischer. If a jury’s ability to apportion fault to an employer were contingent on a showing that a plaintiff’s recovery will actually be subject to a double reduction, then in every tort case involving an on-thejob injury trial courts would be forced to determine and plaintiffs would be forced to prove whether an employer has or is likely to have a subrogation interest. Such a determination would be especially difficult in cases in which an employee’s contested workers’ compensation claim has yet to be settled or conclusively adjudicated. We decline to place this additional burden on plaintiffs and trial courts that already must navigate the murky waters where workers’ compensation and comparative fault
intersect. Instead, we hold that Ridings and Snyder are uniquely applicable to cases in which the plaintiff’s recovery for an injury is governed by both the Workers’ Compensation Law and the laws of the comparative fault system, regardless of whether there is an actual threat of a double reduction of plaintiff’s recovery. Accordingly, we conclude that the trial court did not err in prohibiting Fischer from arguing the comparative fault of Belz.          [Footnotes omitted.]

Makes sense to me. 

My favorite part of the opinion is footnote 2, which says as follows:

There are two potential methods for preventing th[e]double reduction [that would occur if fault were permitted to be assigned to employers and then employers were permitted to collect their subrogation interest out of the plaintiff’s tort recovery.]  .The first is the method prescribed by Ridings and Snyder prohibiting juries from apportioning fault to employers in third-party tort cases. The second would be to allow juries to apportion fault to employers and then limit an employer’s recovery to the extent that the employer was allocated fault. Tennessee Code Annotated section 50-6-112(c) (2005) forecloses the second possibility by allowing an employer to pursue its full subrogation interest against an employee’s recovery regardless of the employer’s degree of fault. See Castleman v. Ross Eng’g, Inc., 958 S.W.2d 720, 723-24 (Tenn. 1997). Accordingly, the only method available to this Court for protecting employees from a double reduction in their tort recoveries is to follow Ridings and Snyder and to prohibit juries from apportioning fault to employers. This method is, of course, an exception to the general rule provided in Carroll and will sometimes result in third parties being attributed liability in excess of their fault. Such difficulties could be avoided if Tennessee Code Annotated section 50-6-112(c) were amended to allow an employer to recover from an employee’s third-party tort recovery only insofar as the employer was not allocated fault in the third-party tort case. We invite the General Assembly to consider such an amendment.

I hope the General Assembly will take such action.  The current method of  addressing this issue is cumbersome and leads to the potential for injustice for tort plaintiffs and defendants.  It only makes sense that an employer should be allocated fault and that its subrogation interest be reduced appropriately.

The case is Troup v. Fischer Steel Corporation, No. W2005-00913-SC-R11-CV  ( Aug. 31, 2007).  Read it here.