Johanson Et Ux. v. Cudahy Packing Co.

A reconsideration of this case upon petition for rehearing convinces the writer that certain errors have crept into the minds of counsel and this court which should be corrected. There is no cause and effect relationship between the alleged tort of respondent and the payment of the award by the insurance carrier. Death, in this case, created no obligation on the part of the insurance carrier to pay. The case is not similar to payment upon a life policy where insured's death is the result of a tort of a third party. The obligation of the carrier to pay in this case arises from the act of an independent agency, the election of the dependents to take compensation. It is purely statutory. We do not have, here, a case of an insurance company trying to recover in tort for injuries sustained by it as the result of the tort. The obligation paid is not one which might have fallen upon the *Page 221 shoulders of respondent, had the dependents elected to sue in tort. The cause of action in tort which was available to the dependents died when they elected to take compensation. It was not the payment of the award which wiped out that cause of action. This is not a case of an insurer paying an obligation of another, for which, in equity and good conscience, it should be reimbursed. Even though respondent were sued and found liable in tort, it would not be obligated to pay the award, but would be obligated to pay damages. The insurance carrier's obligation to pay the award arose out of two facts: (1) the injury of the employee in the course of his employment, and (2) the election of the dependents to take compensation. Under those two facts the carrier's obligation to pay would exist even though it developed that respondent was not responsible in tort for the death of the employee. The statute does not assign the cause of action in tort that was available to the dependents, as that cause dropped out of the picture before the right of the carrier to institute action against respondent was born from payment of the award. What the statute does is to create a new cause of action for the benefit of the carrier, who, but for that statute, would be unable to trace any connection between its payment of the award and the alleged tort of respondent. The statute affords the carrier the means of establishing a judgment in which it is, by law, granted an interest to the extent of the award paid and the expenses of the action. The respondent is hardly in a position to complain that any excess of the judgment over and above the interest of the carrier goes to the dependents. If that situation develops it simply means that the statutory award is less than the actual loss sustained by those dependents. To pay them the difference does not pay them more than they lost. It certainly is not a gratuity to them. The amount of loss they sustained is determined by the rule for measuring damages in such death action. The carrier's interest in the amount *Page 222 of that loss when reduced to judgment is measured by the amount paid out by the carrier as an award, plus the expenses of the action. What this case decides is: The statutory cause of action in favor of the employer or the carrier granted by 42-1-58, R.S.U. 1933 may be assigned. The assignees 1 would have the right to sue for the full amount of damages, even though that amount is in excess of the award. Objection has been raised to our vacating the judgment of dismissal in this case in view of the fact that the complaint was defective in failing to allege payment of the award. Our attention is invited to the fact that appellants stood upon their complaint and refused to amend. Just what 2 would have been accomplished for appellants by an amendment as to payment, when the lower court had decided the cause of action could not be assigned is hard to see. The case was submitted upon the issue of whether or not the cause of action could be assigned. We decided it upon that issue. After holding that the cause of action can be assigned, to deprive appellants of an opportunity to amend their complaint upon an issue which now assumes an important role in the case would be to grasp at technicalities to defeat appellants. If the facts do not justify an amendment, then there should be none and the case should again be dismissed. "Payment" means payment of such sum of money as our Workmen's Compensation Act provides shall be the full amount of the award. The action is not to be maintained upon an instalment payment. The carrier has no right to anticipate payment by an action under the statute to recover the amount of the award. Were such an anticipation permitted, the carrier might recover more than it actually had to pay out. The matter of costs is solved by our determination that it was not error to vacate the judgment of dismissal. Petition for rehearing denied. *Page 223 MOFFAT, C.J., concurs.