Cunningham v. Loma Systems et al
ORDER denying 81 Motion for Summary Judgment. An evidentiary hearing is set for October 18, 2012. The parties should list their witnesses and estimated length of testimony and exhibits by October 1, 2012. Signed by Judge D. P. Marshall Jr. on 7/2/12. (kpr)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
CANDILYN J. CUNNINGHAM
LOMA SYSTEMS, a division of
Illinois Tool Works, Inc., successor
in interest to Cintex of America, Inc.
TYSON FOODS, INC.
Cunningham moves for summary judgment on Tyson's claim for
reimbursement of the workers' compensation benefits it has paid due to
Cunningham's work-related injury. Document No. 81. The papers make it
clear to the Court that many factual disputes exist about whether
Cunningham was made whole under the law when she settled her lawsuit
against Lorna Systems for $2.5 million. Summary judgment is therefore
inappropriate. Porter v. City ofLake Lotawana, 651 F.3d 894,897 (8th Cir. 2011).
The Court will hold an evidentiary hearing on the made-whole issue on 18
October 2012 starting at 9:00 a.m. in Courtroom B-155 of the Richard
Sheppard Arnold United States Courthouse. There are, however, a couple of
matters the Court can decide as a matter of law before the hearing.
First, with candor, Tyson concedes that there is no Arkansas law
supporting its argument that the amount of damages necessary to make
Cunningham whole should be reduced by her percentage of contributory
negligence. South Central Arkansas Electric Cooperative v. Buck, 354 Ark. II, 117
S.W.3d 591 (2003) does not advance Tyson's argument.
Supreme Court simply acknowledged that the Cooperative made the
contributory-negligence argument Tyson now makes, but refused to address
this argument because the Cooperative had failed to raise it below. 354 Ark.
at 21, 117 S.W.3d at 597.
In short, Tyson cites no authority- binding,
persuasive, or otherwise - for its contributory-negligence argument. The
Court concludes that it is inconsistent in principle with the made-whole
doctrine. The Court therefore rejects it.
Tyson next argues that the Court should consider the amount of
damages Cunningham accepted in her settlement agreement with Lorna
Systems as conclusive evidence that Cunningham was made whole. Tyson
acknowledges that Arkansas law does not support its argument and points
instead to a decision by the Washington Court of Appeals. But there is no
need to look across the country when Arkansas cases are directly on point.
For example, in Southern Farm Bureau Casualty Insurance Company v.
Tallant, 362 Ark. 17, 207 S.W.3d 468 (2005), the Arkansas Supreme Court
considered an argument identical to Tyson's. Southern Farm Bureau sought
to estop Tallant from arguing that he was not made whole when he settled his
claim for less than the wrongdoer's insurance policy limits. 362 Ark. at 25,
207S.W.3d at 473. The Court squarely rejected that argument. "Thedecision
of whether any party will be unjustly enriched is a decision made by the
court, irrespective of assertions made by [the parties]." 362 Ark. at 26, 207
S.W.3d at 473.
Further, the particulars of Cunningham and Loma System's settlement
agreement do not determine Tyson's subrogration claim.
companies, through their coverage contracts, are not free to define the terms
and conditions of the equitable remedy of subrogation." Tallant, 362 Ark. at
23,207 S.W.3d at 472. Applying that principle here, Cunningham and Loma
System's settlement agreement" does not and cannot define the nature or
extent of the remedy subrogation provides[;]" "the insurer takes the remedy
as it is defined by law." 362 Ark. at 23-24,207 S.W.3d at 472. The predicate,
under Arkansas law, to any subrogation claim is that the insured has been
made whole. 362 Ark. at 24,207 S.W.3d at 472. At the upcoming hearing, the
Court will decide whether Cunningham has.
The Court sees several factual disputes for resolution.
The extent of Cunningham's injuries and impairments;
Her future medical expenses;
The need for 24-hour care;
Whether she stopped working because she couldn't or
The general uncertainty created by the open workers'
There also remains a mixed question of law and fact: whether unemployment
and social security disability payments should factor in and how much they
have been and will be.
Motion, Document No. 81, denied.
Evidentiary hearing set for 18
October 2012. The parties should list their witnesses (and estimated length
of testimony) and exhibits by 1 October 2012.
D.P. Marshall Jr.
United States District Judge
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