Opinion
No. 1-692 / 01-0152.
Filed January 28, 2002.
Appeal from the Iowa District Court for Scott County, JAMES R. HAVERCAMP, Judge.
Continental Western Insurance Company (Continental) appeals following a judgment entered in favor of the plaintiffs. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH INSTRUCTIONS.
Charles W. Brooke and Kevin L. Halligan of Brooke Halligan, P.L.C., Davenport, for appellant.
Cheryl J. Newport and Stephen W. Newport of Newport Newport, P.L.C., Davenport, for appellee.
Considered by SACKETT, C.J., and MAHAN and HECHT, JJ.
Continental Western Insurance Company (Continental) appeals following a trial in which the district court awarded damages to Thomas Green, his wife Sharon, and his employer T.P. Green Sons (TPG) based on injuries Thomas sustained in an automobile accident. We hold the court erred in awarding damages to TPG, but affirm on all other issues.
I. Background Facts and Proceedings.
Plaintiff Thomas Green was injured in a two-vehicle accident on December 12, 1996, while working for TPG, a company solely owned and operated by him and his wife, Sharon Green. TPG was insured through a policy issued by Continental. TPG was a named insured on liability and workers' compensation insurance policies issued by Continental. The Greens filed a lawsuit against the other driver who had a liability insurance coverage limit of $100,000. The Greens settled their claim against the other driver for $60,000.
The Greens and TPG then filed the current lawsuit against Continental, claiming underinsured motorist coverage (UIM) and damages in excess of the insurance coverage of the tortfeasor. TPG alleged, as Thomas's employer, it had incurred expenses to hire others to replace his services and that it also was entitled to UIM payments. Following a bench trial, the court awarded Thomas $237,000 (which it reduced by five percent for Green's comparative fault), Sharon $38,000, and TPG $40,000. The court then reduced the total judgment by $100,000, the tortfeasor's insurance coverage limit. On appeal from the judgment against it, Continental contends the district court erred in (1) awarding damages to TPG; (2) failing to reduce Thomas Green's recovery by the amount of worker's compensation benefits he could have, but did not, recover; and (3) admitting certain expert testimony on the question of medical causation.
II. The Merits.
a.) TPG's claim for underinsurance benefits. Because this is an action at law, our review is for corrections of errors of law. Iowa R. App. P. 4. We are not bound by the trial court's application of legal principles or its conclusions of law. Midwest Recovery Servs. v. Wolfe, 463 N.W.2d 73, 74 (Iowa 1990).
In pertinent part, the insurance policy in question provides Continental "will pay all sums the `insured' is legally entitled to recover . . . from the . . . driver of an `uninsured motor vehicle'" and that the "damages must result from `bodily injury' caused by an `accident.'" Continental contends TPG has no cognizable claim for underinsurance benefits because it was not "legally entitled to recover" damages from the tortfeasor, and because TPG sustained no damages "resulting from bodily injury" as a result of the injury to Green. We agree with Continental and therefore reverse on this issue.
First, we conclude TPG was not "legally entitled to recover" damages from the tortfeasor. Our supreme court has made clear that employers have no claim for loss of an employee's time, expense of hiring a replacement worker, or increased workers' compensation premiums against a tortfeasor who injures an employee. Anderson Plasterers v. Meinecke, 543 N.W.2d 612, 615 (Iowa 1996) (adopting the modern prevailing view that there is no third-party liability to an employer in such a "purely commercial relationship").
In Wetherbee v. Economy Fire Casualty Co., 508 N.W.2d 657, 658 (Iowa 1993), the supreme court interpreted the phrase "legally entitled to recover damages" in a UIM policy simply to mean that the insured must have suffered damages caused by the fault of the underinsured motorist and be entitled to receive those damages. Id. at 661. In this case, pursuant to the holding of Anderson Plasterers, TPG was not "entitled to receive" damages for expenses to hire others to replace its injured employee's services. The district court erred in concluding otherwise.
We also conclude TPG's claim must fail because the insurance policy provides no underinsurance coverage for property damages. Underinsurance coverage does not provide coverage for such damages. West Trucking Line v. Northland Ins., 459 N.W.2d 262, 264 (Iowa 1990) (interpreting similar underinsurance provisions and finding no coverage for property damage to insured's truck). We believe the loss for which TPG claims coverage in this case is indistinguishable analytically from the property damage for which the insured sought coverage in West. Accordingly, we hold the district court erred in concluding TPG had underinsurance coverage for expenses to hire others to replace its injured employee. We therefore reverse the district court on this issue.
b.) Continental's Claim of Credit For Workers' Compensation. Our review of law actions is for corrections of errors of law. Chariton Feed and Grain, Inc. v. Harder, 369 N.W.2d 777, 782 (Iowa 1985).
The insurance contract under which the Greens and TPG sued provided Continental "would not pay any element of `loss' if a person is entitled to receive payment for the same element of `loss' under any workers' compensation . . . law." Continental, as TPG's workers' compensation insurer, paid Thomas's medical expenses and claimed a subrogation lien against the proceeds of the claim against the tortfeasor. See Iowa Code section 85.22(1) (1999). A contested case settlement reached by Continental and Thomas and approved by the Workers' Compensation Commissioner barred any further recovery by Thomas for workers' compensation benefits. Continental asserts the district court erroneously failed to reduce Thomas's underinsurance recovery by the amount of workers' compensation benefits Thomas could have recovered but for the special case settlement.
Continental fails to cite authority for the proposition that it is entitled to a credit for workers' compensation benefits that Thomas might have, but did not in fact, obtain. As TPG's workers' compensation insurance carrier, it was Continental itself that entered into the agreement which barred Thomas "from any future claims or benefits under the Iowa Workers' Compensation Law." Iowa Code section 516A.2(1) provides that insurers providing uninsured motorist (UM) coverage consistent with the provisions of chapter 516A "may include [in the coverage] terms, exclusions, limitations, conditions, and offsets which are designed to avoid duplication of insurance or other benefits." See Fort Madison Bank Trust Co. v. Farm Bureau Mut. Ins. Co., 543 N.W.2d 591, 594 (Iowa 1996). Our supreme court has previously approved of UM offsets prior to the insured receiving full compensation under the terms of the insurance contract if the offsets will avoid duplication of insurance or other benefits. See Gentry v. Wise, 537 N.W.2d 732, 735 (Iowa 1995); Davenport v. Aid Ins. Co. (Mut.), 334 N.W.2d 711, 715 (Iowa 1983). However, that "assumes the monies sought to be offset by the insurer were received by the party or entity seeking to recover UM benefits." Bank Trust Co. v. Farm Bureau Mut. Ins. Co., 543 N.W.2d at 594 (emphasis added). Here, there will never be any duplication because Thomas has no future right to receive additional workers' compensation benefits. The district court therefore properly refused to grant Continental a credit for workers' compensation benefits Thomas might have recovered but for the special case settlement.
c.) Admissibility of Expert Testimony. We generally review the admission of evidence under an abuse of discretion standard and do so here. Williams v. Hedican, 561 N.W.2d 817, 822 (Iowa 1997). Rulings on the admissibility of opinion evidence are not disturbed on appeal unless manifest abuse of discretion is shown. Hegtvedt v. Prybil, 223 N.W.2d 186, 189 (Iowa 1974).
Continental contends the court erroneously admitted the opinion testimony of several doctors and one nurse regarding Thomas's claims that his continuing and future back complaints and medical bills were caused by this accident. Continental's specific complaint is that their testimony is unreliable in that they incorrectly assumed that Thomas had no similar prior medical and psychological complaints. We find the court did not abuse its discretion in admitting the questioned evidence. If an expert makes some flawed assumptions in testifying, that fact goes to the weight to be given the opinion, not to its admissibility. Olson v. Nieman's, Ltd., 579 N.W.2d 299, 309 (Iowa 1998). The weight and credibility of testimony are matters for the jury. Oak Leaf Country Club, Inc. v. Wilson, 257 N.W.2d 739, 747 (Iowa 1977).
III. Conclusion.
We reverse the district court's award of damages to TPG. However, we hold the district court properly refused to credit Continental for workers' compensation benefits Thomas might have recovered but for the special case settlement and correctly allowed the admission of the expert testimony. We remand this case to the district court for entry of judgment consistent with our decision.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH INSTRUCTIONS.