Nebraska Statute short on made whole doctrine

The Nebraska Supreme Court held in a worker’s compensation case that distribution of proceeds recoverd from a third party is not subject to the equitable “made whole” doctrine of equitable subrogation.

Now, § 48-118 includes language providing for a fair and equitable distribution. It does not, however, adopt the “made whole” doctrine. Nor does it adopt any other specific rule for determining how to fairly and equitably distribute the settlement. Instead the language is plain: The court “shall order a fair and equitable distribution.” Because we apply statutory subrogation, we decline to further read into § 48-118 a requirement that the employee be “made whole.” Instead, under the plain language of § 48-118, the trial court shall make a fair and equitable distribution. The distribution is left to the court’s discretion.

The case is remanded to the court to make its decision without regard to the “made whole” doctrine. It will be interesting to see if the Judge comes up with any different opinion as to what is “fair and equitable” when a person is not made whole by the third party settlement.