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City of Waterloo v. Tim Everett

May 15, 2013

CITY OF WATERLOO, PLAINTIFF-APPELLANT,
v.
TIM EVERETT, DEFENDANT-APPELLEE.



Appeal from the Iowa District Court for Black Hawk County, Andrea J. Dryer, Judge.

The opinion of the court was delivered by: Tabor, J.

The City of Waterloo appeals the district court's conclusion it is not entitled to reimbursement from a police officer's settlement with a third party tortfeasor. AFFIRMED.

Considered by Eisenhauer, C.J., and Potterfield and Tabor, JJ.

This case involves the City of Waterloo's efforts to be reimbursed under Iowa Code section 411.22 (2011) for its payment of medical expenses and temporary disability benefits on behalf of an injured police officer. The district court rejected the city's indemnification claim to proceeds of the officer's settlement of his tort claim against third parties. Because section 411.22 only contemplates subrogation and indemnification rights for the Municipal Fire and Police Retirement System of Iowa (retirement system), and not individual cities, we affirm the district court.

I. Background Facts and Proceedings

Timothy Everett is a police officer for the City of Waterloo. On January 7, 2008, a car hit Everett, crushing his knee. The injuries caused him to miss work from January 9 through June 8, 2008, and from October 31 until November 28, 2008.

Because Everett was on duty when the accident occurred, the city paid $41,642 (corrected from an original amount of $43,854.59) toward his hospital, nursing, and medical costs, and $23,959.84 in temporary disability pay. On March 6, 2009, the statewide system effectively retired Everett for "total and permanent accidental disability."*fn1 Seven months later, Dennis Jacobs, the executive board director of the retirement system signed a document expressly waiving its subrogation interest under chapter 411.*fn2

Meanwhile, Everett filed a personal injury claim against Elvis and Mukadesa Alicic, the driver and owner of the car that struck him. Nationwide Insurance Company, as the Alicics' insurer, offered to settle for its $100,000 policy limit. The city learned of Nationwide's offer and asked to receive $45,232.22 as reimbursement for the $67,814.43*fn3 paid minus the one-third share of Everett's attorney fees. In January 2010, Nationwide settled with Everett for $100,000. Everett and the city agreed to place those funds into a trust account pending resolution of the city's subrogation claim.

The city then filed a petition against Everett seeking reimbursement for its disability and medical payments. The parties submitted stipulated facts, exhibits, and testimony. On May 31, 2012, the district court ruled in favor of Everett, concluding Iowa Code section 411.22 did not entitle the city to a portion of proceeds from Everett's settlement with Nationwide. The court did determine that section 411.15 "imposes a duty to indemnify the city," but the city did not prove the amount of the deduction under that provision. The city now appeals.

II. Scope and Standard of Review

We review statutory interpretation for legal error. Krupp Place 1 Co-op, Inc. v. Bd. of Review of Jasper Cnty., 801 N.W.2d 9, 13 (Iowa 2011).

III. Analysis

The city seeks to recover the amounts it spent on Everett's medical expenses and temporary disability benefits from his damage settlement with the responsible third parties. The city stakes its right to recovery on section 411.22, which cross references sections 411.6(5) and 411.15.

As its primary focus, the city asserts the history of chapter 411 signals the legislature's intent to allow a city subrogation and indemnification rights to recover disability and medical payments from an officer's third-party settlement. Before the statewide system was in place, cities provided their own individual retirement systems for their police officers and firefighters. Bd. of Trs. of Mun. Fire & Police Ret. Sys. of Iowa v. City of West Des Moines, 587 N.W.2d 227, 228 (Iowa 1998). But in 1992, our legislature amended chapter ...


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