Each week I'll be blogging about recent, interesting workers' compensation cases. I invite everyone to share their thoughts about these cases.
Supreme Court of Texas Revisits Its Entergy Decision: Deeply-Divided Court Affirms Its 2007 Determination That Premises Owner Can Also be General Contractor and Enjoy Immunity from Suit By Injured Employee of Subcontractor. Bowing to a storm of criticism from multiple directions within the Lone Star State, the Supreme Court of Texas last year granted a rehearing request in Entergy Gulf States, Inc. v. Summers, 2007 Tex. LEXIS 799, 50 Tex. Sup. J. 1140 (August 31, 2007), reh’g granted, 2008 Tex. LEXIS 301 (April 4, 2008), a controversial decision in which the court held that a premises owner could also be considered a general contractor and, under appropriate conditions, be shielded from tort liability for injuries sustained by an employee of a subcontractor. At issue was whether its 2007 Entergy decision was contrary to the clear intent of the state legislature that, in 1993, had amended the
Texas general contractor statute, but in doing so had also indicated that no substantive change had been intended. The 2007 decision marked what some called an abrupt change; owners had never enjoyed immunity from suits by injured employees of a subcontractor under prior law.
Summers, an employee of International Maintenance Corp. (“IMC”), which had contracted with Entergy to perform construction and maintenance on the latter’s Sabine Station plant, sustained injuries while working on the premises. The contract between IMC and Entergy referred to the former both as “independent contractor” and “contractor” and had a special provision that indicated that the use of such language should not be construed to bar Entergy from raising the “Statutory Employee” defense in any claim brought against it. Subsequently, Entergy sent IMC—and IMC signed—an addendum to the contract that indicated that Entergy was to be considered the statutory employer of IMC employees working at its plant, while IMC would remain the “direct employer.” The purpose of this addendum was to take advantage of a
Louisiana law that shields statutory employers from tort liability. Entergy also agreed to provide workers’ compensation coverage to IMC’s Sabine Station plant employees. Following Summers’ injuries, he applied for and received benefits under the workers’ compensation policy that had been secured by Entergy. Summers then filed a tort action against Entergy, contending he had been injured through Entergy’s negligent acts or omissions.
Entergy contended in relevant part that it was Summers’ statutory employer and accordingly was shielded from the civil action under the exclusive remedy provisions of the Texas Labor Code. The trial court agreed and granted summary judgment in Entergy’s favor. The court of appeals reversed [2004 Tex. App. LEXIS 11843], however, holding that the exclusive remedy provisions of the Texas law did not shield owners—only general contractors—that Entergy had failed to establish as a matter of law that that it had first “undertaken to perform work or services” and then subcontracted part of that work to Summers’ employer, as a general contractor would have done.
Speaking for the 6-3 majority, Justice Green today [April 3, 2009 decision on rehearing] indicated in relevant part that a premises owner that contracts for the performance of work on its premises, and provides workers’ compensation insurance to the contractor’s employees pursuant to that contract, is entitled to the benefit of the exclusive remedy defense generally afforded only to employers by the Texas Workers’ Compensation Act. Observing that the Act specifically confers statutory employer status on general contractors who qualify by providing workers’ compensation insurance for their subcontractors’ employees and yet says nothing about whether premises owners who act as their own general contractor are also entitled to employer status, the majority held that the exclusive remedy defense for qualifying general contractors is, likewise, available to premises owners who meet the Act’s definition of “general contractor,” and who also provide workers’ compensation insurance to lower-tier subcontractors’ employees. Because Entergy Gulf States, Inc. met the definition of “general contractor” under the Act, and because Entergy otherwise qualified under the Act as having provided workers’ compensation insurance under its written agreement with the injured worker's employer, it was entitled to the exclusive remedy defense against the negligence claims brought by the employee, John Summers. As it had done in 2007, the high court reversed the court of appeals’ judgment and rendered judgment for Entergy.
Justice O'Neill dissented and was joined by Chief Justice Henderson and Justice Medina. Justice O'Neill indicated in relevant part that the majority's reading of the statute constituted a major change in the law that, for the first time, enabled premises owners to become statutory employers entitled to the exclusive remedy defense—a result that the Legislature never intended. The dissent also argued that the Act never covered premises owners in the first place, that owners were not included within the definition of general contractors in the 1989 amendment, and that the only way to qualify as a “general contractor” was to be included in a “tripartite” relationship in which the general contractor in the middle of the transaction has, first, undertaken to perform work for an owner, and second, contracted part of that work to a subcontractor. Finally, the dissent argued in relevant part that the issues should be determined by the legislature, not by the courts. See generally Larson’s Workers’ Compensation Law § 111.04.
"Lent" Employee May Not Sue Borrowing Employer in Tort For Work-Related Injury. Kenwal Steel Corp. v. Seyring, 2009 Ind. App. LEXIS 522 (March 25, 2009). Appellee employee sued appellant employer for negligence and default judgment was entered against the employer. The trial court granted the employer's motion to set aside the default judgment but denied the employer's motion to dismiss. The employer pursued an interlocutory appeal. An employee leasing service placed the employee with the employer, and the employee was injured. The appellate court held the leasing service was the employee's lessor and the employer was his lessee so as to create a joint employer relationship for purposes of Ind. Code § 22-3-6-1(a) because a statutory reference to a "lessor" and "lessee" of employees was not a term of art that excluded temporary employees, and this interpretation was consistent with the Act's purpose to give employees a more certain remedy. The employee's exclusive remedy provision against both employers was within the workers' compensation system and not in a tort action. The employer's contract with the leasing service did not waive the exclusive remedy provision because, even if the employee were a third-party beneficiary of that contract and if an employer could waive the exclusive remedy provision by expressly assuming duties towards the employee beyond those implied in the employer/employee relationship, the employee did not show a waiver. The provision did not refer to worker's compensation or the exclusive remedy provision so it did not show an intentional relinquishment of a right to enforce that provision. The trial court's judgment was reversed. See generally Larson’s Workers’ Compensation Law § 67.01.
Police Officer's Injuries in Accident While Driving Unmarked Patrol Car Home Were Not Causally Connected to Employment for Purposes of Workers' Compensation. Fort Wayne Patrolmen's Benevolent Ass'n v. City of
Fort Wayne,
2009 Ind. App. LEXIS 523 (March 25, 2009). Appellants, a police officer and a union, filed suit against appellee city in which they sought damages and a declaratory judgment that the city was liable for the officer's injuries, which were sustained off duty. The Allen Superior Court (Indiana) granted the city's motion for summary judgment and denied appellants' motion for summary judgment. Appellants challenged the trial court's decision. While driving home in her unmarked police vehicle, the officer was involved in an accident. The court held that her compliance with the requirements that her police radio be turned on and that she be armed was insufficient to establish that she was injured "while performing a duty" under Ind. Code § 36-8-4-5 (2007). It stated that the rationale employed in a 1906 case regarding police funeral and pension benefits suggested that the city would be liable for her injuries if she demonstrated any causal connection between the facts resulting in her injury and either the fact that she was a police officer or the performance of a duty enjoined upon her. Furthermore, dictionary definitions indicated that "while performing a duty" could be defined as "during which time as one carries out obligatory tasks enjoined by her assigned participation in an activity." Here, the officer admitted that she was not actively engaged in any police work during her drive home and that her operation of her home fleet vehicle had nothing to do with her accident. Next, nothing in the plain language of the parties' collective bargaining agreement created any rights beyond those provided by § 36-8-4-5. The court affirmed the trial court's award of summary judgment in favor of the city. See generally Larson’s Workers’ Compensation Law § 14.05, 24.02.
Iowa Court Stays Proceedings Where Evidence Failed to Show Riverboat Casino Was Not a "Vessel" under Jones Act; Casino Was Capable of Navigation. Wilson v. Isle of Capri Casino, 2009
Iowa App. LEXIS 216 (March 26, 2009). The Iowa District Court for
Scott
County denied appellant casino's motion to stay enforcement of a workers' compensation judgment in appellee employee's favor pending judicial review. The district court determined the casino failed to meet its burden to establish the prerequisites for a stay. The casino appealed. The casino claimed that the workers' compensation commissioner, in determining it had jurisdiction, and the district court, in issuing the stay, misapplied the law by distinguishing its ship from the riverboat casinos involved in another case. The agency found that the casino was not a vessel and therefore the Iowa Workers' Compensation Commission had jurisdiction over the employee's claim. The appellate court found that federal law did not require a riverboat casino to actually sail to be a "vessel" under the Jones Act, 46 U.S.C.S. § 30104, but only required the ship to be capable of transporting on water, 1 U.S.C.S. § 3. There was no evidence in the record showing that the casino was permanently moored to the dock at the time of the employee's injury. At the time of the employee's accident, the casino was still capable of sailing and was still under the jurisdiction of the Coast Guard. The balance of factors in deciding whether a stay was warranted, Iowa Code § 17A.19(5)(c) (2007), weighed in the casino's favor and it was an abuse of discretion to deny its motion to stay enforcement of the workers' compensation judgment pending judicial review. The judgment was reversed and remanded for the court to issue a stay of the judgment pending judicial review. See generally Larson’s Workers’ Compensation Law § 146.02.
Ohio Supreme Court Refuses to Extend Firefighter's Rule to Protect General Contractor. Torchik v. Boyce, 2009 Ohio 1248; 2009
Ohio LEXIS 706 (March 25, 2009). A county deputy sheriff sought review of a judgment from the Court of Appeals for
Ross
County (
Ohio ), which affirmed a trial court grant of summary judgment to, inter alia, appellee contractor in the sheriff's personal injury action, arising from his fall when deck steps at a residence collapsed. The court of appeals had held that the sheriff's tort action was barred by the fireman's rule. The sheriff was dispatched to investigate a sounding home burglar alarm. Upon walking down deck steps after checking the back windows and doors, the steps collapsed and the sheriff suffered an injury. He filed suit against the home-owner and the contractor who built the house and deck. The trial court granted summary judgment to appellees, finding that the sheriff's claims were barred by the fireman's rule. The court of appeals affirmed the grant of summary judgment, finding that the sheriff's injuries were better compensated through the workers' compensation system. It held that extension of the fireman's rule to the contractor was warranted. On further review, the court reviewed the history and principles of the fireman's rule and found that it was improper to extend it to independent contractors. The contractor's duty of care did not depend on whether a police officer or firefighter's presence was expected. Rather, the contractor's duty was based on the degree of care and foreseeability of injury pursuant to ordinary negligence principles. The state supreme court reversed the judgment of the court of appeals and remanded the matter to the trial court for further proceedings. See generally Larson’s Workers’ Compensation Law § 110.08.
HOW WOULD YOU DECIDE?
Apportionment Allowed For Portion of
California Claimant’s Disability Associated with Illiteracy and Language Difficulties. A
California worker sustained specific and cumulative injuries to his knees, shoulders, wrists, and right ankle while working as an auto washer for a rental car company. Due to the worker's injuries and his inability to read and write English, the workers' compensation judge found him to be non-feasible for vocational rehabilitation and, accordingly, awarded permanent total benefits. Most jurisdictions follow the "full responsibility rule" whereby an employer takes the employee as it finds him/her and is, therefore, responsible for the entire disability outlay.
California , however, allows apportionment of a worker's claim under some, specific circumstances. Its statute generally provides that the employer is liable for only the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. The rental car company accordingly contended that the worker's limited language skills (he was virtually illiterate even in his native Spanish) and his overall lack of aptitude was a pre-existing, non-industrial factor that would support apportioning the worker's permanent disability benefits. Can/should such illiteracy be deemed a non-industrial "disability"?
How would you decide?
In Hertz Corp. v. Workers' Comp. Appeals Bd. & Manuel Aguilar, 2008 Cal. App. LEXIS 2422 (December 16, 2008), review granted, depublished March 25, 2009, the Court of Appeal of California (6th Appellate District) determined that in as much as the Board's finding of 100 percent permanent disability was based, in part, on the finding of vocational non-feasibility, that is, a finding of the worker's permanent inability to compete in an open labor market, and since that finding was based, in part, on pre-existing, nonindustrial factors, it was error to direct the employer to provide 100 percent permanent disability benefits; the rental car company should not be liable for the portion of the workers' disability that had been caused by the pre-existing nonindustrial factors. The court of appeal, therefore, remanded the matter for a redetermination of Aguilar's permanent disability rating keyed to industrial factors.
Note, however, that the Court of Appeal has apparently had second thoughts. On March 25, 2009, review was granted, and the decision was depublished. We will need to await an additional ruling by the court. See generally Larson’s Workers’ Compensation Law § 90.03, 90.04.
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