Utah Home Fire Insurance Co. v. Manning

STEWART, Justice,

dissenting:

¶ 29 I dissent.

¶ 30 The majority opinion flouts the plain and controlling language of §§ 35-1-601 and 35-1-622 of the Workers’ Compensation Act and misstates, and in effect overrules sub silentio, the holding of Riddle v. Mays, 780 P.2d 1252 (Utah 1989). The majority’s view that it is improper for the dissent to address the issue at hand is incorrect. The issue has been raised, and it is our duty to address it, as I explain at the end of this opinion.

¶ 31 The issue is whether Patrick J. Manning, an injured employee of Holmes & Nar-ver, Inc. (H & N), has a common right of action against William R. Green, dba Green Services. Green Services’ public liability insurance carrier challenges Manning’s right to sue Green.

¶ 32 Green contracted to install siding on a building for H & N but was discharged by H & N prior to H & N’s hiring of Manning. Green held itself out as an independent contractor but, while working for H&N, was an employee and statutory employee because H & N had far-reaching control of Green’s conduct on the job, as the majority states.3 Manning was never an employee of H & N at the same time that Green was an employee (statutory or otherwise, it makes no difference) of H & N.

¶ 33 Manning was severely injured while in the course and scope of his employment *252with H & N. He received workers’ compensation from H & N and then sued Green for negligence that occurred prior to Manning’s employment with H & N, and that allegedly caused his injuries. At the time of Manning’s accident, Green had no employment relationship with H & N, either as an employee or as a statutory employee'.

¶ 34 The majority opinion holds that because Green Services had been an employee of H & N prior to the time H & N hired Manning, Manning and Green were co-employees, although they had never been employees of H & N at the same time, and therefore Manning was barred under section 35-1-60 of the Act from suing Green.

¶ 35 Under the Act, an injured employee is entitled to workers’ compensation if he is injured by an accident that occurs in the scope and course of his employment. See Utah Code Ann. § 35-1-45 (1988).4 If that test is met, it makes no difference whether the injury was caused by the employer, a co-employee of the injured employee, or a third person. Thus, “course and scope of employment” defines the applicability of the Act as to both the right to compensation and the scope of the exclusive remedy provision. Section 35-1-60 establishes the fundamental principle that the “right to recover compensation ... for injuries sustained by an employee” in the course and scope of his employment by the employer is the exclusive remedy “against the employer and shall be the exclusive remedy against any officer, agent, or employee of the employer.” (Emphasis added.)

¶36 To reach the result the majority does, it is necessary to add words to the statutory language in section 35-1-60 that the Legislature did not employ. In effect the majority adds the word “former” to the terms “employer,” “officer,” “agent,” and “employee,” expanding the exclusive remedy provision far, far beyond what the Legislature provided and even past rationality. To say that an employee injured in the course and scope of his employment is a co-employee of one who previously worked for the same employer is nonsense, especially when the injured employee did not work for the employer at any time when the prior employee worked for the employer and therefore was never a co-employee. To say that an injured employee cannot sue at common law former employers and former officers, agents, and employees constitutes a huge distortion of the Act.

¶ 37 A corollary principle of the right to compensation for an industrial accident is that all persons sharing the employment relationship at the time of the injury are immune from a common law action for damages. Thus, for the purpose of determining the employee’s right to compensation, and also for the purpose of determining an employee’s right to sue a third person for damages, the existence of the employment relationship at the time the accident occurs determines both the employee’s right to compensation and the immunity of the employer and its officers, agents, and employees from a common law action for the same accident. Professor Larson states:

The controlling fact in establishing exclusiveness [of the workers’ compensation remedy] is the relationship of the parties at the time of occurrence of the injury. Their relationship at other times, such as the time of the employer’s [or co-employee’s] misconduct or the time of bringing the suit is immaterial.

6 Arthur Larson & Lex A. Larson, Larson’s Workers’ Compensation Law § 65-13, at 12-17 (1998) (emphasis added). That is precisely what the following courts have held: See Hull v. Aurora Corp. of Ill., 89 A.D.2d 681, 454 N.Y.S.2d 39 (N.Y.App.Div.1982); Konken v. Oakland Farmers’ Elevator Co., 425 N.W.2d 302, 304-06 (Minn.Ct.App.1988); DuVon v. Rockwell Int’l, 116 Wash.2d 749, 807 P.2d 876, 878-79 (1991) (en banc).

¶ 38 The majority opinion asserts that I have misstated the content of Professor Larson’s Treatise and have erroneously referred to section 65.13 as support for the proposition that the critical time for determining *253whether an injured employee can sue another for damages is the time of the accident.

¶ 39 The majority’s assertion that I have misstated section 65.13 is simply wrong. To repeat the critical language of section 65.13 at 12-17: “The controlling fact in establishing exclusiveness [of the workers’ compensation remedy] is the relationship of the parties at the time of the occurrence of the injury.”5 (Emphasis added.) Their relationship at other times “is immaterial.” Id. The majority states that this applies only with respect to determining who an employer is. The above language simply does not say that. The caption to section 63.13 states broadly: “Time of injury controls [the exclusivity] defense.” Furthermore, as a logical matter, if the time of injury controls the determination of who is an employer, how can the time of injury not control the determination of who is an employee? The same standard must control both questions, and, as shown below, that is exactly what the Utah Act provides.

¶ 40 The majority opinion, after asserting erroneously that section 65.13 at 12-17 of Professor Larson’s treatise refers only to the determination of who an employer is, then states that “[t]he error in this is that co-employee immunity is addressed in a completely different part of the treatise in a manner that contradicts the dissent’s position. See id. §§ 72.00 to 72.34.” Supra ¶ 24. It is patently false to say, as the majority does, that those sections contradict the dissent. Sections 72 to 72.34 do not address at all the question of whether an injured employee may sue a prior employee of the employer. That issue, as to when the necessary employment relationship exists, is addressed, as stated above, in section 65.13.

¶41 Section 35-1-62 of the Utah Act makes explicit that the time of the accident controls who is deemed to be an employer and who is deemed to be an employee. The section states:

When any injury or death for which compensation is payable under this title shall have been caused by the wrongful act or neglect of a person other than an employer, officer, agent, or employee of said employer, the injured employee ... may claim compensation and ... may also have an action for damages against such third person.....
For the purposes of this section and notwithstanding the provisions of Section 35 — 1^42, the injured employee or his heirs or personal representative may also maintain an action for damages against subcontractors, general contractors, independent contractors, property owners or their lessees or assigns, not occupying an employer-employee relationship with the injured or deceased employee at the time of his injwry or death. When any injury or death for which compensation is payable under this title shall have been caused by the wrongful act or neglect of a person other than an employer, officer, agent, or employee of said employer, the injured employee, or in case of death of his dependents may claim compensation and the injured employee or his heirs or personal representative may also have an action for damages against third persons.

Utah Code Ann. § 35-1-62 (1988) (emphasis added).

¶ 42 Under section 35-1-62, Manning “may claim compensation and ... may also have an action for damages against [a] third person” and may also “maintain an action ... against subcontractors, general contractors, independent contractors ... not occupying an employer-employee relationship with the injured or deceased employee at the time of his injury or death.” In short, H & N did not have an “employer-employee relationship” with Green at the time of Manning’s *254injury. Green was a former employee at that time. At the time of the injury, Green was both a third person and an independent contractor. It follows that Manning has a statutory right to sue Green for damages.

¶ 43 Much of the majority opinion goes to great length to prove that Green was an employee of H & N. That point is uncontested; but, although not critical in the above analysis based on section 35-1-62, it is also true that Green was also a statutory employee of H&N.

¶ 44 Riddle v. Mays, 780 P.2d 1252 (Utah 1989), also compels the conclusion that Manning may sue Green under section 35-1-62. Riddle was an employee of Owens-Corning Fiberglass Corp. The defendant Mays was employed by Mountain States Insulation Corp., a subcontractor of Owens-Corning. Riddle was injured by Mays. The trial court dismissed Riddle’s action for damages against Mays and Mountain States on the ground that Riddle’s exclusive remedy was workers’ compensation under section 35-1-60. Riddle appealed on the ground that only his direct and actual employer, Owens-Corning, and its agents and employees were immune from suit under section 35-1-60. On appeal, this Court accepted the trial court’s finding that Owens-Corning was the statutory employer of Mays and held that under Pate v. Marathon Steel Co., 777 P.2d 428 (Utah 1989), Riddle could recover damages under section 35-1-62 against a statutory employee who was also an independent contractor for other purposes. That is precisely the situation here — Green was a statutory employee, and perforce an independent contractor.

¶45 The majority dismisses Riddle by asserting that Mountain States Insulation Corp. was a subcontractor of Owens-Corning; but that did not obviate the fact that Mountain States was also a statutory employee of Owens-Corning. Accordingly, Mays could sue Mountain States under section 35-1-62 even though Mays and Mountain States were both employees of Owens-Corning. The majority maintains that Green was an employee, but not a statutory employee, because the test for determining an employee — the right to control — is more stringent than the test for determining a statutory employer. The point is incorrect. An independent contractor can clearly meet the right to control test and still be a statutory employee, as occurred with respect to Green. See Lee v. Chevron Oil Corp., 565 P.2d 1128 (Utah 1977).

¶46 Finally, it is not improper for the Court to address the issues discussed in the dissent. Patrick Manning, in his brief, asserts that he has a claim “against Green Services” which is actionable “pursuant to section 35-1-62(4), Utah Code Annotated.” Indeed, Manning relies specifically on the statutory language set out above that is found in section 35-1-62. Thus, raising these issues is entirely appropriate. Even if Manning had not raised the issue, addressing it would still be proper. An appellate court, in discharging its sworn duty to decide a case on the merits of the substantive law, is obligated to address those issues “ ‘necessary to a proper decision.’” Kaiserman Assocs., Inc. v. Francis Town, 977 P.2d 462, 464 (Utah 1998) (quoting Falk v. Keene Corp., 113 Wash.2d 645, 659, 782 P.2d 974, 982 (1989)). Courts ought never to decide a case on the basis of which attorney scores the most points in the contest between the parties. The obligation of this Court runs to the parties, not the attorneys. If the attorneys have failed to argue an issue precisely as it might best be framed, it is for an appellate court, nevertheless, to decide the issue correctly: “We should not be forced to ignore the law just because the parties have not raised or pursued obvious arguments.” Id. at 464.

. This provision has been renumbered and is now found at Utah Code Ann. § 34A-2-105 (1997).

. This provision has been renumbered and is now found at Utah Code Ann. § 34A-2-106(l) to -106(4) (1997).

.The majority opinion rules that Green was an employee of H & N. In actuality, Green was a “statutory employee” of H & N. See Utah Code Ann. § 35-1-42; Lee v. Chevron Oil Co., 565 P.2d 1128 (Utah 1977). Whether "employee” or “statutory employee,” however. Manning is not barred from suing Green under the exclusive remedy provision of section 35-1-60. While H & N controlled much of Green’s on-job conduct, the contract with Green provided for a lump sum payment to Green and for Green to provide the necessary equipment to perform the job. To say that Green was an employee and a statutory employee with respect to H & N is fully consistent with Green's also being an independent Con- , tractor for other purposes. See, e.g., Bennett v. Industrial Comm'n, 726 P.2d 427 (Utah 1986); Lee v. Chevron Oil, 565 P.2d 1128 (Utah 1977).

. This provision has been renumbered and is now found at Utah Code Ann. § 34A-2-401 (1997).

. The next sentence in section 65.13 at 12-17 states that the time “of the employer’s misconduct” is an example of factors that are irrelevant in establishing the exclusiveness of the compensation remedy. It is absurd to suggest, as the majority implicitly does, that the time for determining who is an employee under the Act is different from the time for determining who an employer is. Indeed, the terms “employer” and "employee” are reciprocal. One cannot exist without the other. Furthermore, the use of a "for instance” by Professor Larson does not limit the applicability of the general principle stated in section 65.13. It is plainly disingenuous to suggest otherwise.