GKN Co. v. Magness

• Decision Date: 13 March 2001
• Docket Number: No. 49S02-0002-CV-116.,49S02-0002-CV-116.
• Citation: 744 N.E.2d 397
• Parties: GKN CO., formerly known as Gust K. Newberg Construction Company, Appellant-Defendant, v. Larry MAGNESS, Appellee-Plaintiff.
• Court: Indiana Supreme Court

744 N.E.2d 397

GKN CO., formerly known as Gust K. Newberg Construction Company, Appellant-Defendant, v. Larry MAGNESS, Appellee-Plaintiff.

No. 49S02-0002-CV-116.

Supreme Court of Indiana.

March 13, 2001.

Ronald J. Waicukauski, Heidi G. Goebel, White & Raub, LLP, Indianapolis, IN, Attorneys for Appellant.

James H. Young, Young & Young, Indianapolis, IN, Attorney for Appellee.

ON PETITION TO TRANSFER

RUCKER, Justice

Case Summary

A truck driver sued his general contractor for injuries sustained while working on a highway construction project. Contending the truck driver was its employee, the general contractor responded with a motion to dismiss for lack of subject matter jurisdiction. According to the general contractor, the truck driver's exclusive remedy rested with the Indiana Worker's Compensation Act. The trial court denied the motion, and the general contractor pursued an interlocutory appeal. Concluding that a majority of the factors outlined by this Court in Hale v. Kemp, 579 N.E.2d 63 (Ind.1991), weighed in favor of the general contractor, the Court of Appeals reversed in a memorandum decision. GKN Co. v. Magness, 712 N.E.2d 57 (Ind.Ct.App.1999). Having previously granted transfer, we now affirm the trial court's judgment. In this opinion we hold the following: (1) the factors set forth in Hale must be weighed and balanced against each other; (2) the right of control is the most important factor in determining the existence of an employment relationship; and (3) the allegations in the complaint determine who has the burden of demonstrating the exclusivity of the Indiana Worker's Compensation Act.

Facts

GKN Co., formerly known as the Gust K. Newberg Construction Company, was the general contractor of an I-465/I-65 highway construction project. Starnes Trucking, Inc. entered into a written agreement with GKN to haul various materials to and from a GKN job site known as a "batch plant"—a facility where water, cement, and gravel are mixed to create concrete to be used during construction. In turn, Starnes Trucking hired Larry Magness to drive a cement truck. Specifically Magness was required to haul concrete from the batch plant to various highway construction sites.

While present at the batch plant on July 14, 1992, Magness proceeded to refuel his truck. The tank containing the fuel was surrounded by a concrete-covered retaining wall designed to contain the fuel in the event of a spill. Magness was standing on the wall trying to reach the fuel nozzle on top of the tank when the wall collapsed. Falling to the ground, Magness sustained injuries to his right wrist and forearm.

Magness received worker's compensation from Starnes Trucking. He also filed a complaint for damages against GKN complaining of negligence in the maintenance and construction of the retaining wall. Relying on Indiana Trial Rule 12(B)(1), GKN filed a motion to dismiss the complaint for lack of subject matter jurisdiction contending Magness was an employee of GKN. Thus, according to GKN, Magness' exclusive remedy rested with the Indiana Worker's Compensation Act. The trial court denied the motion without reciting its reasons or entering factual findings. On interlocutory review, the Court of Appeals reversed the judgment of the trial court. On transfer, we now affirm the trial court's judgment.

Standard of Review

When an employer defends against an employee's negligence claim on the basis that the employee's exclusive remedy is to pursue a claim for benefits under the Indiana Worker's Compensation Act, the defense is properly advanced through a motion to dismiss for lack of subject matter jurisdiction under Indiana Trial Rule 12(B)(1). Foshee v. Shoney's, Inc., 637 N.E.2d 1277, 1280 (Ind.1994). In ruling on a motion to dismiss for lack of subject matter jurisdiction, the trial court may consider not only the complaint and motion but also any affidavits or evidence submitted in support. Indiana Dep't of Highways v. Dixon, 541 N.E.2d 877, 884 (Ind.1989); Borgman v. State Farm Ins. Co., 713 N.E.2d 851, 854 (Ind.Ct.App. 1999), trans. denied. In addition, the trial court may weigh the evidence to determine the existence of the requisite jurisdictional facts. Borgman, 713 N.E.2d at 854.

The trial court standard for evaluating Trial Rule 12(B)(1) motions to dismiss is not in dispute. However, the standard for appellate review of a trial court's grant or denial of such a motion requires clarification. For example, it has been declared that when evaluating the trial court's ruling on a motion to dismiss for lack of subject matter jurisdiction, a reviewing court will affirm the judgment of the trial court upon any theory supported by the evidence of record. See, e.g., M.V. v. Charter Terre Haute Behavioral Health Sys., Inc., 712 N.E.2d 1064, 1066 (Ind.Ct. App.1999)

; Ransburg Indus. v. Brown, 659 N.E.2d 1081, 1083 (Ind.Ct.App.1995),

trans. denied; Tapia v. Heavner, 648 N.E.2d 1202, 1206 (Ind.Ct.App.1995). By contrast it has also been declared that where the facts are not in dispute, a court of review will look de novo at the trial court's ruling on a Trial Rule 12(B)(1) motion to dismiss. See, e.g., Save the Valley, Inc., v. Indiana Dep't of Envtl. Mgmt., 724 N.E.2d 665, 668 (Ind.Ct.App.2000),

trans. denied; Fratus v. Marion Cmty. Schs. Bd. of Trs., 721 N.E.2d 280, 284 (Ind.Ct.App.1999),

trans. granted, 735 N.E.2d 232 (2000); McEnroy v. St. Meinrad Sch. of Theology, 713 N.E.2d 334, 336 (Ind.Ct.App.1999),

trans. denied, cert. denied, 529 U.S. 1068, 120 S.Ct. 1675, 146 L.Ed.2d 484 (2000); Common Council of City of Hammond v. Matonovich, 691 N.E.2d 1326, 1328 (Ind.Ct.App.1998),

trans. denied; Rieheman v. Cornerstone Seeds, Inc., 671 N.E.2d 489, 491 (Ind.Ct. App.1996), trans. denied.

A review of the case authority shows that the standard of appellate review for Trial Rule 12(B)(1) motions to dismiss is indeed a function of what occurred in the trial court. That is, the standard of review is dependent upon: (i) whether the trial court resolved disputed facts; and (ii) if the trial court resolved disputed facts, whether it conducted an evidentiary hearing or ruled on a "paper record."

If the facts before the trial court are not in dispute, then the question of subject matter jurisdiction is purely one of law. Under those circumstances no deference is afforded the trial court's conclusion because "appellate courts independently, and without the slightest deference to trial court determinations, evaluate those issues they deem to be questions of law." Bader v. Johnson, 732 N.E.2d 1212, 1216 (Ind. 2000). Thus, we review de novo a trial court's ruling on a motion to dismiss under Trial Rule 12(B)(1) where the facts before the trial court are undisputed.

If the facts before the trial court are in dispute, then our standard of review focuses on whether the trial court conducted an evidentiary hearing. Under those circumstances, the court typically engages in its classic fact-finding function, often evaluating the character and credibility of witnesses. Anthem Ins. Cos., Inc. v. Tenet Healthcare Corp., 730 N.E.2d 1227, 1238 (Ind.2000). Thus, where a trial court conducts an evidentiary hearing, we give its factual findings and judgment deference. Menard, Inc. v. Dage-MTI, Inc., 726 N.E.2d 1206, 1210 (Ind.2000). And in reviewing the trial court's factual findings and judgment, we will reverse only if they are clearly erroneous. Id. Factual findings are clearly erroneous if the evidence does not support them, and a judgment is clearly erroneous if it is unsupported by the factual findings or conclusions of law. Id.

However, where the facts are in dispute but the trial court rules on a paper record without conducting an evidentiary hearing, then no deference is afforded the trial court's factual findings or judgment because under those circumstances a court of review is "in as good a position as the trial court to determine whether the court has subject matter jurisdiction." MHC Surgical Ctr. Assocs., Inc. v. State Office of Medicaid Policy & Planning, 699 N.E.2d 306, 308 (Ind.Ct.App. 1998). See also Farner v. Farner, 480 N.E.2d 251, 257 (Ind.Ct.App.1985)

(agreeing with the proposition that "where a case is tried wholly upon documents or stipulations, the appellate tribunal is in as good a position as the trial court to determine the force and effect of the evidence.") Thus, we review de novo a trial court's ruling on a motion to dismiss where the facts before the court are disputed and the trial court rules on a paper record.

In this case, several facts before the trial court were in dispute and just as important even for those facts not in dispute, the parties disagree about the inferences to be drawn from those undisputed facts. Further, the trial court did not conduct an evidentiary hearing, rather it ruled upon a paper record consisting of the parties' complaints, contract, affidavits of witnesses, and excerpts of deposition testimony. Accordingly, in reviewing the factual findings as well as the conclusions of law in this case, we apply a de novo standard of review. In so doing, we will affirm the judgment of the trial court on any legal theory the evidence of record supports. However, the ruling of the trial court is presumptively correct, and we will reverse on the basis of an incorrect factual finding only if the appellant persuades us that the balance of evidence is tipped against the trial court's findings.

Discussion

I.

The Indiana Worker's Compensation Act (the "Act") provides the exclusive remedy for recovery of personal injuries arising out of and in the course of employment. Ind.Code § 22-3-2-6. Although the Act bars a court from hearing any common law claim brought against an employer for an on-the-job injury, it does permit an action for injury against a third-party tortfeasor provided the third-party is neither the plaintiff's employer nor a fellow employee. I.C. § 22-3-2-13. Here, Magness contends that he is entitled...