Anderson v. Sanderson & Porter

• Decision Date: 04 January 1945
• Docket Number: No. 12890.,12890.
• Citation: 146 F.2d 58
• Parties: ANDERSON et al. v. SANDERSON & PORTER et al.
• Court: U.S. Court of Appeals — Eighth Circuit

146 F.2d 58 (1945)

ANDERSON et al. v. SANDERSON & PORTER et al.

No. 12890.

Circuit Court of Appeals, Eighth Circuit.

January 4, 1945.

Frank J. Wills and Paul McKnight, both of Little Rock, Ark. (Gordon E. Young and Henry W. Gregory, Jr., both of Pine Bluff, Ark., and John A. Sherrill and Howard Cockrill, both of Little Rock, Ark., on the brief), for appellants.

Edward L. Wright, of Little Rock, Ark. (Thomas S. Buzbee, Alvin S. Buzbee, and John M. Harrison, all of Little Rock, Ark., on the brief), for appellees.

Before STONE, SANBORN, and THOMAS, Circuit Judges.

SANBORN, Circuit Judge.

The question which this Court is called upon to decide is whether a general contractor is, as to the employees of subcontractors carrying workmen's compensation insurance, a "third party" who, under § 40 of the Workmen's Compensation Law of Arkansas, Act 319 of the Acts of Arkansas, 1939, p. 777; Cum.Supp. to Pope's Ark.Stat.1944, p. 1360, may be sued for common-law negligence. So far as pertinent here, § 40 provides: "The making of a claim for compensation against any employer or an insurance carrier for the injury or death of an employee shall not affect the right of the employee, or his dependents, to make claim or maintain an action in tort against any third party for such injury, * * *."

Sanderson & Porter, a New York partnership, constructed the Pine Bluff Arsenal in Arkansas under a general contract with the United States. The partnership was subject to the Workmen's Compensation Law of Arkansas and carried workmen's compensation insurance as required by the law. Sanderson & Porter sublet the erection of certain distribution pipe lines covered by the contract to Turner-McCoy. Turner-McCoy sublet the insulating of the pipe lines to the Armstrong Cork Company. G. C. Anderson was employed by the Armstrong Cork Company. He was not in the employ, or subject to the direction or control, of Sanderson & Porter. Anderson was injured in the course of his employment, when a scaffold, which it was the duty of Sanderson & Porter to erect and maintain, gave way. Standard Accident Insurance Company was the workmen's compensation insurer of the Armstrong Cork Company. The Insurance Company paid to Anderson, on account of his injuries, what was due him under the Workmen's Compensation Law. Anderson has brought this action at common law against Sanderson & Porter and the members of that partnership, as "third parties", to recover damages for his injuries, allegedly caused by their negligence. Standard Accident Insurance Company intervened for the purpose of recovering from the defendants what the Insurance Company had paid to Anderson as medical expenses and compensation. The defendants, who denied liability in their answer, moved for a summary judgment of dismissal upon the ground that they were not "third parties" against whom such an action could be maintained. The District Court entered summary judgment for the defendants. This appeal followed.

The question for decision involves the interpretation of an Arkansas statute, and obviously can definitely be settled only by the Supreme Court of Arkansas. We are advised by the parties that no State court of Arkansas has as yet ruled upon this question, and that there is no available local data indicating what the law is or will probably be held to be by the courts of that State. The parties, in their briefs and arguments, have relied entirely upon cases interpreting the workmen's compensation laws of other states.

The pertinent sections of the Workmen's Compensation Law of Arkansas, in addition to § 40, are the following:

"§ 2. Definitions. As used in this chapter (a) `Employer' means any individual, partnership, association or corporation carrying on any employment, * * *.

"(b) `Employee' means any person * * * in the service of an employer under any contract of hire or apprenticeship, written or oral, expressed or implied. * * *

"(c) `Employment' means every employment carried on in the State in which five or more employees are regularly employed in the same business or establishment. * * *

"§ 3. Application. From and after the taking effect of this Act, every employer and every employee, unless herein otherwise specifically provided, shall be subject to the provisions of this Act, and shall be bound thereby; * * *.

"§ 4. Remedies exclusive. The rights and remedies herein granted to an employee subject to the provisions of this Act, on account of personal injury or death, shall be exclusive of all other rights and remedies of such employee, his legal representative, dependents, or next kin, or anyone otherwise entitled to recover damages from such employer on account of such injury or death. * * *

"§ 5. Liability for compensation. Every employer subject to this Act shall in accordance therewith secure compensation to his employees and pay or provide compensation for their disability or death from injury arising out of and in the course of employment, without regard to fault as a cause for such injury; * * *.

"§ 6. Subcontractors. A contractor in the performance of whose contract one or more persons are employed, either by himself or by a subcontractor, who subcontracts all or any part of such contract shall be liable for and shall pay compensation to any employee injured whose injury arises out of and in the course of such employment, unless the subcontractor primarily liable therefor has secured compensation for such employee so injured as provided in this Act. * * *"

The appellants contend that the provisions of the Arkansas Workmen's Compensation Law which are here controlling were adopted by the General Assembly (legislature) of Arkansas from the New York Workmen's Compensation Act, with the construction which had been placed upon similar provisions of the New York Act by the courts of New York. The appellants point out that, under the New York Workmen's Compensation Act, the liability of an employer under the Act is exclusive, and that the New York Act, Consol.Laws N.Y. c. 67, § 56, provides (as does the Arkansas law) that "A contractor * * * who subcontracts all or any part of such contract shall be liable for and shall pay compensation to any employee injured whose injury arises out of and in the course of such * * * employment, unless the subcontractor primarily liable therefor has secured compensation for such employee so injured as provided in this chapter." Appellants further point out that in Clark v. Monarch Engineering Co., 1928, 248 N.Y. 107, 161 N.E. 436, 438, it was held that, under the New York Workmen's Compensation Act, "Where the subcontractor has secured compensation for his employees, a general contractor is under no statutory liability"; and that "the Legislature did not intend to provide exemption to the general contractor from common-law liability, at least where no statutory liability is shown to have arisen." Page 438 of 161 N.E.

The appellees argue that the Arkansas Workmen's Compensation Law does not differ substantially from the Missouri Workmen's Compensation Act, and that, under the latter Act, an employee of an insured subcontractor may not maintain an action for common-law negligence against a general contractor. Bunner v. Patti, 343 Mo. 274, 121 S.W.2d 153; New Amsterdam Casualty Co. v. Boaz-Kiel Construction Co., 8 Cir., 115 F.2d 950. The weakness of appellees' argument with reference to the Missouri Act is that that Act specifically provides that an "independent contractor shall be deemed to be the employer of the employees of his subcontractors and their subcontractors when employed on or about the premises where the principal contractor is doing work." § 3308(c), Mo.R.S.1929, § 3698(c), Mo.R.S. A. There is no such provision in the Arkansas Law.

The courts which have considered the question of the "third party" liability of a general contractor to the employees of an insured subcontractor, under statutes similar to the statute of Arkansas here involved, have usually held that, since the general contractor is not the employer of the employees of his subcontractors and is liable for compensation only to the employees of an uninsured subcontractor, the general contractor is, as to the employees of an insured subcontractor, a "third party".

In the Annotation to the case of Adams v. Hercules Powder Company, 1943, 180 Tenn. 340, 175 S.W.2d 319, 151 A.L.R. 1352, it is said in an editorial note at page 1359:

"The provisions of some compensation acts impose liability upon the principal for compensation to employees of independent contractors or subcontractors in case he does not require the independent contractor or subcontractors to carry compensation insurance.

"The cases involving those provisions are generally in favor of the retention of the common-law rights of the employees against the principal — at least where the principal is not liable under the act.

"As before stated, the cases involving compensation acts imposing liability upon the principal contractor for compensation to employees of independent contractors or subcontractors in case he does not require the latter to carry compensation insurance are generally in favor of the retention of the common-law rights of the employee against the principal." ¹

In the same Annotation, it is said (p. 1364 of 151 A.L.R.): "In some jurisdictions the compensation acts, instead of making the liability of the general employer or independent contractor dependent on the carrying of compensation insurance by the independent contractor or subcontractor, directly impose what amounts practically to an absolute, although perhaps a secondary, liability on the former for injuries to employees of the latter. These provisions, drawn in varying language, have been generally construed as creating an exclusive remedy, precluding the maintenance of a common-law action against the general employer or independent contractor, even though rights of action against `third persons' are preserved by the act...