Anderson v. National Carriers, Inc., 55876

• Decision Date: 28 February 1985
• Docket Number: No. 55876,55876
• Citation: 10 Kan.App.2d 203,695 P.2d 1293
• Parties: Archie ANDERSON, Appellant and Cross-Appellee, v. NATIONAL CARRIERS, INC., a Kansas Corporation, Appellee and Cross-Appellant.
• Court: Kansas Court of Appeals

Page 1293

695 P.2d 1293

10 Kan.App.2d 203

Archie ANDERSON, Appellant and Cross-Appellee, v. NATIONAL CARRIERS, INC., a Kansas Corporation, Appellee and Cross-Appellant.

No. 55876.

Court of Appeals of Kansas.

Feb. 28, 1985.

Review Denied April 11, 1985.

Syllabus by the Court

1. The purpose of K.S.A. 44-503 is to give employees of a subcontractor a remedy against the principal and to prevent the principal from evading liability by using a subcontractor to do part of the work undertaken by the principal.

2. A principal is relieved of liability for its negligence in causing an injury to a subcontractor's employee when it has an obligation imposed by the Workmen's Compensation Act to pay benefits to the injured employee.

3. The Kansas Workmen's Compensation Act imposes no duty on a subcontractor to pay compensation benefits to an injured employee of a principal unless the principal's employee is a borrowed servant of the subcontractor when the accident occurs.

4. In determining whether an entity has immunity from a common-law action for liability for personal injuries to a worker under the Kansas Workmen's Compensation Act, the test is whether a worker can recover workers' compensation benefits from the employer for an injury. If so, the remedy under the act is exclusive and a common-law negligence action against an employer is barred. If not, the Kansas Workmen's Compensation Act does not preclude a common-law negligence action.

5. An employer who is immune from suit under the exclusive remedy provisions of the Workmen's Compensation Act (K.S.A. 44-501) may be joined as a "phantom party" to determine its comparative fault in causing the injuries in issue.

6. In an action for personal injuries, it is held that the trial court did not err (1) in refusing to instruct the jury or allow argument concerning workers' compensation benefits, or (2) in refusing to grant a directed verdict that National Beef Packing Company was not at fault.

Lelyn J. Braun, of Lelyn J. Braun, Chartered, Garden City, for appellant and cross-appellee.

Gene H. Sharp, of Neubauer, Sharp, McQueen, Dreiling & Morain, P.A., Liberal, for appellee and cross-appellant.

Before SWINEHART, P.J., and ABBOTT and PARKS, JJ.

ABBOTT, Judge:

This is a personal injury case. The plaintiff, Archie Anderson, was injured on the premises of his employer, National Beef Packing Company, (National Beef) when a semitrailer driven by an employee of defendant, National Carriers, Inc., (National Carriers) backed over Anderson. The case was tried to a jury as a comparative negligence action. The jury attributed 29 percent fault to Anderson, 22 percent fault to National Carriers and 49 percent fault to National Beef, and found total damages in the amount of $700,000.

The plaintiff appeals and defendant cross-appeals. Plaintiff's contentions are largely centered around National Beef's having paid workers' compensation to plaintiff and its being included as a phantom defendant, thereby precluding the plaintiff from arguing and the trial court from instructing the jury as to the consequences of workers' compensation and the relationship between National Beef and National Carriers. Plaintiff also contends the trial court erred in not granting plaintiff's motion for a directed verdict on causation. National Carriers' cross-appeal contends its truck driver was a borrowed servant insofar as National Beef is concerned, and thus National Carrier is shielded from liability because of the Kansas Workmen's Compensation Act.

National Carriers and National Beef are wholly owned subsidiaries of Idle Wild Foods, Inc., which is engaged in food processing and distribution. National Beef operates a beef packing plant in Liberal, Kansas. National Carriers leases offices at National Beef's plant site. National Carriers hauls National Beef products over the road and also provides a hostler service at the plant. The hostler service consists of disconnecting the over-the-road tractor from the semitrailer and using a hostler tractor to transport the semitrailers around the plant site for cleaning, parking and loading. National Beef pays a monthly fee to National Carriers for the hostler service. All three entities are insured under the same workers' compensation insurance policy.

At the time of his injury, the plaintiff was employed by National Beef as a welder in the maintenance department. When the accident occurred, plaintiff was walking across plant grounds, returning to his job site after a job-related errand. National Carrier's employee, a hostler tractor operator, was backing a trailer to a warehouse loading dock at National Beef's plant when he struck and ran over the plaintiff. The plaintiff received severe pelvic, back and leg injuries caused by the dual wheels of the trailer passing over him.

Testimony at trial revealed that the truck driver could not see plaintiff in the mirrors of his hostler because of a blind spot. The plaintiff was struck from behind and did not see the trailer until after he was hit. The engines and power generators of National Beef's plant are in the area where the accident occurred. They produce a high noise level, making it difficult for anyone to hear. All live cattle and butchered beef are trucked through the area where the accident occurred, and the same area is used by plant employees on foot. No attempt had been made to separate vehicular and pedestrian traffic.

The plaintiff recovered workers' compensation benefits from his employer, National Beef, and then sued National Carriers for negligence. National Carriers claimed National Beef's negligence contributed to plaintiff's injuries and joined National Beef for comparative fault purposes.

Two questions are presented by defendant's cross-appeal: (1) Is this negligence action barred by the exclusive remedy provision of the Kansas Workmen's Compensation Act? (2) Is it error to treat National Beef, plaintiff's employer, as a "phantom party" to determine National Beef's proportionate fault where it has paid workers' compensation benefits?

The exclusive remedy provision of worker's compensation law provides that no employer, or other employee of such employer, shall be liable for any injury for which compensation has been provided under the Workmen's Compensation Act. K.S.A. 44-501 et seq. Under this statute, a common-law negligence action cannot be maintained by an injured employee against his employer or a co-employee if the injured employee recovered workers' compensation benefits from the employer. Fugit, Administratrix v. United Beechcraft, Inc., 222 Kan. 312, 564 P.2d 521 (1977). However, an injured employee is not barred from suing third- party tortfeasors. K.S.A.1984 Supp. 44-504(a). Negley v. Massey Ferguson, Inc., 229 Kan. 465, 625 P.2d 472 (1981).

For National Carriers to prevail on the exclusive remedy defense, it has the burden of proof to establish the existence of an employment relationship between it and plaintiff. Orr v. Holiday Inns, Inc., 6 Kan.App.2d 335, 336-37, 627 P.2d 1193, aff'd. 230 Kan. 271, 634 P.2d 1067 (1981). Defendant has failed to establish this relationship. First, the pretrial order stipulates that plaintiff is an employee of National Beef and the hostler operator is an employee of defendant. Second, workers' compensation benefits were recovered against National Beef, not defendant. The plaintiff is suing National Carriers, not National Beef or its employee.

The factual situation in this case is a subcontracting one. National Beef contracted with National Carriers for the hostler service (hostler tractors and operators), which was provided to National Beef for a monthly charge. Assuming that National Carriers was the subcontractor and National Beef the "principal" (to use the language of K.S.A. 44-503[a] ), and that the contractor's employee, the hostler operator, became a statutory employee of the principal, National Beef, for the purpose of workers' compensation, it would be of no comfort to National Carriers. K.S.A. 44-503 addresses the situation in which the contractor's employee is the injured worker. It prevents such an employee from maintaining a common-law action against the principal. His or her exclusive remedy is workers' compensation. All of the cases applying K.S.A. 44-503(a) and the exclusive remedy defense involve an injured employee of a subcontractor, not of a principal such as in the case at bar. Zehring v. Wickham, 232 Kan. 704, 658 P.2d 1004 (1983); Woods v. Cessna Aircraft Co., 220 Kan. 479, 553 P.2d 900 (1976); Hataway v. Procter & Gamble Manufacturing Co., 195 Kan. 335, 405 P.2d 350 (1965); Lessley v. Kansas Power & Light Co., 171 Kan. 197, 231 P.2d 239 (1951).

The purpose of K.S.A. 44-503 is to give employees of a subcontractor a remedy against the principal and to prevent the principal from evading liability by using a subcontractor to do part of the work undertaken by the principal. A principal is relieved of liability for its negligence in causing an injury to a subcontractor's employee when it has an obligation imposed by the Workmen's Compensation Act to pay benefits to the injured employee. The act, however, imposes no duty on a subcontractor to pay compensation benefits to an injured employee of the principal unless the principal's employee is a borrowed servant of the subcontractor when the accident occurs a fact not present in this case. There is therefore no basis or reason to grant immunity to a subcontractor that negligently inflicts an injury on an employee of a principal contractor.

In...