Bridges v. National Engineering and Contracting Co.

• Decision Date: 28 February 1990
• Docket Number: No. 88-1992,88-1992
• Citation: 551 N.E.2d 163,49 Ohio St.3d 108
• Parties: BRIDGES et al., Appellees and Cross-Appellants, v. NATIONAL ENGINEERING AND CONTRACTING CO., Appellant and Cross-Appellee.
• Court: Ohio Supreme Court

Page 108

49 Ohio St.3d 108

551 N.E.2d 163

BRIDGES et al., Appellees and Cross-Appellants, v. NATIONAL ENGINEERING AND CONTRACTING CO., Appellant and Cross-Appellee.

No. 88-1992.

Supreme Court of Ohio.

Submitted Dec. 12, 1989.

Decided Feb. 28, 1990.

Syllabus by the Court

1. A party which asserts in its answer or other responsive pleading the defense of failure to state a claim upon which relief can be granted, pursuant to Civ.R. 12(B)(6), preserves on the record such party's continuing objection to the sufficiency of the complaint.

2. Once the Industrial Commission has certified that an employer has established industrial coverage and paid its premium, pursuant to R.C. 4123.35, the employer is a complying employer as a matter of law, and is entitled to the benefits of R.C. Chapter 4123.

3. An employer's failure to include a particular injured employee in a required payroll report does not deprive the employer of its statutory immunity from a civil action brought by the employee, in the absence of a final determination by the commission that the employer is a noncomplying employer who has not settled its liability to the State Insurance Fund.

This case involves claims for wrongful death, personal injury and intentional tort against an Ohio employer which asserts immunity from liability for such claims by virtue of having complied with the workers' compensation law of the Commonwealth of Kentucky.

In July 1984, the Commonwealth of Kentucky, through the Kentucky Transportation Cabinet ("KTC"), entered into an agreement with the state of Ohio, through the Ohio Department of Transportation ("ODOT"), for the design and construction of modifications to the Brent Spence Memorial Bridge on Interstate 75 over the Ohio River between Covington, Kentucky, and Cincinnati, Ohio, and to the Kentucky and Ohio approaches to the bridge (hereinafter referred to as the "Bridge Project"). All the designs, plans and specifications for the Bridge Project were to be prepared by KTC, although ODOT and the Federal Highway Administration approved those for work to be performed in the state of Ohio. The agreement provided for KTC to receive bids for and award contracts on the Bridge Project, with the concurrence of ODOT on contracts for work to be done on the bridge and the Ohio approach. All work on the project was to be supervised by KTC, with work performed in the state of Ohio being subject to approval by ODOT. Finally, the agreement provided for ODOT to reimburse KTC for all construction work on the Ohio approaches and for 10.5 percent of the costs of construction for the bridge itself. ¹

KTC solicited bids for the Bridge Project during January 1985, and on April 19, 1985, awarded and entered into a contract with the appellant and cross-appellee, National Engineering and Contracting Company ("National"), an Ohio corporation, as general contractor for the Bridge Project. Construction began in May 1985, and continued for almost two years. National dealt exclusively with KTC for all its work, whether in Ohio or Kentucky, and was paid by KTC twice a month for its services.

National was a member of the Ohio Contractors Association and was subject to a collective bargaining agreement between the association and Local No. 265, Laborers' International Union of North America, effective May 1, 1985 through May 1, 1989. All laborers used by National for the Bridge Project were required to join Local No. 265 and were subject to the collective bargaining agreement. Appellees' decedent, Stewart Bridges, and appellee William Lattarulo were hired by National in June 1985 out of National's Covington, Kentucky, office. Bridges, an Ohio resident, and Lattarulo, an Indiana resident, joined Local No. 265 soon thereafter. The payroll for the project was paid from Kentucky, and local Kentucky taxes were withheld.

Paragraph thirty-two of the collective bargaining agreement provided as follows:

"The Contractor agrees to carry Ohio State Workmen's Compensation Insurance and Kentucky Workmen's Compensation for the three counties covered herein for the protection of the employees. Upon request of the Union, the Contractor shall show evidence of his Workmen's Compensation Insurance. The Contractor shall carry Unemployment Insurance as required by Ohio or Kentucky and show proof of such coverage."

All employees of National on the Bridge Project were covered by Kentucky workers' compensation insurance, which was carried with the United States Fidelity and Guarantee Company ("U.S.F. & G."). Although National held "certificates of premium payment" for all of 1986, issued by the Ohio Industrial Commission and Bureau of Workers' Compensation, National apparently had not paid a premium to the Ohio State Insurance Fund on any of Bridges' wages.

On June 27, 1986, appellee Lattarulo and Bridges were working in a closed traffic lane on an Ohio approach to the bridge when an automobile skidded through the plastic traffic-control barrels and struck the two men, causing them serious injuries. Bridges later died as a result of his injuries. Lattarulo's medical expenses were paid by National's Kentucky workers' compensation carrier, U.S.F. & G. U.S.F. & G. also opened a file regarding the death of Bridges, but Mrs. Bridges has not sought payment of Kentucky workers' compensation benefits. Both Lattarulo and Mrs. Bridges applied for Ohio workers' compensation benefits.

On June 26, 1987, appellees filed their amended complaint in the Court of Common Pleas of Hamilton County against National, the driver of the automobile which caused appellees' injuries, and the driver's parents. Appellees asserted claims of wrongful death, personal injury and loss of consortium against all defendants, and intentional tort claims against National. In its answer, National asserted, inter alia, that appellees had failed to state a claim for which relief could be granted, pursuant to Civ.R. 12(B)(6). Cross-motions for summary judgment were filed by National and the appellees, supported by the pleadings, affidavits, and exhibits. The trial court, after hearing arguments of counsel, granted National's motion for summary judgment, and denied appellees', finding that the law of Kentucky applied to bar appellees' claims against National. The trial court, finding no just reason for delay, Civ.R. 54(B), dismissed with prejudice all claims against National.

The court of appeals affirmed in part and reversed in part. The court agreed that appellees' claims against National for wrongful death and personal injury were properly dismissed because National, in its work on the Bridge Project, was not an "employer" as defined in R.C. 4123.01(B)(2) and thus not a "noncomplying employer" subject to common-law actions by its employees, pursuant to 4123.77. However, refusing to adopt Section 184 of the Restatement of the Law 2d, Conflicts of Law (1971), the court of appeals reversed the dismissal of the claims of intentional tort by an employer, and remanded the cause. The court reasoned that, in the choice between Kentucky law (which does not recognize such claims) and Ohio law (which does, see Van Fossen v. Babcock & Wilcox Co. [1988], 36 Ohio St.3d 100, 522 N.E.2d 489), Ohio has the most significant contacts with the claim in this case.

The cause is now before this court upon the allowance of a motion and cross-motion to certify the record.

Hollingsworth & Sunderland and David M. Kothman, Cincinnati, for appellees and cross-appellants.

Holbrook & Poston and Kent W. Seifried, for appellant and cross-appellee.

HOLMES, Justice.

This case presents two issues for our determination. First, we are asked to determine whether Kentucky law, which would bar the claim, ² or Ohio law applies to appellees' intentional tort claims against National. We need not reach the merits of this choice-of-law query, however, because even if Ohio law applies, appellees' complaint fails to set forth an intentional tort claim sufficient to survive National's Civ.R. 12(B)(6) pleading, pursuant to the standards set forth in Van Fossen, supra, and Mitchell v. Lawson Milk Co. (1988), 40 Ohio St.3d 190, 532 N.E.2d 753.

Second, we must determine whether National is a "noncomplying employer" for purposes of Ohio's workers' compensation law, and is thus not entitled to immunity from appellees' wrongful death and personal injury claims provided in R.C. Chapter 4123. For the reasons set forth in Part II of this opinion, we hold that National was a complying employer for purposes of Ohio's workers' compensation law for the period at issue here, and was thus entitled to all the benefits of R.C. Chapter 4123.

I

Appellees' causes of action arose on June 27, 1986, over one month prior to the effective date of R.C. 4121.80(G)(1). Thus, the sufficiency of appellees' claims of an intentional tort committed by their employer, pursuant to Civ.R. 12(B)(6), must be measured against the common-law standard of "intent" as set forth in Van Fossen, supra, at paragraph five of the syllabus.

Appellees argue, however, that appellant did not raise its Civ.R. 12(B)(6) claim in the courts below, and is thus precluded from challenging the sufficiency of the complaint for the first time in this court. We do not agree. Civ.R. 12(B) requires the defense of failure to state a claim for which relief can be granted to be asserted either in the responsive pleading or, at the option of the pleader, by motion. Here, National raised its Civ.R. 12(B)(6) defense in the first paragraph of its answer, which preserved on the record its continuing objection to the sufficiency of the complaint.

The fact that the lower courts ruled on an alternate defense on summary judgment does not divest this reviewing court of jurisdiction. This is so by virtue of Civ.R. 12(H)(2) and our long-standing rule of appellate practice with respect to the sufficiency of a complaint: "To warrant a recovery on the petition, it must show a cause of action in the plaintiff. If the...