Carnley v. Aid to Hospitals, Inc., 95-CV-6298L.

• Decision Date: 28 August 1997
• Docket Number: No. 95-CV-6298L.,95-CV-6298L.
• Citation: 975 F.Supp. 252
• Parties: Michael CARNLEY, Plaintiff, v. AID TO HOSPITALS, INC., Defendant/Third-Party Plaintiff. v. BOEWE-PASSAT REININGUNGS-UND WASCHEREITECHNIK GMBH, E. Weit Machinery Corp., and Boewe-Passat Drycleaning & Laundry Machinery Corporation, Third-Party Defendants.
• Court: U.S. District Court — Western District of New York

975 F.Supp. 252

Michael CARNLEY, Plaintiff, v. AID TO HOSPITALS, INC., Defendant/Third-Party Plaintiff. v. BOEWE-PASSAT REININGUNGS-UND WASCHEREITECHNIK GMBH, E. Weit Machinery Corp., and Boewe-Passat Drycleaning & Laundry Machinery Corporation, Third-Party Defendants.

No. 95-CV-6298L.

United States District Court, W.D. New York.

August 28, 1997.

Kevin Thomas Conklin, Mead, Hecht, Conklin & Gallagher, White Plains, NY, for Michael Carnley.

Glenn Pezzulo, Culley, Marks, Tanenbaum, Capell and Pezzulo, Rochester, NY, for Aid to Hospitals, Inc.

Maurice L. Sykes, Lustig & Brown, LLP, Buffalo, NY, for Texas Workers' Compensation Funds.

Robert M. Shaddock, Saperston & Day, P.C., Rochester, NY, Sheldon Hurwitz, Hurwitz & Fine, P.C., Buffalo, NY, for Boewe-Passat Reiningungs-Und Waschereitechnik GMBH,

Joseph G. Fritsch, Jr., Connors & Corcoran, Rochester, NY, for E. Weit Machinery Co.

DECISION AND ORDER

LARIMER, Chief Judge.

BACKGROUND

Plaintiff, Michael Carnley ("Carnley"), filed a complaint against Aid to Hospitals, Inc. ("ATH"), alleging that injuries he sustained while performing work on a laundry machine in New York were the result of ATH's negligence. Jurisdiction is based on diversity of citizenship. ATH filed a third-party complaint for indemnity and/or contribution against Boewe-Passat Reiningungs-Und Waschereitechnik Gmbh ("German Boewe-Passat"), E. Weit Machinery Co. ("Weit")¹, and Boewe-Passat Drycleaning & Laundry Machinery Corp. ("Boewe-Passat"). Carnley was a Texas resident employed by Boewe-Passat, a Texas corporation, and had traveled to New York to work on the laundry machine at issue.

There are two motions pending before the Court: (1) Boewe-Passat's motion for summary judgment seeking to dismiss the third-party complaint against it, and (2) Texas Workers' Compensation Fund ("Texas Fund") motion to intervene in the action.

For the reasons discussed, infra, Boewe-Passat's motion for summary judgment and Texas Fund's motion to intervene are granted.

DISCUSSION

Carnley, a Texas resident, alleges that he was injured on February 2, 1994 while performing work on a laundry machine on the premises of ATH, a New York corporation. As a result of his work-related injuries, Carnley received workers' compensation benefits from Boewe-Passat's workers' compensation carrier, Texas Fund.

In his complaint, Carnley alleges that ATH was negligent for failing to maintain the laundry machine's warning devices in a safe and reasonable manner. Specifically, Carnley alleges that ATH allowed the warning devices to fall into disrepair and re-programmed the safety mechanisms so that the machine would remain operational even though the warning devices were not functioning. Further, Carnley alleges that ATH failed to warn or notify Carnley of its reprogramming of the machine.

The third-party complaint by ATH, alleging negligence and strict liability, seeks contribution and indemnity from Boewe-Passat, among others.

I. Boewe-Passat's Motion for Summary Judgment

Boewe-Passat moves for summary judgment and seeks dismissal of the third-party complaint against it for contribution and indemnity. Boewe-Passat correctly asserts that Texas law precludes such actions. The Workers Compensation Law of Texas prohibits claims against employers for injuries sustained by their employees whether the claim is brought directly by the employee or by a third-party seeking contribution or indemnity. Tex.Lab.Code Ann. § 417.004.

Boewe-Passat contends that Texas law should apply on the facts of this case and the action be dismissed. Alternatively, Boewe-Passat suggests that even if this Court were to apply New York law, the recent amendment to New York's Workers Compensation Law barring such actions against employers should control, even though that legislative change took effect after plaintiff's injuries and the commencement of this action.

Before dealing with the merits of the conflict-of-laws issue, there is a procedural matter raised by ATH in opposition to Boewe-Passat's motion. ATH contends that Boewe-Passat's motion raises an affirmative defense to the third-party complaint and must, therefore, be pleaded in Boewe-Passat's answer. ATH contends that because Boewe-Passat failed to assert this affirmative defense in its answer, it has waived the defense and may not raise it now in this summary judgment motion.

Although I agree with ATH that the matter raised by Boewe-Passat is an affirmative defense, I believe that the answer can now be amended and the merits of the defense considered here on summary judgment.

In determining whether a claim is an affirmative defense, federal courts sitting in diversity actions should look to state law. See Lazard Freres & Co. v. Protective Life Ins. Co., 108 F.3d 1531, 1540-1541 (2d Cir. 1997). Matters treated as affirmative defenses under state law are generally treated in the same way by federal courts in diversity cases. Charpentier v. Godsil, 937 F.2d 859, 863 (3d Cir.1991). In the present case, whether New York law or Texas law is applied to determine whether Boewe-Passat's workers' compensation defense constitutes an affirmative defense, the outcome is the same. In both New York and Texas, in a civil action for personal injuries, the existence of workers compensation is an affirmative defense to the action. Caceras v. Zorbas, 74 N.Y.2d 884, 885, 547 N.Y.S.2d 834, 547 N.E.2d 89 (1989); Brooks v. National Convenience Stores, Inc., 897 S.W.2d 898, 905 (Tex.App. — San Antonio 1995).

The fact that Boewe-Passat failed to assert this defense as an affirmative defense in its original answer does not constitute a waiver and bar consideration of the motion now. Rule 8(c), Fed.R.Civ.P., provides that "[i]n pleading to a preceding pleading a party shall set forth affirmatively ... any ... matter constituting an ... affirmative defense."

The main objective of Rule 8(c) is to give the opposing party notice of the affirmative defense and the opportunity to rebut it. United States v. Continental Illinois Nat'l Bank and Trust Co. Of Chicago 889 F.2d 1248, 1255 (2d Cir.1989) ("one of the main reasons for the rule ... is to avoid surprises to the plaintiff."). See also Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 350, 91 S.Ct. 1434, 1453-1454, 28 L.Ed.2d 788 (1971). With this in mind, courts have allowed affirmative defenses to be raised in summary judgment motions where the party opposing the motion was not prejudiced in its ability to respond. United States v. Krieger, 773 F.Supp. 580, 583 (S.D.N.Y.1991) (failure to plead affirmative defense of illegality did not preclude defendants from raising that defense on motion for summary judgment where plaintiff had adequate time to respond); Carino v. Town of Deerfield, 750 F.Supp. 1156, 1162 n. 9 (N.D.N.Y.) ("[I]n this Circuit defendants are not deemed to have waived the affirmative defense of res judicata by failing to expressly assert it in their answer."), aff'd, 940 F.2d 649 (2d Cir.1991); Steinberg v. Columbia Pictures Indus., Inc., 663 F.Supp. 706, 715 (S.D.N.Y.1987) ("Although Fed. R.Civ.P. 8(c) requires affirmative defenses to be pleaded, courts have been more lenient in the context of motions for summary judgment."); Kleinknecht v. Gettysburg College, 989 F.2d 1360, 1373-1374 (3d Cir.1993) (affirmative defense of immunity allowed where first raised on motion for summary judgment).

The cases cited by ATH in support of its position that Boewe-Passat has waived its workers' compensation defense are distinguishable from the present case. All but one of the cases cited by ATH involved affirmative defenses that were raised much later in the litigation than is the case here. See Troxler v. Owens-Illinois, Inc., 717 F.2d 530, 532 (11th Cir.1983) (affirmative defense of statutory immunity waived where first raised on appeal); Jakobsen v. Massachusetts Port Authority, 520 F.2d 810, 813 (1st Cir.1975) (affirmative defense waived where defendant raised defense for the first time in a motion for a directed verdict after the presentation of evidence at trial); Freeman v. Chevron Oil Co., 517 F.2d 201, 204 (5th Cir.1975) (affirmative defense not raised until morning of trial).

Unlike the defendants in the above-cited cases, Boewe-Passat has raised its affirmative defense at a relatively early stage of the litigation. In fact, it appears that the parties to the first party action have not yet completed discovery.

In the present case, ATH has been well represented by counsel and has fully responded to Boewe-Passat's summary judgment motion. Furthermore, ATH has made no showing whatsoever that it would be prejudiced by this court's consideration of the defense at this stage of the proceedings.

Because ATH has received notice of the affirmative defense, has been given ample opportunity to respond and has not demonstrated that it would be prejudiced if the Court were to consider Boewe-Passat's defense based on the exclusivity of the workers' compensation laws, Boewe-Passat's failure to plead the defense in its answer does not, under these circumstances, act as a waiver of the defense.

Texas Law or New York Law

Boewe-Passat urges this Court to apply Texas law to this dispute. ATH, on the other hand, vigorously argues that New York law applies. When confronted with a choice of law issue, "[a] federal district court must look to the choice of law rules of the state in which it sits." AroChem International, Inc. v. Buirkle 968 F.2d 266, 269 (2d Cir.1992), citing Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-1022, 85 L.Ed. 1477 (1941). Thus, in the present case, I must apply New York's choice of law rules to determine whether Texas or New York law governs this third-party action. Plaintiff is a Texas resident. Defendant is a New York corporation and the injury occurred in New York. The moving party, and third-party defendant, is a Texas corporation.

In New York, "[i]nterest...