Ehredt v. DeHavilland Aircraft Co. of Canada, Ltd.

• Decision Date: 30 August 1985
• Docket Number: Nos. S-199,s. S-199
• Citation: 705 P.2d 446
• Parties: M.O. EHREDT d/b/a Arctic Guide Air Taxi, Appellant and Cross-appellee, v. DeHAVILLAND AIRCRAFT COMPANY OF CANADA, LTD., Appellee and Cross-appellant. /204.
• Court: Alaska Supreme Court

Page 446

705 P.2d 446

M.O. EHREDT d/b/a Arctic Guide Air Taxi, Appellant and Cross-appellee, v. DeHAVILLAND AIRCRAFT COMPANY OF CANADA, LTD., Appellee and Cross-appellant.

Nos. S-199/204.

Supreme Court of Alaska.

Aug. 30, 1985.

Rehearing Denied Sept. 30, 1985.

Bruce A. Bookman, James N. Leik, Perkins, Coie, Stone, Olsen & Williams, Anchorage, for appellant and cross-appellee.

Steven S. Tervooren, Frank A. Pfiffner, Hughes, Thorsness, Gantz, Powell & Brundin, Anchorage, for appellee and cross-appellant.

Before RABINOWITZ, C.J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ.

OPINION

COMPTON, Justice.

This is an appeal from a judgment awarding damages to a pilot's widow against his employer and the aircraft manufacturer. The employer contends the trial court erred because (1) the trial court should have stayed the legal action pending a workers' compensation board decision on the claim, (2) the employer was protected by the exclusivity provision of the Workers' Compensation Act, (3) a coverage card prepared by the workers' compensation board was excluded from evidence, (4) the trial court applied the wrong measure of damages and (5) the verdict form allowed the jury to apportion negligence among all three parties rather than between the pilot and the defendants together. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

On October 13, 1978, a Twin Otter aircraft crashed in Barrow. M.O. Ehredt d/b/a Arctic Guide Air Taxi (Ehredt) owned the aircraft, which was piloted by Ehredt's employee, Patrick Charles Walters (Walters). Walters died in the crash. Alfred S. Atkins (Atkins), an employee of the North Slope Borough, was a passenger injured in the crash. ¹ The plane was manufactured by DeHavilland Aircraft of Canada, Ltd. (DeHavilland).

Walters' widow (Walters) filed a workers' compensation claim which was controverted and never resolved by the Workers' Compensation Board (Board). Walters sued Ehredt and DeHavilland in superior court, alleging negligence claims against both and a strict products liability claim against DeHavilland. Ehredt sought a stay of the civil action to allow the Board to process the pending workers' compensation claim, but the stay was denied. Ehredt and DeHavilland cross-claimed for contribution and indemnity. After Walters prevailed at trial, DeHavilland settled with Walters' successors and received an assignment of all their rights against Ehredt. ²

In the civil action, Ehredt raised as an affirmative defense the exclusivity provision of the Workers' Compensation Act. The question before the superior court was whether Ehredt had complied with the act by providing coverage for Walters. The superior court refused to admit into evidence a coverage card prepared by the Board and granted a directed verdict for Walters that Ehredt was not entitled to the protection of the exclusivity provision.

Ehredt objected to the use of an alternative verdict form which allowed the jury to apportion negligence among Walters, Ehredt and DeHavilland rather than between Walters and the defendants together. Ehredt moved for a new trial based on the use of this verdict form, but the court denied the motion. Ehredt appeals.

II. IMPACT OF THE PRIOR FILING OF A WORKERS' COMPENSATION CLAIM ON A LATER CIVIL ACTION

Ehredt argues that Walters' filing of a workers' compensation claim prior to his civil suit deprived the superior court of jurisdiction; therefore, its refusal to stay the action at law constitutes reversible error. DeHavilland argues that the trial court acted within its discretion.

The superior court and the Board have concurrent jurisdiction over claims by employees against their employers. Alaska Workmen's Compensation Board v. Marsh, 550 P.2d 805, 808 n. 8 (Alaska 1976). The question whether prior filing of a workers' compensation claim abrogates the concurrent jurisdiction of the superior court to hear the merits of the claim has not been decided in Alaska.

When a statute expressly creates a condition precedent to a civil action (e.g., exhaustion of administrative remedies), the complainant must pursue administrative remedies because the superior court has no jurisdiction. State v. Zia, Inc., 556 P.2d 1257 (Alaska 1976) (action against the state on a contract). However, no similar statute limits the superior court's jurisdiction over workers' compensation claims.

The majority rule is that it is an abuse of discretion for a court to refuse to stay a civil action initiated after a workers' compensation action is filed. 2A A. Larson, The Law of Workmen's Compensation § 67.33, at 12-111 (1983); Taylor v. Superior Court, 47 Cal.2d 148, 301 P.2d 866, 867-68 (Cal.1956). However, the Supreme Court of Nevada recently held that an employee who had filed for and was receiving workers' compensation benefits was not precluded from litigating her common law action even though the Nevada Industry Commission had made no final disposition of her claim. McGinnis v. Consolidated Casinos, 650 P.2d 806 (Nev.1982). The policy goal is to coordinate the work of the courts and administrative agencies, therefore the question whether a court should defer depends on the unique facts of every case. See G & A Contractors v. Alaska Greenhouses, 517 P.2d 1379, 1382-83 (Alaska 1974).

Mechanical application of the rule does not further its underlying policy given the facts of this controversy. The major issue before the court was the construction of an insurance contract, which is a question of law uniquely suited to judicial resolution. Furthermore, Ehredt waited until six weeks before the trial date, after much discovery had taken place, to request a stay. Moreover, no action had been taken in the administrative proceeding. We therefore conclude that the superior court did not abuse its discretion when it refused to grant the stay.

III. ADMISSIBILITY OF THE COVERAGE CARD

An employer is required by law to file evidence of compliance with the Workers' Compensation Act with the Board. AS 23.30.085. The Board maintains a coverage card file for this purpose. At trial, Ehredt offered into evidence a certified copy of a coverage card to prove that there was an official government determination that Ehredt was insured by an Industrial Indemnity Company of Alaska (IICA) workers' compensation policy at the time of Walters' death. Walters and DeHavilland objected on the grounds that the card was untrustworthy and that the danger of misleading the jury outweighed its probative value. Ehredt contends that DeHavilland's objections go to the weight rather than the admissibility of the evidence. The trial court initially admitted the card, but later reconsidered its ruling and excluded it.

Public records are not excluded by the hearsay rule provided there are no circumstances indicating that they are untrustworthy. Alaska R.Evid. 803(8). ³ There is no dispute that the card is a public record within Evidence Rule 803(8)(a). The burden of proving untrustworthiness is on the party seeking to exclude the public record. Kehm v. Procter & Gamble Manufacturing, 724 F.2d 613, 618 (8th Cir.1983). DeHavilland argues that the card is untrustworthy because it contains incorrect dates of coverage, it is unsigned and its source is unclear.

There was conflicting testimony by Board employees whether the lack of signature or unclear source renders the card untrustworthy. Furthermore, the dates of coverage on the card conflict with those in the insurance policy. ⁴ We conclude that the trial court was within its discretion in excluding the card under Evidence Rule 803(8)(b)(v).

Relevant evidence may also be excluded if its probative value is outweighed by the danger of prejudice, confusion or delay. Alaska R.Evid. 403. ⁵ The card had little probative value on the question of existence of coverage, since the Board does not examine insurance policies nor make any determination of coverage prior to filling out the cards. We conclude the court did not abuse its discretion in excluding the coverage card under Evidence Rule 403, because it found the jury might be misled into believing that the Board had determined that Ehredt was covered and because there would be needless presentation of cumulative evidence; since the insurance policy was before the court, there was no need to admit the coverage card.

IV. EHREDT'S POLICY COVERAGE AND THE EXCLUSIVITY DEFENSE

Ehredt ran two sole proprietorships in Barrow: Arctic Cash & Carry, a grocery store, and Arctic Guide Air Taxi, an air taxi. In July 1978, he applied for workers' compensation insurance coverage on both businesses through a broker, Brady & Associates. Fred S. James & Co. took over as broker shortly thereafter and sent an IICA insurance policy to Ehredt. Although the policy referred only to the grocery store, Ehredt testified that he believed the IICA policy covered both the grocery store and the air taxi. On October 31, Ehredt submitted a report of occupational injury to the Board. IICA informed the Board that the claim would be controverted because there was no evidence that Walters' death was work-related.

Walters moved for a directed verdict on the question whether Ehredt had complied with the Act by securing coverage for Walters. The trial court granted the motion, thereby depriving Ehredt of the exclusivity defense. ⁶

The Workers' Compensation Act requires employers to "secure payment of compensation" for their employees. AS 23.30.045, AS 23.30.075. If an employer complies by procuring a policy covering its employees, it is protected from an employee's action at law by the exclusive liability provision. However, if the employer fails to secure payment, the injured employee has the option to claim workers' compensation or to file an action at law. AS 23.30.055.

The Act conclusively presumes that workers' compensation policies cover all employees employed in the business of the employer at locations set forth in the policy. ⁷ Larson refers to this type of statute as a "modified...