Estate of Smith v. Stutzman

• Decision Date: 23 March 2012
• Docket Number: No. 43A01–1103–PL–136.,43A01–1103–PL–136.
• Parties: The ESTATE OF Donald Eugene SMITH, Appellant, v. Joshua STUTZMAN d/b/a Keystone Builders, Appellee.
• Court: Indiana Appellate Court

964 N.E.2d 904

The ESTATE OF Donald Eugene SMITH, Appellant,

v.Joshua STUTZMAN d/b/a Keystone Builders, Appellee.

No. 43A01–1103–PL–136.

Court of Appeals of Indiana.

March 23, 2012.

David C. Kolbe, David C. Kolbe, P.C., Warsaw, IN, Attorney for Appellant.

Lyle R. Hardman, Hunt Suedhoff Kalamaros, LLP, South Bend, IN, Attorney for Appellee.

OPINION

BROWN, Judge.

The Estate of Donald Smith (the “Estate”) appeals from the trial court's dismissal of its lawsuit against Joshua Stutzman d/b/a Keystone Builders (“Stutzman”). The Estate raises two issues, which we revise and restate as whether the trial court properly granted Stutzman's motion to set aside default judgment and motion to dismiss and dismissed the Estate's action. We affirm.

The relevant facts follow. Smith worked for Stutzman. Stutzman filed a report of employee injury/illness with the Indiana Worker's Compensation Board (the “Board”) prepared on June 8, 2010, which indicated that on March 26, 2010, Smith suffered a “[b]roken neck” and was “on a ladder [and] fell 20 feet and died.” Appellee's Supplemental Appendix at 1. A Settlement Agreement and Petition for Approval (the “Settlement Agreement”) was entered into by Donald Smith, deceased, by his widow Carol Smith, Stutzman, and Travelers Casualty Insurance Company of America (“Travelers”), and the Settlement Agreement was filed with the Board on June 22, 2010. The parties to the Settlement Agreement agreed that Smith's worker's compensation claim would be settled for a lump sum payment of $100,000, payable to his sole presumptive dependent, Carol Smith. On June 28, 2010, the Board entered an order approving the Settlement Agreement and directing payment of $100,000.¹

On October 21, 2010, the Estate filed a complaint for damages against Stutzman in the Kosciusko Superior Court alleging in part that while working for Stutzman as an independent contractor on March 26, 2010, Smith fell from a roof resulting in his death and that Stutzman was negligent in maintaining safe work premises which was the direct and proximate cause of Smith's death. On December 27, 2010, the Estate filed a motion for judgment by default and an affidavit in support of its motion. On December 28, 2010, the court entered an entry of default against Stutzman.

On February 1, 2011, Stutzman filed a Motion to Set Aside Default Judgment and Motion to Dismiss together with a memorandum of law. In its motion and memorandum, Stutzman cited to Ind. Trial Rules 60(B) and 12(B)(1) and argued that the December 28, 2010 entry of default was void in part because the Board has exclusive jurisdiction over the claim, Stutzman is immune from suit and damages in a state court proceeding, and the Estate is estopped from asserting that Smith was an independent contractor. On February 18, 2011, the Estate filed a response to Stutzman's motion to dismiss, and on February 22, 2011, Stutzman filed a reply.

On March 4, 2011, the court held a hearing on Stutzman's February 1, 2011 motion and entered an order which found that the Board “has exclusive jurisdiction of this matter,” granted Stutzman's motion, and ordered that the case be dismissed. Appellant's Appendix at 5.

The issue is whether the trial court properly granted Stutzman's February 1, 2011 motion to set aside default judgment and motion to dismiss. The Estate acknowledges that in Indiana if the Worker's Compensation Act applies to an injury then all other remedies are excluded. However, the Estate argues that “no concession was made by [Stutzman] and no contention was asserted by the Estate that [ ] Smith was an employee,” that “the sole argument [Stutzman] can make is that the [Settlement Agreement], by its very existence, invokes exclusivity barring subsequent civil suit,” and that “while the settlement was made pursuant to Section 15 under the Worker's Compensation Code, the issue of employment remained outside the Act and its status remained unresolved.” Appellant's Brief at 5–6. The Estate “concedes that it could never reopen an action under the [Act] for further benefits from Travelers by virtue of the [Settlement Agreement]” but maintains that “there is nothing in the statute which prohibits a civil claim on the remaining disputed issue, the question of employment” and that the Settlement Agreement “specifically left this issue unresolved.” Id. at 7. The Estate asserts that “the parties clearly did not intend to resolve all issues,” that “[t]he issue of employment remained on the table,” and that “[i]ndeed, that issue was left completely unresolved for possible resolution in a civil court of law.” Id.

Stutzman maintains that the court correctly determined that the Estate admitted that Smith was an employee of Stutzman by invoking the jurisdiction of the Board and receiving worker's compensation benefits. Specifically, Stutzman argues that the parties stipulated in the Settlement Agreement that the Board had subject matter jurisdiction over the claim and that “[i]t is axiomatic that, for the Board to have subject matter jurisdiction, Smith was [Stutzman's] employee, acting within the scope and course of his employment.” Appellee's Brief at 9. Stutzman further argues that “[t]he very act of seeking (and accepting) worker's compensation benefits constitutes an admission by the Estate that Smith was an employee acting within the scope and course of his employment.” Id. Stutzman also argues that the Estate is judicially estopped from claiming that Smith was an independent contractor. Stutzman asserts that the trial court did not have subject matter jurisdiction over the Estate's action, that thus the court's entry of default judgment was void, and that the court correctly vacated the entry of default judgment and dismissed the case.

The Indiana Worker's Compensation Act provides for compensation of injury or death by accident arising out of and in the course of employment. Ind.Code § 22–3–2–2; Wright Tree Serv. v. Hernandez, 907 N.E.2d 183, 186 (Ind.Ct.App.2009). trans. denied. Ind.Code § 22–3–2–6, the exclusivity provision of the Act, provides:

The rights and remedies granted to an employee subject to IC 22–3–2 through IC 22–3–6 on account of personal injury or death by accident shall exclude all other rights and remedies of such employee, the employee's personal representatives, dependents, or next of kin, at common law or otherwise, on account of such injury or death, except for remedies available under IC 5–2–6.1.²

This court has stated that the Worker's Compensation Act is designed to grant compensation to injured employees without regard to fault. Waldridge v. Futurex Indus., Inc., 714 N.E.2d 783, 785 (Ind.Ct.App.1999) (citation omitted), reh'g denied, trans. denied. “Once an injured employee accepts or receives compensation under the Act, she concedes that the injury was accidental in nature and that it arose out of and in the course of employment.” Id. (emphasis added). “Accordingly, the employee may not later sue her employer in tort based on the same work-related injury.” Id.

This court has further stated:

[B]y electing to come under the [Worker's] Compensation Act, an employer and employee accept the procedure provided by that act for the adjudication of claims for compensation, and they waive the right of a trial by jury. An agreement, when filed with and approved by the [Worker's Compensation] Board has the force and effect of an award, and adjudicates the facts involved therein....

Where there is no fraud on the part of the employer or an attempt to take advantage of the employee, the fact that the employee is ignorant of the provisions of [the Act] at the time he accepts compensation from his employer with full knowledge of all the facts does not defeat the effect of such acceptance as an election to take the compensation.

Williams v. Delta Steel Corp., 695 N.E.2d 633, 635 (Ind.Ct.App.1998) (citing Ind. Univ. Hosps. v. Carter, 456 N.E.2d 1051, 1054–1055 (Ind.Ct.App.1983) (citations omitted)), trans. denied. This court noted that “[i]n reaching that conclusion, we reasoned that an employee, by accepting and receiving compensation under the Act, concedes that the injury was accidental in nature and that it arose out of and in the course of employment.' ” Id. (citing Univ. Hosps., 456 N.E.2d at 1056 (footnote omitted) (emphasis added)).

Further, the Indiana Supreme Court has stated that “[t]he exclusivity provision [Ind.Code § 22–3–2–6] bars a court from hearing any common law action brought by the employee for the same injuries.” Sims v. U.S. Fidelity & Guar. Co., 782 N.E.2d 345, 349–350 (Ind.2003). The Court further stated:

When an injury to a servant is found to be covered by a workers' compensation act, it is uniformly held that the statutory compensation is the sole remedy, and that any recovery against the employer at common law is barred. It is recognized that this remedy is in the nature of a compromise, by which the worker is to accept a limited compensation, usually less than the estimate which a jury might place upon his damages, in return for an extended liability of the employer, and an assurance that he will be paid.

Id. at 351–352 (quoting W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 80, at 574 (5th ed. 1984) (footnotes omitted)); see also Christopher R. Brown, D.D.S., Inc. v. Decatur Cnty. Mem'l Hosp., 892 N.E.2d 642, 649 (Ind.2008) (noting that “the remedies provided in the Worker's Compensation Act are in derogation of the common law” and that “the law in this jurisdiction is settled that if the Worker's Compensation Act applies to an injury, then the rights and remedies granted to an employee by the Act exclude all other rights and remedies of such employee....”) (internal quotation marks and citations omitted).

In Ind. Univ. Hosps., the Full Industrial Board approved of an agreement pursuant to which an employee would receive certain worker's compensation benefits. 456 N.E.2d at 1053. The employee later brought a civil...