Estate v. Iowa S. Ry. Co.
| Decision Date | 06 October 2021 |
| Docket Number | No. 20-0233,20-0233 |
| Citation | 967 N.W.2d 375 (Table) |
| Parties | The ESTATE OF Anthony J. ZDROIK, Deceased, BY Trishann W. ZDROIK, Personal Representative, Plaintiff-Appellee, v. IOWA SOUTHERN RAILWAY COMPANY, Brian Ostrowski, John Ostrowski, Steven Runstrom and Phil Gliniecki, Defendants-Appellants. |
| Court | Iowa Court of Appeals |
Stephen M. Warner and Lee A. Miller of Arthur Chapman Kettering Smetak & Pikala, PA, Minneapolis, Minnesota, and Kimberly K. Hardeman, Cedar Rapids, and Jennifer K. Eggers, Lakeville, Minnesota, for appellant Iowa Southern Railway Company.
Daniel B. Shuck of the Shuck Law Firm, Sioux City, for appellants Brian Ostrowski, John Ostrowski, Steven Runstrom and Phil Gliniecki.
Steven L. Groves, St. Louis, Missouri, and George F. Davison, Jr., Des Moines, for appellee.
Heard by Bower, C.J., and Vaitheswaran and Schumacher, JJ.
Sheet Piling Services, LLC dispatched twenty-three-year-old Anthony Zdroik and two other employees to repair a railroad bridge belonging to Iowa Southern Railroad Company. The crew used a grapple and sling to transfer railroad ties to a crane truck. Zdroik stood on the bed of the truck to remove the ties from the sling. During one of the transfers, the railroad tie or crane grapple struck Zdroik. Zdroik died as a result of his on-the-job injury.
Zdroik's estate sued the railroad as well as four people associated with Sheet Piling: Brian Ostrowski, John Ostrowski, Steven Runstrom, and Phil Gliniecki, none of whom worked with Zdroik on the day of the accident. The estate alleged the railroad violated the Federal Employers’ Liability Act and was negligent in training crew members; and the Sheet Piling defendants were co-employees of Zdroik who were grossly negligent in training him.
The defendants filed motions for summary judgment. The court denied the Sheet Piling defendants’ motion on the ground that the Ostrowskis were co-employees of Zdroik who could be sued for gross negligence and because fact issues on the elements of gross negligence precluded summary judgment. As for the railroad, the court granted the summary judgment motion on the Federal Employer's Liability Act claim but denied the motion on the negligence claim. The court denied motions to reconsider the rulings.
The defendants applied for interlocutory review. The supreme court granted the applications and stayed further proceedings.
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Iowa R. Civ. P. 1.981(3). Our review is for correction of errors at law. See Barker v. Capotosto , 875 N.W.2d 157, 161 (Iowa 2016).
The rights and remedies of an employee against an employer for an on-the job injury "shall be the exclusive and only rights and remedies of the employee ... at common law or otherwise, on account of such injury." Iowa Code § 85.20(1) (2018). That exclusivity provision does not apply if the injury was caused by a coemployee's "gross negligence amounting to such lack of care as to amount to wanton neglect for the safety of another." Id. § 85.20(2).
As a preliminary matter, the Ostrowskis assert they were not co-employees. Their assertion implicates the subject matter jurisdiction of the district court. See Henrich v. Lorenz , 448 N.W.2d 327, 331 (Iowa 1989) ( ). Subject matter jurisdiction may not be waived. See State v. Mandicino , 509 N.W.2d 481, 482 (Iowa 1993) (). Accordingly, we must address their status.
The Ostrowskis specifically claim they cannot be considered co-employees because they "have not chosen to be covered by" the workers’ compensation act. They point to Iowa Code section 85.1A, which states:
A proprietor, limited liability company member, limited liability partner, or partner who is actively engaged in the proprietor's, limited liability company member's, limited lability partner's, or partner's business on a substantially full-time basis may elect to be covered by the workers’ compensation law of this state by purchasing ... workers’ compensation insurance.
They note that "[p]roprietors, limited liability company members, limited liability partners, and partners who have not elected to be covered by the workers’ compensation law of this state pursuant to section 85.1A" are excluded from the statutory definition of "workers" or "employees." Iowa Code § 85.61(11)(c)(5).
The supreme court addressed and rejected this election-of-coverage argument as a basis for analyzing the exclusivity language of section 85.20. See Horsman v. Wahl , 551 N.W.2d 619, 621 (Iowa 1996). The court made a distinction between coverage and remedy and concluded: "The exclusive remedy provision of workers’ compensation law, set forth in section 85.20, does not relate to coverage; therefore, in the context of section 85.20 a definition of [the defendant] as an "employer," pursuant to section 85.61(2), is required." Id. ; see also Mullen v. Grettenberg , No. 14-1699, 2015 WL 5965221, at *1–2 (Iowa Ct. App. Oct. 14, 2015). We turn to section 85.61(2) to determine whether the Ostrowskis were Zdroik's employers rather than his co-employees.
Section 85.61(2)(a) defines "[e]mployer" as including and applying to the following: "A person, firm, association, or corporation, state, county, municipal corporation, school corporation, area education agency, township as an employer of volunteer fire fighters and emergency medical care providers only, benefited fire district, and the legal representatives of a deceased employer." The Ostrowskis assert Sheet Piling "is a corporation/partnership under the State of Wisconsin" and "[i]t is owned by [them] in a partnership." They cite Carlson v. Carlson , 346 N.W.2d 525, 526 (Iowa 1984), for the proposition that "a member of a partnership, even if he is a ‘working partner,’ is still in law the employer of employees of the partnership and cannot be sued."
The Ostrowskis correctly characterize Carlson . There, the court concluded "that a member of a partnership is an employer of the partnership's employees" and, "[a]ccordingly, Iowa Code section 85.20 precludes an injured employee and his dependents from suing a partner in an independent tort action for his injuries received during the course of his employment for the partnership." Carlson , 346 N.W.2d at 527. If the Ostrowskis were partners in a partnership, Carlson would be dispositive and we would be obligated to dismiss them from the suit for lack of subject matter jurisdiction.
Sheet Piling was not a partnership; it was listed as an "L.L.C." An LLC is a limited liability company. See Iowa Code § 489.108(1) (). Sheet Piling itself might have satisfied the section 85.61(2)(a) definition of "employer" and been immune from suit for gross negligence.1 But that is not the issue. The issue is the status of the Ostrowskis individually.
John Ostrowski attested he was "an owner and partner of Sheet Piling." Brian Ostrowski similarly attested he was "an owner and partner of Sheet Piling." The statute governing limited liability companies makes no reference to owners or partners of limited liability companies. It refers to "[m]anager," "[m]anagermanaged limited liability company," "[m]ember", "[m]ember-managed limited liability company," and "person." Iowa Code § 489.102(11), (12), (13), (14), (17). As Zdroik notes, Sheet Piling's operating agreement, which might have clarified the Ostrowskis’ status, was not included in the summary judgment record. See Felt v. Felt , No. 18-0710, 2019 WL 2372321, at *3 (Iowa Ct. App. June 5, 2019) ().
We conclude there is a genuine issue of material fact as to the status of the Ostrowskis within the limited liability company. That issue of fact must be resolved to determine whether the Ostrowskis were co-employees for purposes of section 85.20 or whether they were employers of Zdroik who would not be subject to gross negligence liability under section 85.20. As noted at the outset, this is an issue of subject matter jurisdiction that cannot be waived.
Because the district court resolved the co-employee issue based on election of coverage under section 85.1A and 86.61(11)(c)(5) rather than their employer status under 86.61(2), we reverse the denial of summary judgment and remand for reconsideration of the issue under section 85.61(2). See Horsman , 551 N.W.2d at 621. If the Ostrowskis are deemed to be co-employees, the court may examine whether one or more of the elements of gross negligence were satisfied as a matter of law. We proceed to that question with respect to the remaining two Sheet Piling defendants.
To establish co-employee gross negligence, a plaintiff must prove the defendants had: "(1) knowledge of the peril to be apprehended2 ; (2) knowledge that injury is a probable, as opposed to a possible, result of the danger; and (3) a conscious failure to avoid the peril." Thompson v. Bohlken , 312 N.W.2d 501, 505 (Iowa 1981). Allegations of gross negligence "carry a high burden of proof," see Johnson v. Interstate Power Co. , 481 N.W.2d 310, 321 (Iowa 1992), and proving a case of gross negligence under ...
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