Fabricius v. Montgomery Elevator Co.

• Decision Date: 09 April 1963
• Docket Number: No. 50905,50905
• Citation: 121 N.W.2d 361,254 Iowa 1319,93 A.L.R.2d 591
• Parties: , 93 A.L.R.2d 591 Jeanette FABRICIUS, Administratrix of the Estate of Thomas E. Fabricius, Plaintiff-Appellee, v. MONTGOMERY ELEVATOR COMPANY, M. L. Parker Company, Defendants, and Insurance Company of North America (its true and correct name being Indemnity Insurance Company of North America), Defendant-Appellant.
• Court: Iowa Supreme Court

Page 361

121 N.W.2d 361

254 Iowa 1319, 93 A.L.R.2d 591

Jeanette FABRICIUS, Administratrix of the Estate of Thomas E. Fabricius, Plaintiff-Appellee, v. MONTGOMERY ELEVATOR COMPANY, M. L. Parker Company, Defendants, and Insurance Company of North America (its true and correct name being Indemnity Insurance Company of North America), Defendant-Appellant.

No. 50905.

Supreme Court of Iowa.

April 9, 1963.

McDonald, McCracken, McDonald & Carlin, Davenport, for defendant-appellant Indemnity Ins. Co. of North America.

Betty, Neuman, Heninger & McMahon, Davenport, for plaintiff-appellee.

THORNTON, Justice.

This is the second interlocutory appeal in this case. The first involved procedure. Fabricius v. Montgomery Elevator Company, 253 Iowa 860, 114 N.W.2d 297.

This appeal is from an order of the trial court overruling defendant's motion to dismiss plaintiff's petition. The question presented is one of first impression in this court.

Plaintiff is the executrix of the estate of a fatally injured employee, injured in the course of his employment. Defendant Indemnity Insurance Company of North America is the workmen's compensation carrier for the decedent's employer. This defendant is the only defendant interested in this appeal.

Division III of plaintiff's petition, directed to this defendant, alleges her decedent met his death in the course of his employment for Parker Service Company, defendant was the workmen's compensation insurance carrier on the employer and in that capacity reserved unto itself the right to inspect the work places, machinery and equipment covered by such policy, though it was not obligated to do so under its policy, but did so undertake to inspect and did so negligently, in that it failed to inspect, failed to properly inspect, failed to notify and recommend, that decedent received fatal injuries because of the unsafe condition of an elevator, and decedent's freedom from contributory negligence.

Compensation benefits have been and are being paid by defendant as the employer's insurance carrier.

Defendant insurance company moved to dismiss because the action alleged is solely within the jurisdiction of the industrial commissioner. Its contention is that for the purpose of this case it stands in the shoes of the employer, its rights, liabilities and defenses are the same, that it is not a 'third party' or 'some person other than the employer' as these terms are used in section 85.22, Code of Iowa, 1958, I.C.A. (The injury here took place April 22, 1960, the amendments to the compensation act by the 58th General Assembly do not apply to the question presented.) Defendant bases its contentions on the entire act pointing particularly to sections 85.20, 85.22, and 87.10.

Plaintiff's position, in brief, is the action is one for the violation of a common law duty and defendant's liability is in no way affected by the act.

I. As between the employee and employer an action for injuries received by the employee arising out of and in the course of the employment is exclusively within the jurisdiction of the industrial commissioner, unless the employee is excluded from coverage or the act has been rejected. Sheahan v. Plagge, Iowa, 121 N.W.2d 120; Groves v. Donohue, Iowa, 118 N.W.2d 65, 69; Bradshaw v. Iowa Methodist Hospital, 251 Iowa 375, 101 N.W.2d 167; and sections 85.1 through 85.21, Code of Iowa, 1958, I.C.A.

In Bradshaw v. Iowa Methodist Hospital, 251 Iowa 375, 387, 101 N.W.2d 167, 174, in discussing aggravation of an injury by negligent hospital treatment, we said:

'Our compensation law does not abolish common law actions in tort except those between employee and employer. The provision of section 85.20, Codes 1954, 1958, I.C.A., that the rights provided in chapter 85 for an employee on account of injury shall be exclusive of all other rights of such employee applies only to actions against the employer (Maytag here) and does not prevent an injured employee from suing third persons at common law.'

And at page 388 of 251 Iowa, page 174 of 101 N.W.2d:

'A statute will not be construed as taking away a common law right existing at the time of its enactment unless that result is imperatively required.'

In Blackford v. Sioux City Dressed Pork, Inc., Iowa, 118 N.W.2d 559, 564-565, an action for indemnity by a third party who had been compelled to respond in damages for negligence, against the employer of the injured party who had compensated the employee under the Act, we approved a statement of the 8th Circuit Court of Appeals in American District Telegraph Company v. Kittleson, 179 F.2d 946, 953 (8th Cir., Iowa, 1950) relating to section 85.3, as follows:

'By section 85.3 every employer subject to the Act is required to 'pay compensation * * * for any and all personal injuries sustained by an employee arising out of and in the course of the employment, and in such cases, the employer shall be relieved from other liability for recovery of damages or other compensation for such personal injury.' The language quoted imposes upon the employer liability to the extent provided by the Act to an employee injured in the course of his employment, and relieves the employer from further liability to his employee. To say that this language relieves an employer from liability to a third party, to one not in his employ, for the employer's act of negligence damaging such third party is to read into the Act something that plainly is not there.'

It is proper to consider the subject matter of the statute as stated by the legislature in determining the proper construction of a statute. We find the subject matter to be dealt with by the act, as expressed by the 35th General Assembly, chapter 147, when the act was originally adopted, is as follows:

'AN ACT relating to employers' liability for personal injury sustained by employees in line of duty, fixing compensation therefor, securing the payment thereof, providing for the appointment of a commissioner and defining his duties.'

The place of the insurance carrier is readily discernible, securing payment of the compensation. In the process of securing payment the legislature has provided every employer shall be insured, section 87.1, unless relieved as provided in section 87.11, insolvency clauses are prohibited in policies, section 87.8, and certain policy provisions are required, sections 87.9 and 87.10.

Section 87.10, pointed out by defendant, provides:

'Every policy issued by an insurance corporation, association, or organization to insure the payment of compensation shall contain a clause providing that between any employer and the insurer, notice to and knowledge of the occurrence of injury or death on the part of the insured shall be notice and knowledge on the part of the insurer; and jurisdiction of the insured shall be jurisdiction of the insurer, and the insurer shall be bound by every agreement, adjudication, award, or judgment rendered against the insured.'

This section does no more than require policy provisions placing the insurer before the commissioner or the court whenever the employer is, and requiring it to pay whatever the employer is required to pay.

It defendant is to be placed in the position of the employer it must be because of the provisions of section 85.22 and the nature of this lawsuit. The question is stated by Chief Judge Clary of the United States District Court for the Eastern District of Pennsylvania in Mays v. Liberty Mutual Insurance Company, 211 F.Supp. 541 (E.D.Pa.1962), a case involving the same allegations we have here, as follows:

'The question before this Court is then refined to whether a workmen's compensation carrier who gratuitously undertakes to conduct safety inspections of the employer's premises has assumed the liability of the employer and thus become an 'employer' under the Pennsylvania statute.'

The court held the insurance carrier had assumed the liability of the employer and thus became liable to the injured employee only as an employer and not at common law. In the course of the opinion the court said:

'* * *, the employer's insurance carrier, by virtue of the statute and its contract, has assumed this liability. * * * Under the Act, the carrier cannot assume any portion of the employer's recognized duty without assuming the corresponding liability. Having assumed a portion of the employer's liability, the carrier stands in the shoes of the employer under the Pennsylvania Act.' Policy reasons of safety are also mentioned.

We do not have a statute which in any way requires a compensation carrier to assume any duty of the employer other than to pay compensation as fixed. The Federal District Court in Pennsylvania does not point out the particular section of the Pennsylvania Compensation Act to which it refers other than the definition of employer in section 103, 77 P.S. § 21 which does not include the insurer, and section 401, as follows:

'The term 'employer', when used in this article, shall mean the employer as defined in article one of this act, or his duly authorized agent, or his insurer if such insurer has assumed the employer's liability, or the State Workmen's Insurance Fund of this Commonwealth if the employer be insured therein.'

This section applies only to procedure. The court also pointed out the subrogation section of the Pennsylvania Act has always been read so as to give the right to the insurer where it has assumed the liability of the employer.

These sections of the Pennsylvania act are not dissimilar to our section 85.22. In pertinent part, it is as follows:

'When an employee receives an injury for which compensation is payable * * *, and which injury is caused under circumstances creating a legal liability against some person other than the employer to pay damages, the employee, * * * may take proceedings against his employer for compensation, and * * * may also maintain an action against such third party for damages. When an injured employee * * * brings an...