First Nat. Bank of Camden, Arkansas v. Tracor, Inc.
| Decision Date | 06 July 1988 |
| Docket Number | No. 87-1335WA,87-1335WA |
| Citation | 851 F.2d 212 |
| Parties | FIRST NATIONAL BANK OF CAMDEN, ARKANSAS, etc., et al., Appellants, v. TRACOR, INC., Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Winslow Drummond, Little Rock, Ark., for appellants.
William C. Frye, Little Rock, Ark., for appellee.
Before JOHN R. GIBSON and FLOYD R. GIBSON, Circuit Judges, and HARPER, * Senior District Judge.
Appellants filed this appeal in response to an order of the District Court for the Western District of Arkansas dismissing three complaints (consolidated by the Court) under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. The facts leading to this appeal are as follows:
Tracor MBA is an ammunition plant located at East Camden, Arkansas. It is a wholly-owned subsidiary of appellee, Tracor, Inc. An explosion occurred at Tracor MBA, resulting in the deaths of three of its employees, Artis Stevens, John Thomas Curb II and Kelvin Thompson. Appellants are the personal representatives of the three decedents. Tracor MBA paid workers' compenation benefits to or in behalf of the survivors of the decedents. Tracor MBA also provided medical care and funeral expenses to appellants. Tracor MBA is immune from suit in tort by appellants because of the exclusive remedy provisions included in the Arkansas workers' compensation statute, Ark. Code Ann., Chapter 9 (1987).
Appellants filed suit against Tracor MBA's parent company, Tracor, Inc., alleging that specific acts of negligence by Tracor, Inc. proximately caused the deaths of decedents. They further alleged that Tracor, Inc. formed Tracor MBA as part of a plan to delegate the munitions production function while allowing Tracor, Inc. to maintain its immunity from tort liability to Tracor MBA's employees. Appellants claim that Tracor, Inc. directed and controlled Tracor MBA's operations, and that Tracor, Inc. was fully aware that deaths and injuries due to the violation of safety regulations had occurred over the years at Tracor MBA.
Tracor, Inc. moved to dismiss the complaints on the ground that the exclusive remedy provision of the workers' compensation act rendered a parent company immune from liability for injuries suffered by employees at the parent's subsidiary. The district court granted the motion to dismiss with prejudice, because appellants failed to allege or otherwise show that Tracor, Inc. assumed control of Tracor MBA or its employees, or that Tracor, Inc. affirmatively undertook to insure the safe working conditions of Tracor MBA's employees. The district court said that appellants' allegation that Tracor, Inc. had breached a duty to insure safe working conditions at Tracor MBA was contrary to Arkansas law.
Appellants appealed the dismissal with prejudice of their complaints. We reverse the district court's dismissal with prejudice.
In ruling on a motion to dismiss for failure to state a cause of action, the court must deny it, and grant leave to file an amended petition "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Bonner v. Circuit Court of City of St. Louis, Mo., 526 F.2d 1331 (8th Cir.1975), cert. denied, 424 U.S. 946, 96 S.Ct. 1418, 47 L.Ed.2d 353 (1976).
Two questions are presented by the set of facts herein: (1) Does immunity from tort liability enjoyed by a corporate subsidiary because of the exclusive remedy provisions of the workers' compensation act extend to the parent corporation? (2) Assuming immunity does not automatically attach to the parent corporation by virtue of the parent/subsidiary relationship, what are the circumstances that dictate the parent's liability?
Arkansas law provides that an employee's sole remedy for injury or death arising out of and in the scope of employment is through the Workers' Compensation Act. Ark.Code Ann. 11-9-105 (Supp.1987). Tracor, Inc. is the sole stockholder of Tracor MBA. On the face of it, immunity would appear to extend from Tracor MBA to Tracor, Inc. as a matter of statutory law. The Arkansas Supreme Court has stated, however, that a subsidiary's immunity does not necessarily extend to the parent corporation. Oliver v. Bluegrass Corp., 284 Ark. 1, 678 S.W.2d 769 (1984). In that case, an employee was accidentally killed while working in a coal mine. The mine was operated by a subsidiary of the defendant parent...
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