Giordano v. McBar Indus., Inc.

• Decision Date: 07 June 2012
• Docket Number: Record No. 111771.
• Court: Virginia Supreme Court
• Parties: Martha R. GIORDANO, as Personal Representative of Scott Alexander Giordano, Deceased v. McBAR INDUSTRIES, INC., et al.

729 S.E.2d 130

Martha R. GIORDANO, as Personal Representative of Scott Alexander Giordano, Deceased

v.McBAR INDUSTRIES, INC., et al.

Record No. 111771.

Supreme Court of Virginia.

June 7, 2012.

Michael H. Gladstone, Richmond (J. Farrest Taylor; McCandlish Holton; Cochran, Cherry, Givens, Smith, Lane and Taylor, on briefs), for appelant.

Robert G. Harrington, Richmond, for appellee, E.C. Couch Builder, Inc.

Benjamin T. Owings, II (Taylor Walker, Richmond, on brief) for appellees, Virginia Builders' Supply, Inc. and A. Bertozzi, Inc.

Steven W. Bancroft (Nicholas J. Lawrence; Bancroft, McGavin, Horvath & Judkins, Fairfax, on brief), for appellee McBar Industries, Inc.

Present: All the Justices.

OPINION BY Justice CLEO E. POWELL.

In this appeal from a judgment in a wrongful death action, we consider whether the circuit court erred in holding that the exclusivity provision of the Virginia Workers' Compensation Act (the “Act”) bars a non-dependent individual who is not eligible to collect benefits under the Act from bringing an action in tort. We further consider whether the circuit court erred in holding that this provision of the Act bars an action in tort against the supplier of a product used in the construction process.

BACKGROUND

Scott Alexander Giordano (“Scott”) and Martha R. Giordano (“Martha”) were married in 1999. In December of 2007, the parties separated and Martha moved out of the marital home. Scott and Martha continued to live separately until August 2, 2008, when the marital home was sold. At that time, Scott moved in with Martha. However, Scott and Martha continued to maintain separate bank accounts and did not co-mingle funds or incur any joint debt.

On August 8, 2008, Scott was hired as an insulator for McBar Industries, Inc. (“McBar”).¹ At the time, McBar was the general contractor on a construction project in Chester, Virginia that involved the erection of a multi-story, mixed-use building. The construction project required the use of several subcontractors and vendors. McBar subcontracted with E.C. Couch Builder, Inc. (“Couch”) to construct and frame the building and A. Bertozzi, Inc. (“Bertozzi”) to hang drywall. Bertozzi, in turn, hired Virginia Builder's Supply, Inc. (“Builder's Supply”) to deliver the drywall.

On September 10, 2008, Scott was working on the first floor of the building while Builder's Supply delivered approximately two tons of drywall and related supplies to the second floor of the building. The placement of these materials caused the structure to fail; the first floor walls collapsed, bringing down the second floor and roof. The collapse killed Scott.

On October 9, 2008, Martha filed a claim for benefits with the Virginia Workers' Compensation Commission (the “Commission”) stemming from Scott's death. After hearing the evidence, a deputy commissioner determined that Scott's estate was entitled to funeral expenses as required under Code § 65.2–512(B). The deputy commissioner further determined that Martha was not a dependent of Scott and, therefore, was not entitled to workers' compensation benefits.

On March 23, 2010, Martha, as personal representative of her husband's estate, filed a wrongful death claim in the Circuit Court of the City of Richmond against McBar, Couch, Bertozzi, and others. On June 30, 2010, Martha amended her complaint to include Builder's Supply as a defendant. The defendants filed pleas in bar, arguing that Code § 65.2–307(A),² the exclusivity provision of the Act, barred Martha's action. The circuit court determined that, because the Commission had jurisdiction over the present matter, the exclusivity provision applied. Accordingly, the circuit court sustained the pleas in bar.³

Martha appeals.

ANALYSIS

Martha argues that the circuit court erred in sustaining the pleas in bar because she was not a member of the class to whom the Act applies. Specifically, Martha contends that because she is not a dependent of Scott she is not eligible for compensation under the Act. Therefore, neither the Act nor the exclusivity provision apply to her.

“The right to compensation under the work[ers'] compensation law is granted by statute, and in giving the right the legislature had full power to prescribe the time and manner of its exercise.” Winston v. City of Richmond, 196 Va. 403, 407, 83 S.E.2d 728, 731 (1954). The plain language of the Act establishes that the General Assembly clearly limited the applicability of the Act to injuries or death by accident “arising out of and in the course of” an individual's employment. Code § 65.2–300. “When an employee sustains such an injury, the Act provides the sole and exclusive remedy available against the employer.” Butler v. Southern States Coop., Inc., 270 Va. 459, 465, 620 S.E.2d 768, 772 (2005). Thus, contrary to Martha's argument, the applicability of the Act does not turn on the compensability of the claim. Rather, the compensability of the claim turns, in part, on the Act's applicability.

Put simply, when the injury falls within the purview of Code § 65.2–300, the exclusivity provision applies. See Butler, 270 Va. at 466, 620 S.E.2d at 773 (“The exclusivity provision of Code § 65.2–307 applies only to an injury both ‘arising out of’ and ‘in the course of’ an individual's employment”). However, when the injury does not arise out of or occur in the course of the employment, the exclusivity provision does not apply. See, e.g., Griffith v. Raven Red Ash Coal Co., 179 Va. 790, 798, 20 S.E.2d 530, 534 (1942).

We have explained that “[a] particular claim may be non-compensable [under the Act] for one of two reasons: (1) it does not fall within the purview of the Act, or (2) while within the purview of the Act, certain defenses preclude recovery.” Adams v. Alliant Techsystems, Inc., 261 Va. 594, 598, 544 S.E.2d 354, 356 (2001).

[A] successfully asserted defense under the Act may render a particular claim non-compensable; however, there is a significant difference between a claim arising within the purview of the Act that is subject to defenses and a claim that is not within the purview of the Act at all. In the former case, there is no recourse to common law remedies; in the latter case, there is.

Id. at 599, 544 S.E.2d at 356.

We further note that a number of jurisdictions have addressed similar situations and have come to the same conclusion.⁴ The Supreme Court of Indiana's analysis in McDonald v. Miner, 218 Ind. 373, 32 N.E.2d 885 (1941), is particularly persuasive.⁵ In McDonald, the decedent received fatal injuries as the result of an accident that arose out of and occurred in the course of her employment. Id. at 885. Her husband, who was not dependent upon the decedent for support, was awarded funeral expenses ⁶ by the Industrial Board of Indiana. Id. He subsequently filed a wrongful death action against the decedent's employer. Id. The trial court dismissed the action, finding that the Industrial Board of Indiana had exclusive jurisdiction. Id. On appeal, the Supreme Court of Indiana affirmed the decision, explaining:

This conclusion was predicated upon the theory that operation under the compensation law is optional with respect to both employer and employee; that the relationship arising therefrom is contractual in character; that the employee by acceptance has, in effect, contracted as to whom his dependents shall be, and that those who otherwise would be regarded as dependents under the wrongful death statute may not complain since there is no vested right in an action for wrongful death.

Id. at 886–87 (citing Chamberlain v. Florida Power Corp., 144 Fla. 719, 198 So. 486 (1940)).

In the present case, it is undisputed that Scott was an employee of McBar and that his death was caused by an accident that occurred in the course of and arose out of his employment with McBar. Clearly, the Act applies and the defense asserted by McBar before the Commission, that Martha was not a dependent, merely rendered the claim non-compensable. As the Act applies, so must the exclusivity provision. Butler, 270 Va. at 466, 620 S.E.2d at 773.

Martha next argues that she is not an employee as defined under Code § 65.2–101 because she is not eligible to receive compensation. As the Act only applies to employees and employers, Martha contends that neither the Act nor the exclusivity provision apply to her action as Scott's personal representative. Again, we must disagree.

The Act provides a number of definitions for the term “employee.” SeeCode § 65.2–101. The definition of employee upon which Martha relies is: “The legal representative, dependents and any other persons to whom compensation may be payable when any person covered as an employee under this title shall be deceased.” Id. Martha's argument focuses on the fact that she is not Scott's legal representative and, having been deemed a non-dependent, she is neither a dependent nor an “other person[ ] to whom compensation may be payable.” As such, she asserts that she cannot be considered to be an employee who has accepted the provision of the Act under Code § 65.2–307(A).

However, the definition of employee relied upon by Martha specifically includes the phrase: “when any person covered as an employee under this title shall be deceased.” By including this language, the General Assembly has clearly demonstrated its intent to look first to the status of the deceased employee when determining the applicability of the Act. Thus, in the context of Code § 65.2–307(A), the “employee” in the present case was Scott. ⁷

Moreover, Martha's reliance on this definition of employee is irrelevant to the issue in this case. While the Act binds employers and employees, it also defines the categories of persons, in addition to the employee, who are bound by the agreement between employer and employee. Even if Martha is not considered an employee under the Act, the language of Code § 65.2–307(A) is clear and unambiguous that Scott, as an employee of McBar, accepted the rights and...