Hamby v. Profile Products, L.L.C.

• Decision Date: 15 August 2006
• Docket Number: No. COA05-1491.,COA05-1491.
• Citation: 632 S.E.2d 804
• Parties: Lennie and Bonnie HAMBY, Plaintiffs, v. PROFILE PRODUCTS, L.L.C., Terra-Mulch Products, L.L.C., Roy D. Hoffman, and Electric Service Group, Inc., Defendants.
• Court: North Carolina Court of Appeals

632 S.E.2d 804

Lennie and Bonnie HAMBY, Plaintiffs, v. PROFILE PRODUCTS, L.L.C., Terra-Mulch Products, L.L.C., Roy D. Hoffman, and Electric Service Group, Inc., Defendants.

No. COA05-1491.

Court of Appeals of North Carolina.

August 15, 2006.

COPYRIGHT MATERIAL OMITTED

Appeal by defendant Profile from order entered 23 June 2005 by Judge Nathaniel J. Poovey in the Superior Court in Caldwell County. Heard in the Court of Appeals 18 May 2006.

Moss, Mason & Hill, by Joseph W. Moss and Matthew L. Mason, Greensboro, for defendant Profile Products, L.L.C.

Jones, Martin, Parris & Tessener Law Offices, P.L.L.C., by John Alan Jones and G. Christopher Olson, Raleigh, for plaintiffs.

Shumaker, Loop & Kendrick, L.L.P., by William H. Sturges and Patricia Wilson Magee, Charlotte, Kennedy, Covington, Lobdell & Hickman, L.L.P., by William G. Scoggin, Raleigh, for North Carolina Citizens for Business and Industry, amicus curiae.

Gregory C. York, Morris, York, Williams, Surles & Barringer, LLP, Charlotte, for Electric Service Group, defendant-appellee.

HUDSON, Judge.

Plaintiffs Lennie and Bonnie Hamby brought this action against defendants Roy Hoffman, Terra-Mulch, L.L.C. ("Terra-Mulch"), and Profile Products, L.L.C. ("Profile"), and Electric Service Group, Inc.("ESG"), for personal injuries sustained in a workplace accident. All defendants moved for summary judgment on grounds that plaintiffs could not satisfy the legal standard required to overcome the protections of Chapter 97 of the North Carolina General Statutes which limit plaintiffs' remedy to worker's compensation benefits. Following a hearing, the court granted summary judgment to Hoffman and Terra-Mulch, but denied same to Profile and ESG. Profile appeals. On 22 November 2005, Profile filed a petition for writ of certiorari. On 5 December, plaintiffs moved to dismiss this appeal as interlocutory. On 6 December 2005, plaintiffs filed a second motion to dismiss on the same grounds. For the reasons discussed below, we dismiss this appeal.

Lennie Hamby ("Hamby") worked as a dump truck operator for Terra-Mulch at its plant in Conover. Dump trucks delivered wood chips to the plant and dumped them whereupon they were poured into a pit containing two large augers. A 42" guardrail separated the pit from a raised dock where Hamby stood to operate the truck. Hamby stepped around the guardrail and in trying to descend from the dock and fell into the pit. A co-worker testified that he tried to stop the augers, but the first emergency stop button was inoperable. Before the co-worker could reach another stop mechanism, the augers injured Hamby, causing the loss of part his left leg.

Defendant Profile appeals from a partial denial of summary judgment. "Ordinarily, a partial summary judgment, because it does not completely dispose of the case, is interlocutory, and cannot be immediately appealed." Wolfe v. Villines, 169 N.C.App. 483, 485, 610 S.E.2d 754, 757 (2005). "In two instances a party is permitted to appeal interlocutory orders[.] First, a party is permitted to appeal from an interlocutory order when the trial court enters a final judgment as to one or more but fewer than all of the ... parties and the trial court certifies in the judgment that there is no just reason to delay the appeal of those claims." Wood v. McDonald's Corp., 166 N.C.App. 48, 54, 603 S.E.2d 539, 543 (2004) (internal quotation marks and citations omitted); see N.C. Gen. Stat. § 1A-1, Rule 54(b). Here, the trial court declined to certify this appeal. Second, an appeal from an interlocutory order is permitted if the order affects a substantial right. Sherrill v. Amerada Hess Corp., 130 N.C.App. 711, 719, 504 S.E.2d 802, 807 (1998).

"Our jurisprudence regarding the substantial right analysis is not defined by fixed rules applicable to all cases of a certain type, but rather is based on an individual determination of the facts and procedural context presented by each case." Boyce & Isley, PLLC v. Cooper, 169 N.C.App. 572, 574-75, 611 S.E.2d 175, 176-77 (2005).

Whether a party may appeal an interlocutory order pursuant to the substantial right exception is determined by a two-step test. The right itself must be substantial and the deprivation of that substantial right must potentially work injury to plaintiff if not corrected before appeal from final judgment. The substantial right test is more easily stated than applied. And such a determination usually depends on the facts and circumstances of each case and the procedural context of the orders appealed from.

Wood, 166 N.C.App. at 55, 603 S.E.2d at 544 (internal quotation marks and citations omitted). Here, defendants assert three substantial rights will be affected if this appeal is not permitted: the risk of inconsistent verdicts, the creation of a significant conflict between Profile and Terra-Mulch, and the creation of a conflict for Profile's counsel, who also represent Terra-Mulch.

Profile first argues that the denial of summary judgment to Profile and grant of summary judgment to Terra-Mulch and Hoffman creates an immediate and fundamental inconsistency and the possibility of inconsistent verdicts. We disagree.

"[T]he possibility of undergoing a second trial affects a substantial right only when the same issues are present in both trials, creating the possibility that a party will be prejudiced by different juries in separate trials rendering inconsistent verdicts on the same factual issue." Green v. Duke Power Co., 305 N.C. 603, 608, 290 S.E.2d 593, 596 (1982). "This Court has interpreted the language of Green and its progeny as creating a two-part test requiring a party to show that (1) the same factual issues would be present in both trials and (2) the possibility of inconsistent verdicts on those issues exists." North Carolina Dep't of Transp. v. Page, 119 N.C.App. 730, 735-36, 460 S.E.2d 332, 335 (1995).

Because Terra-Mulch was Mr. Hamby's employer and Hoffman was his co-employee, plaintiffs would have to meet the standards set by Woodson v. Rowland, 329 N.C. 330, 407 S.E.2d 222 (1991) and Pleasant v. Johnson, 312 N.C. 710, 713, 325 S.E.2d 244, 247 (1985) in order to prevail. Section 97-9 of the Workers' Compensation Act provides that it is the exclusive remedy to any employee for personal injury or death by accident suffered on the job. N.C. Gen.Stat. § 97-9 (2006). However, "when an employer intentionally engages in misconduct knowing it is substantially certain to cause serious injury or death to employees and an employee is injured or killed by that misconduct, that employee, or the personal representative of the estate in case of death, may pursue a civil action against the employer." Woodson, 329 N.C. at 340-41, 407 S.E.2d at 228. In addition, the Act bars "a worker who is injured in the course of his employment from suing a co-employee whose negligence caused the injury." Pleasant, 312 N.C. at 713, 325 S.E.2d at 247. "Provisions of the Act relative to an injured worker bringing an action against a third party for negligence causing injury have been held to apply only to third parties who were `strangers to the employment.'" Id.

Where a defendant is nothing "more than a related, but separate entity" from the employer, the exclusivity provisions of the Workers' Compensation Act are not an absolute bar to recovery. Cameron v. Merisel, Inc., 163 N.C.App. 224, 233, 593 S.E.2d 416 (2004). In such cases, third-party claims are permissible.

Profile is a limited liability company and also the sole member-manager of Terra-Mulch. N.C. Gen.Stat. § 57C-3-30(a) provides that

A person who is a member, manager, director, executive, or any combination thereof of a limited liability company is not liable for the obligations of a limited liability company solely by reason of being a member, manager, director, or executive and does not become so by participating, in whatever capacity, in the management or control of the business. A member, manager, director, or executive may, however, become personally liable by reason of that person's own acts or conduct.

N.C. Gen.Stat. § 57C-3-30(a) (emphasis supplied) (2006). Thus, while Profile cannot be held liable simply because it is the member-manager of Terra-Mulch, it could be personally liable for its own tortious conduct. The dissent cites N.C. Gen.Stat. § 57C-3-23, captioned "Agency powers of managers" as providing support for the contention that a member-manager is covered by the exclusivity provisions of the Workers' Compensation Act. This statute reads:

Every manager is an agent of the limited liability company for the purpose of its business, and the act of every manager, including execution in the name of the limited liability company of any instrument, for apparently carrying on in the usual way the business of the limited liability company of which he is a manager, binds the limited liability company, unless the manager so acting has in fact no authority to act for the limited liability company in the particular matter and the person with whom the manager is dealing has knowledge of the fact that the manager has no authority. An act of a manager that is not apparently for carrying on the usual course of the business of the limited liability company does not bind the limited liability company unless authorized in fact or ratified by the limited liability company.

N.C. Gen.Stat. § 57C-3-23 (2006). This statute appears to cover agency relationships pertaining to regular operation of the business, rather than liability for torts such as those alleged here. The North Carolina Limited Liability Company Act defines liabilities, debts and obligations as:

(10a) Liabilities, debts, and obligations.— Have one and the same meaning and are used interchangeably throughout this Chapter. Reference to "liabilities," "debts," or "obligations" whether individually or in any combination, is deemed to reference "all liabilities, debts, and obligations, whether arising in contract, tort, or otherwise."...