Hamby v. Profile Products, LLC

• Court: North Carolina Court of Appeals
• Writing for the Court: Wynn
• Citation: Hamby v. Profile Products, LLC, 676 S.E.2d 594 (N.C. App. 2009)
• Decision Date: 19 May 2009
• Docket Number: No. COA08-942.,COA08-942.
• Parties: Lennie and Bonnie HAMBY, Plaintiffs, v. PROFILE PRODUCTS, LLC, Terra-Mulch Products, LLC, Roy D. Hoffman, and Electric Service Group, Inc., Defendants.

676 S.E.2d 594

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

No. COA08-942.

Court of Appeals of North Carolina.

May 19, 2009.

Appeal by Plaintiffs from order entered 8 May 2008 by Judge Timothy L. Patti in Superior Court, Caldwell County. Heard in the Court of Appeals 9 March 2009.

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

Forman Rossabi Black, P.A., by Amiel J. Rossabi & William F. Patterson, Jr., Greensboro, for defendant Terra-Mulch Products, LLC.

WYNN, Judge.

This is the second appeal arising from an action brought by Plaintiffs Lennie and Bonnie Hamby against defendants Roy Hoffman; Terra-Mulch, L.L.C. ("Terra-Mulch"); Profile Products, L.L.C. ("Profile"); and Electric Service Group, Inc.("ESG"), for personal injuries sustained in a workplace accident. Though this matter has been the subject of opinions from this Court and the Supreme Court, to appreciate the procedural posture of this case, we first describe the roles of each of the parties involved in this litigation.

Plaintiff Lennie Hamby ("Hamby") worked as a truck-dump operator for Terra-Mulch at its Conover, North Carolina plant. While descending an elevated platform to clear accumulated wood chips in an auger pit, he slipped and entangled his left leg in the augers, which failed to deactivate because the emergency switch was inoperable. The incident resulted in the amputation of his left leg above the knee. Lennie and Bonnie Hamby ("Plaintiffs") brought a civil action describing Terra-Mulch as a wholly-owned subsidiary of Profile; Profile as the alter ego of Terra-Mulch; Roy Hoffman as an Assistant Plant Manager for Terra-Mulch; and ESG as a corporation hired to perform electrical work at Terra-Mulch's Conover plant.

Plaintiffs "allege that Profile and Terra-Mulch collectively failed to provide a safe work site for the inherently dangerous work Hamby performed and that they thus `engaged in conduct which was grossly negligent, willful and wanton, and substantially certain to lead to death or serious injury. ...'" Hamby v. Profile Prods., L.L.C., 361 N.C. 630, 632, 652 S.E.2d 231, 233 (2007). Though Plaintiffs asserted joint claims against Profile and Terra-Mulch, Plaintiffs argued (and our Supreme Court so interpreted) that they were asserting a claim against Terra-Mulch pursuant to Woodson v. Rowland, 329 N.C. 330, 407 S.E.2d 222 (1991), and an ordinary negligence claim against Profile. Hamby, 361 N.C. at 634, 652 S.E.2d at 234. Plaintiffs also asserted a claim against Terra-Mulch's Assistant Plant Manager, Roy Hoffman, pursuant to Pleasant v. Johnson, 312 N.C. 710, 325 S.E.2d 244 (1985), alleging that he "engaged in misconduct which was willful and wanton." Finally, Plaintiffs alleged that ESG negligently performed electrical work causing an emergency stop button to become inoperable, resulting in serious injury to Hamby.

In May 2005, all Defendants moved for summary judgment. On 1 June 2005, Plaintiffs moved to compel discovery, requesting relief pursuant to Rule 56(f) of the North Carolina Rules of Civil Procedure 56(f). On 6 June 2005, without ruling on Plaintiffs' motion to compel discovery, the trial court granted summary judgment to Terra-Mulch and Hoffman, but denied summary judgment to Profile and ESG. Profile immediately appealed the denial of summary judgment to this Court, which in a divided opinion dismissed that appeal as interlocutory. Hamby v. Profile Prods., L.L.C., 179 N.C.App. 151, 158, 632 S.E.2d 804, 809 (2006).

Based on the dissenting opinion, Profile appealed as a matter of right to our Supreme Court, which found the denial of summary judgment to Profile immediately appealable. Hamby, 361 N.C. at 639, 652 S.E.2d at 237. To reach that result, the Supreme Court first agreed that Profile's appeal from the denial of summary judgment was interlocutory because the trial court's order "does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy." Id. at 633, 652 S.E.2d at 233 (citations and quotation marks omitted). The Court further noted that the trial court did not certify the matter for appeal under Rule 54(b); so, to merit review, the interlocutory order had to affect a substantial right. Id. at 634, 652 S.E.2d at 233-34. The Court next focused on Plaintiffs' allegations and evidence that "Profile is [Terra-Mulch's] sole member[-manager]," id. at 636-37, 652 S.E.2d at 235, and that under the pertinent statutes, "when a member-manager is managing the LLC's business, its liability is inseparable from that of the LLC."¹ Id. at 638, 652 S.E.2d at 236. Because Plaintiffs' allegations and forecast of evidence tended to show that Profile was conducting Terra-Mulch's business when Hamby was injured, the Supreme Court concluded that "Profile's liability for actions taken while managing Terra-Mulch is inseparable from the liability of Terra-Mulch. ..." Id. at 639, 652 S.E.2d at 237. It followed that the grant of summary judgment to Terra-Mulch, while denying summary judgment to Profile, created the risk of inconsistent verdicts and made the denial of summary judgment to Profile immediately appealable. Id. The Court further concluded that,

the trial court erred in denying Profile's motion for summary judgment because the denial was premised on Plaintiffs' assertion of a third-party ordinary negligence claim against Profile, a claim that, as a matter of law, plaintiffs could not bring against Profile. Therefore, we remand this case to the Court of Appeals for further remand to the trial court for entry of summary judgment in favor of Profile.

Id.

After the Supreme Court's decision, on 9 January and 3 March 2009, Plaintiffs filed a Motion for Reconsideration regarding the granting of summary judgment in favor of Terra-Mulch, contending that,

When the summary judgment arguments were heard ..., the parties' arguments were premised on Profile's status as a separate legal entity apart from the employer, Terra-Mulch. As such, the misconduct on the part of Defendant Profile was not attributed to Defendant Terra-Mulch. The Supreme Court Opinion in this matter materially changed the substantive law governing issues involved in this case and compels a different result with respect to the summary judgment ruling in favor of Defendant Terra-Mulch. Under the Supreme Court's ruling, the actions, misconduct, and knowledge of Profile is properly attributable to Defendant Terra-Mulch.

The trial court denied Plaintiff's Motion for Reconsideration on 8 May 2008 but certified "the judgment and all rulings in favor of Defendant Terra-Mulch Products, LLC" to this Court for immediate review. Thereafter, Plaintiffs gave "notice of appeal from the following Orders, rulings, and actions of the trial court:"

(1) The Order by the Honorable Nathanial J. Poovey entered on 21 June 2005, granting Defendant Terra-Mulch Products, LLC's and Defendant Roy D. Hoffman's Motions for Summary Judgment;

(2) The decision by the Honorable Nathanial J. Poovey to proceed with the hearing of Defendant Terra-Mulch Products, LLC's Motion for Summary Judgment without addressing Plaintiff's pending Motion to Compel and request for relief pursuant to Rule 56(f) of the North Carolina Rules of Civil Procedure;

(3) The Order of the Honorable Robert P. Johnston entered 27 July 2005, staying discovery pending Defendant Profile Products, LLC's appeal;

(4) The decision by the Honorable Robert P. Johnston to proceed with the hearing of Defendant Profile Products, LLC's Motion to Stay without addressing Plaintiffs' pending Motion to Compel;

(5) The 8 May 2008 Order by the Honorable Timothy L. Patti denying Plaintiffs' Motion for Reconsideration in Light of Subsequently-Decided Authority pursuant to N.C.R. Civ.P.60(b)(6); and

(6) The decision of the Honorable Timothy L. Patti to proceed with the hearing of Plaintiffs' Motion for Reconsideration without addressing Plaintiffs' pending Motion to Compel and request for relief pursuant to Rule 56(f) of the North Carolina Rules of Civil Procedure.

Plaintiffs also filed a petition for writ of certiorari, asking this Court to review the grant of summary judgment to Hoffman contemporaneously with the motion to reconsider the grant of summary judgment to Terra-Mulch. Defendants Terra-Mulch and Hoffman opposed Plaintiffs' petition for writ of certiorari; Terra-Mulch also moved to dismiss this appeal.

From the outset, we observe that our Supreme Court, in mandating the entry of summary judgment in favor of Profile, found it significant to note preliminarily "that plaintiffs did not cross-assign error to the trial court's grant of summary judgment for Terra-Mulch on grounds that the exclusive remedy plaintiffs have against Terra-Mulch is under the Workers' Compensation Act." Id. at 634, 652 S.E.2d at 234. The Supreme Court pointed out that,

Plaintiffs' complaint, amended three times, asserts all claims against Terra-Mulch and Profile jointly, and none of these claims allege ordinary negligence as to those defendants. Before the trial court, the Court of Appeals, and this Court, plaintiffs have argued that Profile's liability is based on ordinary negligence, not gross negligence. The pivotal question presented by this case is whether, as a matter of law, plaintiffs are able to assert an ordinary negligence claim in civil court against Profile, the member-manager of the employer Terra-Mulch. To answer that question and, in so doing, determine whether the trial court's order creates the risk of inconsistent verdicts, we must decide whether Profile, like Terra-Mulch, is entitled to the protection of the exclusivity provision of Chapter 97.

Id.

The Court's statement that the Plaintiffs failed to "cross-assign error to the trial court's grant of summary judgment for...