Horodyskyj v. Karanian

• Decision Date: 01 October 2001
• Docket Number: No. 99SC875.,99SC875.
• Citation: 32 P.3d 470
• Parties: Nestor HORODYSKYJ and Zoriana M. Mororzewych-Horodyskyj, Petitioners, v. Richard KARANIAN, individually, and as President and Owner of Argus Electric Service, Inc.; and Argus Electric Service, Inc., Respondents.
• Court: Colorado Supreme Court

32 P.3d 470

Nestor HORODYSKYJ and Zoriana M. Mororzewych-Horodyskyj, Petitioners, v. Richard KARANIAN, individually, and as President and Owner of Argus Electric Service, Inc.; and Argus Electric Service, Inc., Respondents.

No. 99SC875.

Supreme Court of Colorado, En Banc.

October 1, 2001.

Knapp & Sachs, P.C., Debra Knapp Benjamin Sachs, Feiger, Collison, & Bechtold, LLC, Lynn D. Feiger, Joan M. Bechtold, Brian T. Moore, Denver, CO, Attorneys for Petitioners.

John Kokish, P.C., John Kokish, Castle Rock, CO, Attorney for Respondents.

Killian & Guthro, P.C., J. Keith Killian, Beecher Threatt, Grand Junction, CO, Attorneys for Amicus Curiae Colorado Trial Lawyers Association.

Miller, Lane, Killmer & Greisen, LLP, Darold W. Killmer, John T. Carlson, Denver, CO, Attorneys for Amicus Curiae Plaintiffs' Employment Lawyers Association.

Vaughan & Demuro, P.C., David R. Demuro, General Counsel, Pinnacol Assurance, Michael J. Steiner, Denver, CO, Attorneys for Amicus Curiae Pinnacol Assurance.

Chief Justice MULLARKEY delivered the Opinion of the Court.

In this opinion we address the relationship between workers' compensation laws and on-the-job sexual harassment inflicted by one employee upon another. We hold that injuries resulting from workplace sexual harassment are not compensable under the Workers' Compensation Act and, therefore, an employee's tort claims based on sexual harassment are not barred by the exclusivity provisions of the Act. Our decision today resolves a split of authority that has developed in the court of appeals on this issue. We reverse the judgment of the court of appeals in the case now before us, Horodyskyj v. Karanian, 5 P.3d 332 (Colo.App.1999), and remand the case for proceedings consistent with this opinion.

I.

Nestor Horodyskyj was employed as an apprentice electrician for Argus Electric Service, Inc. from May 1994 to May 1995. Richard Karanian was Horodyskyj's only co-employee and also the president and sole owner of Argus.

Horodyskyj alleges that in the course of his employment at Argus he was sexually harassed by Karanian, who made sexually suggestive remarks to, and unwelcome physical contact with, him. These incidents occurred during regular employment hours. Horodyskyj claims that as a result of these incidents, he left his employment position at Argus.

Horodyskyj filed numerous claims in the trial court, including common-law tort claims of assault and battery, intentional infliction of emotional distress, negligent infliction of mental distress, and invasion of privacy. He also filed a constructive discharge claim based on the Colorado Anti Discrimination Act. Horodyskyj's wife, Zoriana Mororzewych Horodyskyj, asserted claims for loss of consortium. The claims brought against the co-employee, Karanian, were also brought against the employer, Argus, under a respondeat superior theory.

As relevant here, the trial court determined that Horodyskyj's tort claims were barred by the exclusivity provisions of the Workers' Compensation Act, sections 8-41-101 to -505, 3 C.R.S. (2000). The court of appeals upheld the trial court's dismissal of the claims against the employer, Argus, but reversed its dismissal of Horodyskyj's tort claims brought against Karanian individually.

We granted certiorari to determine whether claims based on sexual harassment and related torts are barred by the exclusivity provisions of the Workers' Compensation Act.¹ Applying the test developed in our case law,² we determine that, in the usual case, injuries resulting from workplace sexual harassment do not arise out of an employee's employment for purposes of the Workers' Compensation Act. Moreover, nothing in the express language of the Act addresses sexual harassment. Although the Act was designed to provide exclusive remedies for employees suffering work-related injuries, it was not intended to cover injuries resulting from the usual case of workplace sexual harassment; specific federal and state anti-discrimination laws cover those cases. We hold that Horodyskyj's injuries are not compensable under the Act and, therefore, his claims based on sexual harassment and related torts are not barred by the Act.

II.

Colorado's workers' compensation system establishes the benefits available to workers injured in the course and scope of employment and the procedures for obtaining those benefits. Duran v. Indus. Claim Appeals Office, 883 P.2d 477, 479 (Colo.1994). The purpose of the Act is "to provide a remedy in areas where remedies do not exist at common law." Chartier v. Winslow Crane Serv. Co., 142 Colo. 294, 317, 350 P.2d 1044, 1056 (1960).

The Workers' Compensation Act provides exclusive remedies for employees suffering work-related injuries and occupational diseases. Triad Painting Co. v. Blair, 812 P.2d 638, 641 (Colo.1991); Bailey v. C.P. Constr., Inc., 837 P.2d 277, 279 (Colo.App. 1992). The exclusive-remedy provisions of the Act bar civil actions in tort against an employer for injuries that are compensable under the Act. See §§ 8-41-102 and 8-41-104, 3 C.R.S. (2000). An employer that has complied with the Act is granted immunity from common-law actions for damages, and its employees are limited to the remedies specified in the act. Hilzer v. MacDonald, 169 Colo. 230, 237, 454 P.2d 928, 931 (1969); see also Popovich v. Irlando, 811 P.2d 379, 381 (Colo.1991). Thus, in exchange for the certainty and relative speed of the workers' compensation system, an employee surrenders the right to sue his or her employer in tort and the employer surrenders its defenses to such suit. Popovich, 811 P.2d at 384.

Under the Act, an employee is entitled to compensation in all cases where the following conditions occur:

(a) Where, at the time of the injury, both employer and employee are subject to the provisions of said articles and where the employer has complied with the provisions thereof regarding insurance;

(b) Where, at the time of the injury, the employee is performing service arising out of and in the course of the employee's employment;

(c) Where the injury or death is proximately caused by an injury or occupational disease arising out of and in the course of the employee's employment and is not intentionally self-inflicted.

§ 8-41-301(1), 3 C.R.S. (2000). Only the third requirement is at issue in this case. Therefore, we must determine whether Horodyskyj's injury "arose out of and in the course of" his employment for the purposes of workers' compensation exclusivity.

A.

The phrases "arising out of" and "in the course of" are not synonymous and a claimant must meet both requirements. Younger v. City & County of Denver, 810 P.2d 647, 649 (Colo.1991); In re Question Submitted by U.S. Court of Appeals, 759 P.2d 17, 20 (Colo.1988) (Tolbert). The latter requirement refers to the time, place, and circumstances under which a work-related injury occurs. Popovich, 811 P.2d at 383 (internal citations omitted). Thus, an injury occurs "in the course of" employment when it takes place within the time and place limits of the employment relationship and during an activity connected with the employee's job-related functions. Tolbert, 759 P.2d at 20 n. 3; Deterts v. Times Publ'g Co., 38 Colo. App. 48, 51, 552 P.2d 1033, 1036 (1976). The parties do not dispute that Horodyskyj's injury occurred in the course of his employment at Argus.

The term "arises out of" refers to the origin or cause of an injury. Deterts, 38 Colo.App. at 51, 552 P.2d at 1036. There must be a causal connection between the injury and the work conditions for the injury to arise out of the employment. Younger, 810 P.2d at 649. An injury "arises out of" employment when it has its origin in an employee's work-related functions and is sufficiently related to those functions to be considered part of the employee's employment contract. Popovich, 811 P.2d at 383.

B.

In two earlier cases involving tort claims based on co-employee sexual assault and sexual harassment, we developed a test for determining whether injuries arise out of employment for the purposes of the Workers' Compensation Act. Popovich, 811 P.2d 379; Tolbert, 759 P.2d 17. Conflicting interpretations of this test in several recent decisions by the court of appeals, however, have created a split of authority in this area of law. Compare Horodyskyj, 5 P.3d at 335-36, and Moorhead Mach. & Boiler Co. v. Del Valle, 934 P.2d 861, 865 (Colo.App.1996), and Rendon v. United Airlines, 881 P.2d 482, 484-85 (Colo.App.1994), with Ferris v. Bakery, Confectionery & Tobacco Union, Local 26, 867 P.2d 38, 42 (Colo.App.1993), and Stamper v. Hiteshew, 797 P.2d 784, 785-86 (Colo.App. 1990), and Patel v. Thomas, 793 P.2d 632, 636-37 (Colo.App.1990).

Under the test, willful assaults by co-employees are divided into three categories: (1) those assaults that have an inherent connection with the employment; (2) those assaults that are inherently private; and (3) those assaults that are neutral. Popovich, 811 P.2d at 383 (explaining the test as established in Tolbert, 759 P.2d at 23-24). Both the first and third categories of assaults arise out of the employment for the purposes of the Workers' Compensation Act and therefore prevent an employee from suing his or her employer in tort for injuries based on such assaults. Only the second category of injuries, inherently private assaults, does not arise out of employment and thus tort claims based on such assaults are not barred by workers' compensation exclusivity.

This test was first applied in Tolbert, a case in which the United States Court of Appeals for the Tenth Circuit certified to this court a question pertaining to a pending federal case. The certified question was whether the Colorado Workers' Compensation Act provided the exclusive remedy to an employee for injuries resulting from a sexual assault by a co-employee, thereby prohibiting the employee from suing the employer in tort. Tolbert, 759 P.2d at 18. In Tolbert, an employee was attacked and raped by...