Kelly v. TRC Fabrication, LLC, Docket No. 47653

CourtUnited States State Supreme Court of Idaho
Writing for the CourtSTEGNER, Justice.
Citation168 Idaho 788,487 P.3d 723
Docket NumberDocket No. 47653
Decision Date26 April 2021
Parties Dale KELLY and Nancy Kelly, Husband and Wife, Plaintiffs-Appellants, v. TRC FABRICATION, LLC, an Idaho limited liability company, Defendant-Respondent.

168 Idaho 788
487 P.3d 723

Dale KELLY and Nancy Kelly, Husband and Wife, Plaintiffs-Appellants,
TRC FABRICATION, LLC, an Idaho limited liability company, Defendant-Respondent.

Docket No. 47653

Supreme Court of Idaho, Boise, January 2021 Term.

Opinion Filed: April 26, 2021
Rehearing Denied: June 21, 2021

Racine Olson PLLP, Pocatello, for appellants Dale and Nancy Kelly. Brent O. Roche argued.

Hawley Troxell Ennis & Hawley LLP, Pocatello, for respondent TRC Fabrication, LLC. John A. Bailey, Jr., argued.

STEGNER, Justice.

487 P.3d 725

This case explores the scope of tort immunity afforded to a putative employer under the Idaho Worker's Compensation Act. The question presented is whether the immunity afforded a statutory employer applies to TRC Fabrication, LLC, to bar Dale and Nancy Kelly's complaint for damages.

The facts are relatively straight-forward. TRC Fabrication, LLC, (TRC) purchased steel tubing from Brown Strauss Steel Co. (Brown Strauss), a company located in Fontana, California. Under the sales contract, Brown Strauss sold the tubing "free on board" to TRC, which meant Brown Strauss would retain ownership of the tubing until it was tendered to and accepted by TRC at its Idaho Falls, Idaho, facility. In other words, Brown Strauss agreed that the price of the metal tubing included transportation of the tubing from California to Idaho. Brown Strauss contracted with Jay Transport, a trucking company based in Rigby, Idaho, which in turn engaged Dale Kelly (Kelly), an independent owner-operator of a semi-truck to transport the tubing. Kelly hauled the tubing to Idaho Falls and delivered the load to TRC. When employees of TRC began to unload the tubing from the trailer, a forklift operator dropped the steel tubing, which then slid across the pavement and struck Kelly, seriously injuring his right leg, ankle, and foot.

Kelly and his wife Nancy filed a complaint against TRC, seeking to recover damages for negligence and loss of consortium. After TRC filed a motion seeking summary judgment, the district court granted the motion and dismissed the Kellys’ complaint. The district court concluded that Idaho's worker's compensation law extended statutory immunity to TRC and limited the Kellys’ recovery to workers’ compensation benefits. For the reasons set out below, we reverse the district court's order granting summary judgment, vacate the judgment entered, and remand the case for further proceedings.


A. Factual Background.

Kelly is a professional truck driver. At the time of the events giving rise to the case, Kelly was an owner-operator of a semi-truck and flatbed trailer.

TRC is an Idaho limited liability company that performs steel fabrication work. In January 2018, TRC purchased more than 43,000 pounds of metal tubing from Brown Strauss. Under the terms of the sales contract, it was Brown Strauss's responsibility to arrange delivery of the tubing to TRC. Brown Strauss bore the risk of loss until delivery to and acceptance by TRC. Brown Strauss arranged transportation through Jay Transport. Jay Transport then contracted with Kelly to haul the metal tubing from California to Idaho.

Kelly picked up the shipment on January 19, 2018, and arrived at TRC's facility on January 22, 2018. Unfortunately, during unloading the TRC employee operating the telehandler1 lost control of the top tier of the shipment after lifting it from Kelly's trailer. Pieces of heavy steel tubing slid along the pavement, striking Kelly and severely injuring his right leg, ankle, and foot. Kelly was transported to the hospital by ambulance. Kelly has undergone three surgeries as a result of his injuries. His medical expenses at the time of the hearing on the motion for summary judgment exceeded $145,000.

B. Procedural Background.

On December 20, 2018, Kelly and his wife Nancy2 filed suit against TRC, alleging that TRC's forklift operator was negligent in his

487 P.3d 726

operation of the telehandler, and claiming damages for personal injury and loss of consortium. TRC answered, and asserted numerous affirmative defenses, the chief of which (for purposes of this appeal) was that the Kellys’ exclusive remedy was through Idaho's worker's compensation system.

After discovery, TRC moved for summary judgment, arguing that it was both a category one and category two statutory employer of Kelly, and that TRC was entitled to immunity under the exclusive remedy rule of Idaho Code section 72-201, which shields most workplace injuries from "private controversy." TRC also argued that, because Kelly could only recover through the worker's compensation system, Nancy's derivative claim of loss of consortium necessarily failed. (Citing Coddington v. City of Lewiston , 96 Idaho 135, 525 P.2d 330 (1974) for this proposition.)

The Kellys responded, arguing that immunity under the Idaho Worker's Compensation Act only applies in the context of a contract for services , and that because the core contract in the case was for the sale of goods, the Idaho Worker's Compensation Act does not apply. The Kellys reasoned that TRC was required to establish "the existence of an unbroken chain of interrelated contracts for services between TRC and the injured party[.]" (Italics in original.) The Kellys contended that under the Uniform Commercial Code's "predominant factor test," "a contract for the sale of goods with ancillary delivery is still a contract for the sale of goods and not a contract for services[.]"

In response, TRC argued that there was no statutory requirement of an "unbroken chain" of service contracts for TRC to be a category one statutory employer under the Idaho Worker's Compensation Act. TRC also argued that the Kellys’ proposed interpretation would undermine the statutory employer doctrine. In addition, TRC asserted that it was a category two statutory employer.

Following briefing and oral argument, the district court entered its memorandum decision and order, granting TRC's motion for summary judgment and dismissing the Kellys’ complaint. The district court found that TRC was a category one statutory employer, relying on the definition in Idaho Code section 72-102(13)(a) and on Spencer v. Allpress Logging, Inc. , 134 Idaho 856, 11 P.3d 475 (2000), in which this Court held that a contract involving both goods and services forms the necessary predicate for the applicability of statutory employer immunity. Although the district court held that there was a genuine issue of material fact regarding TRC's alternate argument, i.e., whether TRC was a category two statutory employer, the district court concluded that TRC was Kelly's category one statutory employer and therefore entitled to summary judgment. Finally, the district court concluded that Nancy could not maintain her loss of consortium claim because TRC was immune from being sued in tort as a result of Kelly's injuries.

The Kellys timely appealed.


"This Court's review of a trial court's ruling on a motion for summary judgment is the same standard used by the trial court in originally ruling on the motion." Robison v. Bateman-Hall, Inc. , 139 Idaho 207, 209, 76 P.3d 951, 953 (2003). "Summary judgment is appropriate ‘if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’ " Taylor v. Taylor , 163 Idaho 910, 916, 422 P.3d 1116, 1122 (2018) (citing I.R.C.P. 56(a) ).

Gomez v. Crookham Co. , 166 Idaho 249, 253, 457 P.3d 901, 905 (2020). "The interpretation of a statute is a question of law over which this Court exercises de novo review." Robison , 139 Idaho at 210, 76 P.3d at 954 (citation omitted).

"This Court will liberally construe the worker's compensation statutes to serve the scheme's humane purposes." Kennedy v. Forest , 129 Idaho 584, 587, 930 P.2d 1026, 1029 (1997) (citation omitted).


A. The district court erred in concluding that TRC is Kelly's category one statutory employer.

In granting summary judgment, the district court concluded that TRC was Kelly's

487 P.3d 727

statutory employer under Idaho Code section 72-102(13)(a) because TRC implicitly paid the costs of delivery services as part of its purchase of the metal tubing and because delivery of the tubing was part of the contract. The district court relied on Spencer v. Allpress Logging, Inc. , 134 Idaho 856, 11 P.3d 475 (2000), in reasoning that the Idaho Worker's Compensation Act applies to contracts involving the provision of both goods and services.

On appeal, the gravamen of the Kellys’ argument is that the district court erred in determining that TRC had contracted for Kelly's services because the contract between Brown Strauss and TRC was primarily a contract for goods, not one for services. The Kellys contend that the delivery term "F.O.B. DELIVERED" in the contract does not render the contract one for services. The Kellys also argue that the district court incorrectly relied on Spencer v. Allpress Logging, Inc. , to determine that the...

To continue reading

Request your trial
1 practice notes
  • Eldridge v. Meissen Trucking, 012122 IDWC, IC 2018-002756
    • United States
    • Workers' Compensation Board Idaho
    • January 21, 2022
    ...cattle in question were owned by a separate entity, AB Genetics. Snake River further contends that under Kelly v. TRC Fabrication, LLC, 168 Idaho 788, 487 P.3d 723, 728 (2021), Snake River cannot be considered a category one statutory employer because the transportation of cattle is ancilla......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT