Love v. Flour Mills of America

• Decision Date: 18 November 1980
• Docket Number: 80-1362 and 80-1237,Nos. 79-2277,s. 79-2277
• Citation: 647 F.2d 1058
• Parties: Leon LOVE and James Pickett, Plaintiffs-Appellants, v. FLOUR MILLS OF AMERICA, a Delaware Corporation; and Chickasha Cotton Oil Company, a Delaware Corporation, Defendants-Appellees, and Houston General Insurance Company, Defendant-Appellee. Fred DONALDSON, Plaintiff-Appellant, v. FLOUR MILLS OF AMERICA, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1058

647 F.2d 1058

Leon LOVE and James Pickett, Plaintiffs-Appellants, v. FLOUR MILLS OF AMERICA, a Delaware Corporation; and Chickasha Cotton Oil Company, a Delaware

Corporation, Defendants-Appellees,

and

Houston General Insurance Company, Defendant-Appellee.

Fred DONALDSON, Plaintiff-Appellant, v. FLOUR MILLS OF AMERICA, INC., Defendant-Appellee.

Nos. 79-2277, 80-1362 and 80-1237.

United States Court of Appeals Tenth Circuit.

Argued and Submitted Nov. 18, 1980 in Nos. 79-2277 and 80-1362.

Submitted Nov. 18, 1980 in No. 80-1237.

Decided May 8, 1981.

Larry A. Tawwater, Oklahoma City, Okl., for plaintiffs-appellants Leon Love and James Pickett.

Don Manners of Manners, Cathcart & Lawter, Oklahoma City, Okl., for plaintiff-appellant Fred Donaldson.

Larry D. Ottaway of Fenton, Fenton, Smith, Reneau & Moon, Oklahoma City, Okl., for defendants-appellees Flour Mills of America and Chickasha Cotton Oil Co.

Glen Mullins, Oklahoma City, Okl. (Dale Reneau of Fenton, Fenton, Smith, Reneau & Moon, Oklahoma City, Okl., with him on brief), for defendant-appellee Houston General Insurance Co.

Before McWILLIAMS, BREITENSTEIN and LOGAN, Circuit Judges.

LOGAN, Circuit Judge.

These separate diversity actions stem from a single tragic accident at a grain elevator in Durant, Oklahoma. Because common issues are raised in the appeals, we consolidated the cases and treat all arguments in a single opinion. The principal issues for our determination are (1) whether allegations of gross, willful, and wanton negligence on the part of an employer are sufficient to avoid the exclusive jurisdiction of the Oklahoma Workers' Compensation Act; (2) whether an employer's insurance carrier, providing workers' compensation, general liability, and fire insurance, accused of negligent inspection or failure to inspect and warn, is entitled to claim the employer's immunity from a common law action; and (3) whether a parent corporation is immune from common law suit brought by a subsidiary corporation's injured employee alleging negligence on the part of the parent.

On November 30, 1977, plaintiffs Leon Love, James Pickett, and Fred Donaldson, employees of a grain elevator owned and operated by Flour Mills of America, Inc. (Flour Mills), ¹ were seriously injured when a series of dust explosions and fires destroyed the elevator. Love and Pickett jointly filed a civil action in the Western District of Oklahoma against Flour Mills and its parent corporation Chickasha Cotton Oil Company (Chickasha), alleging gross, wanton, and willful negligence in the maintenance and operation of the elevator. Donaldson filed a similar complaint against Flour Mills in the District Court for the Eastern District of Oklahoma, alleging gross, willful, and wanton negligence in failing to provide a safe place for Donaldson to work and in failing to warn him of the dangers present in the mill. Love and Pickett filed a separate complaint against Houston General Insurance Company in the District Court for the Western District of Oklahoma. They alleged that Houston General was the fire and allied perils insurer of the premises at Durant and that it had a duty to inspect the premises, to recognize and discover hazards and to see that they were corrected. They claim Houston General breached this duty and is liable to plaintiffs for their injuries. The respective courts sustained all defendants' motions to dismiss, declaring that exclusive jurisdiction over the claims asserted was vested in the Oklahoma Workers' Compensation Court. These appeals followed. Liability of Immediate Employer

We recently confronted arguments similar to those asserted here against Flour Mills in Arrington v. Michigan-Wisconsin Pipeline Co., 632 F.2d 867 (10th Cir. 1980). In that case injured workers and representatives of deceased workers brought common law actions against Michigan-Wisconsin, alleging willful and wanton negligence in failing to prevent a fatal explosion and fire in a pipeline ditch in Oklahoma. After analysis of many decisions we held that the Oklahoma Workers' Compensation Act bars all common law negligence actions against the principal employer. As to the allegations of willful and wanton conduct we said,

"We may read the complaints as claiming, by the acerbic adjectives and adverbs used, the highest possible degree of negligence; nevertheless, it is still negligence that is alleged. Mere allegations of willfulness are not sufficient to take cases out of the Compensation Act. 'The liberal use of the phrase "wilfully and knowingly" in the petition added nothing to the facts Such constituted a mere characterization of the acts or omissions of the defendants concerned.' Roberts v. Barclay, 369 P.2d 808, 810 (Okl.1962)."

632 F.2d at 871.

In his authoritative treatise on workers' compensation law, Professor Larson states,

"(s)ince the legal justification for the common-law action is the nonaccidental character of the injury from the defendant employer's standpoint, the common-law liability of the employer cannot be stretched to include accidental injuries caused by the gross, wanton, wilful, deliberate, intentional, reckless, culpable, or malicious negligence, breach of statute, or other misconduct of the employer short of genuine intentional injury.

"Even if the alleged conduct goes beyond aggravated negligence, and includes such elements as knowingly permitting a hazardous work condition to exist, knowingly ordering claimant to perform an extremely dangerous job, wilfully failing to furnish a safe place to work, or even wilfully and unlawfully violating a safety statute, this still falls short of the kind of actual intention to injury that robs the injury of accidental character.

"If these decisions seem rather strict, one must remind oneself that what is being tested here is not the degree of gravity or depravity of the employer's conduct, but rather the narrow issue of intentional versus accidental quality of the precise event producing injury. The intentional removal of a safety device or toleration of a dangerous condition may or may not set the stage for an accidental injury later. But in any normal use of the words, it cannot be said, if such an injury does happen, that this was deliberate infliction of harm comparable to an intentional left jab to the chin."

2A Larson, Workmen's Compensation Law P 68.13 (1976).

We also reject plaintiffs' claim that employees as a class are denied equal protection under section 11 of the Workers' Compensation Act. Plaintiffs contend any interpretation of section 11 that denies compensation benefits to employees who willfully violate safety standards ² while allowing employers who engage in similar willful conduct to retain the benefits of immunity under the Act, promotes discrimination that bears no rational relationship to the objective of promoting safety in the workplace. But we believe the correct interpretation of section 11 is not subject to this infirmity. We read this section to equitably deny benefits to employees who intentionally or willfully injure themselves, yet provide recovery for other injuries sustained by employees, regardless of the employer's fault.

Liability of Insurer

The cause against Houston General was dismissed without determining what kinds of insurance were involved or whether Houston General had in fact inspected the elevator at Durant. Houston General admits in its brief that it was the workers' compensation carrier and provided coverage for general liability and fire perils. The Oklahoma Supreme Court has held the intent of the workers' compensation law "is to make the insurance carrier one and the same as the employer as to liability and immunity." United States Fidelity and Guar. Co. v. Theus, 493 P.2d 433, 435 (Okl.1972). In that case the insurer carried both workers' compensation and general liability insurance on the employer, and the court made no distinction based upon the existence of the liability policy. That decision and Maryland Cas. Co. v. Hankins, 532 P.2d 426, 429 (Okl.1975), convinces us that Oklahoma does not recognize under either contract or tort principles a common law cause of action by an injured worker directly against an employer's insurer for negligent inspection or failure to inspect.

Liability of Owner (Parent) Company

The Love and Pickett complaint against Chickasha asserts simply that Chickasha, with Flour Mills, "owned" the elevator, and that the "injuries were the result of the negligence of the defendants in the maintenance of the Durant Milling Company." Chickasha complains that its liability as an entity separate and distinct from the immediate employer, Flour Mills, was not argued in the trial court and was raised for the first time on appeal. Since the case was dismissed on the pleadings without development of the facts, we must consider all reasonable inferences from the pleadings in reviewing the propriety of the dismissal. Thus, we must read the complaint as charging Chickasha with independent negligence.

Love and Pickett contend Chickasha is not the immediate employer and is therefore not entitled to immunity under Okl.Stat.Ann. tit. 85, § 12 (West 1970), which provides, "(t)he liability prescribed in (section 11) shall be exclusive and in place of all other liability of the employer and any of his employees, at common law or otherwise." (Emphasis added.) Plaintiffs rely principally upon Boggs v. Blue Diamond Coal Co., 590 F.2d 655 (6th Cir.), cert. denied, 444 U.S. 836, 100 S.Ct. 71, 62 L.Ed.2d 47 (1979), which involved a fatal methane gas explosion in a Kentucky coal mine owned and operated by a wholly owned subsidiary of Blue Diamond Coal Company. The Sixth Circuit ruled that the parent corporation, Blue Diamond, was neither an "employer" nor a "contractor" under the Kentucky Workmen's Compensation Act and therefore was not immune from tort liability by virtue of the Act. It reasoned that "the tort system should not deny recovery in an...