New Amsterdam Casualty Co. v. Boaz-Kiel Const. Co.

• Decision Date: 02 January 1941
• Docket Number: No. 11765.,11765.
• Citation: 115 F.2d 950
• Parties: NEW AMSTERDAM CASUALTY CO. v. BOAZ-KIEL CONST. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

115 F.2d 950 (1940)

NEW AMSTERDAM CASUALTY CO. v. BOAZ-KIEL CONST. CO.

No. 11765.

Circuit Court of Appeals, Eighth Circuit.

December 10, 1940.

Rehearing Denied January 2, 1941.

Milton I. Goldstein, of St. Louis, Mo. (J. Porter Henry, Robert D. Evans, and Hennings, Green, Henry & Hennings, all of St. Louis, Mo., on the brief), for appellant.

Clark M. Clifford, of St. Louis, Mo. (Jacob M. Lashly, Arthur V. Lashly, and Lashly, Lashly, Miller & Clifford, all of St. Louis, Mo., on the brief), for appellee.

Before SANBORN and THOMAS, Circuit Judges, and DEWEY, District Judge.

SANBORN, Circuit Judge.

The New Amsterdam Casualty Company brought this suit against the Boaz-Kiel Construction Company, which, as general contractor, constructed the Municipal Auditorium at St. Louis, Missouri, to recover $6,618.85 workmen's compensation and medical expense which the Casualty Company, as the insurer of a subcontractor, L. Tasker Plastering Company, had been obliged to pay to William Grace, an employee of the subcontractor, who had received injuries, in the course of his employment, alleged to have been proximately caused by the negligence of the general contractor.

The court below dismissed the complaint upon the ground that it failed to state a claim upon which relief could be granted.¹ From the judgment of dismissal the Casualty Company has appealed.

The claim of the appellant, stated briefly, is that, as the compensation insurer of the subcontractor, it paid, as required by the terms of its policy, the injured employee the amounts to which he was entitled under the Workmen's Compensation Act of Missouri, in discharge of the primary liability of the subcontractor (the assured) and became subrogated to the rights of the subcontractor against appellee, the general contractor, whose negligence had caused the expenditure; that the amount which appellant was required to pay was $6,618.85; and that it is entitled to judgment against the appellee for that amount. The general contractor, the subcontractor and the injured employee were all subject to the Workmen's Compensation Act of Missouri.

The question which this Court is called upon to decide is whether, under the law of Missouri, a subcontractor can recover from the general contractor what the subcontractor has been required, by the Workmen's Compensation Act, to pay an employee who was injured as the result of the general contractor's negligence, all parties being subject to the Act.

At common law, one who is compelled to pay damages resulting from the negligence of another, has a cause of action for indemnity against the tort-feasor.²

The court below was of the opinion that, under the common law of Missouri, as modified by the Workmen's Compensation Act, the appellant had no cause of action. The Supreme Court of Missouri has not ruled upon the exact question presented. The appellant argues that the Workmen's Compensation Act does not, either expressly or impliedly, deprive its assured of the common law right to indemnity; that the Act is concerned only with the relations of employer and employee, and not with the relations between employers. The appellee asserts that the Act fixes the liability of the general contractor and of the subcontractor for injuries to their employees, and definitely limits that liability, and that appellant, in paying the injured employee of its assured, discharged a primary liability for which no cause of action against the general contractor existed, regardless of fault or negligence.

The pertinent provisions of the Workmen's Compensation Act of Missouri are the following:

§ 3301, Rev.St.Mo.1929, Mo.St.Ann. § 3301, p. 8232: "* * * The employer shall be liable irrespective of negligence, to furnish compensation under the provisions of this chapter for personal injury or death of the employe by accident arising out of and in the course of his employment, and shall be released from all other liability therefor whatsoever, whether to the employe or any other person. * * * "

§ 3308(c), Rev.St.Mo.1929, Mo.St.Ann. § 3308(c), p. 8242, 8243: "The provisions of this section shall not apply to the owner of premises upon which improvements are being erected, demolished, altered or repaired by an independent contractor but such independent contractor shall be deemed to be the employer of the employes of his subcontractors and their subcontractors when employed on or about the premises where the principal contractor is doing work."

§ 3308(d), Rev.St.Mo.1929, Mo.St.Ann. § 3308(d), p. 8243: "In all cases mentioned in the preceding subsections, the immediate contractor or subcontractor shall be liable as an employer of the employes of his subcontractors. All persons so liable may be made parties to the proceedings on the application of any party. The liability of the immediate employer shall be primary, and that of the others secondary in their order, and any compensation paid by those secondarily liable may be recovered from those primarily liable, with attorney's fees and expenses of the suit. Such recovery may be had on motion in the original proceedings. No such employer shall be liable as in this section provided, if the employe was insured by his immediate or any intermediate employer."

§ 3309, Rev.St.Mo.1929, Mo.St.Ann. § 3309, p. 8244: "Where a third person is liable to the employe or to the dependents, for the injury or death, the employer shall be subrogated to the right of the employe or to the dependents against such third person, and the recovery by such employer shall not be limited to the amount payable as compensation to such employe or dependents, but such employer may recover any amount which such employe or his dependents would have been entitled to recover. Any recovery by the employer against such third person, in excess of the compensation paid by the employer, after deducting the expenses of making such recovery shall be paid forthwith to the employe or to the dependents, and shall be treated as an advance payment by the employer, on account of any future installments of compensation."

The Workmen's Compensation Act of Missouri does not add to or supplement the common law of that State, but is substitutional in character.³ The act is a complete and exclusive code governing all questions of substantive rights under its terms.⁴ Because of the substitutional character of the Act, the immediate and remote employers have no responsibility to their employees, injured in the course of employment, except such as is imposed upon them as employers by the terms of the Act.⁵

If the appellee, a general contractor and remote employer, were a "third person" under the Act, the appellant would unquestionably have a cause of action against it for indemnity;⁶ but under § 3308 the status of the appellee was that of a remote employer, and the status of the subcontractor was that of an immediate employer. Bunner v. Patti, 343 Mo. 274, 121 S.W.2d 153. The liability of the immediate employer, the subcontractor, to pay compensation to its injured employee was, by the terms of the Act, a primary obligation. The liability of the remote employer, the general contractor, was secondary as between the two employers, provided that the injured employee was not insured by his immediate employer. If there had been no insurance and if the general contractor had been obliged to pay the injured employee what he was entitled to receive under the Act, the general contractor, by the express terms of the Act, could have recovered such payments from the subcontractor, with attorney's fees and the expenses of suit. Mo.St.Ann. § 3308(d), pp. 8242, 8243. The right of the injured employee to compensation and medical expense, regardless of who or what caused his injury, since no third...