Nichols v. Jacobsen Constr. Co.

• Decision Date: 28 April 2016
• Docket Number: No. 20140866.,20140866.
• Citation: 374 P.3d 3,2016 UT 19
• Parties: Rick J. NICHOLS, Respondent, v. JACOBSEN CONSTRUCTION CO., INC., Petitioner.
• Court: Utah Supreme Court

374 P.3d 3

2016 UT 19

Rick J. NICHOLS, Respondent

v.JACOBSEN CONSTRUCTION CO., INC., Petitioner.

No. 20140866.

Supreme Court of Utah.

April 28, 2016.

William J. Hansen, Karra J. Porter, Sarah E. Spencer, Salt Lake City, for respondent.

Julianne P. Blanch, Alan S. Mouritsen, Salt Lake City, for petitioner.

Justice DURHAM authored the opinion of the Court, in which Chief Justice DURRANT, Associate Chief Justice LEE, and Judge JOHNSON joined. Having recused himself, Justice HIMONAS does not participate herein; Fourth District Judge CHRISTINE S. JOHNSON sat. Justice JOHN A. PEARCE became a member of the Court on December 17, 2015, after oral argument in this matter, and accordingly did not participate.

On Certiorari to the Utah Court of Appeals

Justice DURHAM

, opinion of the Court:

INTRODUCTION

¶ 1 Rick J. Nichols worked for a subcontractor of Jacobsen Construction Company in 2011 when scaffolding came loose and fell on him, causing serious bodily injury. Mr. Nichols alleges that Jacobsen's negligence caused these injuries and thus filed suit with the district court. Jacobsen moved for summary judgment, claiming immunity from suit under the exclusive remedy provision of the Utah Workers' Compensation Act. The district court granted Jacobsen's motion, determining that Jacobsen qualified for immunity under the “eligible employer” statute because: (1) Jacobsen “procure[d] work” that was “part or process of [its] trade or business,” (2) Jacobsen “secure[d] the payment of workers' compensation benefits” for Mr. Nichols, and (3) Jacobsen created and maintained a “written workplace accident and injury reduction program that [met] the requirements” of the statute. Utah Code § 34A–2–103(7)(f)(iii)(B)

.

¶ 2 Mr. Nichols appealed to the Utah Court of Appeals, which affirmed on the “procuring work” requirement but reversed on the “securing the payment” requirement, concluding that the length of time that passed before Jacobsen began making workers' compensation payments had an impact on whether Jacobsen indeed secured payment of those benefits as the statute required. The court of appeals did not address the workplace accident and injury reduction program requirements.

¶ 3 We conclude that Jacobsen qualifies as an “eligible employer” under the workers' compensation statutes and has fulfilled all three of the above requirements, thereby qualifying for immunity from suit. We therefore affirm the district court's grant of summary judgment in its entirety; affirming in part and reversing in part the court of appeals' decision.

BACKGROUND

¶ 4 Jacobsen Construction Company was a general contractor and construction manager for the City Creek Center commercial development project in Salt Lake City. Jacobsen required its subcontractors to participate in a “contractor-controlled insurance program” (CCIP). Under this plan, Jacobsen purchased a single insurance policy from a single insurer that covered all of Jacobsen's subcontractors. This plan included a workers' compensation policy that provided the first $250,000 of benefits for injured workers. Although subcontractors could still purchase their own workers' compensation insurance, the CCIP was “intended to be the primary source of coverage” and would “assume primary position to Subcontractors' insurance in the covered areas of risk.”

¶ 5 Safway was one such subcontractor included in the CCIP. On June 9, 2009, Safway signed a CCIP Enrollment Form and an Insurance Calculation Form. Safway listed under the “Work Description” heading that it would “erect and dismantle scaffolding.” Safway received a certificate of liability insurance on August 27, 2010.

¶ 6 Safway signed the Insurance Calculation Form that twice references the CCIP manual, which in turn requires all participating subcontractors to “compl [y] with the terms and conditions of the Jacobsen City Creek Center CCIP Manual and the Jacobsen City Creek Center Safety and Health Manual.”

¶ 7 Rick J. Nichols was an employee of Safway. On April 11, 2011, Mr. Nichols was severely injured while unloading scaffolding. On the morning of his injury, Mr. Nichols and another Safway employee drove to a construction site to unload scaffolding. Safway had reserved a forklift for the men to use to assist with the unloading, but when the men arrived at the site there was no forklift available. A Jacobsen employee demanded that the men unload the scaffolding by hand because “the project was behind schedule.” Mr. Nichols stayed on the ground while the other Safway employee climbed onto the truck's flatbed. Mr. Nichols began cutting the bands that held the individual scaffolding planks together in order to unload the planks. As Mr. Nichols was cutting through one of the bands, several planks came crashing down on him, with the weight of the impact snapping one of the bands of Mr. Nichols' hard hat.

¶ 8 After the accident, a Safway supervisor came to the site to take Mr. Nichols to speak with one of Jacobsen's safety supervisors. The Jacobsen supervisor told the Safway supervisor to take Mr. Nichols “wherever you want” for medical assistance because “he's not our employee.” Mr. Nichols then filed a workers' compensation claim, but there is a dispute over who initially paid the benefits. Mr. Nichols alleges he initially filed the claim with Safway's insurance carrier, but Jacobsen claims it has paid from “day one and dollar one.” It is undisputed, however, that Jacobsen has paid over $100,000 in benefits and continues to pay as losses accrue.

¶ 9 Mr. Nichols filed a negligence action against Jacobsen in the district court. Jacobsen argued that it was immune from tort liability based on the Utah Workers' Compensation Act's exclusive-remedy provision. The parties then agreed to stay discovery while Jacobsen moved for summary judgment on the question of whether it qualified for immunity under the “eligible employer” statute. See Utah Code § 34A–2–103(7)(f)(iii)(B)

. The statute required Jacobsen to establish that it had (1) “procure[d] work” that was “part or process of [its] trade or business,” (2) “secure[d] the payment of workers' compensation benefits” for Mr. Nichols, and (3) created and maintained a “written workplace accident and injury reduction program that [met] the requirements” of the statute. Id.

¶ 10 The district court granted Jacobsen's motion for summary judgment. First, with respect to the “procuring work” requirement, the district court found in its order that Mr. Nichols did not provide the court with any “admissible factual or legal basis for th[e] assertion ... [that] delivery of supplies on its face would seem not to qualify as procuring work that is part or process of [Jacobsen's] trade or business.” Additionally, the court found that the “plain language of the statute seems to support the delivery of supplies [is] clearly in furtherance of [Jacobsen's] work.” Second, with respect to “securing the payment” of workers' compensation benefits, the court found that Jacobsen met this requirement when it enrolled Safway as a subcontractor in its insurance program. And finally, with respect to the “workplace accident and injury reduction program” requirement, the court found that Jacobsen had submitted several documents demonstrating its compliance with the statute, and that although Mr. Nichols “question[ed] many of the facts surrounding these documents,” he did not “produce[ ] any evidence of [Jacobsen's] failure to comply with the statutory mandates.”

¶ 11 Mr. Nichols appealed to the Utah Court of Appeals, which affirmed on the first requirement (procuring the work), but reversed on the second requirement (securing the payment). Nichols v. Jacobsen Constr. Co., 2014 UT App 201, 334 P.3d 514

. The court concluded that there was a genuine dispute of fact as to whether Jacobsen secured the payment of Mr. Nichols' benefits, because the parties disputed whether Jacobsen paid the benefits from “day one and dollar one” or whether Safway initially secured the payment of the benefits, and Jacobsen stepped in at a later date. Id. ¶¶ 11–12. The court held that Jacobsen would not qualify for immunity “if a significant time passed” before Jacobsen started paying Mr. Nichols' benefits. Id. ¶ 13. The court of appeals did not address the third requirement that Jacobsen create and maintain a “written workplace accident and injury reduction program.” See Utah Code § 34A–2–103(7)(f)(iii)(B)(III).

¶ 12 We granted certiorari on the issue of whether the “securing the payment” provision includes a timing requirement for actual payment of benefits, and the issue of the proper interpretation of the word “work.” We have jurisdiction under Utah Code section 78A–3–102(3)(a)

.

STANDARD OF REVIEW

¶ 13 On certiorari, we give the court of appeals' decision no deference and review its decision under a correctness standard. Energy Claims Ltd. v. Catalyst Inv. Grp., Ltd., 2014 UT 13, ¶ 17, 325 P.3d 70

; Turner v. Univ. of Utah Hosps. & Clinics, 2013 UT 52, ¶ 13, 310 P.3d 1212. We also review questions of statutory interpretation and the grant of summary judgment for correctness. Monarrez v. UDOT, 2016 UT 10, 368 P.3d 846. “To the extent an issue involves a factual question, we ‘view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party’ ”—in this case—Mr. Nichols. Id. ¶ 7 (citation omitted).

ANALYSIS

¶ 14 As set forth in Utah Code section 34A–2–105(1)

, recovery under Utah's Workers' Compensation Act is an injured employee's “exclusive remedy against the employer[,] ... in place of any and all other civil liability whatsoever, at common law or otherwise.” This exclusive remedy provision has been extended to general contractors who qualify as “eligible employers” and meet certain requirements of the statute. Utah Code section 34A–2–103(7)(f)(i) defines an “eligible employer” as an employer who “procures work to be done wholly or in part for the employer by a contractor, including ... all subcontractors under the contractor ... [and] all...