Posey v. Union Carbide Corp.

• Decision Date: 21 April 1983
• Docket Number: No. 81-5366,81-5366
• Citation: 705 F.2d 833
• Parties: Milford Wendell POSEY, Jr., et al., Plaintiffs-Appellants, v. UNION CARBIDE CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 833

705 F.2d 833

Milford Wendell POSEY, Jr., et al., Plaintiffs-Appellants, v. UNION CARBIDE CORPORATION, Defendant-Appellee.

No. 81-5366.

United States Court of Appeals Sixth Circuit.

Argued Aug. 4, 1982.

Decided April 21, 1983.

Larry S. Vines, Lloyd Gathings (argued), Birmingham, Ala., for plaintiffs-appellants.

Hugh T. Shelton, Jr. (argued), Columbia, Tenn., for defendant-appellee.

Before EDWARDS, Chief Circuit Judge, KEITH, Circuit Judge, and HOFFMAN, ^* Senior District Judge.

GEORGE CLIFTON EDWARDS, Jr., Chief Circuit Judge.

This is an appeal from the District Court's, 510 F.Supp. 1143, grant of summary judgment in a diversity action brought by four minor children who are survivors of the deceased, Milford Posey. Posey was killed when he fell through a roof he was engaged in helping to erect on premises owned by defendant Union Carbide Corporation. Plaintiffs' brief recites the applicable facts which we treat as undisputed in this appeal from summary judgment:

Defendant, Union Carbide Corporation, contracted with several contractors to construct a graphite furnace plant on its own premises at Columbia, Maury County, Tennessee. Union Carbide appointed project engineers to see that the construction project was properly performed and the work orderly and expeditiously prosecuted according to the contract. However, neither Union Carbide nor its project engineers exercised absolute control over all phases of the method and performance of the work. * * * Defendant, Union Carbide, contracted with Maury Steel, Inc., to perform the structural steel erection and roofing on Union Carbide's premises. Union Carbide, according to contract, approved all structural drawings before construction began, including those concerning the roof. Union Carbide had knowledge of the possibility that the perlins (roof supporters) were spaced too far apart according to required safety standards, but approved the plans nonetheless.

On July 29, 1975, Milford Wendell Posey, deceased, was employed by Maury Steel, Inc., in the construction of a building for and at the premises of the defendant, Union Carbide Corporation. The decedent fell to his death when a section of corrugated transite material, being used for roofing on the building, collapsed and gave way, causing him to fall to a concrete floor approximately thirty-seven (37) feet below.

Plaintiffs' brief describes their action in negligence terms as follows:

The basis for plaintiffs' action against the defendant, Union Carbide Corporation, is the plaintiffs' averment that said defendant, as owner of the project and project site and by retention of supervisory authority, owed certain duties to Milford Wendell Posey, Jr., deceased, including the duty to provide proper, safe and adequate design specifications with regard to the material used to support the roof of the building where plaintiffs' decedent was working and the nondelegable duty to assure that reasonably safe equipment and methods were used in the performance of such work.

The District Judge, however, granted summary judgment on defendant Union Carbide's motion on the following construction of Tennessee state law which he found to govern this diversity case under Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938):

Plaintiff's decedent died as a result of injuries incurred when he fell through the roof of Union Carbide's new graphite furnace plant. Although Union Carbide argues that it had supervisory control over the project as a whole, it concedes that it did not undertake direct supervisory control of the work performed by plaintiff's decedent. For purposes of this motion the Court assumes that Union Carbide was owner, undertook to hire Maury Steel and the other contractors, and had general control over the project. Because plaintiff's decedent has recovered worker's compensation from Maury Steel's insuror, a grant of summary judgment for Union Carbide would preclude any recovery against Union Carbide.

Workers' compensation laws were enacted to compensate employees for loss of earning capacity sustained in the course of their employment. W.S. Dickey Mfg. Co. v. Moore, 208 Tenn. 576, 347 S.W.2d 493 (1961); Mathis v. J.L. Forrest & Sons, 188 Tenn. 128, 216 S.W.2d 967 (1949). To recover compensation, the employee need not prove negligence, and he is not subject to the defenses of assumption of risk, the fellow servant rule, and contributory negligence. Tenn.Code Ann. Sec. 50-911. Although the employer is required to compensate employees for injuries that may not be the result of the employer's negligence, he is protected from damage verdicts for tortious injury. Id. Sec. 50-908.

Tort recovery is permitted against third parties. The policy for allowing third-party actions is fairly simple: since the third party could not have been liable for worker's compensation, he should be prepared to make the injured person whole under normal tort principles. Injured persons should not be deprived of access to the courts for redress without reason. Employers under worker's compensation acts stand ready to pay worker's compensation. An employee who recovers worker's compensation may not generally pursue a tort remedy against his employer because that protection is the quid pro quo received by the employer for providing worker's compensation coverage.

Tennessee Code Annotated section 50-915 extends the duties and immunities of an employer to entities other than an employee's immediate employer.

A principal, or intermediate contractor, or subcontractor shall be liable for compensation to any employee injured while in the employ of any of his subcontractors and engaged upon the subject matter of the contract to the same extent as the immediate employer.

....

This section shall apply only in cases where the injury occurred on, in, or about the premises on which the principal contractor has undertaken to execute work or which are otherwise under his control or management.

When taken together with Tenn.Code Ann. Sec. 50-908, which provides for worker's compensation as the exclusive remedy tort recovery is barred against a principal contractor.

Section 50-915 creates "statutory employers" that will be liable for worker's compensation in case recovery is unavailable against the employee's immediate employer. Similar "statutory employer" statutes are on the books in over forty states. See 2A A. Larsen, The Law of Workmen's Compensation Sec. 72.31, at 14-57 (1980). The purpose of section 50-195 and similar statutes is to protect employees from irresponsible subcontractors. The principal or general contractor will be responsible for an injured employee's worker's compensation if it has failed to hire reliable, insured subcontractors. The object of the statute is to give the general contractor an incentive to require subcontractors to carry insurance." Id.

We turn now to interpretation of the previously cited Tennessee case law on that subject. Plaintiffs-Appellants contend that this court has authoritatively interpreted Section 50-915 of Tennessee Code Annotated favorably to their claim for tort liability against Defendant Union Carbide. They cite and rely upon Womble v. J.C. Penney Co., 431 F.2d 985 (6th Cir.1970), where a panel of this court said:

The District Court found that appellant as owner of the property was not a principal contractor since that term did not ordinarily refer to the owners of the premises who have contracted with other firms to perform work on the premises which was not a part of the owner's business. We agree with the District Court's findings and hold that Robertson & Sons, and not the appellant, was the principal contractor, and that therefore appellee was not barred from filing his negligence action against appellant, as a third person under T.C.A. Sec. 50-914, even though he recovered workmen's compensation. The term "principal contractor" is not defined in the Tennessee Code, but the courts have dealt with the question in situations similar to the present.

In Siskin v. Johnson, 151 Tenn. 93, 268 S.W. 630 (1925), later followed in Odom v. Sandford & Treadway, 156 Tenn. 202, 299 S.W. 1045 (1927) and International Harvester Company v. Sartain, 32 Tenn.App. 425, 222 S.W.2d 854 (1948), where R.H. Siskin & Sons contracted with one H.C. Carter to unload some railroad cars, and Johnson, an employee of Carter, was injured while unloading the cars, the Court held that the defendants were not principal contractors since they had not contracted or undertaken to execute work for another, but had only employed Carter as an independent contractor to perform certain work for them. Similarly, J.C. Penney had not contracted work for another, and as owner of the store where appellee was injured and by contracting the painting job to Robertson & Sons, it was not a principal contractor under T.C.A. Sec. 50-915. See also, Chappel v. Olin-Mathieson Chemical Corporation, 305 F.Supp. 544 (E.D.Tenn.1969); Jones v. City of Dyersburg, 440 S.W.2d 809 (Ct.App.Tenn.1967).

Id. at 987.

In Womble, however, this court found that there was a "principal contractor" namely Robertson & Sons and that the owner J.C. Penney was not a "principal contractor" under the statute. It followed from that holding that J.C. Penney could neither be held liable for workmen's compensation, if the direct employer was uncollectible, nor be held exempt from a damage action for its own negligence, if such could be established.

On the other hand, in our instant case, we find no facts pled which serve to contradict Judge Wiseman's conclusion that "Union Carbide was a principal contractor for purpose of section 50-195." In fact, Union Carbide's use of four of its own engineers to supervise discrete construction tasks performed by 12 contractors appears to bring the firm within the definition of "statutory employer," according to the test proposed by Professor Larson for the determination of that status. See Larson,...