Sargent Industries, Inc. v. Delta Air Lines, Inc.

• Decision Date: 01 June 1983
• Docket Number: No. 39665,39665
• Citation: 251 Ga. 91,303 S.E.2d 108
• Parties: SARGENT INDUSTRIES, INC. v. DELTA AIR LINES, INC. et al.
• Court: Georgia Supreme Court

Page 108

303 S.E.2d 108

251 Ga. 91

SARGENT INDUSTRIES, INC. v. DELTA AIR LINES, INC. et al.

No. 39665.

Supreme Court of Georgia.

June 1, 1983.

James C. Carr, Jr., Johnson, Ward, Stanfield, Lanham & Carr, Atlanta, Dennis T. Schoen, Albert T. Hofeld, Ltd., Chicago, Ill., T. Cullen Gilliland, Gray, Gilliland, Gordon & Hinson, P.C., Daryll Love, Allen S.C. Willingham, Powell, Goldstein, Frazer & Murphy, Atlanta, for Delta Air Lines, Inc., et al.

Mead Burns, James S. Strawinski, Long, Weinberg, Ansley & Wheeler, Atlanta, for Sargent Industries, Inc.

MARSHALL, Presiding Justice.

This case comes before this court upon a question certified by the United States Court of Appeals for the Eleventh Circuit. These are the facts:

Ms. Mary Lamb was hired by Delta Air Lines, Inc., as a flight attendant in 1965. Delta is a Delaware corporation with its principal place of business, and its operations centralized, in Atlanta, Georgia. In 1965, Ms. Lamb was a Wisconsin resident, and as a Delta employee she was based in Chicago, Illinois; thus, the flights on which she served originated from O'Hare Airport in Chicago.

During Ms. Lamb's tenure with Delta, she was required to undergo recurrent flight-attendant training in Atlanta on a periodic basis. In February of 1979, Ms. Lamb was engaged in a training exercise in Atlanta. At this time, she was a resident of Iowa. During this training, she engaged in an evacuation exercise involving an emergency evacuation slide manufactured by Sargent Industries, Inc., a California corporation. This slide was attached to a mock-up of a Delta aircraft. During this exercise, Ms. Lamb suffered a fall causing her to become a paraplegic.

Ms. Lamb, who was eligible to receive workers' compensation benefits in either Georgia or Illinois, filed a claim for benefits in Illinois. These benefits she is currently receiving.

She subsequently brought this negligence and product-liability suit against Sargent in the United States District Court for the Northern District of Georgia. Diversity of citizenship is the ground of federal jurisdiction. Sargent filed a third-party complaint for contribution and indemnity against Delta, alleging that the fall was caused by negligence on Delta's part in its construction of the mock-up and its conduct of the evacuation procedure.

In a diversity suit, the federal district court must decide questions of conflicts of laws under the rules prevailing in the state in which the court is sitting. Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 51 S.Ct. 1020, 85 L.Ed. 1477 (1941).

The district court granted Delta's motion for summary judgment, on the ground that under Georgia's conflicts-of-law rule, as applied in Wardell v. Richmond Screw Anchor Co., 133 Ga.App. 378, 210 S.E.2d 854 (1974), Georgia law rather than Illinois law is applicable in this case. Under Georgia law, a party, i.e., an employer, who has paid workers' compensation benefits to an employee is immune from being impleaded as a third-party defendant in a tort action by the employee. Georgia State Tel. Co. v. Scarboro, 148 Ga.App. 390(1), 251 S.E.2d 309 (1978) and cits. Georgia Power Co. v. Diamond, 130 Ga.App. 268(4), 202 S.E.2d 704 (1973) and cits., Aretz v. United States, 456 F.Supp. 397 (S.D.Ga.1978); O'Steen v. Lockheed Aircraft Corp., 294 F.Supp. 409 (N.D.Ga.1968). However, under Illinois law, a third-party sued by an injured employee can implead the employer as a third-party defendant, even though the employer has paid workers' compensation benefits to the employee. Skinner v. Reed Prentice, 70 Ill.2d 1, 15 Ill.Dec. 829, 374 N.E.2d 437 (Ill., 1977) and cits.

In this suit, Sargent argues that if the Georgia rule disallowing impleader is applied, this will result in Sargent's subsidizing Delta's workers' compensation payments to the plaintiff because, under Illinois law, Delta is subrogated to the employee's claim to the extent of compensation paid. Skinner v. Reed Prentice, supra. Under Georgia law, an employer previously enjoyed a right to be subrogated to an employee's claim against a third-party to the extent of compensation paid, but this right was repealed by statute in 1972, Code Ann. § 114-403 (Ga.Law 1972, p. 34).

Delta argues that because of its liability for workers' compensation without regard to fault, it should be immunized from being impleaded as a third-party defendant in a tort action by the employee. Delta asserts that this is the prevailing rule in this country. See 2A Larson, The Law of Workmen's Compensation, § 76.00 (1982), but see Lockheed Aircraft Corp. v. United States, --- U.S. ----, 103 S.Ct. 1033, 74 L.Ed.2d 911 (1983).

The district court's grant of Delta's motion for summary judgment was appealed by Sargent to the Eleventh Circuit. On appeal, the federal appellate court certified the following question to this court: "Under Georgia law, does the Illinois or Georgia workers' compensation rule of law apply in fixing a defendant-product manufacturer's right to seek contribution and indemnity by impleading the plaintiff's employer when the injury occurred in Georgia, the employment relationship was localized in Illinois, and the plaintiff sought and received workers' compensation benefits in Illinois even though she was available for such benefits in either state?" Held:

In Wardell v. Richmond Screw Anchor Co., supra, the plaintiff, a North Carolina resident, was an employee of F.D. McDonald Erecting Co., a North Carolina corporation. McDonald was working in South Carolina on a construction project. On this project, Richmond Screw Anchor Co., a Delaware corporation, and Southeast...