Shaw v. Layton Const. Co., Inc.

• Decision Date: 08 April 1994
• Docket Number: BILT-RITE,No. 930475-CA,930475-CA
• Citation: 872 P.2d 1059
• Court: Utah Court of Appeals
• Parties: Kenny Jim SHAW, Plaintiff and Appellant, v. LAYTON CONSTRUCTION COMPANY, INC., a Utah corporation; STEEL DECK ERECTORS, INC., a Utah corporation; and John Does A to Z, Defendants and Appellees. LAYTON CONSTRUCTION COMPANY, INC., Third-party Plaintiff, v.CONCRETE, INC., a Nevada corporation; I. Christensen, Inc., a Nevada corporation or partnership; Harv & Higham Masonry, a Utah corporation; and Tech Steel, a Utah corporation; Third-party Defendants.

Page 1059

872 P.2d 1059

Kenny Jim SHAW, Plaintiff and Appellant, v. LAYTON CONSTRUCTION COMPANY, INC., a Utah corporation;

STEEL DECK ERECTORS, INC., a Utah corporation;

and John Does A to Z, Defendants and Appellees.

LAYTON CONSTRUCTION COMPANY, INC., Third-party Plaintiff, v. BILT-RITE CONCRETE, INC., a Nevada corporation; I.

Christensen, Inc., a Nevada corporation or partnership;

Harv & Higham Masonry, a Utah corporation; and Tech Steel,

a Utah corporation; Third-party Defendants.

No. 930475-CA.

Court of Appeals of Utah.

April 8, 1994.

Certiorari Denied Aug. 19, 1994.

Steven B. Wall, Cory R. Wall (argued), Wall & Wall, a.p.c., Salt Lake City, for appellant.

Lee C. Henning (argued), David C. Richards, Christensen, Jensen & Powell, Salt Lake City, for appellee Layton Const.

Ford G. Scalley, Steven B. Smith (argued), Scalley & Reading, Salt Lake City, for appellee Deck Erectors.

OPINION

Before ORME, Associate P.J., and GREENWOOD and JACKSON, JJ.

ORME, Associate Presiding Judge:

Plaintiff Kenny Jim Shaw appeals the trial court's order dismissing his negligence action against defendants Layton Construction Company and Steel Deck Erectors, Inc. Shaw claims the trial court erred in applying Nevada workers' compensation law, which precludes his negligence action, rather than Utah law, which permits it. We reverse the trial court's order and remand the case for further proceedings consistent with this opinion.

FACTS

On February 5, 1990, Shaw was injured when he fell through a hole in the roof while working on the construction of a state prison in Ely, Nevada. At the time of the injury, Shaw was a Utah resident employed by Harv & Higham Masonry, a Utah corporation, which was a subcontractor on the Nevada project. Shaw was first hired by Harv & Higham in May of 1989 to work on a project in Gunnison, Utah. Shaw began work at the Nevada site in November of that year.

Defendant Layton Construction, a Utah corporation, was the general contractor on the Nevada project. In July of 1989, Layton subcontracted with Harv & Higham in Salt Lake City for the masonry work on that project. At the same time, Layton also subcontracted with Steel Deck Erectors, another Utah corporation, to perform all steel framing and decking work.

Subsequent to his injury, Shaw applied for and received workers' compensation benefits in Utah from his employer, Harv & Higham. He thereafter filed suit against Layton and Steel Deck, as authorized by Utah Code Ann. § 35-1-62 (1988), alleging their negligence contributed to his injuries. While Shaw's amended complaint also named John Does A through Z as defendants, Shaw has not sought to further amend his complaint and name additional, actual defendants.

Defendant Layton Construction filed a motion to dismiss, and defendant Steel Deck moved for summary judgment. Both parties claimed that Nevada, rather than Utah, workers' compensation law applied, and that, under Nevada law, Shaw was precluded from suing them for negligence. After a hearing, the trial court granted both motions. Employing the lex loci delicti choice of law approach, the court ruled that Nevada law applied because the injury occurred in that state. As a result, the court concluded that Layton and Steel Deck were immune from suit under Nev.Rev.Stat. §§ 616.085, 616.270, 616.560 (1992), which preclude common law negligence actions against statutory "employers," such as the general contractor, and "co-employees," including other subcontractors.

On appeal, ¹ Shaw claims that the trial court erred in ruling that Nevada, rather than Utah, workers' compensation law applies. Shaw argues both that Utah law has extraterritorial effect and that a choice of law approach other than lex loci delecti is required in workers' compensation cases, the utilization of which would result in the application of Utah law in the instant case.

ANALYSIS

The issue before this court is essentially one involving a choice of law. The trial court's determination that Nevada rather than Utah law applies constitutes a legal conclusion. "We accord a trial court's legal conclusions no deference but review them for correctness." Kennecott Corp. v. State Tax Comm'n, 862 P.2d 1348, 1350 (Utah 1993).

A. Availability of Action Against Other Parties

Under Utah workers' compensation law, Shaw is precluded from suing his employer, but he is entitled to bring an action for damages against other parties allegedly responsible for his work-related injuries. See Utah Code Ann. § 35-1-62 (1988). According to section 35-1-62, in addition to receiving workers' compensation benefits from his employer, "the injured employee or his heirs or personal representative may also maintain an action for damages against subcontractors, general contractors, independent contractors, property owners or their lessees or assigns." Id.

While Nevada also authorizes additional negligence actions "under circumstances creating a legal liability in some person," it limits such actions to persons "other than the employer or a person in the same employ." Nev.Rev.Stat. § 616.560 (1992). Under the Nevada workers' compensation scheme, "subcontractors, independent contractors and the employees of either shall be deemed to be employees of the principal contractor." Id. § 616.085. Thus, Layton Construction is apparently deemed to be Shaw's "employer," while Steel Deck is his "co-employee," for purposes of Nevada workers' compensation. If properly so designated, they are immune from suit for common-law tort liability under Nevada law. Id. §§ 616.270, 616.560.

In sum, while Shaw's action against Layton Construction and Steel Deck is specifically authorized by Utah workers' compensation law, it is apparently prohibited under the Nevada workers' compensation scheme.

B. Extraterritorial Application of Utah Statute

Shaw argues that the Utah workers' compensation statute has extraterritorial effect, whereby the Utah rule on actions against parties other than the actual employer applies globally, regardless of where a Utah employee is injured and regardless of the connection of the potential defendants to Utah. The Utah statute provides that

[i]f an employee who has been hired or is regularly employed in this state receives personal injury by accident arising out of and in the course of such employment outside of this state, he, or his dependents in case of his death, shall be entitled to compensation according to the law of this state.

Utah Code Ann. § 35-1-54 (1988). Shaw points out that the statute defines "compensation" to "mean the payments and benefits provided for in this title." Id. § 35-1-44.

Shaw further argues that the right to bring a third-party action is a "benefit" under the statute, and therefore part of the "compensation" to which a Utah employee injured out of state is entitled. We disagree. A reading of the Utah workers' compensation act as a whole, see Utah Code Ann. §§ 35-1-1 to -107 (1988 & Supp.1993), demonstrates that the Legislature did not intend the term "benefits" to necessarily include the legal right to bring a common-law tort action against a nonemployer. Instead, at least in some respects, the statutory scheme implies that "benefits" mean only the additional sums due an injured worker for costs incident to his or her injury. According to Utah law, for example, an employee injured by accident in the scope of his or her employment "shall be paid compensation for loss sustained on account of the injury ... and such amount for medical, nurse, and hospital services and medicines ... as provided in this chapter." Id. § 35-1-45 (emphasis added). See also id. § 35-1-81 (providing for "such artificial means and appliances necessary to treat the patient" in addition to compensation for injuries sustained and payment for medical services).

In other instances, the statutory scheme treats "benefits" as a synonym for the "payments" to which the injured worker is entitled or as a synonym for "compensation" as a whole. See id. § 35-1-46 (speaking of "payment of workers' compensation benefits"); id. § 35-1-46.10 (enforcing "payment of benefits"); id. § 35-1-99 ("claim for benefits" barred by statute of limitations if employer is not notified within 180 days).

Whether the Legislature intended "benefits" to mean precisely the same thing as the "compensation" to which an injured worker is entitled, or merely part of the compensation package as a whole, is not clear from the statutory scheme. However, there is no indication that it intended the term to include incidental substantive legal rights, such as the right to bring an action against third parties.

Moreover, such an interpretation of the term "benefits" and resulting extraterritorial application of the Utah rule on actions against third parties would stretch the purpose and intent of workers' compensation, which attempts to expeditiously compensate an injured worker without recourse to litigation. See, e.g., Lantz v. National Semiconductor Corp., 775 P.2d 937, 938 (Utah App.1989) (indicating purpose of workers' compensation system "is to provide speedy and certain compensation for [workers] and their dependents and to avoid the delay, expense and uncertainty" that so often accompanies litigation) (quoting Adamson v. Okland Constr. Co., 508 P.2d 805, 807 (1973)). While Utah furthers this policy by continuing to require coverage for Utah employees temporarily working out of state, the same policy does not justify the extraterritorial imposition of Utah's third-party rule on defendants with little or no connection to Utah.

Accordingly, we conclude that the right of a Utah worker, temporarily out-of-state, to claim workers' compensation benefits in Utah does not include the right to bring an action against all potentially liable third parties under section 35-1-62. Thus, section 35-1-62 does not have automatic extraterritorial effect.

C. Choice of Law

Such a conclusion does not, however, necessarily preclude application of the Utah...