Sheerin v. Steele, 12887.

• Decision Date: 31 January 1957
• Docket Number: No. 12887.,12887.
• Citation: 240 F.2d 797
• Parties: Charlotte D. SHEERIN, Administratrix of the Estate of William James Sheerin, deceased, Appellant, v. Samuel E. STEELE et al., Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

240 F.2d 797 (1957)

Charlotte D. SHEERIN, Administratrix of the Estate of William James Sheerin, deceased, Appellant, v. Samuel E. STEELE et al., Appellees.

No. 12887.

United States Court of Appeals Sixth Circuit.

January 31, 1957.

James A. Markle, Detroit, Mich. (Markle, Markle & Eubank, Detroit, Mich., on the brief), for appellant.

Richard Harvey, Detroit, Mich. (E. Dean Alexander, Alexander, Cholette, Buchanan, Perkins & Conklin, Detroit, Mich., on the brief), for appellee.

Before ALLEN, ALBERT LEE STEPHENS of the Ninth Circuit and MILLER, Circuit Judges.

SHACKELFORD MILLER, Jr., Circuit Judge.

The appellant, as Administratrix of the estate of William James Sheerin, deceased, brought this action in the District Court for the Eastern District of Michigan under the Death Act of the state of Michigan to recover damages for the death of the decedent, which she alleged was caused by the joint negligence of the appellee, Samuel E. Steele, and the Grand Trunk Western Railroad Company. Jurisdiction was based upon diversity of citizenship and the amount involved. The District Judge ruled that the action with respect to the appellee Steele was barred by the New York Workmen's Compensation Act under the full faith and credit clause of the United States Constitution, and sustained appellee's motion for summary judgment, from which ruling this appeal was taken.

William Sheerin and his wife were residents of New York. On March 15, 1954 he was employed as a salesman by the AP Parts Corp., an Ohio corporation, under a written contract which was executed in Ohio. Under the contract his work was to be "countrywide." By the contract the employer and employee mutually agreed to be bound by the Workmen's Compensation Law of the state of New York, and that, regardless of where the injury occurred, the rights of the employee and his dependents would be governed by the laws of New York. On March 25, 1954 Sheerin was a passenger in an automobile being operated by appellee Steele in Muskegon County, Michigan, when the automobile collided with a passenger train of the Grand Trunk Western Railroad Company, causing the death of Sheerin. Steele was a fellow employee of the decedent. At the time of the accident, Sheerin was only temporarily residing in the state of Michigan.

Following Sheerin's death, his widow received an award of $21.00 per week from the Workmen's Compensation Board of New York. Thereafter, on April 11, 1955 this action was filed in Michigan by the Administratrix against the appellee Steele and the co-defendant, Grand Trunk Western Railroad Company, seeking damages in the sum of $150,000.00. Steele, by his answer, claimed that the Administratrix was prevented from suing him in Michigan by reason of the provision of the Workmen's Compensation Act of New York which the employer and employee had agreed would govern the rights of the employee. He contended that under the New York Act the right to compensation under the Act was the exclusive remedy when such employee is killed by the negligence of another in the same employ, to which the Michigan court was required to give full faith and credit under Article IV, Section 1, United States Constitution. This section of the Constitution reads as follows: "Full Faith and Credit shall be given in each State to the public Acts, Records and judicial Proceedings of every other State." The District Judge ruled this defense a valid one in sustaining appellee's motion for summary judgment.

Ordinarily, the validity and construction of a contract with respect to the rights and obligations created thereby are governed by the law of the place where the contract is made. Mutual Life Ins. Co. of New York v. Liebing, 259 U.S. 209, 214, 42 S.Ct. 467, 66 L.Ed. 900; St. Regis Paper Co. v. Stuart, 1 Cir., 214 F.2d 762, 766. But the parties can provide by their contract to have their rights governed by the laws of another state if not contrary to public policy. Duskin v. Pennsylvania-Central Airlines Corp., 6 Cir., 167 F.2d 727, 730, certiorari denied 335 U.S. 829, 69 S.Ct. 56, 93 L.Ed. 382. This common law right was also provided by Section 4123.54, Ohio Revised Code. The agreement of the parties in the present case to be governed by the laws of New York makes the New York law applicable with respect to the rights of the parties under it as if the contract had been made in New York. Lauritzen v. Larsen, 345 U.S. 571, 588-589, 73 S.Ct. 921, 97 L.Ed. 1254.

Section 29 of the New York Compensation Act, Workmen's Compensation Law, McKinney's Consol.Laws, c. 67, § 29, provides that if an employee entitled to compensation under the Act be injured or killed by the negligence of another not in the same employ, the injured employee, or in case of death his dependents, need not elect whether to take compensation under the Act or to pursue his remedy against such other, but may take such compensation and pursue his remedy against such other, subject to the provisions of the Act. It further provides, "The right to compensation or benefits under this chapter, shall be the exclusive remedy to an employee, or in case of death his dependents, when such employee is injured or killed by the negligence or wrong of another in the same employ."

The Michigan Compensation statute, as amended in 1952, Section 17.189 M.S.A., Comp.Laws Supp.1954, § 413.15, provides "Where the injury for which compensation is payable under this act was caused under circumstances creating a legal liability in some person other than a natural person in the same employ or the employer to pay damages in respect thereof, the acceptance of compensation benefits or the taking of proceedings to enforce compensation payments shall not act as an election of remedies, but such injured employee or his dependents or their personal representative may also proceed to enforce the liability of such third party for damages in accordance with the provisions of this section." Apparently, the 1952 amendment has left some questions of construction for the Supreme Court of Michigan with respect to the rights of an injured employee against a fellow employee. The only decision construing the amendment, to which we are referred by counsel for the parties herein, is Remington v. General Motors Corp., D.C.E.D.Mich., 127 F.Supp. 672, 675. The opinion in that case states that the 1952 amendment eliminated the necessity for an injured employee to make election as to whether he would pursue a third party or take under the Act, but that "no such separate action may be maintained against an employee of the employer or the employer itself, even if that employee negligently caused the injury and the benefits of compensation be retained." The District Judge in the present case was of the same opinion. We will consider that to be the Michigan law.

In making his ruling the District Judge relied upon Bradford Electric Light Co. v. Clapper, 286 U.S. 145, 52 S. Ct. 571, 76 L.Ed. 1026 and Ohlhaver v. Narron, 4 Cir., 195 F.2d 676, which followed and relied upon the Clapper case. Appellant contends that the District Judge has misconstrued the ruling in the Clapper case and that the broad effect attributed to it has been materially restricted by later decisions of the Supreme Court, particularly Carroll v. Lanza, 349 U.S. 408, 75 S.Ct. 804, 99 L.Ed. 1183, under which appellee's motion for summary judgment should not have been sustained. It becomes necessary to review these rulings.

In the Clapper case a Vermont employer made a contract in Vermont with an employee, also a resident of Vermont, by which they accepted the Vermont Workmen's Compensation Act, which provided that injury or death of an employee suffered in Vermont or elsewhere in the course of his employment would be compensated for only as provided by the Act, without recourse to actions based on tort. The employee died of an injury he received while casually working in New Hampshire. He left no New Hampshire dependents. His administratrix brought an action in New Hampshire under the Workmen's Compensation Act of the state for damages by reason of his death, which was claimed to have been caused by his employer's negligence. A judgment for the plaintiff, affirmed by the Court of Appeals, 1 Cir., 51 F.2d 992, was reversed by the Supreme Court. The Court ruled the Vermont statute was a defense to the employer against the death action brought in New Hampshire, and that the refusal to recognize such defense was a failure to give full faith and credit to the Vermont statute, in violation of Article IV, Section 1, of the United States Constitution. The ruling on its face would appear to support the judgment of the District Court.

The scope of the ruling was materially restricted by the Court's subsequent decisions in Alaska Packers Association v. Industrial Accident Commission of California, 294 U.S. 532, 55 S.Ct. 518, 79 L.Ed. 1044, and Pacific Employers Insurance Co. v. Industrial Accident Commission, 306 U.S. 493, 59 S.Ct. 629, 83 L.Ed. 940. In those cases the Court stated that there are some limitations upon the extent to which a state will be required by the full faith and credit clause to enforce the law of another state, in contravention of its own statutes or policy. Where the policy of one state's statute comes into conflict with that of another, the necessity of some accommodation of the conflicting interests is apparent, and the conflict is to be...