Stratman v. Admiral Beverage Corp.

• Citation: 760 P.2d 974
• Decision Date: 24 August 1988
• Docket Number: No. 87-247,87-247
• Parties: William W. STRATMAN, as Administrator of the Estate of Kathy Ann Stratman, Appellant (Plaintiff), v. ADMIRAL BEVERAGE CORPORATION and Fremont Beverages, Inc., Appellees (Defendants), Crown Cork and Seal Co., Inc., a New York corporation and Continental Can Company, Inc., (Defendants).
• Court: Wyoming Supreme Court

Page 974

760 P.2d 974

William W. STRATMAN, as Administrator of the Estate of Kathy Ann Stratman, Appellant (Plaintiff), v. ADMIRAL BEVERAGE CORPORATION and Fremont Beverages, Inc., Appellees (Defendants) Crown Cork and Seal Co., Inc., a New York corporation and Continental Can Company, Inc., (Defendants).

No. 87-247.

Supreme Court of Wyoming.

Aug. 24, 1988.

Rehearing Denied Sept. 20, 1988.

Terry J. Harris of Southeast Wyoming Law Offices, Cheyenne, for appellant.

Patrick R. Day and Marcelle Shoop of Holland & Hart, Cheyenne, for appellees.

Before CARDINE, C.J., and THOMAS, URBIGKIT and MACY, JJ., and BROWN, J., Ret. ^*

URBIGKIT, Justice.

Kathy Ann Stratman (Stratman) was killed by being pulled into a canning machine while employed at a Pepsi-Cola plant in Worland, Wyoming. A wrongful death action was brought by her surviving husband, appellant William W. Stratman, individually and as administrator of the estate. Appeal is taken from summary judgment given to appellees Admiral Beverage Corporation (Admiral), the owner of the canning machine, and Fremont Beverages, Inc. (Fremont), the owner of the franchise, plant facility, and bottling operations. Although other defendants and undecided issues remain, the district court certified the summary judgment in favor of appellees as a final order pursuant to Rule 54(b), Wyoming Rules of Civil Procedure, with a finding of no just reason for delay for appeal. At issue is the decision by the district court that Admiral, as a closely affiliated corporation with Fremont, was a joint employer of Stratman and was immune from this employee wrongful death suit pursuant to the Wyoming Worker's Compensation Act and the Wyoming Constitution. Although Fremont is also designated as an appellee, appellant does not now contest its favorable grant of summary judgment.

Appellant identifies the issues as whether the district court erred:

"I. * * * in granting summary judgment to both Admiral Beverage Corporation and Fremont Beverages, Inc., upon their claimed common defense of employer immunity under the Wyoming Workers' Compensation Act and Article 10, Section 4 of the Wyoming Constitution?

"II. * * * in failing to grant appellant partial summary judgment on Admiral Beverage Corporation's claimed affirmative defense that Admiral Beverage Corporation was Kathy Ann Stratman's employer, and further that Admiral Beverage Corporation was entitled to employer immunity under the Wyoming Workers' Compensation Act and Article 10, Section 4 of the Wyoming Constitution?" ¹

Appellees phrase the issues in this manner:

"1. Did the District Court correctly find that Kathy Stratman was jointly employed by Admiral Beverage Corporation and Fremont Beverages, Inc.?

"2. Is Admiral Beverage Corporation entitled to immunity from suit under Wyoming's Worker's Compensation Act?"

We reverse.

I. FACTS

Stratman was killed on January 17, 1986 while working as a "sanitizer" at the plant. Although no one witnessed the accident, she apparently became entangled in the "accelerator fingers" on the can-filling machine and was consequently pulled into the machine, suffering dismembering injuries and immediate death.

By original complaint and three amendments, appellant initiated wrongful death claims against Crown Cork and Seal Co., Inc., the manufacturer of the can-filling machine; Continental Can Company, Inc., the manufacturer of the "seamer" machine incorporated into or assembled with the can-filling machine; and Admiral, as owner of the can-filling machine. Alternatively added was Fremont, if the court should determine that Admiral was Stratman's employer rather than plant owner Fremont. Various cross-claims were filed by the defendants.

Pertinent to this appeal, appellant, by last complaint, alleged liability against Admiral for strict products liability, negligence, and willful and wanton misconduct. The products liability claim emanated from the relationship of Admiral as lessor of the can-filling machine to Fremont as lessee. Liability was asserted against Fremont on the grounds of negligence and willful misconduct. In answering appellant's complaints, Admiral and Fremont both raised the affirmative defense of employer immunity under the Wyoming Worker's Compensation Act and moved for summary judgment.

In its order granting those motions for summary judgment as favoring Admiral and Fremont on the employer-immunity defense, the district court observed:

"The question of joint employer immunity has statewide ramifications to employers and should be addressed by the Wyoming Supreme Court. In addition, the judgments granted here, combined with the dismissal by stipulation of the cross-claims, terminates all claims against Admiral and Fremont. The issues of fact and law involved in the Worker's Compensation issues are unrelated to the general liability issues which form the basis of the Plaintiff's complaint. * * * "

Understanding the immunity issue requires some detailed analysis of the origin and interrelated internal functioning of Fremont and Admiral as affiliated corporations. Fremont Beverages, Inc., a Wyoming corporation, was founded in 1947 by Newell Sargent as a franchise bottler and distributor of Pepsi-Cola products. In 1960, Forrest L. Clay was brought into the company as a partner and as secretary-treasurer. In the late 1960's, management perceived that cans would eventually replace bottles in the soft drink market. Consequently, Admiral Beverage Corporation was formed in 1970 to operate a canning operation with similar but not identical ownership, with the same management and control from Newell and Clay. Admiral's canning operations were placed in Fremont's plant in Worland with Admiral leasing space from Fremont. The companies remained distinct legal entities with Fremont retaining title to the physical plant and the bottling equipment, while Admiral owned the can-filling equipment. Plant employees worked as needed in either bottling or canning.

In 1977, the arrangement was formalized by the execution of a Management and Operating Services Agreement by which Fremont assumed responsibility for all plant employees, including wages, taxes and worker's compensation fund payments. Admiral would reimburse Fremont for its share of these expenses based on a monthly apportionment of the time each employee spent working in the canning operation. ²

Forrest Kelly Clay, ³ vice-president of both Fremont and Admiral, in deposition, described the working relationship. Relevant portions of his testimony is contained in the following exchanges and excerpts:

"Q. Generally, how are operations divided between the two companies in this plant?

"A. Fremont Beverage is responsible for the bottling operations of their respective franchise. Admiral Beverage cooperative is responsible for canning beverages only in owning equipment for their respective members.

* * *

* * *

"Q. And does Admiral Beverage issue any paychecks with respect to individuals employed in Worland, Wyoming?

"A. No, sir. Admiral reimburses Fremont on a pro rata basis for the amount of work that is done for the Admiral companies by the employees who spend their time on that job duty.

* * *

* * *

"Q. With respect to worker's compensation premium payments, is there a similar reimbursement to Fremont for the expense of those payments by Admiral?

"A. Yes, sir."

Forrest Kelly Clay further testified that under the agreement,

" * * * Fremont employees will perform the duties needed to run the operation of the can line; to provide the Admiral members with their cans; and Fremont's duties will include the training, selection and supervision and all aspects of running that equipment, and in turn, Admiral will reimburse Fremont for a fair value of what that time is, * * *."

Additionally, Forrest Kelly Clay testified that, as vice-president of both companies, he was paid by Fremont who, in return, would be reimbursed by Admiral on a pro-rata basis. In this respect, his treatment as an employee was the same as that of Stratman.

Of additional relevance to the issues presented in this appeal is the "Employee Handbook" received by Stratman when she began her employment. The handbook, which on its front cover is identified as "Fremont Beverages, Inc., Employee Handbook" and displays a Pepsi-Cola logo, discusses company history, rules, benefits and safety policies. The handbook repeatedly alludes to Fremont as the employer, and, although it refers to both the plant bottled and canned production, it does not otherwise refer to Admiral. In addition, it specifically welcomes the employees to "Fremont Beverages." (Emphasis added.)

Evidence includes copies of Stratman's weekly time cards with notations on them indicating that on various weeks her time was allocated to Admiral's can line and on other weeks to Fremont's bottle line. These time cards reflect that just prior to her fatal accident, she was transferred to the building night clean-up crew. The record does not clearly reveal when notations on the time cards were actually made as either during or after the work week.

Although Admiral had an account with the Wyoming Worker's Compensation Division (Division), it had been inactive since the early 1970's, and Stratman was listed only on Fremont's payroll reports. Included in evidence, as drafted by "company and counsel," is a copy of the accident report listing Fremont as employer which was submitted to the Division to report her death.

II. SUMMARY JUDGMENT

Disposition by summary judgment requires the dual findings that there is no genuine issue of material fact and the prevailing party is entitled to judgment as a matter of law. Farr v. Link, Wyo., 746 P.2d 431 (1987). In reviewing a summary judgment, we examine the same evidence in the same light as the district court. Connaghan v. Eighty-Eight Oil Co., Wyo., 750 P.2d 1321 (1988). A material fact is one which would have the effect of establishing or refuting an essential element of a cause...