Thompson v. Mehlhaff

Citation698 NW 2d 512,2005 SD 69
Decision Date08 June 2005
Docket Number No. 23230, No. 23229
PartiesKATHLEEN M. THOMPSON, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF TERRY L. THOMPSON, Plaintiff and Appellee, v. LARRY MEHLHAFF d/b/a MEHLHAFF CONSTRUCTION AND d/b/a MEHLHAFF TRUCKING, Defendant and Appellant.
CourtSupreme Court of South Dakota

JACK THEELER and DOUGLAS M. DAILEY of Morgan, Theeler, Wheeler, Cogley & Petersen, Mitchell, South Dakota, Attorneys for plaintiff and appellee.

GARY P. THIMSEN and JENNIFER L. WOLLMAN of Woods, Fuller, Shultz & Smith, Sioux Falls, South Dakota, Attorneys for defendant and appellant.

GORS, Circuit Judge.

[¶ 1.] Terry Thompson's wife, Kathleen, on behalf of his estate (Thompson), sued Mehlhaff Trucking (Mehlhaff) for the wrongful death of her husband following a two-truck collision. The jury found Thompson to be contributorily negligent more than slight and entered a zero damage award. The trial court granted Thompson's motion for judgment notwithstanding the verdict on the jury's finding of contributory negligence more than slight but let the verdict stand on Mehlhaff's liability and ordered a new trial on damages only. Mehlhaff appeals and Thompson has filed a notice of review. We affirm.

FACTS

[¶ 2.] Spencer Quarries was paving a road with asphalt near Greenwood, South Dakota, in Charles Mix County. Spencer Quarries was using its trucks and employees and hired additional trucks and drivers from Mehlhaff to haul hot mix to the lay-down machine. The loaded trucks drove on the "cold" side of the road to avoid damage to the newly laid asphalt on the "hot" side of the road. The empty trucks returned on the freshly paved "hot" side of the road. As a result, at the time of the collision, trucks were driving on the left-hand or "wrong" side of the road instead of the usual right-hand or "correct" side of the road. To protect the freshly laid asphalt, the trucks were driving like they were in England instead of South Dakota.

[¶ 3.] On June 16, 2000, Thompson, who was employed by Spencer Quarries, collided with Stanley Baltzer, an employee of Mehlhaff. Thompson was driving on the "hot" side of the road in the left-hand lane (where he was supposed to be). Baltzer swerved sharply to the right as he went around a curve in the road and the collision occurred in Thompson's lane. The closing speed of the trucks was more than 100 miles per hour. Together the trucks' total weight was 128,000 pounds. Both Thompson and Baltzer were killed in the collision.

[¶ 4.] Thompson's estate received worker's compensation benefits as a result of his death from his employer, Spencer Quarries. Baltzer's estate also collected worker's compensation benefits from his employer, Mehlhaff. Thompson then sued Mehlhaff asserting vicarious liability for the wrongful death of her husband caused by Mehlhaff's employee, Baltzer. Prior to trial, Mehlhaff moved for summary judgment claiming that Thompson was limited to the exclusive remedy of worker's compensation. The trial court denied summary judgment and allowed Thompson's suit against Mehlhaff to proceed.

[¶ 5.] The case was tried January 20-22, 2004. The jury returned a zero verdict against Thompson and in favor of Mehlhaff. In answers to special interrogatories, the jury found Baltzer was negligent and also found that Thompson was contributorily negligent more than slight. The trial court entered judgment in favor of Mehlhaff based on the jury's verdict.

[¶ 6.] Thompson moved for judgment notwithstanding the verdict and for a new trial. The trial court granted Thompson's motion and entered a judgment for Thompson on liability based on the jury's finding that Baltzer was negligent. The trial court further granted a judgment notwithstanding the verdict on the jury's finding that Thompson was contributorily negligent. In doing so, the court concluded that it should have granted Thompson's motion for directed verdict on contributory negligence at the end of the trial because there was insufficient evidence for the jury to find contributory negligence more than slight. Finally, having granted a judgment notwithstanding the verdict for Thompson on liability, the trial court granted a new trial on damages. Mehlhaff appeals and Thompson raises one issue by notice of review.

ANALYSIS
ISSUE ONE

[¶ 7.] Whether worker's compensation was Thompson's exclusive remedy.

STANDARD OF REVIEW

[¶ 8.] For the purpose of the summary judgment motion, both sides agreed that the material facts were not in dispute. Therefore, the exclusive remedy issue was strictly a question of law. Construction of worker's compensation statutes and their application to the facts is a question of law. Faircloth v. Raven Industries, Inc., 2000 SD 158, ¶4, 620 NW2d 198, 200. "Questions of law are reviewed de novo without deference to the trial court." Olson-Roti v. Kilcoin, 2002 SD 131, ¶18, 653 NW2d 254, 258; City of Colton v. Schwebach, 1997 SD 4, ¶8, 557 NW2d 769, 771 (citing Jasper v. Smith, 540 NW2d 399, 401 (SD 1995)).

DISCUSSION

[¶ 9.] Spencer Quarries was the general contractor on the Greenwood project and Mehlhaff was a subcontractor. Thompson was a truck driver for Spencer Quarries. When Thompson was killed on the job, his wife, as the personal representative of his estate, received worker's compensation benefits for the death of her husband from Spencer Quarries.1 When Thompson's estate sued Mehlhaff for negligence, Mehlhaff moved for summary judgment and argued that the estate's claim should be dismissed because the worker's compensation benefits that were received from Spencer Quarries were Thompson's exclusive remedy. The trial court denied the motion.

[¶ 10.] This case presents a question of first impression in South Dakota. Mehlhaff urges this Court to adopt the minority rule that worker's compensation is the sole remedy of an employee of a general contractor who is injured by the negligence of an employee of a subcontractor. However, for the reasons stated below, we decline to do so and instead adopt the majority rule that an employee of a general contractor may collect worker's compensation from the general contractor and also sue a negligent subcontractor or a subcontractor for the negligence of an employee of the subcontractor.

[¶ 11.] The purpose of the South Dakota Worker's Compensation Act is to provide an injured employee with an expeditious remedy independent of fault and to limit the liability of employers and fellow employees. Harn v. Continental Lumber Co., 506 NW2d 91, 95 (SD 1993). There is an inherent trade-off in the worker's compensation scheme. The employee is guaranteed compensation if injured on the job but the employer's liability is limited in exchange for this certainty. The quid pro quo is liability for immunity. Therefore, "[w]orker's compensation is the exclusive remedy for all on-the-job injuries to workers except those injuries intentionally inflicted by the employer." Id. at 95.

[¶ 12.] SDCL 62-3-2 provides that an employee's rights under the worker's compensation law for death or injury arising out of employment are exclusive as to both the employer and fellow employees. That statute provides:

The rights and remedies herein granted to an employee subject to this title, on account of personal injury or death arising out of and in the course of employment, shall exclude all other rights and remedies of such employee, his personal representatives, dependents, or next of kin, on account of such injury or death against his employer or any employee, partner, officer, or director of such employer, except rights and remedies arising from intentional tort.

SDCL 62-3-2 (emphasis added). Therefore, the employee cannot sue the employer or fellow employees except for intentional torts. Id. However, an injured employee can sue a third party for negligence subject to the employer's right to subrogation for the worker's compensation paid to the employee. SDCL 62-4-38. That statute provides:

If an injury for which compensation is payable under this title has been sustained under circumstances creating in some other person than the employer a legal liability to pay damages in respect thereto, the injured employee may, at the employee's option, either claim compensation or proceed at law against such other person to recover damages or proceed against both the employer and such other person. However, in the event the injured employee recovers any like damages from such other person, the recovered damages shall be an offset against any worker's compensation which the employee would otherwise have been entitled to receive.

Id. (emphasis added). For example, if Thompson had been killed by a third party, such as a member of the motoring public unrelated to the construction project, Thompson's estate could collect worker's compensation and sue the third party for negligence. If Thompson's estate obtained a judgment from the third party, the estate would then have to repay the worker's compensation benefits to Spencer Quarries from that judgment.

[¶ 13.] Here, Thompson's estate sued the subcontractor, Mehlhaff, for vicarious liability as a result of Baltzer's negligence. Mehlhaff asserts Thompson could not sue under 62-3-2 because Baltzer was a fellow employee. While it is correct that Thompson could not sue Baltzer if he were a fellow employee, Baltzer worked for Mehlhaff, not Spencer Quarries. Therefore, Baltzer was not a fellow employee. Consequently, SDCL 62-3-2 did not preclude Thompson from suing Mehlhaff.

[¶ 14.] Mehlhaff also urges the adoption of a common employment theory to preclude this tort action. Mehlhaff argues that even if Thompson and Baltzer were not technically both employed by Spencer Quarries, as a practical matter they were both doing the same thing on the same job. For that proposition Mehlhaff relies upon a 1936 Massachusetts case, Dresser v. New Hampshire Structural Steel Co., 296 Mass 97, 101, 4 NE2d 1012, 1013-14 (1936), wherein the court ...

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