Travelers Ins. Co. v. L.V. French Truck Service, Inc.

• Decision Date: 05 July 1988
• Docket Number: No. 63052,63052
• Citation: 770 P.2d 551,1988 OK 76
• Parties: TRAVELERS INSURANCE COMPANY, Appellee, v. L.V. FRENCH TRUCK SERVICE, INC., Appellant.
• Court: Oklahoma Supreme Court

Page 551

770 P.2d 551

1988 OK 76

TRAVELERS INSURANCE COMPANY, Appellee, v. L.V. FRENCH TRUCK SERVICE, INC., Appellant.

No. 63052.

Supreme Court of Oklahoma.

July 5, 1988.

As Corrected March 28, 1989.

Dissenting Opinion March 28, 1989.

Rehearing Denied March 28, 1989.

Certiorari to the Court of Appeals, Div. 3.

In an action by a subrogated liability carrier against an employer to recover payout made to satisfy an agreed judgment against insured-electric company in a previous tort action arising from plaintiff-employee's work-related injuries, the employer, who satisfied compensation obligation owing to employee, moved for summary judgment. The District Court, Kingfisher County, Robert Lovell, Judge, gave summary judgment to the carrier. The Court of Appeals reversed. Upon carrier's petition, certiorari is granted.

OPINION OF THE COURT OF APPEALS VACATED; SUMMARY JUDGMENT

REVERSED AND CAUSE REMANDED WITH DIRECTIONS.

Barry R. Davis, Messrs. Lee, Beuch, Davis and Durocher, Oklahoma City, for appellant.

John T. Edwards, Gayle Freeman Cook, Messrs. Monnet, Hayes, Bullis, Thompson & Edwards, Oklahoma City, for appellee.

OPALA, Justice.

This case presents two dispositive issues: (1) Does 85 O.S.Supp.1984 § 12 ¹ immunize an employer from liability for violating 63 O.S.1981 § 981? AND (2)² Is an action seeking recovery under 63 O.S.1981 § 984 ³ for "all liability incurred" time-barred because it was filed over three years after the statute's violation? We answer both questions in the negative. Other issues discussed in part III do not afford a basis for corrective relief.

Employees of the appellant, L.V. French Truck Service, Inc. [French], while transporting a drilling rig along a country road, came upon an overhead electrical power line. Because the clearance was insufficient for the load, one of French's employees climbed atop the truck to raise the line. While carrying out this task he suffered a severe electrical shock. After receiving workers' compensation, the injured employee sued the owner of the power line, Cimarron Electric Cooperative [Cimarron], which later impleaded French. An agreed judgment was rendered for the employee. ⁴ Cimarron then dismissed its third-party claim without prejudice after French agreed to defend a new action to be brought by Cimarron for indemnity under 63 O.S.1981 § 981 (the so-called "six-foot" law) and § 984. ⁵ Appellee, Travelers Insurance Company [Travelers], Cimarron's liability carrier, who paid the judgment to the employee, became subrogated to whatever rights Cimarron had against French.

Based on French's alleged "six-foot" law violation, Travelers sued French for "indemnity" to recover the loss it paid in satisfying the judgment. ⁶ French moved for summary judgment. It interposed its immunity under 85 O.S.Supp.1984 § 12 ⁷ [§ 12] and argued that Travelers' claim is barred by estoppel by judgment, collateral estoppel and the limitation period prescribed by 12 O.S.1981 § 95 (Second). ⁸

The trial court denied French's motion and sua sponte gave summary judgment to Travelers. The Court of Appeals reversed, holding that (a) § 12 does not immunize French from its "six-foot" law liability and (b) issues of comparative negligence must be submitted to a jury. It also declared that if no negligence is attributed to Cimarron, Travelers is entitled to be indemnified only to the extent of French's liability to its employee for compensation benefits. We now grant certiorari on Travelers' petition, vacate the Court of Appeals' opinion and reverse the trial court's summary judgment.

I

THE IMMUNITY AFFORDED AN EMPLOYER BY 85 O.S.Supp.1984 § 12

DOES NOT EXTEND TO LIABILITY IMPOSED BY 63 O.S.1981 § 984

Under the Workers' Compensation Act, ⁹ an employer is obligated to

"pay or provide compensation for the disability or death of his employee resulting from an accidental personal injury sustained by the employee arising out of and in the course of his employment without regard to fault...." ¹⁰

The immunity provided by § 12 covers

"all other liability of the employer ... at common law or otherwise, for such injury ... to the employee, or the spouse, personal representative, parents, or dependents of the employee, or any other person." [Emphasis added.]

In Harter Concrete Products, Inc. v. Harris ¹¹ we held that § 12 immunity extends "to all liability either directly or indirectly derived from the employee's injuries," but a third party's right to indemnity "must arise out of an independent legal relationship between employer and indemnitee." ¹² What then is the legal origin of Travelers' (or Cimarron's) claim against French? Did it arise from the employee's injuries or from the alleged "six-foot" law violation? Although French's compensation liability, as well as the loss paid by Travelers, arose out of the same facts, the gravamen of Travelers' claim is enforcement of a statutorily-created duty which is imposed without regard to whether any other kind of obligation may result from the violation, i.e., responsibility to pay compensation for an employee's on-the-job injury. Section 984 creates a jural relationship of a character that is sufficiently independent to place French's act of violating § 981 dehors the protection afforded by § 12. ¹³ Recovery under § 984 is not limited in amount. In sum, we hold that, upon satisfying its duties under the Workers' Compensation Act, French did not acquire § 12 immunity from any liability imposable by § 984. ¹⁴

II TRAVELERS' ACTION AGAINST FRENCH IS NOT TIME-BARRED

Both parties agree that the limitation period applicable to Travelers' claim is three years. The dispute is over when the time began running. French argues that the statutory action is predicated on indemnity from liability, rather than from loss. An action to enforce indemnity from liability accrues when the event for which indemnity is due occurs, while a cause of action for indemnity from loss does not arise until the loss is paid. ¹⁵ Since Travelers filed suit more than three years after the employee was injured, French urges the claim is barred by limitations.

The § 984 liability is divisible into two distinct reparation components: 1) for damage to electrical facilities and 2) for all liability incurred from any accidental contact with a high voltage line or conductor. Assuming arguendo that Travelers' claim is stricto sensu one for "indemnity" rather than for enforcement of the "six-foot" law as subrogee, ¹⁶ we disagree with French's view of § 984 and conclude, as the trial court did, that the legislature must have intended the phrase "liability incurred" to mean "loss." ¹⁷

Section 984 does not speak to "liability" alone, but rather to liability incurred. Physical damages to the facilities are thus distinguished from other types of losses that may be suffered. The statute imposes tort liability. An action for its vindication may be premised on intentional as well as negligent conduct. ¹⁸ Since Travelers became subrogated to Cimarron's claim, its action against French rests on the same legal footing as though Cimarron itself had brought it. The right to sue for loss from physical damage accrues at the time of its occurrence, while a claim on a liability incurred cannot arise and be enforced until it is determined, whether judicially or by agreement, in an amount that is certain and the loss is paid.

In short, the phrase "liability incurred," as used in § 984, is synonymous with "loss." The limitation period applicable to an action for damage to electrical facilities is three years from its occurrence. The time to bring suit on a liability incurred runs from the time its amount is determined and the loss paid. Because Travelers sued French within three years after it paid the agreed judgment rendered against Cimarron, the action is not time-barred.

III FRENCH'S REMAINING CONTENTIONS

French argues that Travelers is estopped by the prior judgment against Cimarron from asserting any claims stemming from the occurrence that gave rise to the earlier lawsuit. In essence, French invokes the doctrines of issue and claim preclusion. ¹⁹ If French's liability under the "six-foot" law had already been fully and fairly litigated, then Travelers, as subrogee of Cimarron's statutory rights, would be foreclosed from asserting its claim against French.

As a third-party defendant in the employee's suit against Cimarron, French approved the judgment's content as well as its form. Cimarron's claim against French was dismissed without prejudice as part of a settlement agreement whose terms were incorporated into the judgment. Although that case ended with an agreed judgment against Cimarron, the issues affecting Cimarron's third-party suit against French were neither judicially determined nor settled by the parties. Nay, the judgment explicitly reserved to Cimarron its right of action. Claim preclusion may not be invoked to block prosecution of a claim that was excepted or reserved in a prior judgment. ²⁰ All issues to be pressed in Travelers' action were also reserved for future litigation. We hence hold that Travelers is not precluded in this suit from asserting its claim against French.

IV SUMMARY JUDGMENT AGAINST FRENCH CANNOT BE ALLOWED TO STAND

Next, because both parties argued below that material issues of fact remained to be tried, French urges it was denied due process and equal protection when summary judgment was given to Travelers. We disagree. The trial court is required by Rule 13(e), Rules for the District Courts, ²¹ to render judgment sua sponte when it finds an absence of material issues of fact, and a party is entitled to be so dealt with as a matter of law. Erroneous as it was to give judgment to Travelers, no fundamental-law infirmities are apparent in this ruling. Although the trial court correctly denied summary judgment for French and in so doing committed no error, the record impels a comment on the correctness of its decision for Travelers.

The trial...