Woodson v. Rowland

• Decision Date: 15 November 1988
• Docket Number: No. 8814SC148,8814SC148
• Citation: 373 S.E.2d 674,92 N.C.App. 38
• Court: North Carolina Court of Appeals
• Parties: , 13 O.S.H. Cas. (BNA) 1972 Susie Mae WOODSON, Administratrix of the Estate of Thomas Alfred Sprouse, Deceased v. Neal Morris ROWLAND; Morris Rowland Utility, Inc.; Davidson & Jones, Inc.; and Pinnacle One Associates, a North Carolina Partnership.

Page 674

373 S.E.2d 674

92 N.C.App. 38, 13 O.S.H. Cas. (BNA) 1972

Susie Mae WOODSON, Administratrix of the Estate of Thomas Alfred Sprouse, Deceased v. Neal Morris ROWLAND; Morris Rowland Utility, Inc. Davidson & Jones, Inc.; and Pinnacle One Associates, a North Carolina Partnership.

No. 8814SC148.

Court of Appeals of North Carolina.

Nov. 15, 1988.

Smith Helms Mulliss & Moore by L.D. Simmons, II, Charlotte, for Davidson & Jones, Inc., defendant-appellee.

Patterson, Dilthey, Clay, Cranfill, Sumner & Hartzog by Grady S. Patterson, Jr. and David H. Batten, Raleigh, for Pinnacle One Associates, defendant-appellee.

EAGLES, Judge.

Plaintiff presents four issues on appeal. She first argues that Rowland Utility's actions in violating certain Occupational Safety and Health Administration (OSHA) safety regulations were so grossly negligent as to amount to an intentional assault on her decedent. She next argues that Rowland's individual actions were those of a co-employee rather than Sprouse's employer. She further contends that both D & J and Pinnacle breached a nondelegable duty by allowing Rowland Utility's negligence in failing to maintain a safe work place while performing an inherently dangerous activity. Plaintiff also alleges that D & J negligently hired and retained Rowland Utility as its subcontractor. Based on the record before us, we disagree and affirm.

I

Plaintiff first attempts to overcome the exclusivity provision of the North Carolina Workers' Compensation Act (Act), G.S. 97-10.1. She argues that Rowland Utility's gross and wanton negligence amounts to intentional conduct. Plaintiff recognizes that our long-standing precedents prevent an employee covered by the Act from bringing an action against his employer for ordinary negligence. Hicks v. Guilford County, 267 N.C. 364, 148 S.E.2d 240 (1966). On the other hand, the Act does not immunize an employer or a co-employee for his intentional torts. Daniels v. Swofford, 55 N.C.App. 555, 286 S.E.2d 582 (1982). Additionally, our Supreme Court has allowed an employee injured by the willful, wanton, and reckless negligence of a co-employee on the job to sue the co-employee for damages. Pleasant v. Johnson, 312 N.C. 710, 325 S.E.2d 244 (1985).

G.S. 97-10.1 provides that

[i]f the employee and the employer are subject to and have complied with the provisions of this Article, then the rights and remedies herein granted to the employee, his dependents, next of kin, or personal representative shall exclude all other rights and remedies of the employee, his dependents, next of kin, or representative as against the employer at common law or otherwise on account of such injury or death.

In her complaint plaintiff admits that her decedent was an employee of Rowland Utility and that he was acting within the course and scope of his duties at the time of his death. However, plaintiff argues that because Rowland Utility's conduct was so grossly negligent as to be equivalent to an intentional tort, plaintiff's remedy is not limited to a claim for workers' compensation benefits under the Act.

Defendants argue that plaintiff has chosen her remedy by filing a claim for workers' compensation benefits. They argue that the mere filing of a claim is an election of remedies which precludes this action for wrongful death. We reject defendant's contention that plaintiff has elected her remedy merely by filing her claim with the Industrial Commission without more. Freeman v. SCM Corporation, 311 N.C. 294, 316 S.E.2d 81 (1984) (per curiam); see also McAllister v. Cone Mills Corp., 88 N.C.App. 577, 364 S.E.2d 186 (1988); Stack v. Mecklenburg County, 86 N.C.App. 550, 359 S.E.2d 16, disc. rev. denied, 321 N.C. 121, 361 S.E.2d 597 (1987). However, upon a careful review of the Act and the explanatory case law we conclude that the employer's conduct, though grossly negligent, was not such that it would prevent application of G.S. 97-10.1.

A

Our courts have recognized a general exception to the Act's exclusivity provision when an employer intentionally injures his employee. Daniels, 55 N.C.App. at 560, 286 S.E.2d at 585. Professor Larson explains the rationale for this exception by stating that Workers' Compensation Acts are designed to protect employers for damages resulting from accidents. See 2A Larson, The Law of Workmen's Compensation Section 68.11 (1988) (hereinafter cited as Larson). Intentional torts are beyond the scope of the Act.

Plaintiff relies on our Supreme Court's decision in Pleasant which stated that "willful, wanton and reckless negligence should also be treated as an intentional injury for purposes of our Workers' Compensation Act." Pleasant 312 N.C. at 715, 325 S.E.2d at 248. However, Pleasant involves a personal injury claim between co-employees and does not decide whether an employer could be sued by an employee for grossly negligent acts. Id. at 717, 325 S.E.2d at 250. Accordingly, Pleasant does not control here.

The Act assures employees compensation for accidental work related injuries. Id. at 712, 325 S.E.2d at 246. The Act features a balance of benefits for rights where "the employee and his dependents give up their common law right to sue the employer for negligence in exchange for limited but assured benefits." Id. The Act's exclusivity provision maintains the balance. Larson, section 68.15.

In holding co-employees liable for willful, reckless and wanton acts, the Pleasant court pointed out that

[s]ince the negligent co-employee is neither required to participate in the defense of the compensation claim nor contribute to the award, he is not unduly prejudiced by permitting the injured employee to sue him after receiving benefits under the Act. Furthermore, when an employee who receives benefits under the Act is awarded a judgment against a co-worker, any amount obtained will be disbursed according to the provisions of N.C.G.S. 97-10.2 and may reduce the burden otherwise placed upon an innocent employer or insurer.

Id. at 717, 325 S.E.2d at 249-250. Significantly, those factors insured that the delicate balance established by the Act was not disturbed. Here, those considerations are not present. To allow a suit by an employee against his employer, even for gross, wilful and wanton negligence, would skew the balance of interests inherent in our Workers' Compensation Act. Changes in the Act's delicate balance of interests is more properly a legislative prerogative than a judicial function. Accordingly, we hold that the Act bars an employee's suit against his employer for injuries caused on the job by the employer's grossly negligent acts.

B

In Freeman v. SCM Corporation, 66 N.C.App. 341, 311 S.E.2d 75, aff'd, 311 N.C. 294, 316 S.E.2d 81 (1984), our court held, in part, that because plaintiff employee had received workers' compensation benefits he could no longer bring a tort action against his employer. The Supreme Court affirmed in a per curiam opinion. The Supreme Court wrote specifically "to make it abundantly clear that in fact plaintiff had no 'selection' as to the appropriate avenue of recovery for injuries." Freeman v. SCM Corporation, 311 N.C. 294, 296, 316 S.E.2d 81, 82 (1984). The court concluded by stating that as long as the employee was covered by the Workers' Compensation Act, he must make any negligence claims against his employer before the Industrial Commission.

Most recently, in Barrino v. Radiator Specialty Co., 315 N.C. 500, 340 S.E.2d 295 (1986), a divided Supreme Court held that an employee who had received workers' compensation benefits could not sue his employer in the civil courts for grossly negligent conduct. Justice Billings, joined by Justice Mitchell, concurred separately but ruled against plaintiff's action relying on the fact that plaintiff had elected his remedy by accepting workers' compensation benefits. Three justices dissented.

In Stack v. Mecklenburg County, supra, we attempted to harmonize these two positions. We held that both Freeman and Barrino mandate that once coverage under the Act is established, the plaintiff employee could not bring an independent negligence action against the employer.

Here the evidence shows that plaintiff's decedent Sprouse, is an employee covered under the Act. Therefore, plaintiff may not bring an action for negligence against Sprouse's employer. Plaintiff had no right to select a remedy other than a workers' compensation claim.

Whether plaintiff filed a claim or actually received workers' compensation benefits is irrelevant here. Plaintiff's exclusive remedy as against the employee was to pursue her claim under the Act and receive the workers' compensation benefits allowed by law.

II

Plaintiff argues that Rowland, individually, was grossly negligent in failing to ensure the work site complied with North Carolina Department of Labor and federal OSHA regulations and that the failure resulted in her decedent's death. She further claims that when Rowland made these decisions, he was acting as Sprouse's co-employee, not his employer. Rowland argues that he is the corporate alter ego and is, like the corporate employer, immune from a negligence action.

Rowland contends, without contradiction, that he is the sole shareholder of Rowland Utility. The record here shows that Rowland made all of the decisions concerning the corporation including which jobs to bid, who to hire, and salaries. Because Rowland Utility had "no separate mind, will or existence of its own and [was] but a business conduit for its principal," we hold that Neal Morris Rowland is the alter ego of the corporate employer, Morris Rowland Utility, Inc. J.M. Thompson Co. v. Doral Manufacturing Co., 72 N.C.App. 419, 426, 324 S.E.2d 909, 914, disc. rev. denied, 313 N.C. 602, 330 S.E.2d 611 (1985). Accordingly, Morris Rowland must be given the same immunity from negligence actions that is granted employers pursuant to G.S. 97-10.1. Larson, Section 72.13. To do otherwise would effectively negate the exclusivity...