Zocco v. US Dept. of Army, 89-109-CIV-3-BR.
| Decision Date | 13 April 1992 |
| Docket Number | No. 89-109-CIV-3-BR.,89-109-CIV-3-BR. |
| Citation | 791 F. Supp. 595 |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | Scott ZOCCO, Plaintiff, v. UNITED STATES of America, DEPARTMENT OF the ARMY; Deggeller Attractions, Inc. a/k/a Deggeller Attractions; and Lawrence "Running Bear" Brawley, Defendants. |
James M. Cooper, Cooper & Davis, Fayetteville, N.C., for plaintiff.
R.A. Renfer, Jr., Asst. U.S. Atty., U.S. Attys. Office, Raleigh, N.C., for defendants U.S. and Dept. of Army.
J.A. Webster, III, Young, Moore, Henderson & Alvis, P.A., Raleigh, N.C., for defendants Deggeller Attractions, Inc. and Lawrence Brawley.
This matter is before the court for ruling on several pending motions. An evidentiary hearing and oral argument were held on 6 April 1992. Although the court announced its rulings from the bench at the hearing, it will elaborate on its rationale for those rulings in this order.
The United States Army ("Army") contracted with defendant Deggeller Attractions, Inc. ("Deggeller") to operate the 1988 fair at the Fort Bragg Army base in Fayetteville, North Carolina. As the principal contractor, Deggeller agreed to furnish all labor, materials, supplies, services, and equipment. The contract prohibited the operation of all unsafe rides. The Army retained the right to inspect and approve all matters of safety. Deggeller hired defendant Lawrence Brawley as a subcontractor to assemble and operate two rides, one of which was "Superstitious Mountain." Brawley did not carry workers' compensation insurance for his employees.
Brawley purchased Superstitious Mountain in 1986. The ride is assembled and operated off a truck flatbed which is elevated at a range from near ground level to nine- to ten-feet high. Cars operate on a rail which is bolted to the flatbed and on plywood risers which are supported by metal beams and poles. The portion of the ride which travels over the flatbed and risers is covered by a thick canvas tarp. Brawley's ride had been inspected and approved by governmental authorities in Maryland, Virginia, South Carolina, and Florida prior to the 1988 Fort Bragg Fair. It had been part of several fairs between 1986 and 1988 and was never associated with any employee or patron accident. Brawley had never received notice or a warning of any type of safety violation.
A federal safety inspector, Christine Pasch, conducted a walk-through inspection of all of the rides prior to the opening of the 1988 Fort Bragg Fair. This inspection was to determine if any obvious hazards existed for the public, not to inspect the mechanical integrity of the rides, the nonpublic areas, or the worker areas. Because no safety problems were located, the fair was opened to the public.
On 1 May 1988, while the fair was underway, plaintiff Scott Zocco, then seventeen years of age, was hired by Brawley to work at Superstitious Mountain. Zocco was called upon to tighten the bolts securing the rail several times during the day. On one such occasion he was bumped from behind by one of the cars. He fell off the ride platform through the canvas tarp and onto the asphalt pavement ten feet below, thereby sustaining serious injuries. Zocco has filed workers' compensation claims with the North Carolina Industrial Commission against all three defendants; although those claims are still pending, Zocco has chosen not to prosecute them until this lawsuit is resolved.
Zocco filed a complaint alleging negligence against the Army, Deggeller, and Brawley. At the close of discovery, Deggeller and Brawley moved for summary judgment contending that this court lacks subject-matter jurisdiction over Zocco's claims against them. Plaintiff moved for partial summary judgment on Deggeller's second and third defenses through which Deggeller raised a subject-matter jurisdiction defense. The court found that genuine issues of material fact remained concerning the court's subject-matter jurisdiction and therefore denied both motions on 15 October 1991.
A pretrial order was filed on 7 February 1992 and the matter was called for trial on 20 February 1992. At a hearing on that date, it became apparent to the court that it was necessary to resolve the lingering issue of subject-matter jurisdiction prior to trial. The court therefore continued the trial, invited the parties to file additional materials on this question, and set an evidentiary hearing to resolve any factual issues related to its subject-matter jurisdiction. The court also gave defendant United States permission to file an untimely motion for summary judgment.
Because several provisions of the North Carolina Workers' Compensation Act, N.C.Gen.Stat. §§ 97-1 et seq. (1991), lie at the heart of the dispute over the court's subject-matter jurisdiction, it is worthwhile to discuss the Act in some detail at the outset. According to section 97-2, employers who regularly employ three or more employees are subject to the provisions of the Act. Id. § 97-2(1). "Every employer and employee ... shall be presumed to have accepted the provisions of the Act respectively to pay and accept compensation for personal injury or death by accident arising out of and in the course of his employment and shall be bound thereby." Id. § 97-3.
Every employer subject to the Act must either procure a workers' compensation liability insurance policy or furnish to the Commissioner of Insurance sufficient financial information to qualify as a selfinsurer. Id. § 97-93(a). If an employer has complied with the Act, its injured employee's exclusive remedy is the compensation provided for in the Act:
Every employer subject to the compensation provisions of the Act shall secure the payment of compensation to his employees in the manner hereinafter provided; and while such security remains in force, he or those conducting his business shall only be liable to any employee for personal injury or death by accident to the extent and in the manner herein specified.
If the employee and employer are subject to and have complied with the provisions of the Act, then the rights and remedies herein granted to the employee ... shall exclude all other rights and remedies of the employee ... as against the employer at common law or otherwise on account of such injury or death.
Id. § 97-10.1. These "exclusivity provisions" prevent an employee from suing an employer for injuries attributable to the employer's negligence. Horney v. Meredith Swimming Pool Co., 267 N.C. 521, 148 S.E.2d 554 (1966). The injured employee's exclusive remedy is a workers' compensation claim over which the North Carolina Industrial Commission has exclusive original jurisdiction. N.C.Gen.Stat. § 9791.
When principal contractors and subcontractors are involved, it can sometimes be difficult to determine who is responsible for securing worker's compensation insurance coverage for the subcontractors' employees. Section 97-19 addresses this issue:
Any principal contractor ... who shall sublet any contract for the performance of any work without requiring from such subcontractor or obtaining from the Industrial Commission a certificate, issued by a workers' compensation insurance carrier, or a certificate of compliance issued by the Department of Insurance to a self-insured subcontractor, stating that such subcontractor has complied with G.S. 97-93 hereof, shall be liable ... to the extent as such subcontractor would be if he were subject to the provisions of the Act for the payment of compensation and other benefits under the Act on account of the injury or death of ... any employee of such subcontractor due to an accident arising out of and in the course of performance of the work covered by such subcontract.
Id. § 97-19. Thus, if the principal contractor does not require the subcontractor to demonstrate that he has acquired coverage for his employees, the principal contractor will be liable for payment of workers' compensation benefits to the subcontractor's injured employees. In this situation, the principal contractor — considered the employee's "statutory employer" — is entitled to the protection of the Act's exclusivity provisions. Pinckney v. United States, 671 F.Supp. 405, 410 (E.D.N.C.1987); see Matthews v. United States, 825 F.2d 35, 36 (4th Cir.1987) (applying Maryland law).
Deggeller contends that it had procured workers' compensation insurance coverage with the American Insurance Company for Brawley's employees and that Deggeller therefore was a statutory employer of Zocco under section 97-19. The court denied both parties' motions for summary judgment because it was convinced that a genuine issue of material fact remained regarding whether the American Insurance Company policy submitted did, in fact, cover Brawley's employees. Zocco contends that the only way this issue can be permanently resolved is for the American Insurance Company and Fireman's Fund Insurance Companies, American's parent, to be made parties to this action. He has therefore moved to join these companies as defendants pursuant to Rule 19(a) of the Federal Rules of Civil Procedure. That rule provides, in pertinent part:
A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in the person's absence complete relief cannot be accorded those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the...
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