Case Title: Laidlow v. Hariton Machinery Co., Inc.

Citation: 

Docket Number: a-89-00

State: new-jersey

Court: New Jersey Supreme Court

Date: 2002-02-25T00:00:00Z

Document:
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). LONG, J., writing for a unanimous Court. The issue before the Court is whether an employer's removal of a safety guard from an industrial machine operated by an employee constitutes an intentional wrong exposing the employer to tort liability outside of the Workers' Compensation Act. In 1992, Rudolph Laidlow, an employee of AMI-DDC, Inc. (AMI), suffered a serious injury when his hand was caught in a rolling mill being operated without a safety nip guard. Actually, AMI had a safety guard installed in 1979, but the guard was never engaged during normal operation. The only time the guard was engaged was when Occupational Safety and Health Administration (OSHA) inspectors came to the plant. Laidlow operated the machine with the safety guard disengaged for a period of twelve to thirteen years. During that time, there were no reported injuries, but there were a number of close calls, and Laidlow himself had on three occasions spoken to his immediate supervisor, Portman, regarding the safety guard. AMI conceded that the guard was removed for speed and convenience. Laidlow sued AMI on an intentional tort theory. He also named Portman in the suit for discovery purposes. Both AMI and Portman moved for summary judgment, claiming that the Workers' Compensation Act barred Laidlow from pursuing common law remedies. The trial court held that Laidlow failed to demonstrate an intentional wrong and that Workers' Compensation was his exclusive remedy. The trial court granted both motions for summary judgment. The Appellate Division affirmed the dismissals, concluding that there was no evidence of an intentional wrong by AMI to warrant an exception from the Workers' Compensation bar. The Appellate Division relied on the lack of any accident over a twelve-year period and determined that OSHA violations alone, in the absence of proof of deliberate intent to injure, would not satisfy the intentional wrong standard. The court dismissed the suit against Portman because Laidlow failed to demonstrate any need to pursue discovery. Judge Lintner dissented, contending that the record presented a jury issue regarding intentional wrong; that the lack of injuries over the twelve-year period was not dispositive of the issue of substantial certainty of injury; that, coupled with the guard's removal, AMI's deceptive practices with regard to OSHA provided conclusive evidence of context under Millison; and that Laidlow should have been allowed to obtain discovery from Portman. The appeal is before the Supreme Court as of right under R. 2:2-1(a)(2) based on the dissenting opinion below. The Court granted amicus curiae status to the Trial Lawyers of America (ATLA-NJ) and to the New Jersey Manufacturer's Insurance Company (NJM). HELD: Where an employee alleges that his employer removed a safety device from a dangerous machine, knowing that the removal was substantially certain to result in injury to its workers and, in addition, deliberately and systematically deceived safety inspectors into believing that the machine was properly guarded, and the employee's allegations are proven, both the conduct and context prongs of Millison are satisfied, entitling the employee to pursue his common-law remedies. 1. In Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161 (1985), this Court was faced with the question of what categories of employer conduct will be sufficiently flagrant so as to constitute an intentional wrong, thereby entitling a plaintiff to avoid the so-called exclusive remedy provision of the Workers' Compensation Act. First, the Court rejected Professor Larsons's thesis that in order to obtain redress outside the Workers' Compensation Act an employee must prove that the employer subjectively desired to harm him. Instead, the Court adopted Prosser's substantial certainty test for intentional wrong, a test encompassing acts that the employer knows are substantially certain to produce injury even though, strictly speaking, the employer does not will that result. Second, an employer loses the cloak of immunity afforded by the Workers' Compensation Act when the employer knows that his actions are substantially certain to result in injury or death to the employee, when the resulting injury and the circumstances of its infliction on the worker are more than a fact of life of industrial employment and plainly beyond anything the Legislature intended the Workers' Compensation Act to immunize. (Pp. 11-22) 2. This Court fully subscribes to the holding in Mabee v. Borden, Inc., 316 N.J. Super 218 (1998) that removal of a safety guard can meet the intentional wrong standard and that such a determination requires a case-by-case analysis. (Pp. 23-25) 3. The Court agrees with Judge Lintner's dissent in respect of Laidlow's right to discovery from Portman and that summary judgement is inappropriate without such discovery. Moreover, apart from the discovery issue, summary judgment should have been denied to AMI and the case sent to a jury on the issue of substantial certainty. A reasonable jury could conclude, in light of all the surrounding circumstances, including the prior close-calls, the seriousness of any potential injury that could occur, Laidlow's complaints about the absent guard, and the guilty knowledge of AMI as revealed by its deliberate and systematic deception of OSHA, that AMI knew that it was substantially certain that removal of the safety guard would result eventually in injury to one of its employees, the absence of prior accidents notwithstanding. Moreover, the Legislature would never consider such actions or injury to constitute simple facts of industrial life qualifying them for immunity under the Workers' Compensation Act. Removal of a safety guard by an employer, however, does not establish a per se intentional wrong: An analysis of the totality of the circumstances is required. (Pp. 25-31) 4. Although the same facts and circumstances will be relevant to both prongs of Millison, as a practical matter, when an employee sues an employer for an intentional tort and the employer moves for summary judgment based on the Workers' Compensation bar, the trial court must make two separate inquiries: If the substantial certainty standard presents a jury question and if the court concludes that the employee's allegations, if proved, would meet the context prong, the employer's motion for summary judgment should be denied; if not, it should be granted. (Pp. 31-33) The judgment of the Appellate Division is REVERSED. The matter is REMANDED for trial after plaintiff is afforded a reasonable opportunity to complete discovery concerning Portman. CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, VERNIERO, LaVECCHIA, and ZAZZALI join in Justice LONG's opinion. RUDOLPH LAIDLOW and JEAN LAIDLOW, Plaintiffs-Appellants, v. HARITON MACHINERY COMPANY, INC., Defendant, and RICHARD PORTMAN and ADVANCED METALLURGY AMI-DDC INC., a Division of Technitrol, Defendants-Respondents, and JAY HILL INDUSTRIES, INC., UNITED ENGINEERING AND FOUNDRY CO., INC., ART WIRE/DODUCO, UESC INC., WEAN INC., BARTO INC., UNITED ENGINEERING INC., UNITED FOUNDRY INC., DANIELI UNITED, a Division of United Foundry Inc., JOSEPH YASENKA, Individually and t/a JAY HILL INDUSTRIES, JAY HILL INDUSTRIES, an unincorporated entity, AA CO., INC., BB CO., INC., CC CO., INC., DD CO., INC., said names being fictitious; JOHN DOE, RICHARD ROE, RICHARD DOE and JOHN ROE, said names being fictitious, Defendants. Argued November 5, 2001 -- Decided February 25, 2002 On appeal from the Superior Court, Appellate Division, whose opinion is reported at 335 N.J. Super. 330 (2000). Kenneth J. Fost argued the cause for appellants (Fost, Muscio & Caruso, attorneys). Kenneth E. Pogash argued the cause for respondent AMI-DDC, Inc. (Guida, Fabricant & Bressler, attorneys). John J. Murphy, III, argued the cause for respondent Richard Portman (Stradley Ronon Stevens & Young, attorneys; Mr. Murphy and Francis X. Manning, on the brief). Michael A. Galpern submitted a brief on behalf of amicus curiae Association of Trial Lawyers of America-New Jersey Chapter (Greitzer and Locks, attorneys; Mr. Galpern and Margaret M. Allen, of counsel and on the brief). Michael J. Marone submitted a brief on behalf of amicus curiae New Jersey Manufacturers Insurance Companies (McElroy, Deutsch & Mulvaney, attorneys; Mr. Marone and Richard J. Williams, Jr., of counsel and on the briefs). The opinion of the court was delivered by LONG, J. The Workers' Compensation system has been described as an historic trade-off whereby employees relinquish their right to pursue common-law remedies in exchange for prompt and automatic entitlement to benefits for work-related injuries. Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161, 174 (1985). That characterization is only broadly accurate. In fact, not every worker injured on the job receives compensation benefits and not all conduct by an employer is immune from common-law suit. The Legislature has declared that certain types of conduct by the employer and the employee will render the Workers' Compensation bargain a nullity. Thus, for example, a worker whose death or injury is intentionally self-inflicted or results from a willful failure to make use of a safety device, furnished and required by the employer, will be ineligible for benefits. N.J.S.A. 34:15-7; Akef v. BASF Corp., 140 N.J 408, 412-413 (1995). Likewise, an employer who causes the death or injury of an employee by committing an intentional wrong will not be insulated from common-law suit. N.J.S.A. 34:15-8; Millison, supra, 101 N.J. at 169. The described limitations involve intentional wrongful conduct committed either by the worker or the employer. Underlying those limitations is the idea that such conduct neither constitutes a natural risk of nor arises out of the employment, the very notions at the heart of the Workers' Compensation bargain in the first instance. See generally Modern Workers Compensation, 102.20 (2001). III Our decision in Millison is obviously at the root of this case and a review of our holding there is essential. In Millison, we were faced with the question of what categories of employer conduct will be sufficiently flagrant so as to constitute an 'intentional wrong,' thereby entitling a plaintiff to avoid the 'exclusivity' bar of N.J.S.A. 34:15-8? Millison, supra, 101 N.J. at 176. That statute reads: Such agreement shall be a surrender by the parties thereto of their rights to any other method, form or amount of compensation or determination thereof than as provided in this article and an acceptance of all the provisions of this article, and shall bind the employee and for compensation for the employee's death shall bind the employee's personal representatives, surviving spouse and next of kin, as well as the employer, and those conducting the employer's business during bankruptcy or insolvency. If an injury or death is compensable under this article, a person shall not be liable to anyone at common law or otherwise on account of such injury or death for any act or omission occurring while such person was in the same employ as the person injured or killed, except for intentional wrong. * * * If these decisions seem rather strict, one must remind oneself that what is being tested here is not the degree of gravity or depravity of the employer's conduct, but rather the narrow issue of intentional versus accidental quality of the precise event producing injury. The intentional removal of a safety device or toleration of a dangerous condition may or may not set the stage for an accidental injury later. But in any normal use of the words, it cannot be said, if such an injury does happen, that this was deliberate infliction of harm comparable to an intentional left jab to the chin. [2A A. Larson, The Law of Workmen's Compensation 68.13 at 13-22 to 13-27 (1983) (footnotes omitted) (emphasis added).] What is critical, and what often has been misunderstood, is that we cited Professor Larson and the cases relying on his approach for informational, not precedential, purposes. Millison, in fact, specifically rejected Professor Larson's thesis that in order to obtain redress outside the Workers' Compensation Act an employee must prove that the employer subjectively desired to harm him. In place of Larson's theory, we adopted Dean Prosser's broader approach to the concept of intentional wrong. Under Prosser's approach, an intentional wrong is not limited to actions taken with a subjective desire to harm, but also includes instances where an employer knows that the consequences of those acts are substantially certain to result in such harm. See W. Prosser and W. Keeton, The Law of Torts, 80 at 569 (5th ed. 1984). In accordance with that view, we cited approvingly to the Restatement (Second) of Torts 8A, which provides, in part: All consequences which the actor desires to bring about are intended, as the word is used in this Restatement. Intent is not, however, limited to consequences which are desired. If the actor knows that the consequences are certain, or substantially certain, to result from his act, and still goes ahead he is treated by the law as if he had in fact desired to produce the result.See footnote 11 In abandoning Larson's purely subjective approach in favor of substantial certainty, we stated: In adopting a substantial certainty standard, we acknowledge that every undertaking, particularly certain business judgments, involve some risk, but that willful employer misconduct was not meant to go undeterred. [Ibid.] Although noting in Millison that we were not repudiating earlier decisions like Bryan and Arcell, by identifying our holding as a logical development of the law we stated implicitly what was obvious: that Bryan and Arcell had been modified to the extent that an intentional wrong can be shown not only by proving a subjective desire to injure, but also by a showing, based on all the facts and circumstances of the case, that the employer knew an injury was substantially certain to result. In addition to adopting Prosser's substantial certainty test relative to conduct, in Millison we added a crucial second prong to the test: Courts must examine not only the conduct of the employer, but also the context in which that conduct takes place: may the resulting injury or disease, and the circumstances in which it is inflicted on the worker, fairly be viewed as a fact of life of industrial employment, or is it rather plainly beyond anything the legislature could have contemplated as entitling the employee to recover only under the Compensation Act? Regarding the defendant physicians' conduct, however, we reached a different conclusion: Plaintiffs have, however, pleaded a valid cause of action for aggravation of their initial occupational diseases under the second count of their complaints. Count two alleges that in order to prevent employees from leaving the workforce, defendants fraudulently concealed from plaintiffs the fact that they were suffering from asbestos- related diseases, thereby delaying their treatment and aggravating their existing illnesses. As noted earlier, du Pont's medical staff provides company employees with physical examinations as part of its package of medical services. Plaintiffs contend that although plaintiffs' physical examinations revealed changes in chest x-rays indicating asbestos-related injuries, du Pont's doctors did not inform plaintiffs of their sicknesses, but instead told them that their health was fine and sent them back to work under the same hazardous conditions that had caused the initial injuries. These allegations go well beyond failing to warn of potentially-dangerous conditions or intentionally exposing workers to the risks of disease. There is a difference between, on the one hand, tolerating in the workplace conditions that will result in a certain number of injuries or illnesses, and, on the other, actively misleading the employees who have already fallen victim to those risks of the workplace. An employer's fraudulent concealment of diseases already developed is not one of the risks an employee should have to assume. Such intentionally- deceitful action goes beyond the bargain struck by the Compensation Act. But for defendants' corporate strategy of concealing diseases discovered in company physical examinations, plaintiffs would have minimized the dangers to their health. Instead, plaintiffs were deceived--or so they charge-- by corporate doctors who held themselves out as acting in plaintiffs' best interests. The legislature, in passing the Compensation Act, could not have intended to insulate such conduct from tort liability. We therefore conclude that plaintiffs' allegations that defendants fraudulently concealed knowledge of already-contracted diseases are sufficient to state a cause of action for aggravation of plaintiffs' illnesses, as distinct from any claim for the existence of the initial disease, which is cognizable only under the Compensation Act. Eleven months before plaintiff's injury, Borden installed the Plexiglas cover. A bypass switch was installed to permit access to the machine for maintenance purposes. On the disputed facts, a jury could nevertheless conclude that a general policy was adopted by Borden allowing operators as well unimpeded access to the machine while in operation to remove excess glue without interrupting production. The switch was therefore left in maintenance mode at least ninety-five percent of the time to avoid shut down of the machine, and Borden personnel encouraged the operators to utilize the switch to minimize holdups in production. Thus, a factfinder could reasonably conclude that the Plexiglas guard was essentially rendered ineffectual. Moreover, although other Borden labeling machines contained hazard signs, the Alfa Labeler displayed no warning signs. Finally, plaintiff's expert, based on the depositions and statements of Borden personnel, opined that alteration of the safety mechanisms resulted in a virtual certainty that employee injuries would occur. V The crucial fact is not so much what Portman did, but what he knew. Portman's knowledge, as the employer's representative, is essential to the determination of the employer's knowledge concerning the substantial or virtual certainty of future injury as a result of its decision to disengage the guard. It was Portman who ordered that the guard be made operational during OSHA inspections and tied off at all other times to facilitate production. When plaintiff expressed concern about safety on three separate occasions, Portman's purported responses it was okay and not a problem were at best ambiguous. Portman, perhaps more then [sic] anyone else, is the one person who could shed light on what, if any, appreciation AMI had concerning the risk of injury associated with its decision. As the employer's representative, Portman's appreciation of the danger would be imputed to the employer. See Lehmann v. Toys 'R' Us, Inc., 132 N.J. 587, 619-20, 626 A.2d 445 (1993). Portman's importance cannot be overstated. Precluding the discovery action against Portman prevented plaintiff from learning the information necessary to succeed against AMI. Neither defendant should have been dismissed pending completion of discovery of Portman's appreciation of the risk involved in tying off the guard. In short, we disagree with AMI and the Appellate Division that the absence of a prior accident on the rolling mill ended any inquiry regarding intentional wrong. That is simply a fact, like the close-calls, that may be considered in the substantial certainty analysis. Turning to the facts in this record, we are satisfied that a reasonable jury could conclude, in light of all surrounding circumstances, including the prior close-calls, the seriousness of any potential injury that could occur, Laidlow's complaints about the absent guard, and the guilty knowledge of AMI as revealed by its deliberate and systematic deception of OSHA, that AMI knew that it was substantially certain that the removal of the safety guard would result eventually in injury to one of its employees. Thus, a jury question was presented on that issue. A finding that the substantial certainty prong was satisfied does not end our inquiry. Laidlow's allegations, if proved, also must satisfy the context prong of Millison to preclude AMI from summary judgment. We have concluded that if Laidlow's allegations are proved, however, the context prong of Millison would be met. Indeed, if an employee is injured when an employer deliberately removes a safety device from a dangerous machine to enhance profit or production, with substantial certainty that it will result in death or injury to a worker, and also deliberately and systematically deceives OSHA into believing that the machine is guarded, we are convinced that the Legislature would never consider such actions or injury to constitute simple facts of industrial life. On the contrary, such conduct violates the social contract so thoroughly that we are confident that the Legislature would never expect it to fall within the Worker's Compensation bar. NO. A-89 RUDOLPH LAIDLOW and JEAN LAIDLOW, Plaintiffs-Appellants, v. HARITON MACHINERY COMPANY, INC., Defendant, and RICHARD PORTMAN and ADVANCED METALLURGY AMI-DDC INC., a Division of Technitrol, Defendants-Respondents. DECIDED February 25, 2000 Chief Justice Poritz (a) Purpose. An actor purposefully causes harm by acting with the desire to bring about that harm. (b) Knowledge. An actor knowingly causes harm by engaging in conduct believing that harm is substantially certain to result.