Case Title: Clark v. Industrial Co. of Steamboat Springs, Inc.

Citation: 

Docket Number: 90-290

State: wyoming

Court: Wyoming Supreme Court

Date: 1991-10-02T00:00:00Z

Document:
Clark v. Industrial Co. of Steamboat Springs, Inc.1991 WY 125818 P.2d 626Case Number: 90-290Decided: 10/02/1991Supreme Court of Wyoming
EDWARD R. CLARK, 
APPELLANT (PLAINTIFF),

 
 
v.

 
 
THE INDUSTRIAL COMPANY OF 
STEAMBOAT SPRINGS, INC., A DELAWARE CORPORATION; AND TIC - THE INDUSTRIAL 
COMPANY WYOMING, INC., A WYOMING CORPORATION, APPELLEES 
(DEFENDANTS).

 
 
Appeal from the District 
Court, LaramieCounty, Edward L. Grant, 
J.

 
 
Nicholas Vassallo and 
Harold F. Buck of Buck Law Offices, Cheyenne, for 
appellant.

 
 
Thomas W. Sullins, II, of 
Brown & Drew, Casper, for 
appellees.

 
 
Before URBIGKIT, C.J., 
and THOMAS, CARDINE, MACY and GOLDEN, JJ.

 
 

GOLDEN, 
Justice.

 
 

[¶1.]     Edward R. Clark (Clark) 
appeals the trial court's order granting summary judgment for The Industrial 
Company Wyoming, Inc. (TICW) in Clark's action against TICW for his on-the-job injuries. 
The trial court found that TICW was Clark's 
employer and was therefore immune from suit under the exclusive remedy 
provisions of the Worker's Compensation Act.

 
 

[¶2.]     On appeal, Clark raises the following issues:

 
 

A. Is the existence of a 
"contract for hire" a necessary prerequisite to a defendant's status as an 
employer for purposes of workers' compensation immunity?

 
 

B. Can a "contract of 
hire" exist without an employee's express or implied knowledge or consent to the 
employment relationship?

 
 

[¶3.]     Appellee's statement of 
the issue more clearly presents the procedural point to be 
resolved:

 
 
Whether the court below 
was correct in its decision granting summary judgment in favor of appellee the 
Industrial Company Wyoming, Inc. (TICW) based upon its dual findings that there 
was no genuine issue of material fact and that appellee the Industrial Company 
Wyoming, Inc. (TIW) was entitled to judgment as a matter of law pursuant to 
Wyoming's Worker's Compensation immunity statute.

 
 
We affirm the trial 
court's order granting summary judgment for TICW.

 
 
FACTS

 
 

[¶4.]     Clark, a millwright, 
suffered serious injuries while working at a construction project at 
Kerr-McGee's Jacob's Ranch Mine. A coal chute struck the scaffolding on which he 
was standing and he fell to the concrete floor below, fracturing both of his 
heels and causing severe damage to the vertebrae in his back. Clark received worker's compensation benefits of over 
$89,000 as a result of this injury.

 
 

[¶5.]     At the time of his 
fall, Clark was employed by The Industrial Company Wyoming, Inc. (TICW), a 
wholly-owned subsidiary of The Industrial Company of Steamboat Springs, Inc. 
(TICSS).1 TICW was formed by TICSS in 1977 as 
a Wyoming 
corporation in order to benefit from the five percent in-state preference on 
state-funded projects. Before his employment by TICW at the Jacob's Ranch Mine, 
Clark had been employed by TICSS, the parent 
corporation, exclusively but intermittently, for a number of years. His most 
recent employment had been at TICSS's project at the Rochelle Mine in Campbell County, Wyoming. Clark's employment at the Rochelle job ended on February 
20, 1987. He and most of his fellow employees at Rochelle were subsequently 
hired by TICW for the Jacob's Ranch project.

 
 

[¶6.]     Clark claims that he was unaware at the time of the 
accident that he was employed by the subsidiary, TICW, rather than the parent 
company, TICSS. Clark testified at a deposition 
in this case that he had never heard of TICW until he took a warehouse job with 
them over a year after his accident. Some of his co-workers at the Jacob's Ranch 
job also testified that they either thought they were working only for TICSS or 
they were unsure whether they were working for TICW or TICSS. 

 
 

[¶7.]     TICW made worker's 
compensation contributions for Clark while he 
was employed on the Jacobs Ranch project. Clark's paychecks at Jacob's Ranch were made from an 
account whose checks bore the name of "The Industrial Company of Wyoming, Inc. 
Subsidiary of The Industrial Company of Steamboat Springs, Inc." However, the 
words following "The Industrial Company" on the checks were in small type. 
Before beginning work with TICW, Clark filled 
out a W-4 form, but this form did not contain any information about who his 
employer was.

 
 

[¶8.]     Clark sued TICSS in the district court on a negligence 
theory for the injuries he received at Jacob's Ranch. TICSS answered and then 
moved for dismissal which was converted to a motion for summary judgment by 
attachment of affidavits. See W.R.C.P. 12(b). Clark sought and was granted leave to file an amended 
complaint. His amended complaint named both TICW and TICSS as defendants. He 
alleged that the parent corporation was responsible for the torts of its 
subsidiary and of the parent's employees. He further alleged that the subsidiary 
was liable despite payment of worker's compensation benefits because it never 
informed Clark that he was not working for the parent corporation and thus he 
did not give his consent to the employment.

 
 

[¶9.]     The trial court filed a 
decision letter granting summary judgment to TICW on appellant's amended 
complaint on October 18, 1990. The trial court stated that there was no genuine 
issue of material fact concerning TICW's status as Clark's employer. TICW was therefore entitled to summary 
judgment because of worker's compensation immunity. On October 23, 1990, Clark 
and TICSS filed a stipulation for dismissal with prejudice of the claims 
relating to TICSS. TICSS is not a party to this appeal. Clark took timely appeal of that portion of the court's 
order granting summary judgment for TICW.

 
 
STANDARD OF 
REVIEW

 
 

[¶10.]  This court has set forth its standard of 
review of a trial court's order granting summary judgment in numerous, 
previously-published opinions. Most recently stated,

 
 
[w]e review a summary 
judgment in the same light as the district court, using the same materials and 
following the same standards. Summary judgment is proper only when there are no 
genuine issues of material fact and the prevailing party is entitled to judgment 
as a matter of law. (citations omitted.)

 
 
Zmijewski v. Wright, 809 P.2d 280, 282 (Wyo. 1991) (citations 
omitted).

 
 
Also,

 
 
     [a] motion for summary 
judgment places an initial burden on the movant to make a prima facie showing 
that no genuine issue of material fact exists and that summary judgment should 
be granted as a matter of law. Rule 56(c), Wyoming Rules of Civil Procedure. Once a prima 
facie showing is made, the burden shifts to the party opposing the motion to 
present specific facts showing that a genuine issue of material fact does exist. 
We analyze challenges to a grant of summary judgment by reviewing the record in 
a light most favorable to the party opposing the motion giving him all favorable 
inferences that can be drawn from the facts. Conclusory statements or mere 
opinions are insufficient, however, to satisfy an opposing party's burden. 
(citations omitted.)

 
 
TZ Land & Cattle Co. 
v. Condict, 795 P.2d 1204, 1208 (Wyo. 1990) 
(quoting Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704, 710 
(Wyo. 1987)) 
(citations omitted).

 
 
DISCUSSION

 
 

[¶11.]  Worker's compensation benefits generally 
constitute a worker's sole and exclusive remedy against his or her employer for 
accidents in the workplace.

 
 
The right of each 
employee to compensation from the [worker's compensation] fund shall be in lieu 
of and shall take the place of any and all rights of action against any employer 
contributing as required by law to the fund in favor of any person or persons by 
reason of the injuries or death.

 
 

Wyo. Const. art. 10, § 
4.

 
 
The worker's compensation 
statute in effect at the time of appellant's injury 
stated:

 
 
     The rights and 
remedies provided in this act for an employee and his dependents for injuries 
incurred in extrahazardous employments are in lieu of all other rights and 
remedies against any employer making contributions required by this act, or his 
employees acting within the scope of their employment unless the employees are 
culpably negligent, but do not supersede any rights and remedies available to an 
employee and his dependents against any other person.

 
 
W.S. 27-12-103(a) (June 
1983 Repl.).2

 
 

[¶12.]  The immunity provisions of the Worker's 
Compensation Act are to be narrowly construed. Fiscus v. Atlantic Richfield 
Company, 742 P.2d 198, 200 (Wyo. 1987), appeal after remand 773 P.2d 158 
(1989). An entity asserting the defense of immunity under the worker's 
compensation statute must establish that it is (1) an employer, (2) who pays 
into the worker's compensation fund, (3) as required by law. See Stratman v. 
Admiral Beverage Corporation, 760 P.2d 974, 979 (Wyo. 1988); Fiscus, 742 P.2d  at 200. At issue 
in this case is whether TICW was appellant's "employer" for purposes of the 
immunity statute. The trial court determined that TICW was appellant's employer, 
and therefore, granted TICW's motion for summary judgment.

 
 

[¶13.]  Appellant argues that TICW was not his 
employer because he had no "contract of hire" with TICW. Appellant quotes 
Larson's discussion of the role of a "contract for hire" in worker's 
compensation cases:

 
 

The compensation 
"employee" concept has expanded beyond the common-law "servant" concept in its 
actual application. There is, however, one respect in which the compensation 
concept is narrower than that of the common laws; most acts insist upon the 
existence of a "contract of hire, express or implied," as an essential feature 
of the employment relation. At common law, it is perfectly possible to strike up 
a master-servant relation without a contract, so far as vicarious liability is 
concerned.

     The reason for the 
difference between the two concepts is readily explained by the difference 
between the nature of the two liabilities involved.

     Compensation law * * * 
is a mutual arrangement between the employer and employee under which both give 
up and gain certain things. Since the rights to be adjusted are reciprocal 
rights between employer and employee, it is not only logical but mandatory to 
resort to the agreement between them to discover their relationship. To thrust 
upon a worker an employee status to which he has never consented would not 
ordinarily harm him in a vicarious liability suit by a stranger against his 
employer, but it might well deprive him of valuable rights under the 
compensation act, notably the right to sue his own employer for common-law 
damages. This reasoning applies not only to the question of whether there is any 
employment relation at all, but also to the question whether one of two or more 
persons is an employer.

 
 
1C A. Larson, Workmen's 
Compensation Law § 47.10 at 8-285 to 289 (1990 ed.)

 
 

[¶14.]  Unlike the statutes of many of the 
jurisdictions whose cases are cited in Larson's treatise, Wyoming's worker's 
compensation act does not contain an explicit, general "contract for hire" 
requirement. Our statute concerning coverage for out-of-state injuries does 
contain the requirement, but it is found nowhere else in the act. See W.S. 
27-12-208 (June, 1983 Repl.).3

 
 

[¶15.]  However, this court has judicially 
recognized the "contract for hire" requirement under certain circumstances. In 
Stratman, 760 P.2d  at 980, this court adopted the "contract for hire" 
requirement in cases involving joint employment. Joint employment occurs when "a 
single employee, under contract with two employers, and under the simultaneous 
control of both, simultaneously performs services for both employers, and when 
the service for each employer is the same as, or is closely related to, that for 
the other." 1C A. Larson, supra § 48.41 at 8-511, cited in Stratman, 760 P.2d  at 
980. In Stratman, the husband of an employee who was killed at a bottling plant 
sued the bottling plant owner (Fremont) and the owner of a related canning 
operation whose machine was involved in the accident (Admiral). Plant employees 
worked as needed in either bottling or canning; both enterprises were located in 
the same plant. Both Fremont and Admiral raised the defense of employer 
immunity. A primary issue in the case was whether Admiral and Fremont were 
"joint employers" of the decedent. We outlined a three-part test for 
determination of whether joint employment exists; the first element, or 
"critical threshold inquiry," was the existence of a contract of hire. Stratman, 
760 P.2d  at 980.

 
 

[¶16.]  In this case, unlike Stratman, joint 
employment is not at issue. There are not two employers, each claiming 
entitlement to worker's compensation immunity. TICSS has already settled with 
appellant and has been dismissed from the case. Only TICW now claims immunity. 
The question thus becomes whether the "contract for hire" requirement ought to 
be expanded in this jurisdiction to cover the circumstances in this 
case.

 
 

[¶17.]  The reasoning behind the rule seems to be 
that an employee should not be required to give up his common-law right of 
action against his employer in favor of worker's compensation without an 
agreement on his part to the employment relationship. We agree with this 
reasoning in principle, and with the Colorado courts that the rule should not be 
applied in a technical or formal way, but should be interpreted broadly to 
protect workers. Olsen v. Industrial Claims Appeals Office of the State of 
Colorado, slip op., 1991 WEST-LAW 64157 ___ P.2d ___ (Colo. App. 4-25-91) 
(employer estopped from asserting lack of contract for hire); Romero v. U-Let-Us 
Skycap Services, Inc., 740 P.2d 1004, 1005 (Colo. App. 1987). However, since the 
rule is not contained in our worker's compensation statute, we must also be 
careful not to apply it in ways which would frustrate the statutory purpose. 
Above all, we will seek to avoid an overly rigid or mechanical application of 
the rule which would lead to inequitable results.

 
 

[¶18.]  As mentioned above, Larson extends the 
rule to cover situations in which there is a question about which of two 
entities is the injured workman's employer. He also apparently perceives a lack 
of consent similar to that of having an employment relationship "thrust upon" 
the employee in any circumstances when the employee agrees to be "employed" for 
purposes of worker's compensation but does not agree who his employer will be. 
We see a vast difference in the right the employee surrenders in the two 
situations. An employee who is mistaken about his employer but is willing to 
negotiate for worker's compensation with any employer does not necessarily 
suffer "prejudice" which rigid application of the a contract of hire requirement 
could cure. Therefore, we hold that in the absence of a joint employment 
dispute, an employee who agrees to be "employed" but is mistaken about the 
identity of his actual employer must affirmatively demonstrate either that the 
employee suffered harm because of being mistaken about the identity of his 
employer, or that his mistake about the employer's identity was due to bad faith 
or fraud by the employer.

 
 

[¶19.]  In this case, there is no evidence of bad 
faith or fraud on the part of TICW. Appellant does not allege that he was 
unwilling to enter into an employment relationship with TICW, only that he did 
not know that TICW was his employer. It seems safe to say that appellant knew he 
was employed by someone, presumably TICSS, and that he would receive 
worker's compensation benefits if he were injured. Prejudice was particularly 
unlikely since TICSS administered TICW's worker's compensation program. The 
evidence does not suggest that appellant would have refused to take the job at 
Jacob's Ranch or negotiated for independent contractor status had he known that 
TICW was his employer rather than TICSS. In sum, appellant gives us no reason 
why he would have been unwilling to accept employment and consequent worker's 
compensation benefits from TICW had he known the truth about the actual 
circumstances of his employment from the very beginning. Indeed, he did accept 
such benefits once they became available. Under the circumstances, application 
of the "contract for hire" rule would lead to a result which frustrates the 
purpose of the immunity rule contained in the worker's compensation 
act.

 
 
CONCLUSION

 
 

[¶20.]  We recognize the "contract for hire" 
requirement in non-joint employer, worker's compensation cases where the 
employee suffers prejudice, either by having the employment relationship thrust 
upon him without his consent, or by having an employer thrust upon him under 
circumstances where he suffered harm from being mistaken about who the employer 
was or was misled as to the identity of the employer. In this case, none of the 
circumstances which justify application of the contract for hire rule are 
present. Therefore, TICW should not be stripped of its employer's immunity by 
failure to prove a contract for hire.

 
 

[¶21.]  Furthermore, the other essentials of an 
employment relationship are not in question and may be established as a matter 
of law since appellant has not contested TICW's right to control his work on the 
Jacob's Ranch site in this appeal. See Boehm, 748 P.2d  at 712-13. We hold that 
appellant has raised no genuine issue of material fact, and appellee is entitled 
to judgment as a matter of law. The trial court properly entered summary 
judgment for TICW on the basis of worker's compensation 
immunity.

 
 

[¶22.]  Affirmed.

 
 
FOOTNOTES

 
 

1 The Industrial Company 
of Steamboat Springs, Inc. is now known simply as "The Industrial Company." In 
order to facilitate differentiation between the parent and its subsidiary, we 
will continue to refer to The Industrial Company as TICSS.

 
 

2 W.S. 27-12-101 through 
27-12-805 were repealed and reenacted as W.S. 27-14-101 through 27-14-804 
effective July 1, 1987, or approximately one month after appellant's accident. 
See 1986 Spec.Sess.Wyo. Sess. Laws ch. 3, § 3. The current version of this 
statute is found at W.S. 27-14-104(a) (June 1991 Repl.).

 
 

3 
See footnote 2 for legislative history of this act to the present-day statute.