Opinion ID: 1795815
Heading Depth: 1
Heading Rank: 5

Heading: city of hastings

Text: [3] In concluding that the Nebraska Workers' Compensation Act constituted Hofferber's exclusive remedy against the City, the district court relied upon § 48-148, which provides in pertinent part: If any employee . . . of any employer subject to the Nebraska Workers' compensation Act files any claim with, or accepts any payment from such employer, or from any insurance company carrying such risk, on account of personal injury, or makes any agreement, or submits any question to the Nebraska Workers' Compensation Court under such act, such action shall constitute a release to such employer of all claims or demands at law, if any, arising from such injury. Based upon this provision and §§ 48-111 and 48-112, we have held that if an injury arises out of and in the course of employment, the Nebraska Workers' Compensation Act is the injured employee's exclusive remedy against his or her employer) [17] Because the City is a political subdivision, § 13-910(8) is also pertinent to our inquiry. This statute states that the Political Subdivisions Tort Claims Act does not apply to lalny claim by an employee of the political subdivision which is covered by the Nebraska Workers' Compensation Act. [18] It is undisputed that Hofferber's accidental injury arose out of and in the course of his employment with Hastings Utilities and that he brought a claim against Hastings Utilities under the Nebraska Workers' Compensation Act. The question is whether these facts necessarily bar his tort claim against the City. Hofferber's argument that he may proceed against the City is based upon the following general principle: A parent corporation is generally not immune from an action in tort by an injured employee of its subsidiary by virtue of the employee's entitlement to workers' compensation. Where an employee of a subsidiary is injured while working on property owned by the parent corporation and receives workers' compensation benefits from the subsidiary, the employee may maintain an action in tort against the parent corporation even though parent and subsidiary are covered by [the] same policy of workers' compensation insurance. [19] This court has never addressed this principle, but Hofferber urges that we should adopt it here and apply it here by treating the City and Hastings Utilities as separate entities analogous to a parent and subsidiary corporation. In this regard, Hofferber relies primarily on Turner v. Richmond Power and Light Co., [20] in which a divided panel of an Indiana appellate court held that because a municipally-owned electrical utility operated as a 'discrete business enterprise from the city with little `functional integration, [21] a city employee who was injured by a powerline and received workers' compensation benefits could maintain a negligence action against the utility. In reaching its conclusion, the court noted that the utility maintained its own budget and had its own financial officer whose decisions were binding upon the city. The court further noted that the utility conducted its legal affairs and maintained certain insurance coverage separately and distinctly from the city and that the utility's hiring, training, and firing process was independent of the city's. A dissenting member of the panel concluded that the relationship between the city and the utility was more analogous to the relationship between different branches of the same governmental unit. [22] Hofferber argues that although Hastings Utilities is owned by the City, when the City engages in utility services it does so in its proprietary, rather than governmental, capacity. [23] Hofferber contends that because of this, the utility becomes more like a private entity and separate and distinct from the City. [24] He notes that the board of public works is not composed of members of the Hastings City Council and that a 'Manager of Utilities' has the right to hire and fire employees. [25] Also, he notes, the board of public works may obtain and pay for technical or professional services, make its own rules and regulations, and purchase materials and supplies. Hofferber argues that Hastings Utilities' funds are maintained separately from those of the City, that it generates its own revenue, and that it is audited separately from the City. On the record before us, we need not decide whether a parent corporation is immune from a tort action by an injured employee of its subsidiary by virtue of the employee's entitlement to workers' compensation. Assuming without deciding that such an action would be allowed, we do not view the relationship between the City and Hastings Utilities as analogous to that of a parent corporation and its subsidiary. The record conclusively establishes that the City and Hastings Utilities are not separate entities, but, rather, that Hastings Utilities is an agency or department of the City. Although Hastings Utilities has specific proprietary responsibilities, it is functionally integrated with city government. Hastings Utilities employees are employees of the City subject to the same rules and regulations as other employees of the City. Hastings Utilities utilizes the City's personnel department, which maintains the records of Hastings Utilities' employees. Its budget and rates are subject to the approval of the Hastings City Council. Hastings Utilities is insured under the City's workers' compensation insurance policy. The fact that Hastings Utilities is audited separately is due to a requirement of state law and is not indicative of a separate corporate existence. The record does not reflect that the manager of Hastings Utilities has powers or responsibilities materially different from those of other department heads of the City. We therefore conclude that the district court did not err in determining as a matter of law that Hofferber's tort claim against the City was barred by the exclusive remedy provisions of the Nebraska Workers' Compensation Act [26] and the corresponding exemption in the Political Subdivisions Tort Claims Act. [27]