Court Opinion

ID: 4388553
Source: CourtListenerOpinion
Date Created: 2019-04-18 15:04:25.523628+00
Date Added: 2024-06-11T07:49:50.361091
License: Public Domain

FILED
                                                                            Apr 18 2019, 9:03 am

                                                                                CLERK
                                                                            Indiana Supreme Court
                                                                               Court of Appeals
                                                                                 and Tax Court

ATTORNEYS FOR APPELLANTS                                   ATTORNEYS FOR APPELLEES
David A. Anderson                                          Joseph P. Hunter
Todd C. Peabody                                            Muncie, Indiana
Anderson & Associates, PC                                  Storrs W. Downey
Indianapolis, Indiana                                      Jeffrey E. Kehl
                                                           Bryce Downey & Lenkov, LLC
                                                           Chicago, Illinois

                                            IN THE
    COURT OF APPEALS OF INDIANA

Lora Brenner and Shawn                                     April 18, 2019
Brenner,                                                   Court of Appeals Case No.
Appellants-Plaintiffs,                                     18A-CC-1342
                                                           Appeal from the Delaware Circuit
        v.                                                 Court
                                                           The Honorable John M. Feick,
All Steel Carports, Inc., All Steel                        Judge
Carports and Buildings, LLC,                               Trial Court Cause No.
Chavez Real Estate and Ignacio                             18C04-1612-CC-985
Chavez,
Appellees-Defendants.

Riley, Judge.

Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019                                  Page 1 of 15
                                 STATEMENT OF THE CASE
[1]   Appellants-Plaintiffs, Lora and Shawn Brenner (collectively the Brenners),

      pursue this interlocutory appeal from the trial court’s dismissal of their claims

      against Appellees-Defendants, Ignacio Chavez (Ignacio) and Chavez Real

      Estate.

[2]   We reverse and remand for further proceedings.

                                                      ISSUE
[3]   The Brenners present us with four issues on appeal, which we consolidate and

      restate as: Whether the trial court improperly dismissed their claims against

      Ignacio and Chavez Real Estate.

                       FACTS AND PROCEDURAL HISTORY
[4]   Lora was an employee of All Steel Carports, Inc., and All Steel Carports and

      Buildings, LLC, (collectively All Steel), whose business premises was located in

      Munice, Indiana. All Steel’s business premises had been owned by Ignacio, but

      ownership of the real estate was transferred to Chavez Real Estate at some

      point prior to the instant litigation. Ignacio had been the president of All Steel

      Carports, Inc., since 2006 and of All Steel Carports and Buildings, LLC, since

      2009. Lora was terminated from All Steel in July 2016.

[5]   On December 27, 2016, the Brenners filed a Complaint, which they amended

      once, against All Steel, Ignacio, and Chavez Real Estate, (collectively the

      Defendants), raising claims of negligence, gross negligence, wrongful

      Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019        Page 2 of 15
      termination, and loss of consortium based on their allegations that Lora had

      been exposed to contaminants during her employ with All Steel which had

      made her ill. The Defendants moved the trial court to dismiss the Amended

      Complaint, arguing that the trial court lacked subject matter jurisdiction

      because all of the Brenners’ claims, apart from the wrongful termination claim,

      were barred by the Worker’s Compensation Act (WCA). On September 27,

      2017, the trial court granted the Defendants’ motion to dismiss without entering

      findings of fact or conclusions of law.

[6]   On December 22, 2017, the Brenners filed their Second Amended Complaint

      against the Defendants in which they made the following relevant allegations:

              3. [] Chavez Real Estate is a domestic Limited Liability
              Company. Said Defendant is the “owner” of the real estate in
              question.

              4. [Ignacio,] located at 2200 N. Granville Ave[.], Muncie,
              Indiana, 47303, was the “former owner” of said real estate.

              ****

              6. [Lora] was an employee of [All Steel] in Muncie, Indiana
              (herein “the Employers”).

              7. [Shawn] is married to Lora [] and has been at all relevant times
              relating to this lawsuit.

              8. While working for the Defendant Employers and while on the
              Defendant owners’ property, [Lora] was exposed to extreme
              amounts of dust, ground contaminants, pollutants and mold.

      Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019        Page 3 of 15
              9. In 2016, Lora [] discovered that a significant amount of mold
              was present in the office building where she worked.

              10. During her time working for the “Employers” on the
              “owner” and “former owner’s” premises, Lora [] was exposed to
              mold and other toxins that were present in the structure and air
              and others that were introduced during a remodeling project on
              the premises. The structure and building she was working in is
              located at 22 N. Granville Ave., Muncie, Indiana, 47303.

              11. She suffered severe illness from exposure to toxins, ground
              contaminants, pollutants, and mold present in the building.

      (Appellants’ App. Vol. II, p. 19). The Brenners further alleged that others

      employed by All Steel had become ill, Lora had ordered an environmental

      inspection of the All Steel business premises, and that All Steel had terminated

      her for allowing the inspection to take place. The Brenners also alleged that All

      Steel did not maintain worker’s compensation insurance for Lora. The

      Brenners re-asserted their claims of negligence, gross negligence, and loss of

      consortium as to all the Defendants and re-asserted their claim of wrongful

      termination only as to All Steel. The Brenners sought the costs of Lora’s

      medical treatment, lost wages, lost earning capacity, and punitive damages.

[7]   On January 16, 2018, Chavez Real Estate answered the Second Amended

      Complaint. On February 2, 2018, All Steel and Ignacio answered the Brenners’

      Second Amended Complaint and raised the affirmative defenses that the

      Brenners had failed to state a claim upon which relief could be granted and the

      trial court lacked subject matter jurisdiction because the Worker’s

      Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019         Page 4 of 15
       Compensation Board had sole jurisdiction over their negligence, gross

       negligence, and loss of consortium claims. The Defendants also filed the

       Affidavit of Scott Boylan, the controller for All Steel, and attached verification

       that All Steel had worker’s compensation insurance when the Brenners filed

       their original Complaint in 2016.

[8]    On February 7, 2018, All Steel and Ignacio filed a motion to dismiss with an

       accompanying memorandum, seeking the dismissal of all of the Brenners’

       claims, except that for wrongful termination, based on the previously-raised

       affirmative defenses. On April 2, 2018, Chavez Real Estate joined in All Steel’s

       and Ignacio’s motion. On April 3, 2018, the trial court heard argument on the

       Defendants’ motion to dismiss, but no additional evidence was introduced. On

       April 4, 2018, Chavez Real Estate filed a response to the Brenners asserting that

       the Brenners were precluded from pursuing any third-party tort claims without

       first seeking relief under the WCA. On April 23, 2018, the trial court entered its

       Order granting the Defendants’ motion to dismiss the Brenners’ negligence,

       gross negligence, and loss of consortium claims. The trial court entered no

       findings of fact or conclusions of law.

[9]    On May 21, 2018, the Brenners sought leave of the trial court to pursue an

       interlocutory appeal of the trial court’s Order dismissing their claims. On May

       22, 2018, the trial court granted the Brenners’ request. This court accepted

       jurisdiction over the Brenners’ appeal on July 18, 2018.

[10]   The Brenners now appeal. Additional facts will be provided as necessary.

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019        Page 5 of 15
                                 DISCUSSION AND DECISION
[11]   The Brenners contend that the trial court had jurisdiction and, thus, improperly

       dismissed their claims against Ignacio and Chavez Real Estate. 1 In their

       motion to dismiss pleadings, Ignacio and Chavez Real Estate argued that the

       WCA provided the Brenners with their exclusive remedy, and they properly

       challenged the Brenners’ claims through a motion to dismiss for lack of subject

       matter jurisdiction under Indiana Trial Rule 12(B)(1). GKN Co. v. Magness, 744

       N.E.2d 397, 401 (Ind. 2001). We note that the trial court granted the motion to

       dismiss based upon the pleadings and without having an evidentiary hearing.

       We also note that the jurisdictional facts contained in the record are not in

       dispute. In such circumstances, we review de novo a trial court’s decision to

       dismiss claims for lack of subject matter jurisdiction. Id.

                                                             I. The WCA

[12]   The WCA provides compensation to employees for accidental injuries which

       arise out of, and in the course of, employment. Campbell v. Eckman/Freeman &

       Assocs., 670 N.E.2d 925, 930 (Ind. Ct. App. 1996), trans. denied; see also Ind.

       Code 22-3-2 et seq. According to the WCA’s exclusive remedy provision,

                [t]he rights and remedies granted to an employee subject to IC
                22-3-2 through IC 22-3-6 on account of personal injury or death
                by accident shall exclude all other rights and remedies of such

       1
         The Brenners do not appeal the trial court’s dismissal of their negligence, gross negligence, and loss of
       consortium claims against All Steel. The record does not reflect that the Brenners have filed a Worker’s
       Compensation claim against All Steel.

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019                                  Page 6 of 15
        employee, the employee’s personal representatives, dependents,
        or next of kin, at common law or otherwise, on account of such
        injury or death, except for remedies available under IC 5-2-6.1.

I.C. § 22-3-2-6. Therefore, if an employee is injured in an accident arising out

of, and in the course of, employment, he is entitled to compensation under the

WCA, and the exclusive remedy provision precludes a trial court from hearing

a common law action brought by the employee for the same injuries. Campbell,

670 N.E.2d at 930. It is the employer-employee relationship that defines the

parameters of the immunity granted by the WCA’s exclusive remedy provision.

Ross v. Schubert, 180 Ind. App. 402, 407, 388 N.E.2d 623, 627 (Inc. Ct. App.

1979), trans. denied, superseded by statute on other grounds. “In enacting the

[WCA], the legislature never manifested a desire to reach beyond the

employment relationship and benefit a third party,” and, thus, the WCA was

“never intended to abridge the remedies an employee has in tort against a

[t]hird party.” Id. The right of an employee to pursue remedies in tort against a

third party is embodied in Indiana Code section 22-3-2-13, titled “Claims

against third persons; subrogation; procedures”, which provides, in relevant

part, that

        [w]henever an injury or death, for which compensation is
        payable under chapters 2 through 6 of this article shall have been
        sustained under circumstances creating in some other person than the
        employer and not in the same employ a legal liability to pay damages
        in respect thereto, the injured employee, or the injured employee's
        dependents, in case of death, may commence legal proceedings against the
        other person to recover damages notwithstanding the employer’s
        or the employer’s compensation insurance carrier’s payment of

Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019            Page 7 of 15
               or liability to pay compensation under chapters 2 through 6 of
               this article.

       (Emphasis added). With this provision the WCA creates an exception to the

       exclusive remedy provision for actions to be brought against third parties,

       namely someone other than the employer or a fellow employee, in which legal

       liability was created by a WCA-compensable injury.

                                                            II. Ignacio

[13]   The Brenners contend that its claims against Ignacio were improperly dismissed

       because section 22-3-2-13 permitted them to proceed against Ignacio under a

       premises liability theory in his third-party capacity as the previous owner of the

       All Steel business premises. Ignacio counters that, as an officer of All Steel, he

       was immune from liability under the WCA’s exclusive remedy provision. We

       addressed similar facts in Jackson v. Gibson, 409 N.E.2d 1236 (Ind. Ct. App.

       1980), and so find the case instructive. Jackson was the custodian at Sun

       Realty Company and injured himself while performing his duties. Id. at 1236-

       37. Gibson was the president, director, and manager of Sun Realty as well as

       the owner of the building where Jackson injured himself. Id. at 1237. Jackson

       argued that Gibson, as the owner of the building where he was injured, was

       subject to suit under section 22-3-2-13 and brought a negligence action against

       Gibson based on a premises liability theory. Id. The trial court concluded that

       it lacked subject matter jurisdiction because Gibson and Jackson were both

       employed by Sun Realty and that Gibson could not be held liable except as

       provided for by the WCA. Id.

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019        Page 8 of 15
[14]   In affirming the trial court, this court noted the provisions of Indiana Code

       section 22-3-2-5 which provide immunity from personal suit to those persons

       “conducting [his] employer’s business” and found that Gibson, who was

       supervising and directing Jackson’s work, was conducting Sun Realty’s

       business. Id. at 1238. We concluded that Gibson, therefore, could not be held

       liable as the landowner as a separate entity. Id. at 1238-39.

[15]   Jackson seems to suggest that an officer of a corporation make a showing that he

       was conducting his employer’s business in order to come within the immunity

       granted to employees. However, Indiana Code section 22-3-6-1(b)(1) provides

       that, for purposes of the WCA, an “executive officer elected or appointed and

       empowered in accordance with the charter and bylaws of a corporation . . . is

       an employee of the corporation under IC 22-3-2 through IC 22-3-6.” In

       addition, in Rodgers v. Hembd, 518 N.E.2d 1120 (Ind. Ct. App. 1988), trans.

       denied, after citing section 22-3-6-1(b)(1), this court held that “an officer of a

       corporation is an employee and is entitled to immunity under the fellow

       employee rule, regardless of his dual capacity[],” without any showing that the

       corporate officer in that case was actively conducting his employer’s business.

       Id. at 1122-23.

[16]   Here, the undisputed evidence before the trial court was that Ignacio was the

       president of All Steel Carports, Inc. Following Jackson and Rodgers, and in light

       of section 22-3-6-1(b)(1), we conclude that Ignacio was an employee of All Steel

       Carports, Inc. Accordingly, as to All Steel Carports, Inc., Ignacio was not a

       third party for purposes of section 22-3-2-13.

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019           Page 9 of 15
[17]   However, our inquiry does not end there. The Brenners also brought suit

       against All Steel Carports and Buildings, LLC, of which Ignacio was also

       president. All Steel Carports and Buildings is a limited liability company, not a

       corporation, and so Ignacio was not an employee of that entity by virtue of

       section 22-3-6-1(b)(1). The challenger of subject matter jurisdiction has the

       burden of establishing lack of jurisdiction. GKN, 744 N.E.2d at 404. Thus,

       following Jackson, Ignacio had the burden to produce some evidence that he

       acted as employee of All Steel Carports and Buildings, LLC, in order to be

       shielded by the immunity provided in sections 22-3-2-13 and 22-3-2-5. When a

       trial court relies solely on the pleadings in ruling on a motion to dismiss, we

       generally presume that the trial court was correct. Jennings v. St. Vincent Hosp. &

       Health Care Center, 832 N.E.2d 1044, 1050 (Ind. Ct. App. 2005), trans. denied.

       However, nothing in the pleadings filed in the trial court established that

       Ignacio acted as an employee for All Steel Carports and Buildings, LLC, in

       addition to holding the title of president of that entity.

[18]   Ignacio argues that the Brenners essentially invoke the “dual-capacity”

       doctrine, under which a plaintiff seeks to sue an employer on a theory outside

       of the employer-employee relationship. Ignacio correctly points out that

       Indiana has rejected this doctrine. See Procare Rehab Servs. of Community Hosp. v.

       Vitatoe, 888 N.E.2d 349, 355 (Ind. Ct. App. 2008). However, because we have

       determined that it was not established that Ignacio was acting as an employee

       of All Steel Carports and Buildings, LLC, this is not a “dual-capacity” scenario

       as to the limited liability company. All Steel Carports and Buildings, LLC, did

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019       Page 10 of 15
       not own the business premises, and Lora is suing Ignacio as the former

       landowner. Thus, in this case, there are two different entities. We conclude

       that Ignacio’s status as president of All Steel Carports and Buildings, LLC, did

       not shield him from direct suit and that the Brenners are permitted to proceed

       against him as a third party under section 22-3-2-13.

                                              II. Chavez Real Estate

                                        A. Employer-Employee Relationship

[19]   The Brenners also argue that they had authority to sue Chavez Real Estate as a

       third party pursuant to section 22-3-2-13. Chavez Real Estate counters that

       Lora was an employee of Chavez Real Estate, and so her exclusive remedy

       against it was through a WCA claim. The employer bears the burden to

       establish lack of jurisdiction unless the plaintiff’s complaint demonstrates facts

       establishing the employment relationship. GNK, 744 N.E.2d at 404. Chavez

       Real Estate contends that “the Brenner’s [sic] pleadings establish that Lora

       Brenner was an employee of Chavez Real Estate.” (Chavez Real Estate’s Br. p.

       16). In support of that contention, Chavez Real Estate argues, without citation

       to the record, that All Steel Carports, Inc., All Steel Carports and Buildings,

       LLC, and Chavez Real Estate all have the same address, the same registered

       agent, and the same owner, Ignacio. However, even if we were to assume those

       facts were relevant, our examination of the pleadings before the trial court,

       namely the Second Amended Complaint, the Answers filed by the parties, and

       the dismissal motion filings, did not reveal the address for Chavez Real Estate,

       the identity of the registered agents of any of those entities, or that Ignacio

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019        Page 11 of 15
       owned all of the named entities. Chavez Real Estate also contends that the

       Brenners’ averment in their Complaint that “[c]ommunicating with other

       companies and scheduling of such tasks was a routine part of Ms. Brenner’s

       job” established that she worked for Chavez Real Estate. (Appellant’s App.

       Vol. II, p. 20). However, the Brenners maintained throughout their Complaint

       that Lora was an employee of All Steel, not Chavez Real Estate, and so there is

       no basis in the remainder of the Complaint for linking the cited reference to

       “job” to Chavez Real Estate. Because the Complaint did not establish an

       employer-employee relationship, the burden to do so remained on Chavez Real

       Estate.

[20]   Inasmuch as Chavez Real Estate argues that Lora was employed by both it and

       All Steel, under the WCA, it is possible for an employee to simultaneously have

       two employers. See I.C. § 22-3-3-31. For purposes of the WCA, an employee is

               every person, including a minor, in the service of another, under
               any contract of hire or apprenticeship, written or implied, except
               one whose employment is both casual and not in the usual course
               of the trade, business, occupation, or profession of the employer.

       I.C. § 22-3-6-1(b). In addition, this court uses the seven-factor test set forth by

       our supreme court in Hale v. Kemp, 579 N.E.2d 63 (Ind. 1991), to determine if

       an employer-employee relationship has been established. See Jennings, 832

       N.E.2d at 1050-51 (applying the Hale factors). The Hale factors are:

               (1) the right to discharge; (2) mode of payment; (3) supplying tools or
               equipment; (4) belief of the parties in the existence of an employer-
               employee relationship; (5) control over the means used in the results

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019        Page 12 of 15
               reached; (6) length of employment; and (7) establishment of the work
               boundaries.

       Id.

[21]   Here, there was no evidence contained in the relevant pleadings as to any of

       these factors which would establish that Lora was also employed by Chavez

       Real Estate. We conclude that Chavez Real Estate did not carry its burden to

       show that it was shielded from suit by the exclusive remedy provision of the

       WCA.

                               B. WCA Claim as Co-requisite to Third-Party Suit

[22]   Lastly, in what appears to be a novel legal argument, Chavez Real Estate

       contends that the Brenners were required to pursue a WCA claim against her

       employer “in concert” with any third-party suit. (Chavez Real Estate’s Br. p.

       15). Before turning to the merits of this argument, we pause to note that, on

       appeal, the Brenners contend that, “[i]n the present case, a worker’s

       compensation action is being pursued against Ms. Brenner’s employer and . . .

       remains unresolved at this time.” (Appellants’ Br. pp. 12-13). We agree with

       Chavez Real Estate that there was nothing in the pleadings before the trial court

       that established that the Brenners had pursued a WCA claim against All Steel,

       and so we assume for purposes of our analysis that the Brenners have not done

       so.

[23]   The Brenners and Chavez Real Estate both claim that section 22-3-2-13

       supports their position, and so we must examine the statute. When we are

       faced with a question of statutory interpretation, we must first determine

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019         Page 13 of 15
       whether the language of the statute is clear and unambiguous. Smith v.

       Champion Trucking Co., 925 N.E.2d 362, 365 (Ind. 2010). We will construe a

       statute only if there is some ambiguity which requires construction. Id. As with

       any statute, when we construe the WCA, the cardinal principle is to ascertain

       and give effect to the legislature’s intent. Ross, 180 Ind. App. at 405, 388

       N.E.2d at 626. The remedies provided in the WCA are in derogation of the

       common law, and as such, they are strictly construed against limitations on a

       claimant’s right to bring suit. Campbell, 670 N.E.2d at 931.

[24]   As noted above, section 22-3-2-13, authorizes an employee to pursue a direct

       suit against a third-party tortfeasor. It also contains elaborate subrogation

       procedures applicable in the event that an employer or its insurance carrier has

       paid for or is liable for payment for an injury. Neither party directs us to any

       express language in the statute that supports its position, and our examination

       of the WCA as a whole, and section 22-3-2-13 in particular, does not reveal that

       the statute has any express provisions on the subject of whether an employee

       must pursue a WCA claim against her employer prior to bringing suit against a

       third party.

[25]   Neither the Brenners nor Chavez Real Estate argues that section 22-3-2-13 is

       ambiguous. However, we find that section 22-3-2-13’s provision that an

       employee may bring suit against a third-party tortfeasor “[w]henever an injury

       or death, for which compensation is payable under chapters 2 through 6 of this

       article, shall have been sustained” is ambiguous, in that the phrase “is payable

       under chapters 2 through 6 of this article” is reasonably subject to two different

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019       Page 14 of 15
       interpretations. The phrase could be understood to mean “is due”, from which

       it would be inferred that a WCA claim must be pursued prior to third-party suit,

       or it could be understood to mean “is potentially to be paid,” from which it

       could be inferred that a WCA claim was not required to be filed before pursuit

       of third-party litigation. Given the lack of express terms in the statute on the

       subject, the ambiguity present in the statute’s wording, and our obligation to

       construe the WCA strictly against limitations on a claimant’s right to bring suit,

       we hold that an employee is not required to file a WCA claim against her

       employer prior to pursuing litigation against a third-party tortfeasor. As such,

       the Brenners were not precluded from initiating suit against Chavez Real Estate

       by their failure to first file a WCA claim against All Steel.

                                              CONCLUSION
[26]   Based on the foregoing, we conclude that Ignacio and Chavez Real Estate

       failed to established lack of subject matter jurisdiction, and, therefore, the trial

       court improperly dismissed the Brenners’ claims against Ignacio and Chavez

       Real Estate.

[27]   Reversed and remanded for further proceedings.

[28]   Bailey, J. and Pyle, J. concur

       Court of Appeals of Indiana | Opinion 18A-CC-1342 | April 18, 2019         Page 15 of 15