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Williams v. Mammoth of Alaska (3/3/95), 890 P 2d 581
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NOTICE: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers
are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501; (907) 264-0607.
THE SUPREME COURT OF THE STATE OF ALASKA
IDA WILLIAMS, Personal )
Representative of the ) Supreme Court No. S-6012
Estate of WALTER W. NEYHART, )
) Superior Court No.
Appellant, ) 3AN-92-6611 CI
)
v. ) O P I N I O N
)
MAMMOTH OF ALASKA, INC., ) [No. 4174 - March 3, 1995]
B.C.S.C., INC., and )
A.T. & S., L.P., )
)
Appellees. )
______________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
James A. Hanson, Judge.
Appearances: Charles W. Coe, Anchorage,
for Appellant. Samuel W. Cason and Richard
L. Waller, Stone, Waller & Jenicek,
Anchorage, for Appellees.
Before: Moore, Chief Justice,
Rabinowitz, Matthews, Compton, and Eastaugh,
Justices.
RABINOWITZ, Justice.
I. FACTS AND PROCEEDINGS
A.T. & S., L.P. (A.T. & S.) is a limited partnership
organized under the Alaska Uniform Limited Partnership Act,
AS 32.10.1 The enterprise manufactures and sells urethane
insulation, and sells fiberglass and other industrial insulation.
A.T. & S. has one general partner and four limited partners. The
general partner is B.C.S.C., Inc. (B.C.S.C.), an Alaska
corporation.
In July 1990 Walter Neyhart, an employee of A.T. & S.,
died in an on-the-job accident. A forklift operator was stacking
Comex containerized shipping units, which are the size of
semitrailers, in the A.T. & S. warehouse yard. Neyhart was
standing between two of the Comex units in the yard area but out
of the forklift operator's sight. The forklift operator took a
third Comex unit and pushed it and the other two together,
crushing Neyhart to death.
A.T. & S. concluded that Neyhart had no statutory
beneficiaries, and thus, that it did not have to pay death
benefits pursuant to AS 23.30.215, the relevant provision of the
Workers' Compensation Act. Accordingly, A.T. & S. paid $10,000
into the Second Injury Fund as required pursuant to
AS 23.30.040(c).2
The personal representative for Neyhart's estate filed
tort claims against A.T. & S., B.C.S.C., and Mammoth of Alaska,
Inc. (Mammoth), the firm that leased the forklift to A.T. & S.3
The complaint alleged that the defendants negligently failed to
repair, maintain, and inspect the forklift, and that they were
guilty of negligence per se by operating the forklift in
violation of state and federal laws designed to ensure the safety
of such machinery. Because Mammoth was in bankruptcy, the
superior court stayed all proceedings against it, as required
under the relevant provision of the federal bankruptcy code, 11
U.S.C. 362(a). A.T. & S. and B.C.S.C. then moved for summary
judgment, contending that as Neyhart's employers, they were
immune from tort liability pursuant to AS 23.30.055, the
exclusive remedy provision of the Workers' Compensation Act. The
superior court granted summary judgment to A.T. & S. and B.C.S.C.
and entered a final judgment dismissing the estate's claims
pursuant to Civil Rule 54(b). This appeal followed.
A. B.C.S.C.'s Status As A Separate Entity.
Neyhart's estate contends that a genuine issue of
material fact exists regarding the extent to which B.C.S.C. was
acting as a general partner at the time of Neyhart's accident and
the extent to which B.C.S.C. was acting as a separate corporate
entity.4 The estate thus argues that it was improper to grant
summary judgment as to whether B.C.S.C., as Neyhart's employer,
was entitled to protection under the exclusive remedy provision
of AS 23.30.055.5
The estate attempts to analogize the present case to
Croxton v. Crowley Maritime Corp., 817 P.2d 460 (Alaska 1991)
(Croxton II). Croxton II involved a plane crash that resulted in
the death of the copilot, an employee of a subsidiary
corporation. Id. at 461. The representative of the copilot's
estate filed a wrongful death claim against the subsidiary's
parent corporation, alleging that an employee of the parent
negligently assigned an inexperienced pilot to the flight.
Disregarding corporate form, the superior court ruled that the
parent's employee was in substance an employee of the subsidiary,
so that the exclusive remedy provision of AS 23.30.055 barred the
wrongful death suit. Id. at 461-62.
We overturned the superior court's determination on the
ground that those who elect to incorporate their business
ventures cannot avoid the consequences of their chosen form of
organization. Id. at 464-65. Our determination turned upon the
recognition of the parent corporation and the subsidiary
corporation as separate legal entities under Alaska law. Id. at
462.
Because that appeal involved separate legal entities,
Croxton II is inapposite to the situation here in which a
partnership employee is attempting to assert a common law tort
claim against an individual partner. The nearly universal rule
is that if the employer is a partnership, then each partner is an
employer of the partnership's employees. This is because a
partnership is not a legal entity separate from its partners.
See, e.g., Swiezynski v. Civiello, 489 A.2d 634, 637 (N.H. 1985);
Brebaugh v. Hales, 788 P.2d 1128, 1135 (Wyo. 1990); 2A Arthur
Larson, The Law of Workmen's Compensation 72.15 (1993). The
rationale for this rule is that, as a matter of law, partners
have equal rights in the management of the partnership business
unless the partnership agreement provides otherwise. See AS
32.05.130(5). Thus, each partner has an equal right to control
an employee's work performance, and each partner is liable for an
employee's workers' compensation claim. E.g., Swiezynski, 489
A.2d at 637.6 Allowing employees a third-party claim against a
partner would require partners to bear the cost of workers'
compensation insurance without the accompanying immunity from
employee tort claims, thereby frustrating one of the policies
behind the Workers' Compensation Act. Id.7 Thus, the exclusive
remedy provision of AS 23.30.055 of the Workers' Compensation Act
bars an employee's common law tort claim against a partnership
partner in those instances where a partner's negligence arises
out of and is within the course of partnership business.
Brebaugh, 788 P.2d at 1135; 2A Larson, supra, 72.15.8
Furthermore, we have explicitly rejected the "dual
capacity" doctrine. The "dual capacity"doctrine is the theory
that an employer, apparently protected under the exclusive remedy
provision of AS 23.30.055, may nonetheless incur tort liability
to an employee if, with regard to that tort, the employer holds a
position that imposes obligations independent and distinct from
its role as employer. State v. Purdy, 601 P.2d 258, 259-60
(Alaska 1979).9
As the general partner in A.T. & S., a limited
partnership, B.C.S.C. was Neyhart's employer at the time of the
accident. Thus, we hold that the superior court did not err in
granting B.C.S.C.'s summary judgment motion on the ground that at
the time of Neyhart's death B.C.S.C. was his employer and
entitled to the exclusive liability protection afforded by AS
23.30.055.
B. A.T. & S.'s Alleged Intentional Torts.
The estate next contends that A.T. & S.'s violations of
state and federal safety regulations regarding the operation of
the forklift constituted the commission of an intentional tort
against Neyhart. An exception to the exclusivity provisions of
AS 23.30.055 exists in cases of an employer's, or fellow
employee's, intentional torts committed against the employee.
Van Biene v. ERA Helicopters, Inc., 779 P.2d 315, 318 (Alaska
1989). In Van Biene this court adopted the majority rule that an
employer's violation of government safety regulations, even if
willful and knowing, does not rise to the level of an intentional
tort. Id. at 318-19; see also 2A Larson, supra 68.13.10
The estate responds that this court has failed "to
address the spectrum of other actions which are reckless
indifferences to the safety of workers." The estate also cites
authority for the minority view that an employer's intentional
violations of safety regulations may support a finding of intent
to harm an employee. See, e.g., Holtz v. Schutt Pattern Works
Co., 626 N.E.2d 1029, 1032 (Ohio App. 1993); 2A Larson, supra,
68.13 n.10 and 68.15.
In Holtz, the court held that an employer's violation
of safety standards constitutes an intentional tort if the
employer knowingly subjects an employee to a dangerous process,
procedure, instrumentality, or condition with knowledge that harm
to the employee will be a substantial certainty. Holtz, 626
N.E.2d at 1032. Even assuming that we were receptive to
modifying the rule we adopted in Van Biene and following Holtz,
there is simply no evidence referred to in the estate's
opposition to B.C.S.C.'s motion for summary judgment that would
justify a finding that A.T. & S. violated safety standards with
knowledge that harm to an employee would be a substantial
certainty.11 Thus, we hold that the superior court correctly
rejected the estate's contention that the exclusivity provision
of AS 23.30.055 is inapplicable to this case under the
intentional tort exception.
C. The Propriety Of The Superior Court's
Entry Of A Rule 54(b) Judgment.
Neyhart's estate asserts that the superior court erred
in granting final judgment in favor of A.T. & S. and B.C.S.C.
while Mammoth was still in bankruptcy. Specifically, the estate
contends that the grant of final judgment is contrary to Civil
Rule 54(b), in that the judgment causes the estate prejudice and
promotes judicial inefficiency.12
We review an entry of judgment under Rule 54(b) for
abuse of discretion. S & B Mining Co. v. Northern Commercial
Co., 813 P.2d 264, 269 (Alaska 1991). Typically, use of Rule
54(b) is appropriate only if the party seeking judgment is likely
to suffer actual hardship otherwise. Johnson v. State, 577 P.2d
706, 710 (Alaska 1978).13
Before the superior court, A.T. & S. and B.C.S.C.
argued that because there was no indication as to when Mammoth's
bankruptcy stay would be lifted, evidence in this action would
grow stale. Furthermore, they argued that the threat of
outstanding litigation would likely chill their business
opportunities because of consequent difficulties in arranging
financing, obtaining insurance, and attracting trading partners.
Finally, A.T. & S. and B.C.S.C. argued that the issues to be
resolved in the motion for a Rule 54(b) judgment did not affect
the merits of the estate's claims against Mammoth.
We hold that the superior court did not abuse its
discretion in entering a Rule 54(b) judgment. The superior court
expressly found that no just reason existed to delay the entry of
final judgment as to A.T. & S. and B.C.S.C. Additionally, the
superior court's entry of the Rule 54(b) judgment involved the
sole legal issue of immunity under the exclusive remedy
provisions of AS 23.30.055. The superior court resolved no
factual issue that would prejudice the estate's claims against
Mammoth. Also, the exclusivity issue will not arise in more than
one appeal because Mammoth cannot reasonably assert that it was
Neyhart's employer. Finally, the superior court could properly
consider the delay resulting from an indefinite stay or
continuance in deciding whether to enter a Rule 54(b) judgment.
See Jefferson v. Spenard Builders' Supply, Inc., 366 P.2d 714,
716 (Alaska 1961). Therefore, we conclude that the superior
court did not abuse its discretion in entering final judgment
pursuant to Civil Rule 54(b).14
AFFIRMED.
_______________________________
1 The Alaska Uniform Limited Partnership Act, AS 32.10,
was repealed in 1992 and has since been replaced by AS 32.11,
also entitled Alaska Uniform Limited Partnership Act.
2 Alaska Statute 23.30.040(c) states:
If an employee suffers a compensable injury
that results in death and the employee is not
survived by a widow, widower, child, or
dependent relative eligible to receive death
benefits under AS 23.30.215, the employer or
insurance carrier shall pay $10,000 to the
second injury fund.
3 Neyhart's estate contends that one or more B.C.S.C.
officers rented the forklift. The rental agreement lists A.T. &
S. alone as the lessee, and bears Shirley Cleveland's signature.
Shirley Cleveland is president of B.C.S.C.
4 B.C.S.C. contends that Neyhart's representative did not
raise this issue below or in the points on appeal, and that she
thus waived the issue. Review of the record shows that Neyhart's
representative raised this issue before the superior court as
well as in her points on appeal.
5 Alaska Statute 23.30.055 provides:
Exclusiveness of liability. The liability of
an employer prescribed in AS 23.30.045 is
exclusive and in place of all other liability
of the employer and any fellow employee to
the employee, the employee's legal
representative, husband or wife, parents,
dependents, next of kin, and anyone otherwise
entitled to recover damages from the employer
or fellow employee at law or in admiralty on
account of the injury or death. The
liability of the employer is exclusive even
if the employee's claim is barred under
AS 23.30.022. However, if an employer fails
to secure payment of compensation as required
by this chapter, an injured employee or the
employee's legal representative in case death
results from the injury may elect to claim
compensation under this chapter, or to
maintain an action against the employer at
law or in admiralty for damages on account of
the injury or death. In that action the
defendant may not plead as a defense that the
injury was caused by the negligence of a
fellow servant, or that the employee assumed
the risk of the employment, or that the
injury was due to the contributory negligence
of the employee.
6 In the circumstance where the partner is carrying on
partnership business, "the partnership is liable for the . . .
injury to the same extent as the partner so acting." AS
32.05.080.
7 We articulated this policy in State v. Purdy, 601 P.2d
258 (Alaska 1979), as follows:
One general purpose of workmen's
compensation is to provide an assured
recovery to an injured employee without
regard to notions of fault. In return for
the certainty of payment, the law makes the
liability exclusive, i.e., it is in place of
all other liability to which the employer
might be subjected because of the injury. As
we observed in Gordon v. Burgess Construction
Co., 425 P.2d 602, 604 (Alaska 1967):
[T]he remedies provided by a
workmen's compensation act are
intended to be in lieu of all
rights and remedies as to a
particular injury whether at common
law or otherwise.
Id. at 259 (footnotes omitted).
8 A partner need not be a natural person; therefore, a
corporation may be a partner. See Uniform Partnership Act 6
cmt., 6 U.L.A. 23 (1969) ( 6 of the Uniform Partnership Act was
adopted verbatim by the Alaska Legislature at AS 32.05.010).
Thus B.C.S.C. is a partner and an employer.
9 Even if we accepted the dual capacity doctrine, the
estate has failed to show that a genuine issue of material fact
exists as to whether B.C.S.C. acted as a separate entity. The
only possible basis advanced by the estate in support of its
argument that B.C.S.C. was acting as a separate entity --
apparently as a subcontractor -- is the presence of B.C.S.C.
employees on the job site. This argument fails for several
reasons. First, the record contains no evidence that B.C.S.C.
employees alone worked in the A.T. & S. yard at the time in
question. To support its argument, the estate relies solely upon
an assertion in its statement of genuine issues of material fact.
Because this assertion is not a statement made under oath, it is
not relevant to our review of the superior court's grant of
summary judgment. See, e.g., Alaska Rent-A-Car, Inc. v. Ford
Motor Co., 526 P.2d 1136, 1139 n.3 (Alaska 1974). Second, as
B.C.S.C.'s brief correctly notes, the record contains no evidence
that B.C.S.C. "had a contract or other relationship with A.T. &
S. outside of its role as general partner."
10 In Van Biene v. ERA Helicopters, Inc., 779 P.2d 315,
318-19 (Alaska 1989), we reversed a Civil Rule 12(b)(6)
dismissal. There we stated:
We conclude that these allegations fail to
constitute the type of intentional tort
actionable outside the workers' compensation
system. Liberally construed, the facts
alleged fail to make out an intentional tort.
At best, the complaint alleges gross
negligence or wilful and knowing violation of
FAA regulations. The vast majority of courts
have held that such allegations do not
constitute an intentional act allowing suit
outside of the workers' compensation act. As
Professor Larson notes:
Since the legal justification for
the common-law action is the
nonaccidental character of the
injury from the defendant
employer's standpoint, the common-
law liability of the employer
cannot, under the almost unanimous
rule, be stretched to include
accidental injuries caused by the
gross, wanton, wilful, deliberate,
intentional, reckless, culpable, or
malicious negligence, breach of
statute, or other misconduct of the
employer short of genuine
intentional injury.
. . . .
Even if the alleged conduct goes
beyond aggravated negligence, and
includes such elements as knowingly
permitting a hazardous work condition to
exist, knowingly ordering claimant to
perform an extremely dangerous job,
wilfully failing to furnish a safe place
to work, or even wilfully and unlawfully
violating a safety statute, this still
falls short of the kind of actual
intention to injure that robs the injury
of accidental character.
2A A. Larson, Larson Workmen's Compensation
68.13, at 13-8 to -26 (1983 & Supp. 1985)
(footnotes omitted).
In [Stafford v. Westchester Fire Insurance
Co., 526 P.2d 37 (Alaska 1974), overruled on
other grounds, 556 P.2d 525 (Alaska 1976),]
we recognized this majority rule. As the
court explained, suits for intentional torts
have been permitted on the grounds that the
harm is not accidental but "[a] stiff burden
is placed on the employee to demonstrate
intent to harm by the employer, or in some
cases by his agents."526 P.2d at 43 n.29.
11 Examination of the record discloses that the estate's
opposition was based exclusively upon an unsigned affidavit of
Ron Lopez, the forklift operator at the time of the accident.
(For purposes of deciding this appeal we assume that the
affidavit was properly executed.) In this affidavit Mr. Lopez
makes the following assertions: that the forklift had a broken
window, lacked a backup bell, and had no horn; that the
forklift's fire extinguisher was never inspected; that the
forklift's forks were too narrow to fit under the Comex boxes;
that when he had a Comex box on the forks he could not see
anything; that while working the forklift he was never escorted;
that hard hats were not required in the yard; and that the men's
bathroom was out of order so a lot of the men were required to
use the yard to relieve themselves.
12 Alaska Civil Rule 54(b) states in relevant part:
When more than one claim for relief is
presented in an action . . . or when multiple
parties are involved, the court may direct
the entry of a final judgment as to one or
more but fewer than all of the claims or
parties only upon an express determination
that there is no just reason for delay and
upon an express direction for the entry of
judgment.
Neyhart's representative also contends that the final
judgment is contrary to Alaska Civil Rule 19, because A.T. & S.
and B.C.S.C. are indispensable parties as to the litigation with
Mammoth. This contention is without merit. Rule 19 expressly
pertains only to joinder of parties, not to dismissal of parties
through a Rule 54(b) judgment.
13 When construing analogous Federal Rule of Civil
Procedure 54(b), federal courts consider "whether the claims
under review [are] separable from the others remaining to be
adjudicated and whether the nature of the claims already
determined [is] such that no appellate court would have to decide
the same issues more than once." Curtiss-Wright Corp. v. General
Elec. Co., 446 U.S. 1, 8 (1980). The superior court should not
grant a Rule 54(b) judgment merely because a party requests one.
Johnson, 577 P.2d at 710.
14 Our disposition makes it unnecessary to address the
issue of whether the representative for Neyhart's estate has
standing to bring this suit. That issue concerns whether A.T. &
S.'s payment of $10,000 into the Second Injury Fund pursuant to
AS 23.30.040(c) operated as an assignment to A.T. & S. of all
claims against third parties stemming from Neyhart's accidental
death.
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