Edgin v. Entergy Operations, Inc.

Annotate this Case
Michele EDGIN and Tracy Edgin v. 
ENTERGY OPERATIONS, INC.

97-264                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered January 22, 1998


1.   Judgment -- summary judgment -- standard of review. -- The standard for
     appellate review of a summary judgment is whether the
     evidentiary items presented by the moving party in support of
     the motion left a question of material fact unanswered and, if
     not, whether the moving party is entitled to judgment as a
     matter of law; once the moving party has established a prima
     facie entitlement to summary judgment, the opposing party must
     meet proof with proof and demonstrate the existence of a
     material issue of fact; this court views the evidence in a
     light most favorable to the party against whom the motion was
     filed, resolving all doubts and inferences against the moving
     party.

2.   Contracts -- contract made for benefit of third party is actionable by
     third party. -- A contract made for the benefit of a third party
     is actionable by the third party.

3.   Master & servant -- employer may not contractually absolve itself in
     advance for employee's injuries caused by employer's negligence. -- The
     common law pertaining to master and servant has long
     recognized that an employer or master may not, by contract in
     advance, absolve itself from liability for injuries sustained
     by its employee or servant that are caused by the employer's
     or master's own negligence; such agreements have been
     considered to be void as against public policy.

4.   Master & servant -- agreement by which employee relinquished additional
     claims for injuries against employer's clients not void per se. -- Where
     an agreement between appellant and her employer did not
     purport to absolve the employer of any and all liability but
     instead provided that in exchange for employment, the employee
     would relinquish any additional claims for work-related
     injuries that were covered by workers' compensation benefits
     against the employer's clients or customers, the agreement was
     not by virtue of its contents per se void as being against
     public policy.  

5.   Contracts -- contracts exempting party from future negligence liability
     strictly construed. -- Contracts that exempt a party from
     liability for future negligence are not favored by the law and
     are strictly construed against the party relying on them. 

6.   Contracts -- contracts exempting party from future negligence liability
     must set out what liability is to be avoided. -- The rationale behind
     invalidating agreements purporting to release a party for its
     own negligence before liability arises is based upon the
     strong public policy of encouraging the exercise of care;
     while it is not impossible to avoid liability for negligence
     through contract, to avoid such liability, the contract must
     at least clearly set out what negligent liability is to be
     avoided.

7.   Master & servant -- agreement between appellant and employer was clear and
     unambiguous -- only released clients from liability for injuries covered
     by workers' compensation. -- The supreme court was persuaded that
     the agreement between appellant and her employer was clear and
     unambiguous and only released the employer's clients from
     liability for work-related injuries sustained by its employees
     that were covered by the workers' compensation statutes; by
     signing the employment application, an employee was not
     forfeiting his or her right to receive any compensation for
     work-related injuries; rather, the employee was merely
     agreeing to waive an additional remedy against the employer's
     client in exchange for employment with the employer; in this
     respect, the supreme court could not say that the agreement
     violated public policy by discouraging the employer or its
     clients from exercising reasonable care; nor could the court
     say that the language of the agreement did not clearly
     identify what the employee was giving up in exchange for
     employment; the employer was not attempting to escape
     liability entirely but was, instead, attempting to shield its
     clients from separate tort liability for those injuries
     covered by workers' compensation.
8.   Master & servant -- agreement between appellant and employer precluded
     appellant from bringing suit against employer's client. -- The supreme
     court, rejecting appellant's argument that the agreement
     between her and her employer contained factually inaccurate
     information to the effect that any work-related injury was
     covered by workers' compensation, observed that when the
     agreement was read in toto, it was clear that the employee
     agreed to waive any rights that she might have to bring suit
     against a client of her employer only if the injuries
     sustained by the employee were in fact covered by workers'
     compensation; where there was no dispute that appellant
     received workers' compensation benefits for the injuries in
     question, she was precluded, under the terms of the agreement,
     from bringing suit against her employer's client. 

9.   Appeal & error -- supreme court will not reverse absent specific objection.
     -- An appellant must make a specific objection that apprises
     the trial court of his or her current argument and may not
     change the argument on appeal; absent such a specific
     objection informing the trial court of the nature of the error
     alleged on appeal, the supreme court will not reverse.


     Appeal from Pope Circuit Court; John S. Patterson, Judge;
affirmed.
     Dunham & Faught, P.A., by: James Dunham, for appellants.
     Huckabay, Munson, Rowlett & Tilley, P.A., by: Julia L.
Busfield, for appellee.

     Donald L. Corbin, Justice.
     Appellants Michele and Tracy Edgin filed a negligence action
against Appellee Entergy Operations, Inc., for injuries that
Michele Edgin sustained while working at Entergy's nuclear plant in
London as a security guard.  During the time she was working at the
nuclear plant, Michele Edgin was employed by the Wackenhut
Corporation.  Appellants appeal the order of the Pope County
Circuit Court granting Entergy's motion for summary judgment. 
Appellants argue that the trial court erred in granting summary
judgment on the basis of an agreement contained in Michele Edgin's
employment application, which forecloses any action by Edgin
against Wackenhut's clients for injuries sustained by her that are
compensable under the Workers' Compensation Act.  This question is
one of first impression; hence, our jurisdiction is pursuant to
Ark. Sup. Ct. R. 1-2(a)(17)(i).  We find no error and affirm. 
     The amended complaint reveals the following facts.  On or
about April 15, 1995, Appellant Michele Edgin was employed by
Wackenhut as a security officer.  Wackenhut had been employed by
Entergy to provide security services at its nuclear plant in
London.  Edgin had been assigned to work at Entergy's nuclear plant
and was to perform security checks on the doors inside the plant. 
She was trained to go through the door, make sure that the door was
secured, make her presence known, and then move on to the next door
to be checked.  Each door to be checked was pressurized by creating
a vacuum from the inside.  On the date in question, Edgin was
making a routine check of one of the doors when, upon trying to
open the door, she found that the pressure was too high and that
the door could not be pulled open.  While attempting to open the
door a second time, the vacuum on the other side of the door
slammed the door shut, causing Edgin to lose her grip and her body
to slam against an iron object behind her.  As a result, Edgin
suffered physical injuries.  
     Edgin alleged in her complaint that Entergy had sole and
exclusive control on the amount of pressure to be placed inside
each door.  She alleged further that the door she was trying to
open when she was injured had been "written up" on at least two
previous occasions as being difficult to open or for having caused
false alarms for one reason or another.  Edgin alleged that Entergy
had a duty to keep the pressure adjusted so that routine security
checks could be made by employees of Wackenhut, and that the breach
of this duty was the proximate cause of her injuries.  Edgin
alleged damages for injuries to her lower back in excess of $9,000,
a loss of earnings and earning capacity in excess of $100,000, and
expenses for pain and suffering in excess of $50,000.  Tracy Edgin
claimed that as a result of the injuries to his wife, he had
sustained a loss of consortium entitling him to damages in excess
of $50,000.  
     Entergy filed a motion for summary judgment, arguing that
Michele Edgin was an employee of Wackenhut at the time of the
accident and that she had already received workers' compensation
benefits for her injuries.  Entergy contended that the claim was
barred because Edgin had signed an agreement in consideration of
her employment in which she specifically waived and forever
released any right that she might have had in the future to make
claims or bring suit against any client of Wackenhut for damages
based upon injuries covered under workers' compensation laws. 
Exhibit "A" attached to the motion for summary judgment was a
photocopy of the agreement, contained on the last page of Edgin's
employment application, which provides in pertinent part:
     (2)  in recognition of the fact that any work related
     injuries which might be sustained by me are covered by
     state Workers' Compensation statutes, and to avoid the
     circumvention of such state statutes which may result
     from suits against the customers or clients of Wackenhut
     based on the same injury or injuries, and to the extent
     permitted by law, I HEREBY WAIVE AND FOREVER RELEASE ANY
     RIGHTS I MIGHT HAVE to make claims or bring suit against
     any client or customer of Wackenhut for damages based
     upon injuries which are covered under such Workers'
     Compensation statutes.

Entergy also argued that Tracy Edgin's claim of loss of consortium
was derivative of and extinguished by the release and waiver signed
by Michele Edgin.  The trial court granted Entergy's motion, and
this appeal followed. 
     The standard for appellate review of a summary judgment is
whether the evidentiary items presented by the moving party in
support of the motion left a question of material fact unanswered
and, if not, whether the moving party is entitled to judgment as a
matter of law.  R.J. Jones Excavating Contr., Inc. v. Firemen's
Ins. Co., 324 Ark. 282, 920 S.W.2d 483 (1996).  Once the moving
party has established a prima facie entitlement to summary
judgment, the opposing party must meet proof with proof and
demonstrate the existence of a material issue of fact.  Pugh v.
Griggs, 327 Ark. 577, 940 S.W.2d 445 (1997).  This court views the
evidence in a light most favorable to the party against whom the
motion was filed, resolving all doubts and inferences against the
moving party. Id.  
     The sole issue on appeal is whether the agreement signed by
Michele Edgin is enforceable by Entergy.  It is a well-settled
principle of law that a contract made for the benefit of a third
party is actionable by such third party.  See, e.g., Howell v.
Worth James Constr. Co., 259 Ark. 627, 535 S.W.2d 826 (1976); Cate
v. Irvin, 44 Ark. App. 39, 866 S.W.2d 423 (1993).  It is not
disputed that Entergy was a third-party beneficiary of the
agreement signed by Edgin, despite the fact that Entergy was not
specifically identified in the agreement by name.  Entergy would no
doubt benefit from such an agreement, whereby Wackenhut intended to
shield its clients from being held liable for injuries to Wackenhut
employees assigned to perform jobs for such clients, provided that
the injuries were covered by this state's workers' compensation
laws.  Thus, the question here is not whether the agreement may be
enforced by Entergy, but rather, whether the agreement is capable
of being enforced against Edgin.  
     The common law pertaining to master and servant has long
recognized that an employer or master may not, by contract in
advance, absolve itself from liability for injuries sustained by
its employee or servant that are caused by the employer's or
master's own negligence.  See, e.g., Pittsburgh, C., C. & St. L.
Ry. Co. v. Kinney, 115 N.E. 505 (Ohio 1916); Pugmire v. Oregon
Short Line R.R. Co., 92 P. 762 (Utah 1907).  Such agreements were
considered to be void as against public policy.  Id.  The agreement
at issue in this case does not, however, purport to absolve the
employer of any and all liability.  Instead, it provides that in
exchange for employment, the employee relinquishes any additional
claims for work-related injuries, which are covered by workers'
compensation benefits, against the employer's clients or customers. 
Accordingly, the agreement is not by virtue of its contents per se
void as being against public policy.  
     The issue then is whether the language of the agreement
clearly identifies that which the employee is relinquishing in
exchange for employment.  The parties agree on the general
principle that contracts that exempt a party from liability for
future negligence are not favored by the law and are strictly
construed against the party relying on them.  Farmers Bank v.
Perry, 301 Ark. 547, 787 S.W.2d 645 (1990).  In Farmers Bank, the
issue on appeal was the admissibility of an exculpatory clause in
the bank's rental agreement for a safety deposit box signed by the
appellees, which provided that the "undersigned customer holds the
Farmers Bank harmless for loss of currency or coin left in this
box."  Id. at 550, 787 S.W.2d  at 646.  In holding that the trial
court was correct in excluding the signature card from the jury,
this court stated that it "has never upheld an agreement purporting
to release a party from liability for his own negligence before it
occurred."  Id.  This court went on to state:
     The rationale behind the numerous decision [sic]
     invalidating so-called releases given before liability
     arises is based upon the strong public policy of
     encouraging the exercise of care.  When construing such
     release contracts, this court has said that it is not
     impossible to avoid liability for negligence through
     contract; however, to avoid such liability, the contract
     must at least clearly set out what negligent liability is
     to be avoided.

Id. at 550-51, 787 S.W.2d  at 646-47 (citations omitted) (emphasis
added).  This court concluded that the language of the exculpatory
clause on the signature card did not expressly exempt the bank from
liability for its own negligence, as it did not clearly set out
what negligent liability was to be avoided.   
     Similarly, in Firstbank of Arkansas v. Keeling, 312 Ark. 441,
850 S.W.2d 310 (1993), this court declined to reverse the trial
court's ruling that the contract between Firstbank and the
insurance company did not release the bank from any liability for
its fraud or deceit.  This court stated that there was no authority
to support the bank's argument that an agreement may effectively
exonerate one from liability for fraudulent conduct in inducing
another to enter into a contract.  This court stated that the
reason for disfavoring such agreements is based upon the public
policy of encouraging the exercise of reasonable care.  "While it
is not impossible for such an agreement to be enforceable, the
clause must clearly set out the negligence for which liability is
to be avoided."  Id. at 445, 850 S.W.2d  at 313 (citing Farmers, 301
Ark. 547, 787 S.W.2d 645).
     Appellants argue that the agreement in this case does not
specifically set out what negligent liability is to be avoided.  We
disagree.  We are persuaded by Appellee's argument that the
agreement is clear and unambiguous and only releases the clients of
Wackenhut from liability for work-related injuries sustained by a
Wackenhut employee that are covered by the workers' compensation
statutes.  By signing the employment application, an employee is
not forfeiting his or her right to receive any compensation for
work-related injuries; rather, the employee is merely agreeing to
waive an additional remedy against a client of Wackenhut in
exchange for employment with Wackenhut.  In this respect, we cannot
say that the agreement violates public policy by discouraging the
employer or its clients from exercising reasonable care.  Nor can
we say that the language of the agreement did not clearly identify
what the employee was giving up in exchange for employment.  The
employer is not attempting to escape liability entirely, but is,
instead, attempting to shield its clients from separate tort
liability for those injuries that are covered by workers'
compensation, unlike the agreements at issue in Farmers Bank and
Firstbank.     
     Furthermore, our interpretation of this agreement is not
inconsistent with the sound public policy considerations that form
the basis of our workers' compensation laws.  Nor is it
inconsistent with this court's previous holdings in Daniels v.
Riley's Health & Fitness Ctrs., 310 Ark. 756, 840 S.W.2d 177
(1992), and National Union Fire Ins. v. Tri-State Iron & Metal, 323
Ark. 258, 914 S.W.2d 301 (1996), which involved the application of
the dual-employment doctrine.  In both of those cases, this court
held that the workers, who were employed by temporary employment
agencies and were injured while working their assigned jobs for a
special employer, were not entitled to bring suit against those
special employers, as such claims were barred by the exclusive-
remedy provision of our Workers' Compensation Act. 
     Appellants additionally argue that the agreement contains
factually inaccurate information, in that it states that any work-
related injury is covered by workers' compensation.  We are not
persuaded by this argument.  When the agreement is read in toto, it
is clear that the employee agrees to waive any rights she might
have to bring suit against a client of Wackenhut only if the
injuries sustained by the employee are in fact covered by workers'
compensation.  Here, there is no dispute that Michele Edgin
received workers' compensation benefits for the injuries in
question.  Accordingly, under the terms of the agreement, she is
precluded from bringing suit against Entergy for those same
injuries, as Entergy is a client of Wackenhut. 
     Lastly, Appellants contend that the trial court's ruling must
be reversed because Entergy failed to demonstrate the authenticity
of the agreement, which was attached as an exhibit to its motion
for summary judgment.  During oral argument before this court,
Appellants argued that it was error for the trial court to grant
summary judgment on the basis of an unauthenticated document.  We
do not reach the merits of this argument, because Appellants failed
to make this specific objection below.  An appellant must make a
specific objection that apprises the trial court of his or her
current argument and may not change the argument on appeal. 
Foreman v. State, 328 Ark. 583, 945 S.W.2d 926 (1997).  Absent such
a specific objection informing the trial court of the nature of the
error alleged on appeal, this court will not reverse.  Isbell v.
State, 326 Ark. 17, 931 S.W.2d 74 (1996).  
     Here, the only time that the authentication of the document
was even remotely discussed was through two ambiguous references
made by Appellants in their brief filed in response to Entergy's
motion for summary judgment.  Appellants did not raise the issue as
a separate point in the response itself, nor did they support the
references made in their brief with any argument or authority, such
that the trial court would have perceived that they were
specifically challenging the authenticity of the exhibit.  Clearly,
such an argument could have been directly made if it was in fact a
disputed issue.  
     Affirmed.
     Newbern, Glaze, and Imber, JJ., dissent.
     Newbern, J., dissents because the agreement at issue violates
the policy of encouraging the exercise of reasonable care.
     Glaze, J., dissents.
     I respectfully disagree with the majority opinion.  In my
view, the opinion contravenes statutory law, public policy, and
case law.  In short, the opinion adopts a rule which will be
coercively applied against employees, whereby employers can compel
employees, in exchange for hiring them, to waive any right of
redress for any injury sustained resulting from a negligent act of
the employers' clients or customers.  If employees refuse to waive
their rights, they simply will not be hired, or if already
employed, will lose their jobs.
     Initially, Entergy's argument is beguiling.  It says Michelle
Edgin, when applying for a job with her employer Wackenhut
Corporation, agreed to waive her claim for any job-related injury
she may sustain resulting from the negligence of one of Wackenhut's
customers, because Edgin would already be receiving Workers'
Compensation benefits for the injury.  The waiver, however, makes
no mention that the Workers' Compensation law specifically provides
that her making a claim for Workers' Compensation benefits shall
not affect her right as an employee to sue any third party who may
have negligently caused her injury.  See Ark. Code Ann.  11-9-410
(Repl. 1996).  (Emphasis added.)  
     Indisputedly, any agreement whereby an employee waives his
right to compensation benefits is invalid.  Ark. Code Ann.  11-9-
108(a) (Repl. 1996).  Section 11-9-108(a) also provides that no
contract shall operate to relieve the employer or carrier, in whole
or in part, from liability under Chapter 9 of the Workers'
Compensation law.  This statutory provision is designed to protect
employees against the practice of unscrupulous employers to avoid
compensation liability by having employees sign a contract waiving
all their rights to compensation in consideration of being
employed.  Bryan v. Ford, Bacon & Davis, 246 Ark. 327, 438 S.W.2d 472 (1969). 
     While in the present case, Michelle was not asked by Wackenhut
to waive her compensation benefits in exchange for an opportunity
to work, she was requested, before hiring her, to release any
legitimate negligence action she would have against Wackenhut's
customers.  Wackenhut, by law, must furnish its employees Workers'
Compensation coverage and that law in no way authorizes it, as an
employer, to protect its customers against liability those
customers may have under  11-9-410(a).  Surely employer Wackenhut
should not be able to entice business customers by assuring them
immunity from suit that might arise under  11-9-410(a).  Wackenhut
should not be able to force an employee to waive in futurity his or
her statutory right against a third-party tortfeasor in exchange
for Wackenhut giving a job to the employee.  Arkansas statutory law
establishes public policy, see Sterling Drug, Inc. v. Oxford, 294
Ark. 239, 743 S.W.2d 380 (1988), and here that law and policy gives
an employee the right to maintain an injury action in court against
any third party, and Wackenhut, or any employer, has no authority
to divest its employees of that right.
     Even if Wackenhut's waiver provision was not void as against
public policy, another reason requires the trial court's reversal. 
I would add that this court has never upheld an agreement
purporting to release a party from liability for his own negligence
before it occurred.  Firstbank of Ark. v. Keeling, 312 Ark. 441,
850 S.W.2d 310 (1993).  The reason for disfavoring such clauses is
based upon the public policy of encouraging the exercise of
reasonable care.  Id. at 445.  While it is not impossible to avoid
liability through contract, the contract must at least clearly set
out what negligent liability is to be avoided.  Middleton & Sons v.
Frozen Food Lockers, 251 Ark. 745, 474 S.W.2d 895 (1972). 
Contracts which exempt a party from liability for negligence are
not favored by the law, and they are strictly construed against the
party relying on them.  Farmers Bank v. Perry, 301 Ark. 547, 787 S.W.2d 645 (1990); Gulf Compress Company v. Harrington, 90 Ark.
258, 119 S.W. 249 (1909).
     In her application for employment with Wackenhut, Michelle
Edgin signed the following release or waiver which reads in
pertinent part:
     In recognition of the fact that any work-related injuries
     which might be sustained by me are covered by state
     Workers' Compensation statutes, and to avoid the
     circumvention of such state statutes which may result
     from suits against the customers or clients of Wackenhut
     based on the same injury or injuries, and to the extent
     permitted by law, I HEREBY WAIVE AND FOREVER RELEASE ANY
     RIGHTS I MIGHT HAVE to make claims or bring suit against
     any client or customer of Wackenhut for damages based
     upon injuries which are covered under such Workers'
     Compensation statutes.
     Entergy argues that the release is clear and unambiguous and
therefore valid.  However, the clause stating that "any work
related injuries which might be sustained by me are covered by
state Workers' Compensation statutes" is erroneous and misleading. 
Not all work-related injuries are covered by workers' compensation. 
Further, the clause does not clearly set out what negligent
liability is to be avoided.  Taken literally, this language could
release Entergy for even intentional torts.  Again, such an
interpretation would be against public policy. 
     Imber, J., joins this opinion.