Gerish v. Savard

Annotate this Case
Gerrish v. Savard (98-103); 169 Vt. 468; 739 A.2d 1195

[Filed 23-Jul-1999]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as  formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the  Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 No. 98-103

Ralph I. Gerrish	                         Supreme Court

	                                         On Appeal from
     v.		                                 Washington Superior Court

Paul Savard	                                 January Term, 1999

Matthew I. Katz, J.

       L. Brooke Dingledine of Valsangiacomo, Detora & McQuesten, P.C.,
  Barre, for  Plaintiff-Appellant.

       Douglas D. Le Brun and Elizabeth H. Miller of Dinse, Knapp & McAndrew,
  P.C., Burlington, for Defendant-Appellee.

       John L. Kellner and Kevin E. Brown of Langrock Sperry & Wool,
  Middlebury, for Amicus Curiae Vermont State Labor Council, AFL-CIO.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       JOHNSON, J.   This appeal arises out of a personal injury action in
  which plaintiff  alleged that he was injured when his employer negligently
  rigged a crane, causing a cable to snap  and a piece of granite to fall on
  plaintiff.  Plaintiff argues that it was error for the trial court to 
  grant summary judgment because there is a genuine issue of material fact as
  to whether  defendant, who was the president and owner of the granite
  company at which plaintiff worked,  was acting as an employer or a
  co-employee when the incident occurred.  Because plaintiff has  not alleged
  facts showing that defendant acted outside the scope of his duty as an
  employer, we 



       To warrant a grant of summary judgment, there must be no genuine
  issues of material  fact and the moving party must be entitled to judgment
  as a matter of law.  See Mello v. Cohen,  ___ Vt. ___, ___, 724 A.2d 471,
  473 (1998).  The opposing party must be given the benefit of  all
  reasonable doubts and inferences in determining whether a genuine issue of
  material fact  exists.  See Miller v. Town of West Windsor, 167 Vt. 588,
  588, 704 A.2d 1170, 1171 (1997).

       In the incident central to this case, a piece of granite being hoisted
  by a crane fell onto  plaintiff when the cable snapped or somehow gave way. 
  Plaintiff alleges that defendant is liable  for his injuries because
  defendant (1) failed to properly maintain and order the repair of a faulty 
  brake for the crane, but instead simply removed the brake, (2) failed to
  warn plaintiff and others  of the faulty brake, (3) failed to exercise
  reasonable care in repairing the brake, and (4) failed to  replace the
  frayed cable, which had been reported to defendant shortly before the
  accident.   Plaintiff asserted in the amended complaint that by
  "undertaking the actual repair and  replacement of mechanical parts of the
  crane, [defendant] established a personal duty to Plaintiff  to exercise
  reasonable care in his handling and maintaining [of] a dangerous

       Defendant filed a motion for summary judgment, arguing that
  plaintiff's exclusive  remedy was through the worker's compensation
  statute, see 21 V.S.A. § 622, which, in  providing relief for injured
  workers, bars workers from bringing common-law negligence actions  against
  their employers.  While injured workers may bring negligence actions
  against persons  other than the employer, see 21 V.S.A. § 624(a), defendant
  argued that he was not liable as a co-employee because plaintiff had
  alleged only failure to maintain a safe work place, which is a 
  nondelegable duty of the employer.  Defendant additionally emphasized that
  he was not present  in the plant


  at the time of the accident.
       In opposing defendant's motion, plaintiff argued that defendant was
  acting as a co-employee at the time of the accident.  Plaintiff pointed
  out that defendant frequently worked  alongside his employees and that
  there was conflicting evidence as to whether defendant was  present at the
  time of the accident.  Plaintiff further emphasized the allegations that
  defendant  had personally repaired and maintained the crane involved in the
  accident, had personally  removed the brake on the crane, and had
  personally received a report just prior to the accident  that the cable was
       The trial court denied defendant's motion without prejudice to allow
  for further  discovery.  Defendant renewed his motion for summary judgment,
  and the trial court granted the  motion, reasoning that the duty in the
  instant case was similar to that in a Wisconsin case,  Gerger v. Campbell,
  where an employer who had modified a hydraulic press was found not  subject
  to co-employee liability because the decision to modify the machine was
  within the  employer's nondelegable duty to furnish reasonably safe tools
  and equipment to an employee.   See 297 N.W.2d 183, 185-86 (Wis. 1980). 
  This appeal followed. 
       The undisputed material facts of this case cannot support a conclusion
  that defendant is  subject to liability as a co-employee, nor is the
  primary disputed fact (whether defendant was  present in the immediate area
  at the time of the accident) determinative of this issue.
       Vermont's workers' compensation statute guarantees workers a remedy
  for a work place  injury, see 21 V.S.A. § 618, and injured workers carry a
  reduced burden of proof, see Bishop v.  Town of Barre, 140 Vt. 564, 572,
  442 A.2d 50, 53 (1982) (claimant entitled to benefits upon  showing that
  injury was suffered by accident arising out of employment, and need not


  employer's negligence).  The amount of recovery is fixed, however, and the
  statute provides the  exclusive remedy for work place injuries:

     [T]he rights and remedies granted by the provisions of this chapter 
     to an employee on account of a personal injury for which [he or 
     she] is entitled to compensation under the provisions of this chapter 
     shall exclude all other rights and remedies of the employee . . . at 
     common law or otherwise on account of such injury.

  21 V.S.A. § 622.  Thus, "[w]orkers' compensation law represents a public
  policy compromise in  which 'the employee gives up the right to sue the
  employer in tort in return for which the  employer assumes strict liability
  and the obligation to provide a speedy and certain remedy' for 
  work-related injuries."  Murray v. St. Michael's College, 164 Vt. 205,
  209-10, 667 A.2d 294,  298 (1995) (quoting Lorrain v. Ryan, 160 Vt. 202,
  214, 628 A.2d 543, 551 (1993)).
       There is, however, an exception to the general rule that the workers'
  compensation  statute provides the exclusive remedy for work place

     Where the injury for which compensation is payable under the 
     provisions of this chapter was caused under circumstances creating 
     a legal liability to pay the resulting damages in some person other 
     than the employer, the acceptance of compensation benefits or the 
     commencement of proceedings to enforce compensation benefits 
     shall not act as an election of remedies, but the injured employee   
     . . . may also proceed to enforce the liability of such third party 
     for damages in accordance with the provisions of this section.

  21 V.S.A. § 624(a).  This exception may, under certain circumstances, apply
  to an employer if  the employer was acting in the capacity of a co-employee
  in negligently causing the accident.   See Dunham v. Chase, 165 Vt. 543,
  544, 674 A.2d 1279, 1281 (1996) (mem.).
       Our decision in Garrity v. Manning, 164 Vt. 507, 671 A.2d 808 (1996),
  provides the  most recent and significant interpretation of the co-employee
  exception as it applies to corporate  officers.  In that case, the
  plaintiff, who was employed as a truck driver, was injured when he 


  slipped and fell on a snow- and ice-covered parking lot maintained by his
  employer.  See id. at  508, 671 A.2d  at 808.  The plaintiff alleged that
  the president and majority stockholder of the  corporation that employed
  him was liable as a co-employee because he sometimes assisted in  sanding
  and clearing the parking lot.  See id.  We upheld the decision of the trial
  court that the  plaintiff's exclusive remedy was through the workers'
  compensation statute, because the alleged  negligence on the part of
  defendant fell within the parameters of an employer's nondelegable  duty to
  maintain a safe work place.  See id. at 514, 671 A.2d  at 812.

       This reasoning reflects our decision in Garrity to abandon the
  "proximity rule," which  looked to the immediacy of the corporate officer's
  participation in the negligent activity to  determine whether there was
  liability as a co-employee.  See Steele v. Eaton, 130 Vt. 1, 6, 285 A.2d 749, 753 (1971) (applying proximity rule).  We did so because the proximity
  rule had the  effect of saddling small businesses and closely-held
  corporations with greater liability, merely by  virtue of the fact that
  corporate officers in such organizations would, by necessity, be more 
  involved in the day-to-day operations of the business.  The focus on the
  immediacy of a  corporate officer's participation risked "turn[ing] the
  exclusive remedy provision into an illusion"  for small businesses, thus
  depriving small businesses of the benefit of the bargain manifested in  the
  workers' compensation statute.  Garrity, 164 Vt. at 511, 671 A.2d  at 810.  

       Instead, we adopted the more workable "Wisconsin rule," which examines
  the nature of  the duty involved to determine whether the negligent act was
  committed in the capacity of an  employer or a co-employee, and hence
  whether there is co-employee liability.  See id. (where  duty is
  nondelegable duty of employer common law action cannot be maintained
  because action  is actually against employer).  The policy rationale behind
  this rule is to prevent double recovery 


  against employers.  For instance, in a case where the employer's duty to
  provide a safe work  place is breached, allowing an employee to recover
  worker's compensation from the corporation  and to sue a corporate officer
  (who will often be indemnified by the corporation) as an individual  will
  frequently have the effect of imposing double liability on the corporation. 
  See id. at 512,  671 A.2d  at 811.

       In light of our holding in Garrity, the key question in determining
  when conduct is  governed exclusively by the worker's compensation statute
  is whether the negligence occurred in  the performance of a nondelegable
  duty of the employer as opposed to arising out of an  obligation owed to
  the injured employee.  See id. at 513, 671 A.2d  at 811.  To establish co-
  employee liability, the plaintiff must show that there was a personal duty
  owed the plaintiff apart  from the nondelegable duties of the employer. 
  See id. at 514, 671 A.2d  at 812.  Plaintiff has not  done so in this case.

       We agree with the trial court that the instant case is similar to
  Gerger v. Campbell, 297 N.W.2d 183 (Wis. 1980). (FN1)  The question before
  the court in that case was whether the  lower court properly decided that
  the president of a corporation was not acting as a co-employee  when he
  negligently designed and installed a modification of a hydraulic press, the
  subsequent  operation of which resulted in injury to the plaintiff.  See
  id. at 184.  The Wisconsin court  discusses the fact that the defendant had
  retired, had left the day-to-day operation of the business  to his sons,
  and visited the plant only every two months.  Additionally, the court noted
  that the  defendant was not present on the premises at the time the
  accident occurred and that the 


  alteration to the hydraulic press preceded the accident by several months.

       In concluding that the defendant was not liable as a co-employee, the
  court looked not to  the immediacy of his participation in the day-to-day
  operations of the business, however, but  instead focused on the duty
  implicated by his actions.  The court noted that the decision to  modify
  the press was a corporate decision, and that the duty to provide safe
  equipment for the  execution of the employment task is a nondelegable duty
  of the employer.  See id. at 186 (citing  Wasley v. Kosmatka, 184 N.W.2d 821 (Wis. 1971).  Therefore, the president was determined to  be immune
  from suit because his "negligence occurred in the course of the
  nondelegable duties  of an employer to furnish reasonably safe tools and
  equipment to an employee."  Id. at 185-86.   The court reasoned that
  "[o]nly if it can be said that by his conduct he has changed his status 
  from that of a supervisor to that of a co-employee will an action for
  common law tort lie. . . .  It  did not constitute the negligence of a
  co-employee, even though his affirmative acts increased the  risk to a
  corporate employee who subsequently used the machine."  Id. at 186-87
  (emphasis  added).

       An analogous situation exists in the instant case.  An employer in
  Vermont also has a  nondelegable duty to provide a safe work place and safe
  tools and equipment.  See Landing v.  Town of Fairlee, 112 Vt. 127, 129, 22 A.2d 179, 180 (1941); 21 V.S.A. § 223(a). Here, as in  Gerger, defendant
  allegedly made a decision that a piece of machinery could operate without a 
  certain safety feature.  Additionally, here, as in Gerger, the modification
  was made several  months before the accident.(FN2)   In both cases,
  therefore, the corporate officer altered the  working 


  environment and thereby increased the risk for all employees.  In both
  cases, whether  the employer made the alteration himself does not change
  the nature of the duties involved;  rather, this reflects only the
  realities of running a small business in which corporate officers must 
  frequently participate in the day-to-day operations of the business.  

       Defendant in this case was exercising managerial prerogatives, and not
  merely taking the  place of a worker.  It is the exercise of managerial
  prerogatives in fulfillment of the employer's  nondelegable duties that
  signals that the employer has not "doffed the cap of corporate officer, 
  and donned the cap of a co-employee."  Kruse v. Schieve, 213 N.W.2d 64, 66
  (Wis. 1973)  (Kruse I).

     The maintenance of a safe workplace, including suitable machinery 
     and tools, is the duty of the employer.  Moreover, the employer's 
     duty is nondelegable in that the employer cannot escape liability 
     for breach either by purporting to delegate to another the duty 
     itself, or by delegating merely the performance of the duty. . . . To 
     charge the employee with the same duty as the employer would 
     effectively sidestep the workers' compensation law and hold the 
     employee liable for breach of the same duty already compensated 
     for through the payment of benefits.

  Rounds v. Standex Int'l, 550 A.2d 98, 101-02 (N.H. 1988) (citations

       Thus, for a common law negligence action to lie where a corporate
  officer appears to be  acting both as an employer and as a co-employee, a
  plaintiff must allege circumstances that  reveal a duty that is "additional
  to and different from" the general, nondelegable duty of the  employer. 
  Kruse I, 213 N.W.2d  at 67.  This is because the co-employee exception of 21
  V.S.A.  § 624(a) applies where there is liability in someone "other than
  the employer."  To be considered  "other than the employer," the individual
  must not be involved in performing a nondelegable  duty of the employer and
  must not be exercising managerial prerogatives - because 


  both of these activities indicate that the individual is acting as an

       Plaintiff argues that, in the instant case, defendant has, in fact,
  stepped outside his role as  an employer.  Plaintiff cites a number of
  cases from Missouri and Wisconsin in which an  employer who modified the
  operation of a piece of machinery was found to have violated a  personal
  duty owed the injured worker and was therefore subject to liability as a
  co-employee.   We are not persuaded that these cases set forth a different
  rule or compel a different result.

       Plaintiff primarily relies on Tauchert v. Boatmen's Nat'l Bank, 849 S.W.2d 573 (Mo.  1993), in which the defendant unsuccessfully rigged an
  elevator hoist, injuring the plaintiff.  The  Supreme Court of Missouri
  held that the trial court had erred in granting summary judgment for  the
  defendant in that case because there was a genuine issue of material fact
  regarding whether  the defendant acted as an employer or co-employee in
  rigging the elevator hoist.  Based on the  alleged facts, the court could
  not rule-out the possibility that defendant, by personally rigging the 
  elevator hoist while working with the plaintiff, had committed an
  "affirmative negligent act  outside the scope of his responsibility to
  provide a safe workplace for plaintiff," resulting in  breach of personal
  duty.  Id. at 574.

       Plaintiff additionally points to Craft v. Scaman, 715 S.W.2d 531 (Mo.
  Ct. App. 1986), in  which an employer working with his employee rigged a
  machine in such a way that the resulting  friction caused a fire that
  engulfed the employee in flames.  The court found that there was no 
  immunity in that case, reasoning that the employer had breached a
  common-law duty to exercise  reasonable care in handling a dangerous

       Finally, in Kruse v. Schieve, 240 N.W.2d 159 (Wis. 1976) (Kruse II),
  reviewed by the 

  Wisconsin Supreme Court after remanding the case to allow plaintiffs to
  replead, see Kruse v.  Schieve, 213 N.W.2d 64, 67 (Wis. 1973) (Kruse I),
  the court concluded that there was a cause  of action for co-employee
  liability where a corporate officer had personally directed the  employee
  to remove the safety guard from a machine.  
       From these cases, plaintiff seeks to draw a parallel to the instant
  case, where the  defendant also allegedly modified a piece of machinery,
  thereby creating a greater risk to  plaintiff.  As we established in
  Garrity, however, one cannot look merely to the type of activity  or the
  corporate officer's participation in the activity to determine whether
  there is co-employee  liability.  Bare similarity in the underlying factual
  scenario (i.e., modification of a piece of  machinery) does not establish
  that defendant in the instant case was operating outside the scope  of his
  nondelegable duties as an employer when he rigged the crane.
       The distinguishing feature of Craft and Kruse is that the employer in
  those cases engaged  in an affirmative act directed at the particular
  employee that increased the risk of injury to that  particular employee,
  thus creating the personal duty that is the basis for co-employee
  liability.  It  is the affirmative act directed at a particular employee
  that places the employer's conduct outside  the scope of an employer's
  nondelegable duties.  Furthermore, in Tauchert, the court - without 
  extensive recitation of the alleged facts (FN3) - concluded only that there
  was a genuine issue of  material fact as to whether the supervisor was
  acting as an employer or co-employee at the time  of the accident.  Like
  the Craft and Kruse courts, however, it also required that the plaintiff 
  show negligence outside the scope of the employer's duties.  See Tauchert,
  849 S.W.2d  


  at 574; Craft, 715 S.W.2d  at 537 ("The negligence must have been directed
  toward the particular  plaintiff and the tortious act must have been
  outside the scope of the employer's responsibility.")  (citations omitted). 
  This is the same rule we have applied in the instant case.

       Because plaintiff in this case has not alleged facts showing that
  defendant acted outside  the scope of his duty as an employer, the trial
  court did not err in granting defendant's motion  for summary judgment.


	                               FOR THE COURT:

	                               Associate Justice


FN1.  Although Wisconsin no longer allowed co-employee liability at the time
  the case was  decided, there was co-employee liability at the time the
  accident occurred. 
FN2.  Defendant points to undisputed deposition testimony attached to
  plaintiff's opposition to  summary judgment that indicates the brake was
  removed three to four months prior to the  accident.
FN3.  In fact, the supervisor and injured employee worked together to rig
  the elevator, as a  later decision in the case explains.  See Tauchert v.
  Ritz, 909 S.W.2d 687, 688-89 (Mo. Ct.  App. 1995).