Branda Hall v. Dallman Contractors, LLC, Shook LLC, and AT&T Services, Inc. ( 2016 )

Feb 03 2016, 9:49 am
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
David B. Wilson James D. Ahern
Indianapolis, Indiana Brandon Kroft
Heather T. Gilbert
CASSIDAY SCHADE LLP
Crown Point, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Brenda Hall, February 3, 2016
Appellant-Plaintiff, Court of Appeals Case No.
49A02-1502-CT-67
v. Appeal from the Marion Superior
Court No. 4
Dallman Contractors, LLC, The Honorable Cynthia J. Ayers,
Shook LLC, and AT&T Judge
Services, Inc., Trial Court Cause No.
Appellees-Defendants 49D04-0802-CT-8563
Altice, Judge.
Case Summary
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[1] This case arises out of a negligence action filed by Brenda Hall (Hall) against
AT&T Services, Inc. (AT&T Services), among others,1 for injuries she sustained
when she tripped and fell on her way into work. AT&T Services filed a motion
for summary judgment asserting that Hall’s negligence claim against it was
barred by the exclusive remedies provision of the Worker’s Compensation Act
(the Act). See Ind. Code § 22-3-2-6. The trial court agreed, finding that the
designated evidence established that under the corporate structure of AT&T,
Inc., AT&T Services and Ameritech, Hall’s employer, were both subsidiaries of
AT&T, Inc., and as such, were joint employers of Hall. Consequently, Hall’s
negligence action against AT&T Services could not stand because Hall had
already received a worker’s compensation settlement from Ameritech. The trial
court therefore granted summary judgment in favor of AT&T Services.
[2] We affirm.2
Facts & Procedural History
[3] On December 5, 2007, Hall, while on her way into work for Ameritech, tripped
and fell over the snow-covered legs of a construction sign placed in a walkway
adjacent to an ongoing construction project at the AT&T building in downtown
Indianapolis. As a result of the fall, Hall injured her arm. On June 8, 2008,
1
Hall has also named Dallman Contractors, LLC, and Shook LLC as defendants in the negligence action.
They are not participating in this appeal.
2
We held oral argument in this matter on January 14, 2016. We commend counsel on the quality of their
written and oral advocacy.
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Hall filed for worker’s compensation benefits. On September 21, 2009, the
Worker’s Compensation Board of Indiana issued a stipulated award to Hall to
compensate her for a twenty-nine percent permanent partial impairment of her
right arm.
[4] On February 25, 2008, Hall filed her complaint for damages against Dallman
Contractors, LLC (Dallman). On June 30, 2008, Dallman named “AT&T” 3 as
a non-party. Appellant’s Appendix at 27. Hall filed an amended complaint on
April 29, 2009, in which she added Shook LLC and “American Telephone &
Telegraph Company f/k/a AT&T, Inc. d/b/a AT&T Property Management”
(AT&T Property Management) as additional defendants. Id. at 33. On
October 20, 2009, AT&T Property Management filed an Ind. Trial Rule 17
motion to “substitute AT&T Services, Inc. in its stead as the real party in
interest.” Id. at 54. AT&T Management alleged that “responsibility for
physical building maintenance at the AT&T property in question, such as snow
and ice removal, is properly designated as AT&T Services, Inc.” Id. AT&T
Management maintained that it was responsible only for administrative
management of the AT&T properties, including the property in question. The
trial court granted the motion and AT&T Services was substituted for AT&T
Management.
3
Dallman referred only to “AT&T” and not a specific corporate entity.
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[5] On January 30, 2012, AT&T Services filed its first motion for summary
judgment in which it claimed that Hall’s claim against it was barred under the
exclusive remedy provision of the Act. On June 4, 2012, the trial court granted
summary judgment in favor of AT&T Services, thereby dismissing Hall’s claims
against AT&T Services with prejudice. After her motion to correct error was
denied, Hall appealed. This court reversed and remanded, finding that
questions of fact remained as to whether AT&T Services was Hall’s employer
or a joint employer for purposes of the exclusive remedy provision of the Act.
Specifically, the court found that AT&T Services’ designated evidence did not
establish that it was a subsidiary. See Hall v. Dallman Contractors, LLC, 994
N.E.2d 1220 (Ind. Ct. App. 2013) (Hall I).
[6] On May 30, 2014, AT&T Services filed its second motion for summary
judgment, again claiming that Hall’s claim was barred by the exclusive remedy
provision of the Act. AT&T Services designated evidence it argued established
that Ameritech and AT&T Services are both subsidiaries of AT&T, Inc., and
therefore joint employers of Hall. On January 9, 2015, the trial court entered
an order granting AT&T Services’ second motion for summary judgment. In
support of its decision, the trial court determined that AT&T Services and
Ameritech were both subsidiaries of AT&T, Inc., and therefore, for purposes of
the Act, were joint employers of Hall. The court concluded that Hall’s prior
worker’s compensation action “was her sole and exclusive remedy against them
for the injuries she sustained as a result of her fall on December 5, 2007. [Hall],
therefore, cannot proceed in this action against [AT&T Services] and
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accordingly; [AT&T Services] is entitled to Summary Judgment as a matter of
law.” Appellant’s Appendix at 22-23.
Discussion & Decision
[7] Hall maintains that summary judgment is inappropriate. We review summary
judgment de novo, applying the same standard as the trial court: “Drawing all
reasonable inferences in favor of . . . the non-moving parties, summary
judgment is appropriate ‘if the designated evidentiary matter shows that there is
no genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law.’” Williams v. Tharp, 914 N.E.2d 756, 761 (Ind.
2009) (quoting Ind Trial Rule 56(C)). “A fact is ‘material’ if its resolution
would affect the outcome of the case, and an issue is ‘genuine’ if a trier of fact is
required to resolve the parties’ differing accounts of the truth, or if the
undisputed material facts support conflicting reasonable inferences.” Id.(internal citations omitted).
[8] The initial burden is on the summary-judgment movant to “demonstrate . . . the
absence of any genuine issue of fact as to a determinative issue,” at which point
the burden shifts to the non-movant to “come forward with contrary evidence”
showing an issue for the trier of fact. Id. at 761-62 (internal quotation marks
and substitution omitted). And “[a]lthough the non-moving party has the
burden on appeal of persuading us that the grant of summary judgment was
erroneous, we carefully assess the trial court’s decision to ensure that [s]he was
not improperly denied h[er] day in court.” McSwane v. Bloomington Hosp. &
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Healthcare Sys., 916 N.E.2d 906, 909-10 (Ind. 2009) (internal quotation marks
omitted).
[9] Indiana law is clear that the Act provides “the exclusive remedy for recovery of
personal injuries arising out of and in the course of employment.” Hall I, 994
N.E.2d at 1224 (citing GKN Co. v. Magness, 744 N.E.2d 397, 401-02 (Ind.
2001)). “‘Although the Act bars a court from hearing any common law claim
brought against an employer for an on-the-job injury, it does permit an action
for injury against a third-party tortfeasor provided the third-party is neither the
plaintiff’s employer nor a fellow employee.’” Id. (quoting GKN Co., 744 N.E.2d
at 402). In its definition of “employer,” the Act provides that “[a] parent
corporation and its subsidiaries shall each be considered joint employers of the
corporation’s, the parent’s, or the subsidiaries’ employees for purposes of IC 22-
3-2-6 [exclusive remedies] and IC 22-3-3-31 [apportionment of award].” I.C. §
22-3-6-1(a).
[10] Hall directs us to McQuade v. Draw Tite, Inc., 659 N.E.2d 1016 (Ind. 1995),
wherein our Supreme Court held that an employee was not precluded under the
Act from bringing a negligence action against the parent corporation of her
employer. At that time, however, the statutory definition of “employer” for
purposes of the Act did not include a parent or subsidiary of the defendant’s
employer. Finding the statutes in the Act were silent as to its applicability to an
injured worker seeking recourse against his employer’s parent corporation, the
court held that the parent corporation fell within the language of I.C. § 22-3-2-
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13, which left intact the injured employee’s right to pursue a legal claim against
any “other person than the employer.”
[11] Hall also directs us to Ritter v. Stanton, 745 N.E.2d 828 (Ind. Ct. App. 2001),
trans. denied, wherein this court refused to depart from the McQuade holding.
We held that an injured employee could maintain an action against The Kroger
Company, which was the parent corporation of his employer 4 from which he
had already received a worker’s compensation settlement.
[12] Effective July 1, 2000, the definition of employer under the Act was amended to
provide that “[a] parent or a subsidiary of a corporation or a lessor of employees
shall be considered to be the employer of the corporation’s, the lessee’s, or the
lessor’s employees for purposes of IC 22-3-2-6.” In 2001, the legislature further
amended the definition of “employer” for purposes of the Act to provide “[a]
parent corporation and its subsidiaries shall each be considered joint employers
of the corporation’s, the parent’s, or the subsidiaries’ employees for purposes
of IC 22-3-2-6 and IC 22-3-3-31.” We find that the amendment to the Act’s
definition of “employer” abrogated the holdings in Ritter and McQuade.
[13] Hall nevertheless argues that we should strictly construe the statutory language
and find that the Act’s definition of employer limits a “joint employer” to the
subsidiaries of a single “parent corporation.” In other words, Hall argues that
the legislature’s use of “parent corporation” in the singular signifies its intent to
4
Stanton worked for Gateway Freightline Corporation, which was a wholly owned subsidiary of Kroger.
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limit “parent corporation” to a direct or immediate parent corporation and
exclude any higher tiered “parent” corporations. Hall maintains that the
evidence shows only that the Bell Companies own 100% of Ameritech and not
whether any one of the Bell Companies owns a majority of the voting shares of
Ameritech. Hall asserts that if only one of the Bell Companies owns a majority
of Ameritech’s shares, then that company is the parent corporation of
Ameritech, thereby making AT&T Holdings and AT&T, Inc. the grandparent
and great-grandparent corporations, respectively, of Ameritech. Hall designates
them as such because, according to Hall, Ameritech cannot have multiple
parent corporations. In the alternative, Hall argues that if none of the Bell
Companies holds a majority of shares of Ameritech, then AT&T Teleholdings
should be deemed the parent corporation, not AT&T, Inc. Under Hall’s
interpretation of what constitutes a parent corporation, AT&T Services and
Ameritech are not subsidiaries of the same parent corporation and therefore
they are not joint employers of Hall such that AT&T Services can assert the
exclusive remedy provision of the Act.
[14] We disagree with Hall’s reading of the statutory language. As noted by this
court in Hall I, the Act does not define subsidiary. In Hall I, this court therefore
looked to the Indiana Business Corporation Law’s (BCL) definition of
subsidiary, which provides that a subsidiary of a resident domestic corporation
“‘means any other corporation of which a majority of the outstanding voting
shares entitled to be cast are owned (directly or indirectly) by the resident
domestic corporation.’” Hall I, 994 N.E.2d at 1226 (quoting Ind. Code § 23-1-
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43-16). The court in Hall I determined that the evidence presented did not
establish that AT&T Services and Ameritech were subsidiaries pursuant to this
definition. To be sure, in addition to the uncertainty as to which entity was
Hall’s employer, the court noted that the designated evidence showed only that
Ameritech owned 8.15% of AT&T Services at the time of Hall’s fall, which was
clearly not a majority of the outstanding voting shares. No further evidence
was presented concerning the “complex corporate structure” involved. Id. at
1224.
[15] In its second motion for summary judgment, AT&T Services again argued that
Hall’s claim was barred by the exclusive remedy provision of the Act. This
time, AT&T Services sought to establish that it and Ameritech were subsidiaries
within the meaning of that term as defined in the BCL and to answer the factual
questions this court found were left unanswered in Hall I. In support of its
second motion, AT&T Services designated the Affidavit of Stacy Hitzemann,
Senior Data Analyst for AT&T Services, who affirmed that Hall was employed
by Ameritech at the time of the occurrence. AT&T Services also designated the
Affidavit of Steven Threlkeld, who explained the relevant portions of AT&T,
Inc.’s corporate structure and the relationship between AT&T Services and
Ameritech at the time of the occurrence. AT&T Services argues that this
evidence establishes that it and Ameritech were both subsidiaries of AT&T, Inc.
(the parent corporation) as defined by Section 16 of the BCL at the time of
Hall’s fall. An organizational chart showing the corporate relationship between
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AT&T Services and Ameritech was attached to Threlkeld’s affidavit and is
reproduced below.
[16] AT&T Services argues that because AT&T, Inc. owns 83.1% of AT&T
Services, AT&T Services is a subsidiary of AT&T, Inc. AT&T Services further
asserts that because AT&T, Inc. owns 100% of AT&T Teleholdings, Inc.,
which in turn owns 100% of Illinois Bell Telephone Company, Wisconsin Bell,
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Inc., Indiana Bell Telephone Company, Inc., Michigan Bell Telephone
Company, and The Ohio Bell Telephone Company (the Bell Companies),
which collectively owned 100% of Ameritech, Ameritech is also a subsidiary of
AT&T, Inc., albeit a third-tier subsidiary.
[17] In support of its position that there can be multiple tiers of subsidiaries and
Ameritech should be deemed a subsidiary of AT&T, Inc., AT&T Services notes
that the comments to the BCL’s definition of subsidiary elaborate that the term
“includes all ‘tiered’ subsidiaries: If Corporation A owns a majority of the
voting shares of Corporation B, which in turn owns a majority of the voting
shares of Corporation C, Corporation C is a “subsidiary” of Corporation A for
purposes of Chapter 43.” This comment squarely addresses the question
presented and leads us to conclude that Ameritech is a subsidiary of AT&T,
Inc. The fact that Ameritech is a third-tier subsidiary does not alter our
conclusion.
[18] Further, we agree that AT&T Services is also a subsidiary of AT&T, Inc.
Because Ameritech and AT&T Services are both subsidiaries of AT&T, Inc.,
they should be considered joint employers pursuant to the Act’s definition of
“employer.” As such, Hall’s negligence action against AT&T Services is barred
by the exclusive remedies provision of the Act because Hall has already
received a worker’s compensation settlement from Ameritech. The trial court
did not err in granting summary judgment in favor of AT&T Services.
[19] Judgment affirmed.
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[20] Riley, J., and Brown, J., concur.
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