Hanco Corporation v. Patricia Goldman , 178 So. 3d 709 ( 2015 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2013-IA-00728-SCT
HANCO CORPORATION
v.
PATRICIA GOLDMAN, TIMOTHY KELLY,
NANCY KELLY, AND JONATHAN W. KELLY,
WRONGFUL DEATH BENEFICIARIES OF
WAYNE KELLY, DECEASED
DATE OF JUDGMENT: 04/16/2013
TRIAL JUDGE: HON. BILLY JOE LANDRUM
TRIAL COURT ATTORNEYS: JAMES L. QUINN
LEONARD BROWN MELVIN III
SAMUEL STEVEN McHARD
ROBERT O. ALLEN
S. ROBERT HAMMOND, JR.
COURT FROM WHICH APPEALED: SECOND JUDICIAL DISTRICT OF THE
CIRCUIT COURT OF JONES COUNTY
ATTORNEYS FOR APPELLANT: ROBERT O. ALLEN
WILLIAM ROBERT ALLEN
JOHN CHADWICK WILLIAMS
S. ROBERT HAMMOND, JR.
ATTORNEYS FOR APPELLEES: SAMUEL STEVEN McHARD
PAUL MANION ANDERSON
MARCUS ALAN McLELLAND
LEONARD BROWN MELVIN III
NATURE OF THE CASE: CIVIL - PERSONAL INJURY
DISPOSITION: AFFIRMED AND REMANDED - 09/17/2015
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
CONSOLIDATED WITH
NO. 2013-IA-00731-SCT
PATRICIA GOLDMAN, TIMOTHY KELLY,
NANCY KELLY AND JONATHAN W. KELLY,
WRONGFUL DEATH BENEFICIARIES OF
WAYNE KELLY, DECEASED
v.
AMERICAN AIR SPECIALISTS OF MISSISSIPPI,
INC. AND HANCO CORPORATION
DATE OF JUDGMENT: 04/16/2013
TRIAL JUDGE: BILLY JOE LANDRUM
COURT FROM WHICH APPEALED: SECOND JUDICIAL DISTRICT OF THE
CIRCUIT COURT OF JONES COUNTY
ATTORNEYS FOR APPELLANT: ROBERT O. ALLEN
WILLIAM ROBERT ALLEN
JOHN CHADWICK WILLIAMS
S. ROBERT HAMMOND, JR.
ATTORNEYS FOR APPELLEE: SAMUEL STEVEN McHARD
PAUL MANION ANDERSON
MARCUS ALAN McLELLAND
LEONARD BROWN MELVIN III
NATURE OF THE CASE: PERSONAL INJURY
DISPOSITION: AFFIRMED AND REMANDED - 09/17/2015
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE DICKINSON, P.J., KITCHENS AND CHANDLER, JJ.
KITCHENS, JUSTICE, FOR THE COURT:
¶1. Wayne Kelly was killed while working at a construction site in Hattiesburg,
Mississippi. His family (the Kellys) sued, among other defendants, Hanco Corporation, Inc.
(Hanco), the general contractor for the project on which Wayne Kelly had been working at
the time he died, and American Air Specialists of Mississippi, Inc. (American Air), the
subcontractor that had leased the services of Kelly and his coworkers from Landrum
Professional Employer Services, Inc. (Landrum). The Kellys and Hanco/American Air
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moved separately for summary judgment. The circuit court denied summary judgment to
Hanco and American Air. Hanco filed a petition for interlocutory appeal and the Kellys filed
a cross-petition for interlocutory appeal. This Court granted interlocutory appeal and
consolidated the cases. Although Section 71-3-9 of the Mississippi Workers’ Compensation
Act provides the exclusive remedy to claimants seeking compensation for on-the-job injuries,
this Court affirms the denial of summary judgment because Hanco waived its exclusive-
remedy affirmative defense.
FACTS AND PROCEEDINGS BELOW
¶2. In September 2007, Saddle Creek Corporation of Lakeland, Florida, entered into a
contract with Hanco Corporation (Hanco) of Hattiesburg, Mississippi, to construct a cross
dock distribution facility at the Forrest County Industrial Park. Hanco subcontracted with
American Air Specialists, Inc. (American Air), on November 30, 2007. The subcontract
specified that the role to be performed by American Air was to provide all labor, materials,
and equipment required for the installation of the HVAC, including fans and louvers,
plumbing, site utilities, and design and engineering for the new facility. The subcontract also
required that American Air carry workers’ compensation and employers’ liability insurance
and that American Air provide Hanco “with valid certificates of insurance prior to
commencement of work verifying that insurance requirements and limits have been met.”
¶3. At the time it subcontracted with Hanco, American Air had an agreement with
Landrum Professional Employer Services, Inc. (Landrum), of Pensacola, Florida. This
agreement was executed March 9, 2007, and was to continue “in full effect from such date
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for a period of one (1) year, and from year to year thereafter” unless cancelled by either party
upon provision of thirty days’ prior written notice. The agreement made Landrum employees
available to American Air for lease and allowed Landrum “a right of direction and control
over jobsite employees, including a right to hire, terminate, discipline, and reassign jobsite
employees assigned” to American Air. Further, American Air “maintain[ed] primary
responsibility for interviewing, hiring, assigning, and setting salary and benefits for jobsite
employees.” Landrum was required to furnish workers’ compensation insurance, but
American Air was to provide a “general liability insurance policy with a minimum
requirement of one million dollars ($1,000,000) combined single limit.”
¶4. In accordance with the Landrum-American Air agreement, Landrum provided a
Liberty Mutual workers’ compensation policy for employees “leased to but not
subcontractors of American Air Specialists of MS, Inc.,” the term of which was January 1,
2008, through January 1, 2009. A certificate of insurance was issued, and Hanco was named
as certificate holder. Additionally, American Air took out a general liability policy in the
amount of $1,000,000 per occurrence from The State Auto Insurance Companies. As with
the workers’ compensation policy, the holder of the certificate of insurance on the general
liability policy was Hanco.
¶5. Wayne Kelly, Leonardo Navarro Diaz, and Brandon E. Rathbone1 died on March 21,
2008. Kelly and his coworkers were connecting sewer lines at a construction site for a
distribution facility being built in Hattiesburg when the trench in which they were working
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Kelly’s coworkers, Diaz and Rathbone, are not parties to the instant lawsuit.
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caved in and buried the three men beneath wet dirt and clay. On November 8, 2010, Wayne
Kelly’s wife, Nancy, and his children, Patricia Goldman, Timothy Kelly, and Jonathan W.
Kelly (the Kellys), filed suit against multiple defendants, including Hanco and American Air,
in the Circuit Court of the Second Judicial District of Jones County, alleging negligence as
the proximate cause of Wayne Kelly’s death. Because the regulations of the Occupational
Safety and Heath Administration (OSHA) allegedly had been violated by the defendants, the
Kellys filed a combined motion for summary judgment on liability against Hanco and
American Air on January 29, 2013. Hanco and American Air then moved for summary
judgment, respectively, arguing that the Mississippi Workers’ Compensation Act, Mississippi
Code Section 71-3-9 (Rev. 2011), provided the exclusive remedy available to the Kellys,
since Liberty Mutual had paid workers’ compensation benefits.
¶6. On April 16, 2013, the circuit court denied summary judgment to Hanco and
American Air, reasoning that “genuine issues of material fact remain, and it would be
premature for the Court to grant Summary Judgment at this time.” On May 6, 2013, Hanco
filed its petition for interlocutory appeal in this Court. The Kellys filed a cross-petition for
interlocutory appeal that same day, arguing that the circuit court had erred in failing to
determine that the affirmative defense of exclusivity had been waived as a matter of law.
¶7. This Court granted an interlocutory appeal to Hanco on September 4, 2013, and
consolidated the appeal with the Kellys’ cross-petition for interlocutory appeal. That same
day, this Court granted the Kellys’ cross-petition for interlocutory appeal, which this Court
ordered consolidated with the Hanco interlocutory appeal.
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¶8. Hanco claims on interlocutory appeal that the trial court erred in failing to apply the
exclusivity provision of the Mississippi Workers’ Compensation Act, Mississippi Code
Section 71-3-9 (Rev. 2011). Finding that to be a dispositive issue, we address only the
following question: whether, under the Horton Doctrine, Hanco waived its exclusive-remedy
affirmative defense by actively participating in the litigation for twenty-six2 months without
pursuing the enforcement of that affirmative defense. See MS Credit Center, Inc. v. Horton,
926 So. 2d 167 (Miss. 2006).
STANDARD OF REVIEW
¶9. This Court employs a de novo standard of review when reviewing a trial court’s grant
or denial of summary judgment. WW, Inc. v. Rainbow Casino-Vicksburg Partnership, L.P.,
68 So. 3d 1290, 1292 (Miss. 2011). Motions for summary judgment must be granted “if the
pleadings, depositions, answers to interrogatories and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.” Id. (citing Miss. R. Civ. P. 56(c)).
“The party moving for summary judgment bears the burden of showing that no genuine issue
of material fact exists.” Id. (citing Bennett v. Hill-Boren, P.C., 52 So. 3d 364, 368 (Miss.
2011)). The burden then shifts to the nonmoving party: “[t]he non-moving party must
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The Kellys assert a twenty-eight month delay, measured ostensibly from the filing
of their complaint (November 8, 2010) to the filing of Hanco’s motion for summary
judgment (March 1, 2013). We find that just over twenty-six months elapsed between
Hanco’s filing of its answer and defenses (December 22, 2010) and its filing of a motion for
summary judgment (March 1, 2013).
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produce specific facts showing that there is a genuine material issue for trial.” Id. (citing Van
v. Grand Casinos of Miss., Inc., 767 So. 2d 1014, 1018 (Miss. 2000)).
DISCUSSION
¶10. In 2006 this Court held that:
A defendant’s failure to timely and reasonably raise and pursue the
enforcement of any affirmative defense or other affirmative matter or right
which would serve to terminate or stay the litigation, coupled with active
participation in the litigation process, will ordinarily serve as a waiver.
Horton, 926 So. 2d at 180. The Kellys argue that Hanco should be afforded no immunity
under the exclusivity provision of the Mississippi Workers’ Compensation Act because it
“waived that defense as a matter of law” by actively participating in the litigation for twenty-
eight months prior to filing a summary judgment motion.
¶11. The issue before this Court in Horton was whether the defendant had waived the right
to require arbitration pursuant to an arbitration clause in an employment contract. Id. at 173.
The defendant in Horton had delayed pursuing its “right to compel arbitration for eight
months (over 240 days)” and this Court held:
[A]bsent extreme and unusual circumstances—an eight month unjustified
delay in the assertion and pursuit of any affirmative defense or other right
which, if timely pursued, could serve to terminate the litigation, coupled with
active participation in the litigation process, constitutes a waiver as a matter
of law.
Id. at 181. The Court explained in a footnote that “[t]o pursue an affirmative defense or other
such rights, a party need only assert it in a pleading, bring it to the court’s attention by
motion, and request a hearing.” Id. at 181 n.9 (emphasis added).
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¶12. The parties dispute whether the exclusivity provision of the Workers’ Compensation
Act constitutes an affirmative defense. Affirmative defenses, according to this Court, hinge
upon “the nature of a defendant’s pleading”:
A matter is an “avoidance or affirmative defense” only if it assumes the
plaintiff proves everything he alleges and asserts, even so, the defendant wins.
Conversely, if, in order to succeed in the litigation, the defendant depends
upon the plaintiff failing to prove all or part of his claim, the matter is not an
avoidance or an affirmative defense. A defendant does not plead affirmatively
when he merely denies what the plaintiff has alleged.
Hertz Commercial Leasing Div. v. Morrison, 567 So. 2d 832, 835 (Miss. 1990). The
exclusivity provision of the Mississippi Workers’ Compensation Act, Section 71-3-9,
provides that:
The liability of an employer to pay compensation shall be exclusive and in
place of all other liability of such employer to the employee, his legal
representative, husband or wife, parents, dependents, next-of-kin, and anyone
otherwise entitled to recover damages at common law or otherwise from such
employer on account of such injury or death . . . .
Miss. Code Ann. § 71-3-9 (Rev. 2011). The exclusivity provision meets the definition of an
affirmative defense because, irrespective of whether the plaintiff proves “everything he
alleges and asserts,” the defendant still wins.
¶13. In Grimes v. Warrington, this Court considered whether the failure of the defendant
physician to assert a defense of immunity under the Mississippi Tort Claims Act (MTCA)
for five years, during which the defendant physician actively participated in the litigation
process, constituted a waiver under Horton. Grimes v. Warrington, 982 So. 2d 365, 369
(Miss. 2008). In that case, the plaintiff filed a complaint against the defendant physician on
June 4, 2001. Id. at 370. The defendant timely filed an answer on June 27, 2001, to the
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plaintiff’s complaint in which he asserted tort-claims immunity, but waited until August 3,
2006, more than five years later, to pursue a motion for summary judgment on the basis of
the MTCA. Id. The defendant actively participated in the litigation as well: “the case was set
and twice reset for trial, experts were designated and deposed on the merits of the negligence
claim, and Dr. Warrington filed a motion in limine to exclude part of Grimes’s expert’s
testimony.” Id. This Court therefore reversed and remanded the case for trial on the merits.
Id.
¶14. Similarly, in East Mississippi State Hospital v. Adams, we considered whether
defendants had waived insufficiency of process and insufficiency of service of process
defenses “by failing to pursue them until almost two years after they raised them in their
answer while actively participating in the litigation.” East Mississippi State Hosp. v. Adams,
947 So. 2d 887, 890-91 (Miss. 2007). Because “defendants participated fully in the litigation
of the merits for over two years without actively contesting jurisdiction in any way” and
because the defendants “participated fully in discovery,” this Court held that defendants had
waived their affirmative defenses. Id. at 891. This Court therefore affirmed the trial court’s
denial of defendants’ motion to dismiss. Id.
¶15. In the present case, the Kellys filed their complaint on November 8, 2010. Hanco filed
its answer and defenses on December 22, 2010, in which it claimed the Workers’
Compensation Act constituted an exclusive remedy. Hanco did not raise the exclusivity
provision again until it filed a motion for summary judgment on March 1, 2013. The record
reflects that Hanco actively participated in litigating the merits of the case. Hanco filed
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motions to join various motions of codefendants. Hanco designated experts it planned to call
at trial. Additionally, as did the defendant physician in Grimes, Hanco actively participated
in numerous depositions. Grimes, 982 So. 2d at 371.
¶16. Hanco failed to file its motion for summary judgment until more than twenty-six
months after it had raised the exclusive-remedy provision in its answer to the Kellys’
complaint. The record suggests no “extreme and unusual circumstances” which would
explain or justify this delay. Hanco had abundant opportunity to assert the affirmative
defense. As in Horton, “if timely pursued,” the exclusive-remedy provision “would serve to
terminate or stay the litigation.” Horton, 926 So. 2d at 180, 181. Instead, Hanco actively
participated in the litigation by joining motions of other codefendants, designating expert
witnesses it planned to call at trial, and participating in depositions of witnesses. Although
it did assert the exclusive-remedy defense in its answer, Hanco did not “bring it to the court’s
attention, and request a hearing” until it filed its summary judgment motion more than
twenty-six months later. Horton, 926 So. 2d at 181 n. 9.
CONCLUSION
¶17. Because Hanco waived the affirmative defense of the exclusivity provision of Section
71-3-9, the judgment of the Circuit Court of the Second Judicial District of Jones Count
denying summary judgment is affirmed, and these cases are remanded for further
proceedings.
¶18. AFFIRMED AND REMANDED.
WALLER, C.J., DICKINSON AND RANDOLPH, P.JJ., LAMAR, CHANDLER,
PIERCE, KING AND COLEMAN, JJ., CONCUR.
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