Eshanya Walls v. Markley Enterprises, Inc. , 116 N.E.3d 479 ( 2018 )

FILED
Dec 11 2018, 9:04 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEE
Robert J. Konopa Kevin W. Kearney
Eric W. von Deck Hunt Suedhoff Kalamaros, LLP
Elizabeth A. Klesmith South Bend, Indiana
Tuesley Hall Konopa LLP
South Bend, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Eshanya Walls, December 11, 2018
Appellant-Plaintiff, Court of Appeals Case No.
18A-CT-266
v. Appeal from the Elkhart Superior
Court
Markley Enterprises, Inc., The Honorable Stephen R.
Appellee-Defendant. Bowers, Judge
Trial Court Cause No.
20D02-1605-CT-105
Pyle, Judge.
Statement of the Case
[1] Eshanya Walls (“Walls”) filed a complaint against Markley Enterprises, Inc.
(“Markley”), alleging that she was injured while working at Markley due to
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Markley’s negligence. Markley filed a motion to dismiss under Indiana Trial
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Rule 12(B)(1), and the trial court dismissed Walls’ complaint for lack of subject
matter jurisdiction, finding that Walls’ negligence claim was barred by the
exclusive remedy provision of the Indiana Worker’s Compensation Act (“the
Act”). On appeal, Walls argues that the trial court erred in dismissing her
complaint. Using the statutory definition of “employer” set forth in INDIANA
CODE § 22-3-6-1(a), we conclude that Walls was an employee of both Markley
and the temporary staffing agency that placed her with Markley, and that the
trial court properly dismissed Walls’ action under Trial Rule 12(B)(1) because
her exclusive remedy rests with the Act.
[2] We affirm.
Issues
1. Whether the trial court erred in dismissing Walls’ complaint
for negligence against Markley for lack of subject matter
jurisdiction.
2. Whether terms of the agreement between the temporary
staffing agency and Markley amounted to Markley’s waiver of
the exclusive remedy provision of the Act.
1
Markley initially filed a motion for summary judgment, which the trial court treated as a motion to dismiss
for lack of subject matter jurisdiction under Indiana Trial Rule 12(B)(1).
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Facts
[3] Markley is a corporation which maintains an assembly plant in Elkhart County,
Indiana. Bridge Staffing, Inc. (“Bridge”) is a temporary staffing agency that
“assign[s] employees to perform services for client companies, and provid[es]
related management and human resource services.” (App. Vol. 2 at 142). On
August 20, 2004, Markley and Bridge entered into a Client Service Agreement
(“Agreement”). Under the Agreement, Markley, as Bridge’s client, indicated its
desire that Bridge provide “services as may be necessary to meet [Markley’s]
staffing needs” (App. Vol. 2 at 142), and Bridge agreed to:
1. Provide [Markley] the employees and services as requested by
[Markley] or [Markley’s] assigned representatives.
2. Assume full responsibility for paying, withholding, and
transmitting payroll taxes; making unemployment contributions;
and handling unemployment and workers’ compensation claims
involving assigned employees with respect to compensation that
[Bridge] has agreed to pay.
3. Recruit, interview, test, screen, and ensure compliance with
legally required pre-employment obligations for all employees to
be assigned to [Markley’s] facilities.
***
5. Provide all services which [Bridge] shall render under this
Agreement to be as an independent contractor with respect to
[Markley].
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6. Provide workers’ compensation insurance coverage for all
employees assigned to [Markley’s] facilities . . . .
(App. Vol. 2 at 142). The Agreement further provided as follows:
1. That [Bridge] will invoice [Markley] for services provided in
accordance with this [A]greement on a weekly basis. . . .
***
4. [Markley] agrees not to directly or indirectly hire an employee
assigned through [Bridge] without written consent from [Bridge].
...
(App. Vol. 2 at 143).
[4] Walls began her employment with Bridge on June 23, 2014. Shortly thereafter,
Bridge assigned her to work at Markley’s Elkhart assembly plant. On October
2, 2014, while operating a punch press at Markley, Walls was pulled into the
press, and a finger on her right hand was crushed and severed, resulting in
permanent partial impairment. Walls filed a worker’s compensation claim with
Bridge and its worker’s compensation insurer, and the insurer paid for all
medical expenses and worker’s compensation benefits related to the incident.
Markley did not pay any worker’s compensation benefits.
[5] On May 12, 2016, Walls filed a complaint against Markley, alleging that “[a]s a
direct and proximate result of Markley’s negligence,” she sustained “personal
injuries requiring surgeries and long-term medical care and mental distress and
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emotional injuries.” (App. Vol. 2 at 17). On July 5, 2016, Markley filed its
answer to the complaint.
[6] On October 13, 2017, Markley filed a motion for summary judgment,
maintaining that Walls was a joint employee of Bridge and Markley; that under
the Act, Walls’ exclusive remedy for personal injury was through worker’s
compensation; and that the trial court, therefore, lacked subject matter
jurisdiction over the action. Walls filed a response to the summary judgment
motion on November 10, 2017. On December 29, 2017, the trial court held
oral argument on the motion.
[7] On January 18, 2018, the trial court issued its order, indicating that it treated
Markley’s motion for summary judgment as a motion to dismiss for lack of
subject matter jurisdiction under Trial Rule 12(B)(1). The trial court granted
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Markley’s motion and dismissed Walls’ negligence action. Walls now appeals.
Discussion
[8] Walls argues that the trial court erred when it dismissed her complaint against
Markley under Trial Rule 12(B)(1) for lack of subject matter jurisdiction,
finding that the Act was her exclusive remedy for the personal injuries she
sustained while working at Markley.
2
Walls has filed a motion to strike Markley’s appendix and any reference thereto in Markley’s brief. Walls
also has filed a motion for leave to cite to an unpublished case. Contemporaneously with this memorandum
decision, we grant Walls’ motion to strike Markley’s appendix but decline to strike portions of Markley’s
brief. We hereby deny Walls’ motion for leave to cite to an unpublished case.
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[9] It is well-settled that when an employer defends against an individual’s
negligence claim on the basis that the individual’s exclusive remedy is to pursue
a claim for benefits under the Act, the defense is properly advanced through a
motion to dismiss for lack of subject matter jurisdiction under Trial Rule
12(B)(1). GKN Co. v. Magness, 744 N.E.2d 397, 400 (Ind. 2001) (citing Foshee v.
Shoney’s Inc., 637 N.E.2d 1277, 1280 (Ind. 1994)). “When a trial court is
confronted with a motion to dismiss based on Ind. Trial Rule 12(B)(1), the trial
court is required to determine whether it has the power to adjudicate the
action.” MHC Surgical Ctr. Assocs., Inc. v. State Office of Medicaid Policy and
Planning, 699 N.E.2d 306, 308 (Ind. Ct. App. 1998). “In ruling on a motion to
dismiss for lack of subject matter jurisdiction, the trial court may consider not
only the complaint and motion but also any affidavits or evidence submitted in
support.” GKN, 744 N.E.2d at 400. “In addition, the trial court may weigh the
evidence to determine the existence of the requisite jurisdictional facts.” Id.
[10] The applicable standard of review for Trial Rule 12(B)(1) motions to dismiss for
lack of subject matter jurisdiction is a function of what occurred in the trial
court. Id. at 401. That is, the standard of review is dependent upon: (i)
whether the trial court resolved disputed facts; and (ii) if the trial court resolved
disputed facts, whether it conducted an evidentiary hearing or ruled on a paper
record. Id. If the facts before the trial court are not in dispute, then the
question of subject matter jurisdiction is purely one of law. Id. Under those
circumstances no deference is afforded the trial court’s conclusion because
appellate courts independently, and without the slightest deference to the trial
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court determinations, evaluate those issues they deem to be questions of
law. Id.
[11] If, however, the parties dispute the facts presented to the trial court, then our
standard of review focuses on whether the trial court conducted an evidentiary
hearing. Id. Under those circumstances, the court engages in its fact-finding
function, often evaluating the character and credibility of witnesses. Id.
Accordingly, when a trial court conducts an evidentiary hearing, we give
deference to its factual findings and judgment, and we will reverse only if the
findings and judgment are clearly erroneous. Id.
[12] However, where, as here, the facts are in dispute but the trial court rules on a
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paper record without conducting an evidentiary hearing, then no deference is
afforded the trial court’s factual findings or judgment. Under those
circumstances, a court of review is “in as good a position as the trial court to
determine whether the court has subject matter jurisdiction.” Id. Thus, we
review de novo a trial court’s ruling on a motion to dismiss where the facts
before the court are disputed and the trial court rules on a paper record. Id. In
so doing, we will affirm the judgment of the trial court on any legal theory the
evidence of record supports. Id. However, the ruling of the trial court is
presumptively correct, and we will reverse on the basis of an incorrect factual
3
Here, the trial court held oral argument on Markley’s motion.
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finding only if the appellant persuades us that the balance of the evidence is
tipped against the trial court’s findings. Id.
[13] Turning to the facts of this case, we note that the Act provides the exclusive
remedy for recovery of personal injuries arising out of and in the course of
employment. IND. CODE § 22-3-2-6 (“The rights and remedies granted to an
employee [under the Act] on account of personal injury or death by accident
shall exclude all other rights and remedies of such employee . . . on account of
such injury or death, except for remedies available under IC 5-2-6.1.”).
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. I.C. § 22-3-2-13.
[14] INDIANA CODE § 22-3-6-1(a) defines “employer” for purposes of the Act as
follows, in relevant part: “‘Employer’ includes the state and any political
subdivision, any municipal corporation within the state, any individual or the
legal representative of a deceased individual, firm, association, limited liability
company, or corporation or the receiver or trustee of the same, using the
services of another for pay.” The statute further provides, “Both a lessor and a
lessee of employees shall each be considered joint employers of the employees provided by
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the lessor to the lessee for purposes of IC 22-3-2-6 and IC 22-3-3-31.” I.C. § 22-3-6-1(a)
(emphasis added).
[15] According to Walls, the trial court erred in finding that she was a joint
employee of both Bridge and Markley. Walls specifically contends that she is
entitled to recover against Markley because at the time she was injured, she was
not a leased employee of Markley but, instead, was “the employee of an
independent contractor – Bridge – who assigned her not to Markley but to work
at Markley’s facility.” (Walls’ Br. 12) (emphasis added). The focus of Walls’
argument is that “an assigned employee is not the same as a leased employee if
those terms are strictly construed.” (Walls’ Br. 14). According to Walls, “[a]n
assignment, contrary to a lease, does not necessarily involve a relinquishment of
control of the property or person assigned.” (Walls’ Br. 14). Thus, according to
Walls, because Walls was assigned to work at Markley’s assembly plant, Walls was
not a Markley employee. To resolve this matter, and because the Act does not
define when an employee is considered “leased” under INDIANA CODE § 22-3-
2-6(1)(a), Walls invites this Court to interpret the statute to “‘determine and
4
INDIANA CODE § 22-3-2-6 is the exclusive remedy provision of the Act. INDIANA CODE § 22-3-3-31 requires
joint employers to contribute to the payment of compensation for injuries or death in proportion to their
wage liability. This section also provides “that nothing in this section shall prevent any reasonable
arrangements between such employers for a different distribution as between themselves of the ultimate
burden of compensation.” I.C. § 22-3-3-31. The Agreement between Markley and Bridge stated that Bridge
assumed full responsibility for handling worker’s compensation claims involving assigned employees and
would provide worker’s compensation insurance coverage for all employees assigned to Markley’s facility.
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give effect to the intent of the legislature’” regarding the term “leased.” (Walls’
Br. 13).
[16] It is well-settled that we cannot and do not engage in statutory interpretation
unless the language of the statute is ambiguous. Hinshaw v. Bd. of Comm’rs of Jay
County, 611 N.E.2d 637, 638 (Ind. 1993). An ambiguous statute is one which is
susceptible to more than one interpretation. Id. When a statute is ambiguous,
we will engage in construction to effect the intent of the legislature. Id.
However, if the statute is not ambiguous, we must give effect to the plain,
ordinary, and usual meaning of the words of the statute. State Bd. of Tax
Comm’rs v. Jewell Grain Co., Inc., 556 N.E.2d 920, 921 (Ind. 1990).
[17] Here, our review does not reveal any ambiguity regarding INDIANA CODE § 22-
3-2-6(1)(a). Thus, we decline to engage in statutory interpretation of the statute.
However, we do note that the term “leased” is not defined in the Act.
Undefined words in a statute or ordinance are given their plain, ordinary, and
usual meaning. 600 Land, Inc. v. Metro. Bd. of Zoning Appeals of Marion Cty., 889
N.E.2d 305, 309 (Ind. 2008); IND. CODE § 1-1-4-1(1). As a result, courts may
consult English language dictionaries to ascertain the plain and ordinary
meaning of a statutory term. State Bd. of Accounts v. Ind. Univ. Found., 647
N.E.2d 342, 347 (Ind. Ct. App. 1995), trans. denied.
[18] The term “leased” is defined as “1. To grant use or occupation of under the
terms of a contract. 2. To get or hold by such a contract.” American Heritage
Dictionary of the English Language Online (5th ed. 2018)
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https://www.ahdictionary.com/word/search.html?q=lease (last visited Nov.
19, 2018). Black’s Law Dictionary defines the term “lease,” as a verb, as
follows: “[t]o grant the possession and use of (land, buildings, rooms, movable
property, etc.) to another in return for rent or other consideration.” Lease,
Black’s Law Dictionary (8th ed. 2004).
[19] The term “assign” is defined as “6. Law To transfer (property, rights, or
interests) from one to another.” American Heritage Dictionary of the English
Language Online https://www.ahdictionary.com/word/search.html?q=assign
(last visited Nov. 19, 2018). Black’s Law Dictionary defines the term “assign”
as “[t]o convey; to transfer rights or property . . . .” Assign, Black’s Law
Dictionary (8th ed. 2004).
[20] In its order granting Markley’s motion to dismiss, the trial court found as
follows:
Walls’ differentiation between “leased” and “assigned”
employees – the latter being a category she argues that she falls
into and that rules out any finding of dual employment under §
22·3·6·l(a) – is a distinction that is illusory rather than real. . . .
Walls makes much of the Bridge-Markley [A]greement’s liberal
use of the word “assign” and its derivatives, claiming that this
aspect of the agreement weighs against a conclusion that she is a
“leased” employee of Markley’s under § 22·3·6·l(a). This
contention attributes unwarranted significance to the use of
“assign.” Use of that word simply acknowledges what staffing
agencies like Elwood and Bridge do: they “assign” workers to
client companies seeking their assistance in obtaining an
adequate workforce. See, e.g., Frontz v. Middletown Enter., Inc., 15
N.E.3d 666, 667 (Ind. Ct. App. 2014) (holding that plaintiff
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Frontz was limited to remedies under Worker’s Compensation
Act against Middletown after he was injured; “Frontz was an
employee of Wimmer Temporaries, Inc.” and “Wimmer assigned
Frontz to Middletown”) (emphasis added); Taylor v. Ford Motor
Co., 944 N.E.2d 78, 83 (Ind. Ct. App. 2011) (describing plaintiff
in [Kenwal Steel Corp. v. Seyring, 903 N.E.2d 510 (Ind. Ct. App.
2009),] as a “temporary employee [who] sought to bring suit
against the company he had been assigned to work for”)
(emphasis added). It does not transform the arrangement
between Bridge and Markley as to Walls into something other
than what it was as a matter of law: an arrangement by one
company (Markley) to lease an employee (Walls) from a
temporary staffing agency (Bridge).
(App. Vol. 2 at 12-14). We agree. For purposes of the Act, Bridge was the
lessor of Walls, Markley was the lessee of Walls, and Walls was a joint
employee of the two. Accordingly, Walls is limited to the exclusive remedy
provision of the Act. The trial court did not err in dismissing her action against
5
Markley for lack of subject matter jurisdiction.
[21] Walls also argues that, under the terms of the Agreement between Bridge and
Markley, Markley “opted out” of the exclusive remedy provision of the Act.
(Walls’ Br. 18). In support of her argument, Walls points to the following terms
of the Agreement: [Bridge] “agrees to . . . “[p]rovide workers’ compensation
insurance coverage for all employees assigned to [Markley’s] facilities” and
5
Because of this holding, we need not analyze the employment relationship between Markley and Walls
under the seven-factor test set forth in Hale v. Kemp, 579 N.E.2d 63 (Ind. 1991). See also GKN, 744 N.E.2d at
399.
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“[a]ssume full responsibility for . . . workers’ compensation claims involving
assigned employees.” (App. Vol. 2 at 142). According to Walls, the
“arrangement clearly intended that [Walls] would remain a Bridge employee –
and only a Bridge employee – while rendering services at Markley’s plant[, and
that] Markley opted out of worker’s compensation rights and responsibilities.”
(Walls’ Br. 22).
[22] Even assuming that an employer can waive the exclusive remedy provision of
the Act, Walls has not established that Markley waived its rights or “opted out
of worker’s compensation rights and responsibilities.” (Walls’ Br. 22).
“Waiver is the intentional relinquishment of a known right; an election by one
to forego some advantage he might have insisted upon.” Lafayette Car Wash,
Inc. v. Boes, 258 Ind. 498, 501, 282 N.E.2d 837, 839 (1972). Nothing in the
terms of the Agreement suggests that Markley intentionally relinquished its
right. We, therefore, conclude that Markley did not waive its right to enforce
the exclusive remedy provision of the Act, and that the trial court did not err in
finding the same.
[23] Affirmed.
Vaidik, C.J., and Barnes, Sr.J., concur.
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