Kenneth Stewart, Jr. v. Nucor Corporation

United States Court of Appeals
For the Eighth Circuit
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No. 15-3597
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Kenneth Stewart, Jr.
lllllllllllllllllllll Plaintiff - Appellant
v.
Nucor Corporation
lllllllllllllllllllll Defendant - Appellee
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Appeal from United States District Court
for the Eastern District of Arkansas - Jonesboro
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Submitted: April 12, 2016
Filed: July 15, 2016
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Before WOLLMAN, BEAM, and MURPHY, Circuit Judges.
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BEAM, Circuit Judge.
Kenneth Stewart, Jr. appeals the district court's1 adverse grant of summary
judgment in his negligence suit against Nucor Corporation for injuries sustained
while working at Nucor's steel mill. We affirm.
1
The Honorable Kristine G. Baker, United States District Judge for the Eastern
District of Arkansas.
I. BACKGROUND
Vesuvius USA contracted with Nucor to provide it with personnel to work at
Nucor's Blytheville, Arkansas, steel mill, and it hired Stewart, a welder, for this
purpose. During training, Stewart signed a waiver of claims for injuries covered by
workers' compensation against Vesuvius's contractees (the "Third-Party Waiver" or
TPW). The TPW read:
WAIVER OF CLAIMS AND SUITS AGAINST THIRD-PARTIES
RELATING TO INJURIES COVERED BY WORKERS'
COMPENSATION
As a condition of my {employment} {continued employment}
with Vesuvius and in recognition of the fact that any work-related
injuries that might be sustained by me or covered by state Workers'
Compensation laws, I hereby waive, to the extent permitted by law, any
right I might have to make claims or bring suits against the following
classes or categories of persons or entities arising out of or as a result of
injuries sustained by me, which are covered under workers'
compensation laws:
(a) Any persons or entities having ownership, possession, or
control of or over the premises or work sites at which my
work will be performed;
(b) Any persons or entities acting as architects, engineers, or
construction managers with respect to work being
performed or to be performed at the premises or work sites
at which my work will be performed;
(c) Any persons or entities performing work at, on, or about
the premises or work sites at which my work will be
performed;
(d) Any contractors or subcontractors performing any portion
of the work at or about the premises or work sites at which
my work will be performed;
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(e) Any persons or entities that Ken Stewart may have
contractual or implied obligations to indemnify arising out
of any such injuries; and
(f) Any agents, servants, or employees of any of the persons or
entities in the classes or categories set out in (a) through
(e), above.
The underlined portions above were filled in by hand by Stewart.
On the day of training, Stewart first spent ten to twelve hours watching training
videos at two different locations. He was then taken to Nucor, given a stack of
paperwork that included the TPW, and sent into a room with a video player. The
trainer instructed Stewart to play some videos and answer questions about them. (The
paperwork included quizzes pertaining to the videos.) Stewart was under the
impression that he had to pass the quizzes in order to be hired. While watching the
videos, Stewart also completed the other paperwork, including the TPW. Stewart
testified that the trainer was preparing to leave for the day and apparently wanted to
complete the training quickly, and as a result Stewart felt rushed to complete the
paperwork.
Later, while working at Nucor's steel mill, Stewart was injured, for which he
received workers' compensation benefits. He sued Nucor for negligence, and Nucor
moved for summary judgment on the basis of the TPW. The district court granted the
motion, finding that the TPW's language and the circumstances of its execution met
the standard for enforcement of exculpatory contracts under Arkansas law and that
the agreement was not unconscionable. Stewart appeals.
II. DISCUSSION
This is a diversity action occurring in Arkansas, and so we apply Arkansas law.
"We review de novo the district court's grant of summary judgment, viewing the
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evidence in the light most favorable to the nonmoving party," Robinson v. Terex
Corp., 439 F.3d 465, 467 (8th Cir. 2006), as well as its interpretation of Arkansas law.
Id. "Summary judgment is proper if there are no disputed issues of material fact and
the moving party is entitled to judgment as a matter of law." Id. The district court
considered two issues in granting Nucor's motion: whether the TPW was enforceable
and whether it was unconscionable.
A. Enforceability
"An exculpatory contract is one in which a party seeks to absolve himself in
advance for the consequences of his own negligence." Finagin v. Ark. Dev. Fin.
Auth., 139 S.W.3d 797, 806 (Ark. 2003). Exculpatory contracts are disfavored by the
Arkansas Supreme Court, Plant v. Wilbur, 47 S.W.3d 889, 893 (Ark. 2001), and as
such must clearly set out the liability to be avoided and are to be strictly construed
against the drafter. Finagin, 139 S.W.3d at 806. They may be enforced "(1) when the
party is knowledgeable of the potential liability that is released; (2) when the party
is benefiting from the activity which may lead to the potential liability that is
released; and (3) when the contract that contains the clause was fairly entered into."
Id. at 808. The Arkansas Supreme Court has followed our circuit in adopting a "total
transaction" approach to exculpatory contracts, ascertaining the intent of the parties
according to both the language of the contract as well as the circumstances of its
execution. Plant, 47 S.W.3d at 893 (citing Haines v. St. Charles Speedway, Inc., 874
F.2d 572, 575 (8th Cir. 1989)).
Stewart challenges elements (1) and (3), claiming that the circumstances
surrounding his signing the TPW–being given the TPW at the end of a long day of
training, feeling compelled to pay attention to videos he was being quizzed on,
believing he needed to pass those quizzes to be hired, and feeling rushed by the
trainer–create a genuine dispute of material fact as to whether he was knowledgeable
of the potential liability he was waiving and whether he fairly entered into the
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contract. Nucor points out that Stewart admitted in testimony that he was given an
opportunity to review the contract. It is undisputed he has a high school diploma and
the ability to read, and there is no evidence Stewart asked about the meaning of the
TPW or the consequences of not signing it.
Stewart has not created a genuine issue of material fact as to the enforceability
of the TPW. The parties stipulated that he had the opportunity to read the TPW, that
he did not ask the trainer any questions concerning the meaning of the TPW, and that
he had the ability to read and understand the contract. Stewart might have felt tired
from the long day of training, distracted by the videos, and rushed by the trainer. But
these facts alone do not amount to conditions sufficient to render the TPW
unenforceable. This is so particularly because Stewart was indisputably afforded the
opportunity, which he failed to avail himself of, to inquire about the meaning of the
TPW. The language of the TPW is not so overly complex or riddled with legal jargon
as to call into question Stewart's ability to understand it. "Ultimately, [Stewart] is
bound to know the contents of the contract that he signed." Jordan v. Diamond
Equip. & Supply Co., 207 S.W.3d 525, 532 (Ark. 2005). We affirm the district court
as to enforceability of the TPW.
B. Unconscionability
In assessing whether a contract provision is unconscionable, Arkansas courts
again look to the totality of the circumstances, considering "whether there is a gross
inequality of bargaining power between the parties and whether the aggrieved party
was made aware of and comprehended the provision in question." Jordan, 207
S.W.3d at 535. Applying Arkansas law, we have also considered "whether the
provision is commercially reasonable 'according to the mores and business practices
of the time and place.'" Geldermann & Co., Inc. v. Land Processing, Inc., 527 F.2d
571, 576 (8th Cir. 1975) (quoting 1 Arthur L. Corbin, Contracts § 128, at 551 (1963)).
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Stewart presents the same arguments here that he does for the enforceability
issue. Nucor points to an affidavit it submitted from the CEO of an industrial
construction and maintenance contractor that has an office in Blytheville, stating the
company hired six welders during the relevant time period. Nucor argues this shows
the availability of other work Stewart could have sought and thus that there was not
a gross inequality in bargaining power. The district court noted that neither party
presented record evidence of relevant industry practices but that Nucor cited to cases
recognizing the validity of such agreements under comparable circumstances. See,
e.g., Edgin v. Entergy Operations, Inc., 961 S.W.2d 724 (Ark. 1998).
Stewart has not created a genuine issue of material fact as to the
unconscionability of the TPW. He does not present any evidence rebutting Nucor's
affidavit showing the availability of other work in the region at that time. It is
undisputed he had the opportunity to read and understand the TPW. Reviewing the
language, it is not especially complicated or difficult to understand. Although there
is no record evidence of industry practice, Edgin addressed precisely the same sort
of contract at issue here–waiver of claims by an employee against the employer's
clients for injuries that can be claimed under workers' compensation–and upheld the
application of the agreement to foreclose the plaintiff-employee's negligence action.
Additionally, there is no evidence presented by Stewart of fraud, duress,
misrepresentation, or any other inequitable conduct on the part of Vesuvius or Nucor.
We also affirm the district court on the unconscionability issue.
III. CONCLUSION
For the foregoing reasons we affirm.
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