Lori Brenner and Shawn Brenner v. Ignacio Chavez (mem. dec.)

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Dec 08 2020, 8:44 am
court except for the purpose of establishing CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
David A. Anderson Storrs W. Downey
Anderson & Associates, PC Jeffrey E. Kehl
Indianapolis, Indiana Bryce Downey & Lenkov LLC
Chicago, Illinois
IN THE
COURT OF APPEALS OF INDIANA
Lora Brenner and December 8, 2020
Shawn Brenner, Court of Appeals Case No.
Appellants-Plaintiffs, 20A-CC-538
Appeal from the Delaware Circuit
v. Court
The Honorable John M. Feick,
Ignacio Chavez, Judge
Appellee-Defendant Trial Court Cause No.
18C04-1612-CC-985
Weissmann, Judge.
Court of Appeals of Indiana | Memorandum Decision 20A-CC-538 | December 8, 2020 Page 1 of 8
[1] Ignacio Chavez wore many hats in his interconnected businesses where he
worked with Lora Brenner. Lora Brenner worked for two of those businesses: a
corporation in which Ignacio acted as president and employee and a limited
liability company in which Ignacio was sole owner and managing member.
Ignacio also owned the property on which the two businesses operated. When
Lora became ill, allegedly due to workplace contaminants, she and her husband
sued the businesses and Ignacio but found their efforts thwarted by the
Worker’s Compensation Act (WCA). The WCA operates as the sole recourse
for employees injured on the job by the negligence of their employers or co-
employees.
[2] After we found in a prior appeal that Ignacio could avoid some personal
liability because he wore the hat of employee in the corporation, Ignacio
attempted to avoid personal liability altogether by claiming he also wore the hat
of employee of the LLC. The trial court agreed the WCA’s exclusivity
provision applied to Ignacio and dismissed the Brenners’ claims against him.
The Brenners appealed, arguing Ignacio never donned the employee hat at the
LLC and the court possessed jurisdiction over their case. We agree Ignacio
failed to establish he was an employee of the LLC but nonetheless conclude the
trial court lacked jurisdiction. Therefore, we affirm the trial court’s dismissal.
Facts
[3] This is the second time this case has come before us. In the Brenners’ first
interlocutory appeal, we determined that under the Indiana Workers’
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Compensation Act (WCA), Ignacio failed to establish that he was an employee
of All Steel Carports and Buildings, LLC (the LLC). Brenner v. All Steel
Carports, Inc., et al., 122 N.E.3d 872, 879 (Ind. Ct. App. 2019) (“Brenner I”); see
Ind. Code § 22-3-1 et seq. That decision preserved Lora’s premises liability
claims against Ignacio. On remand, Ignacio attempted to cure that evidentiary
omission by filing a motion to dismiss asserting he was an employee, as well as
officer and member, of the LLC. Appellant’s App. Vol. II, pp. 32-33. Ignacio
contended that because he was Lora’s co-employee in the LLC, the WCA was
the Brenners’ exclusive remedy. Id. at 33.
[4] The trial court granted Ignacio’s motion to dismiss, summarily finding the court
lacked subject matter jurisdiction over the Brenners’ claims against Ignacio. Id.
at 21. Given its context, that ruling necessarily meant the trial court found: 1)
Ignacio was an employee of the LLC; 2) the WCA precluded the Brenners’
third-party lawsuit against him because he was an employee of the LLC and,
therefore, a co-employee of Lora; and 3) the WCA was the Brenners’ sole
remedy for Ignacio’s alleged negligence as owner of the land on which Lora
worked. This Court accepted jurisdiction of this appeal under Indiana
Appellate Rule 14(B).
Discussion and Decision
[5] The Brenners contend in this second interlocutory appeal, as they did in the
first, that the trial court erroneously ruled it lacked subject matter jurisdiction
over their premises liability claims against Ignacio. We find Ignacio failed to
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establish he was an employee of the LLC, but the trial court nonetheless lacks
subject matter jurisdiction over the Brenners’ premises liability claims because
the Record shows the WCA was Lora’s exclusive remedy.
[6] In ruling on a motion to dismiss for lack of subject matter jurisdiction under Ind.
Trial Rule 12(B)(1), the trial court may consider not only the complaint and
motion but also any affidavits or evidence submitted in support. GKN Co. v.
Magness, 744 N.E.2d 397, 400 (Ind. 2001). In addition, the trial court may weigh
the evidence to determine the existence of the requisite jurisdictional facts. Id.[7] The standard of review on appeal is a function of the trial court proceedings. Id.The standard of review depends on: (i) whether the trial court resolved disputed
facts; and (ii) if so, whether it conducted an evidentiary hearing or ruled on a
“paper record.” Id. If the facts before the trial court are not in dispute, the
question of subject matter jurisdiction is purely one of law, and we apply a de novo
standard of review. When reviewing a judgment de novo, we treat the issue as if
we were the first court in the case to consider the issue, with no deference given
to the trial court’s judgment. Ind. Dept. of Env’t Mgmt. v. Constr. Mgmt. Assocs.,
L.L.C., 890 N.E.2d 107, 112 (Ind. Ct. App. 2008). De novo review also applies
if, as here, the facts before the trial court are in dispute but the trial court conducts
no evidentiary hearing. GKN, 744 N.E.2d at 400.
I. WCA and Co-Employees
[8] The WCA provides the exclusive remedy for recovery of personal injuries
arising out of and in the course of employment. Ind. Code §§ 22-3-2-2, -6. This
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exclusive remedy provision applies to the employee as well as the employee’s
dependents and next of kin. I.C. § 22-3-2-6. However, the WCA specifically
permits a lawsuit by an injured employee against wrongdoers who are neither
the employee’s employer or “in the same employ” – that is, a fellow employee.
Ind. Code § 22-3-2-13.
[9] The sole issue raised in Ignacio’s motion to dismiss granted by the trial court is
whether Lora was barred from suing Ignacio because he was her fellow
employee in the LLC and not a third party within the meaning of I.C. § 22-3-2-
13. A member or manager in a limited liability company may be considered an
“employee” of the company for purposes of the WCA exclusivity provisions
only if the LLC specifically designates him so in the manner required by Ind.
Code 22-3-6-1(b)(9). As Ignacio presented no evidence he had followed those
statutory procedures—neither party even cited that statute in the trial court or
on appeal—he cannot be deemed an employee of the LLC.
[10] However, this legal conundrum serves as a red herring. We already found
Ignacio to be a fellow employee of Lora at All Steel Carports, Inc.
Accordingly, the trial court lacked subject matter jurisdiction over the Brenners’
claims against Ignacio. The trial court reached the right decision—dismissal—
but in response to the wrong question.
II. Subject-Matter Jurisdiction
[11] As previously noted, the WCA authorizes an employee to sue a third party for
work injuries only when the third party is neither the employer nor “in the same
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employ.” I.C. § 22-3-2-13. Employees are “in the same employ” if the personal
injury occurs in the course of and arises out of the co-employee’s employment.
Hatke v. Fiddler, 868 N.E.2d 60, 64 (Ind. Ct. App. 2007). The purpose of the
“in the same employ” requirement is to require some nexus between the
employment of the third party and the injury beyond that of a shared employer.
Thiellen v. Graves, 530 N.E.2d 765, 767 (Ind. Ct. App. 1988).
[12] Lora’s claims against Ignacio arise from her alleged exposure to contaminants
while she was working at the two All Steel businesses on Ignacio’s land. Prior
to Brenner I, the trial court dismissed the Brenners’ claims against the two All
Steel defendants on the grounds it lacked subject matter jurisdiction and the
WCA was the Brenners’ sole remedy. Brenner I, 122 N.E.3d at 876. The
Brenners did not appeal that dismissal. Id. n.1. That final judgment necessarily
constituted a finding that Lora’s alleged injury arose out of and in the course of
her employment with the two All Steel businesses. See I.C. §§ 22-3-2-2, -6
(specifying WCA only applies to injuries arising out of and in the course of
employment).
[13] We determined in Brenner I that Ignacio, who served as President of All Steel
Carports, Inc., also was an employee of the corporation for purposes of I.C. §
22-3-2-13. Brenner I, 122 N.E.3d at 878. Our conclusion was based on Ind.
Code § 22-3-6-1(b)(1), which provides that an executive officer elected or
appointed and empowered in accordance with the charter and bylaws of a
corporation . . . is an employee of the corporation under IC 22-3-2 through IC
22-3-6.” Id. The parties in Brenner I focused on the application of the WCA as
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it defines employment status, and thus this Court in Brenner I did not determine
whether Ignacio’s role as a fellow employee of Lora at All Steel Carports, Inc.
deprived the trial court of subject matter jurisdiction over the Brenners’ claims
against Ignacio as landowner. Yet, Lora’s alleged personal injury arose out of
and in the course of her employment with that corporation, of which Lora and
Ignacio were employees. They shared not only the same employer but also the
same workplace, which Ignacio owned. Ignacio and Lora were “in the same
employ”—an unavoidable conclusion dispositive of subject matter jurisdiction.
[14] This is not a novel decision. Other Indiana appellate courts have ruled an
injured employee cannot sue a fellow employee as a third party even if that
employee owns the land on which the injuries occurred. For instance, in
Jackson v. Gibson, 409 N.E.2d 1236, 1238-39 (Ind. Ct. App. 1980), reh. denied, we
found the WCA barred a realty corporation’s custodian injured on the job from
suing the president and sole shareholder of that corporation who also
individually owned the business premises. In Northcutt v. Smith, 642 N.E.2d
254, 258 (Ind. Ct. App 1994), we found the WCA barred an employee from
suing his supervisor for an injury the employee suffered while working on the
supervisor’s land. Both Jackson and Northcutt require a finding that the trial
court lacked jurisdiction over the Brenners’ claims against Ignacio as
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landowner, given the earlier judgment finding Ignacio and Lora were co-
employees at All Steel Carports, Inc.1
[15] Accordingly, the trial court properly granted Ignacio’s amended motion to
dismiss Counts II, IV, and VI of the Brenners’ Second Amended Complaint.
[16] The judgment of the trial court is affirmed.
Bailey, J., and Vaidik, J., concur.
1
To the extent this decision impairs the Brenners’ ability to recover for injuries Ignacio allegedly caused, the
Indiana General Assembly is the appropriate source for change. See Procare Rehab. Servs. of Cmty. Hosp. v.
Vitatoe, 888 N.E.2d 349, 355–56 (Ind.Ct.App.2008) (acknowledging unfairness in observation that pursuant
to WCA, hospital employee injured during course of employment may not recover for negligent aftercare
provided by employer-hospital or fellow employees, although construction worker injured during course of
employment who receives negligent aftercare from same hospital would be able to pursue third party claim
against hospital).
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