Johnson v. Chattanooga-Hamilton County Hospital Authority

OPINION

BROCK, Justice.

The plaintiff seeks to recover benefits provided by the Workers’ Compensation Act of Tennessee for an injury alleged to have arisen out of and in the course of his employment with the defendant hospital authority. The trial court rejected the claim on two grounds: (1) that the employer, the defendant hospital authority, is exempt from the provisions of the Workers’ Compensation Laws of Tennessee and (2) that the statute of limitations had run on the claim asserted.

We find that the first issue is dispositive of this litigation and find it unnecessary to consider the second issue presented.

It is provided by the Workers’ Compensation Act, T.C.A. § 50-6-102 as follows:

(a) In this chapter, unless the context otherwise requires:

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(3) “Employer” includes any individual, firm, association or corporation, or the receiver, or trustee of the same, or the legal representative of a deceased employer, using the services of not less than five (5) persons for pay, and in the case of an employer engaged in mining and production of coal, one (1) employee for pay. If the employer is insured, it shall include his insurer, unless otherwise herein provided; ....

Also pertinent here are the following provisions of the Workers’ Compensation Act, to-wit:

T.C.A. § 50-6-106. Employment’s not covered. — The Worker’s Compensation Law shall not apply to:

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(5) The state of Tennessee, counties thereof and municipal corporations; provided, however, that the state, any county, or municipal corporation may accept the provisions of this chapter by filing written notice thereof with the said division under the commissioner of labor, at least thirty (30) days before the happening of any accident or death, and may at any time withdraw the acceptance by giving like notice of the withdrawal....

The rule of construction to be followed by courts in interpreting the Workers' Compensation Act of this State is set out in T.C.A. § 50-6-116 as follows:

Construction of chapter. — The rule of common law requiring strict construction of statutes in derogation of common law shall not be applicable to the provisions of the Workers’ Compensation Law, but the same is declared to be a remedial statute which shall be given an equitable construction by the courts to the end that the objects and purposes of this chapter may be realized and attained.

The defendant authority is the creature of the Legislature resulting from the enactment of chapter 297, Private Acts of 1976, as amended by chapter 125, Private Acts of 1977. Section one of that charter legislation provides:

A governmental Hospital Authority to be known as the Chattanooga-Hamilton County Hospital Authority, is hereby created and established for and on behalf of Hamilton County, Tennessee, for the purpose of performing a governmental function by operating Baroness Erlanger Hospital and T.C. Thompson Children’s Hospital and such other similar or associated hospitals and existing health centers deemed appropriate to be operated by said authority as sole operator for the purpose of providing health care facilities and programs for the residents of Hamilton County, Tennessee.

Highly material also to the determination of this case are sections 18 and 19 of the charter legislation, which are as follows:

SECTION 18. The authority is hereby declared to he a public instrumentality acting on behalf of the county, but without the power of eminent domain, and in that connection to be fulfilling a public function, and the authority and all properties at any time owned by it and the income therefrom and all bonds or notes issued by the authority and the income therefrom shall be exempt from all taxation in the State of Tennessee. Also, for purposes of the Securities Law of 1955, compiled as Sections 48-1601 through 48-1648, Tennessee Code Annotated, and any amendment thereto or substitution therefor, bonds or notes issued by the authority shall be deemed to be securities issued by a public subdivision of the State of Tennessee.

SECTION 19. The authority shall be a public nonprofit corporation and no part of its net earnings remaining after payment of its expenses shall inure to the benefit of any individual, firm or corporation.

It is our conclusion that the quoted sections of the charter legislation clearly indicate that this authority is such a subdivision of the state and county as is contemplated by the exemption provision of T.C.A. § 50-6-106(5) hereinabove quoted. As such, it is freed of the obligations imposed by the workers’ compensation laws of this State and its employees cannot acquire any rights under those laws unless and until the authority decides to elect to operate under the workers’ compensation laws as provided by said paragraph 5 of T.C.A. § 50-6-106. We therefore affirm the decision of the chancellor dismissing the plaintiff’s complaint on the ground that the defendant is exempt from the workers’ compensation laws of this State.

In our view the plaintiff’s reliance upon the decision of this Court in Smith v. Lincoln Memorial University, 202 Tenn. 238, 304 S.W.2d 70 (1957) is misplaced. Clearly the employer in that case, Lincoln Memorial University, was not a governmental instrumentality or “public instrumentality acting on behalf of the county” entitled to be exempted from the workers’ compensation law under the statutory provisions above quoted, but was, as held by the Court, a charitable educational institution operating under a welfare charter and, as such, was not entitled to the exemption. As this Court noted, “It seems to us ... that if the Legislature intended to exclude eleemosynary institutions from the workings of the Workmen’s Compensation Law then they would have said so.” 304 S.W.2d at 72. Likewise, in our view the decision of the Arkansas Court in Muse v. Prescott School District, 233 Ark. 789, 349 S.W.2d 329 (1961) does not support the plaintiff’s position in this case. It was there held that a school district was a political subdivision and, as such, was excluded from the provisions of the Arkansas workers’ compensation statute. We have considered other authorities cited by the plaintiff but find that none of them would support a contrary result in the case at bar. Even exemption legislation is to be given a reasonable construction and when the legislative intent to exclude from coverage of the Workers’ Compensation Act is clear, that intention must be obeyed. We find such legislative intent displayed in the language which we have quoted herein.

The decree of the chancellor is affirmed and costs incurred upon this appeal are assessed against the appellant and surety.

HARBISON, C.J., and FONES and DROWOTA, JJ. HERSCHEL P. FRANKS, Special Judge, dissents, see separate opinion.