Buck v. Freeman , 619 N.W.2d 793 ( 2000 )

OPINION

HALBROOKS, Judge

Rhonda Sue Buck, an employee of Freeman Fireworks Forever, was killed in an explosion at work. The trustee of her heirs brought a negligence action against the Minnesota Workers’ Compensation Assigned Risk Plan, contending it breached its statutory duty to conduct on-site safety inspections, but the district court ruled the plan was immune from suit under Minn. Stat. § 176.031 (1998). Appellant also sued respondent-owner, contending that as a working employer, he was subject to liability as a grossly negligent coemployee under Minn. Stat § 176.061, subd. 5 (1998). The district court granted summary judgment for Freeman on this claim, holding that the employer may not be found to be a grossly negligent coemployee. This is appeal is taken from the final partial judgment. We affirm.

FACTS

Decedent Rhonda Sue Buck worked for respondent Harrison L. Freeman, doing business as Freeman Fireworks Forever. She was Freeman’s only employee. On April 19, 1996, Freeman mixed flash powder, which decedent then drew from a metal bucket with a metal-handled pot to place into shell casings. An explosion occurred, resulting in Buck’s death. Although the cause of the explosion is not certain, it may have been the result of friction from the metal barrel and metal-handled pot or from static electricity generated by decedent’s snowsuit.

As trustee for the heirs and next-of-kin of decedent, appellant Richard Buck sued decedent’s former employer alleging that Freeman was liable as a grossly negligent coemployee. The district court granted Freeman’s motion for summary judgment, holding that the workers’ compensation act (WCA) was the exclusive remedy against the employer. Buck also sued Freeman’s compensation insurer, the Minnesota Workers’ Compensation Assigned Risk Plan and its related insurers and administrators (MWCARP or insurers) in negligence based on the failure to inspect Freeman’s premises as required by Minn.Stat. § 79.253, subd. 2 (1998). The district court dismissed the claim for lack of subject-matter jurisdiction because the insurers were immune from suit under Minn. Stat. § 176.031 (1998). The district court further held that Minn.Stat. § 79.253, subd. 2, does not create a private cause of action for failure to inspect. An amended judgment was entered April 4, 2000, pursuant to a stipulation under Minn. R. Civ. P. 54.02.

ISSUES

1. Is an employer who performs workplace duties subject to liability as a coemployee, or does the workers’ compensation act provide the exclusive remedy for work-related injuries and fatalities?

2. Are compensation insurers subject to negligence liability or are they protected by the exclusive remedy provisions of Minn.Stat. § 176.031 (1998)?

3. Does Minn.Stat. § 79.253, subd. 2 (1998), create a private cause of action against compensation insurers?

ANALYSIS

On appeal from summary judgment, we review the record to determine whether there are any genuine issues of material fact and whether the district court erred in applying the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). We “must view the evidence in the light most favorable to the party against whom judgment was granted.” Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993).

1. Liability of Employer as Grossly Negligent Coemployee

The exclusive remedy of employees against an employer for injuries sustained in workplace accidents is found within the WCA. Minn.Stat. § 176.031 (1998).¹ This statute guaranteed decedent compensation for any injuries sustained at work and, in exchange, she forfeited her common law rights against Freeman. See Wicken v. Morris, 527 N.W.2d 95, 99 (Minn.1995) .(describing the reciprocal concessions made by employer and employees under the WCA). On the other hand, an employee may be held liable for the personal injuries of a coemployee if the injury is a result of gross negligence or intentional act.² Minn.Stat. § 176.061, subd. 5(c) (1998); Dawley v. Thisius, 304 Minn. 453, 456, 231 N.W.2d 555, 557 (1975).

Buck argues that “immunity attaches to conduct not status,” and, therefore, in participating in the activities of a coemployee, Freeman is subject to liability in the same manner as a coemployee. No statute or caselaw directly supports the notion that active performance of duties in the workplace results in abrogation of the employer’s immunity under the exclusive remedy provision of the WCA. Cf. Dawley, 304 Minn. at 456, 231 N.W.2d at 557-58 (establishing that in limited circumstances an employee may be held liable for gross negligence against a coemployee); Wicken, 527 N.W.2d at 98-99 (manager may be liable as coemployee); Stelling v. Hanson Silo Co., 563 N.W.2d 286, 290 (Minn.App.1997) (finding a shareholder of a corporation liable as a coemployee). We will not re-interpret the WCA to narrow employer immunity protections.³

We conclude the district court did not err in holding that Freeman, as decedent’s employer, is immune on the negligence claim and is entitled to the protection of the exclusive remedy provisions of the WCA.

2. Dismissal of Action Against MWCARP

A. Insurer’s Immunity under Workers’ Compensation Act

Buck contends that the district court erred in dismissing his claim against MWCARP. The district court determined that it had no subject-matter jurisdiction over the claim because “compensation insurers would be entitled to immunity [under the WCA] since they are subject to the burdens” of the act. If the WCA provides the employee’s exclusive remedy, the district court has no jurisdiction. McGowan v. Our Savior’s Lutheran Church, 527 N.W.2d 830, 833 (Minn.1995). Whether the compensation insurers fall under the exclusive remedy provisions of WCA is a question of statutory interpretation, which is reviewed de novo. Frost-Benco Elec. Ass’n v. Minnesota Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn.1984).

This court has never considered whether the immunity provision of the WCA extends to the acts of an insurer. The plain language of the statute does not include insurers as employers.⁴ But in Konken v. Oakland Farmers Elevator Co., 425 N.W.2d 302 (Minn.App.1988), review denied (Minn. Aug. 24, 1988), in considering whether a third party was entitled to the protection of the exclusivity provisions of the WCA, this court noted that

[a] third person, other than the employer’s compensation insurer, is subject to no burdens of the act and consequently, under the scheme of reciprocity, is entitled to no benefits of the act.

Id. at 305 (quoting Modjeski v. Atwell, Vogel & Sterling, Inc., 309 F.Supp. 119, 121 (D.Minn.1969) (emphasis added)). Furthermore, in Modjeski, the court noted that

[t]here is within the statute a clear pattern to create an inseparable identity between the employer and his insurer insofar as compensation and medical benefits for the injured party are concerned.

Modjeski, 309 F.Supp. at 122. In coming to its conclusion, the court in Modjeski relied on several provisions of the WCA in which insurers and employers are treated similarly. Id. at 121-22. Like the courts in Modjeski and Konken, we conclude that a reasonable reading of the statute results in compensation insurers being protected by the exclusive remedy provisions of the WCA. See Heaslip v. Freeman, 511 N.W.2d 21, 22 (Minn.App.1994), review denied (Minn. Feb. 24, 1994) (in statutory interpretation, a reviewing court must “look first to the specific statutory language and be guided by its natural and most obvious meaning”).

Because insurers are subject to the burdens of the WCA, they are also entitled to the benefits of the exclusive remedy provisions of the WCA. Therefore, the district court did not err in dismissing Buck’s action against the insurers for lack of subject-matter jurisdiction.

B. Private Cause of Action under Minn.Stat. § 79.253, subd. 2 (1998)

Buck contends, in the alternative, that the district court erred in dismissing the action against the MWCARP because Minn.Stat. § 79 .253, subd. 2, establishes a duty of inspection and creates a private cause of action not barred by the exclusivity provisions of the WCA.⁵ As a result, Buck argues, the failure to inspect Freeman’s premises gives rise to a negligence claim.⁶

Statutes do not give rise to a civil cause of action unless the liability is explicit or clearly implicated. Semrad v. Edina Realty, Inc., 493 N.W.2d 528, 532 (Minn.1992). The plain language of Minn.Stat. § 79.253, subd. 2, does not explicitly create a cause of action and, therefore, we must decide if one is clearly implied.

There is generally a reluctance on the part of the courts to imply a private right of action. Hoppe by Dykema v. Kandiyohi County, 543 N.W.2d 635, 638 (Minn.1996); Haage v. Steies, 555 N.W.2d 7, 8 (Minn.App.1996) (“Principles of judicial restraint weigh against recognizing statutory rights of action that are not clearly expressed or implied by the legislation.”). In determining whether a private cause of action may be implied, this court must consider

(1) whether appellant belongs to the class for whose benefit the statute was enacted; (2) whether the legislature indicated an intent to create or deny a remedy; and (3) whether implying a remedy would be consistent with the underlying purpose of the [statute].

Flour Exch. Bldg. Corp. v. State, 524 N.W.2d 496, 499 (Minn.App.1994), review denied (Minn. Feb. 14, 1995).

“The purpose of the assigned risk plan is to provide workers’ compensation coverage to employers rejected by a licensed insurance company.” Minn.Stat. § 79.252, subd. 1 (1998). The benefited class, therefore, is employers rejected by the voluntary insurance market. The purpose of the statute is not to establish safety standards or to protect employees from harm, but rather to provide them with compensation insurance, should an accident occur. Implying a cause of action based upon a failure to inspect runs counter to the statute’s purposes.⁷

Here, the legislature did not expressly or clearly imply a private cause of action. An implied remedy would be inconsistent with the purpose of the statute. We, therefore, hold that the district court did not err in finding that no cause of action exists under Minn.Stat. § 79.253, subd. 2.

DECISION

Because an employer is immune from suit under Minn.Stat. § 176.031 (1998), and the performance of duties does not transform an employer into a coemployee for the purposes of the WCA, we affirm the dismissal of the action against respondent Freeman. Furthermore, because Minn. Stat. § 79.253, subd. 2 (1998), does not create a private cause of action, the compensation insurers retain the exclusive remedy protections of Minn.Stat. § 176.031.

Affirmed.

1 . Minn.Stat. § 176.031 (1998) provides:

The liability of an employer prescribed by this chapter is exclusive and in the place of any other liability to such employee * * * entitled to recover damages on account of such injury or death.

2 . Minn.Stat. § 176.061, subd. 5(c) (1998), describes liability as follows:

[a] coemployee working for the same employer is not liable for a personal injury incurred by another employee unless the injury resulted from the gross negligence of the coemployee or was intentionally inflicted by the coemployee.

There is also an exception to the exclusivity provision for an employer's intentional torts, where an employer’s intentional torts are excepted from the exclusivity provision. Boek v. Wong Hing, 180 Minn. 470, 471-72, 231 N.W. 233, 234 (1930). There are no allegations that Freeman’s acts were intentional.

3 . In addition, Buck contends that the district court erred by concluding that the form of Freeman's business was not at issue and that "Freeman so dominated the business to be considered the 'employer' no matter what the form of business organization.” If Freeman organized his business as a corporation, Buck argues, the corporate entity would be the employer and Freeman would "clearly be a co-employee” subject to liability. Minn.Stat. § 176.061, subd. 5(c). But, "the party resisting summary judgment must do more than rest on mere averments.” DLH Inc. v. Russ, 566 N.W.2d 60, 71 (Minn.1997). A genuine issue for trial must be established by substantial evidence. Id. at 69-70. In opposing summary judgment, Buck failed to present evidence that Freeman Fireworks Forever had filed for or received corporate status. As the district court noted, there is no evidence that Freeman's business adopted a corporate name as required by Minn.Stat. § 302A.115, subd. 1(b) (1998).

4 . Minn.Stat. § 176.011, subd. 10 (1998), defines an employer as

any person who employs another to perform a service for hire; and includes corporation, partnership, limited liability company, association, group of persons, state, county, town, city, school district, or governmental subdivision.

5 . Minn.Stat. § 79.253, subd. 2, states in relevant part:

The assigned risk plan shall, through persons under contract with the plan, perform on-site surveys of employers insured by the assigned risk plan and recommend practices and equipment to employers designed to reduce the risk of injury to employees.

6 . The assigned risk plan is designed for employers otherwise unable to secure coverage in the voluntary insurance market. The statute mandates that the assigned risk plan conduct on-site inspections and recommend safe practices. Id. The statute also includes a priority schedule for inspections. Under the schedule, Freeman's facility had not been inspected by the time of the accident.

7 .Buck also asserts that when a statute imposes a duty of protection, and one neglects that duty, common law negligence applies and liability may be imposed. Osborne v. McMasters, 40 Minn. 103, 104-05, 41 N.W. 543, 543-44 (1889). In other words, to violate the statute is to deviate from the standard of care owed to another. Id. In finding the nonperformance of a legal duty actionable, the court in Osborne remarked that the “object [of the statute] is to protect the public against” this type of harm. Id. at 104, 41 N.W. at 543. But here, the object of this statute is not to protect employees, but rather, to provide insurance to employers that could otherwise not obtain it.