Third-party ex-employer not exempt from negligence suit, COA says

The Indiana Court of Appeals has reinstated a woman’s negligence claim against her former employer, concluding he was considered a third party in the suit and could therefore not be shielded.

Following her firing from All Steel Carports, Inc. in July 2016, Lora Brenner and her spouse sued All Steel, its former president, Ignacio Chavez, and the property’s owner, Chavez Real Estate, for negligence, gross negligence, and loss of consortium.

In their suit, the Brenners alleged that while working at All Steel, Lora was exposed to extreme amounts of dust, ground contaminants, pollutants and mold that caused her to suffer severe illness, and that All Steel did not maintain worker’s compensation insurance for Lora. The Brenners thus sought the costs of Lora’s medical treatment, lost wages, lost earning capacity and punitive damages.

They further alleged that other All Steel employees also had become ill, and when Lora ordered an environmental inspection of the All Steel business premises, it terminated her for allowing the inspection to take place.

All three parties filed a motion to dismiss the claims, and Chavez Real Estate filed a separate response asserting that the Brenners were precluded from pursuing any third-party tort claims without first seeking relief under the Workers Compensation Act.

The motion to dismiss the Brenners’ claims was granted, but the trial court also granted the Brenners’ request for leave from the trial court to pursue an interlocutory appeal on that dismissal.

On appeal, the Brenners contended that their claims against Ignacio Chavez were improperly dismissed because Indiana Code section 22-3-2-13 permitted them to proceed against him under a premises liability theory in his third-party capacity as the previous owner of the All Steel business premises. Ignacio countered that, as an officer of All Steel, he was immune from liability under the WCA’s exclusive remedy provision.

But the Indiana Court of Appeals disagreed with the latter contention in Lora Brenner and Shawn Brenner v. All Steel Carports, Inc., All Steel Carports and Buildings, LLC, Chavez Real Estate and Ignacio Chavez,18A-CC-1342, reversing and remanding for further proceedings.

Although it found Ignacio was not a third party for purposes of I.C. 22-3-2-13, it did find that he was the president of All Steel, and therefore his status as president did not shield him from direct suit and that the Brenners were permitted to proceed against him as a third party under the statute.

The appellate court concluded the same was true for Chavez Real Estate, and further rejected its “novel legal argument” that the Brenners were required to pursue a WCA claim against her employer “in concert” with any third-party suit.

“Given the lack of express terms in the statute on the subject, the ambiguity present in the statute’s wording, and our obligation to construe the WCA strictly against limitations on a claimant’s right to bring suit, we hold that an employee is not required to file a WCA claim against her employer prior to pursuing litigation against a third-party tortfeasor,” Judge Patricia Riley wrote. “As such, the Brenners were not precluded from initiating suit against Chavez Real Estate by their failure to first file a WCA claim against All Steel.”

The appellate court thus concluded that Ignacio and Chavez Real Estate failed to establish lack of subject matter jurisdiction, and, therefore, the trial court improperly dismissed the Brenners’ claims against them. The case was remanded to Delaware Circuit Court for proceedings.

This article was first published by The Indian Lawyer.

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