Brock v. Price

934 N.W.2d 5

Huey BROCK, Plaintiff, Appellant, and Cross-Appellee

v.Richard PRICE and KS Industries, LLC, Defendants, Appellees and Cross-Appellants

No. 20190092

Supreme Court of North Dakota.

Filed October 3, 2019

Duane A. Lillehaug (argued), Fargo, North Dakota, and Michael D. Ainbinder (appeared) and Colleen M. Pratt (appeared), Long Beach, California, for plaintiff, appellant, and cross-appellee.

Seth A. Thompson (argued), Brenda L. Blazer (appeared), and Briana L. Rummel (appeared), Bismarck, North Dakota, for defendants, appellees, and cross-appellants.

Tufte, Justice.

[¶1] Huey Brock appeals from judgments dismissing his negligence action against Richard Price and KS Industries, LLC ("LLC") and awarding Price and LLC costs and disbursements in the amount of $181,467. Price and LLC cross-appeal from the judgment awarding costs and disbursements. We affirm the district court’s summary judgment dismissal of the negligence action because it is barred by the Workforce Safety and Insurance Act’s exclusive remedy provisions. We reverse the award of costs and disbursements and remand for the court to hold a hearing on Brock’s objections required by N.D.R.Civ.P. 54(e)(2).

I

[¶2] LLC is based in Tioga and at all relevant times has obtained Workforce Safety and Insurance ("WSI") coverage for its employees in North Dakota. Brock, a California resident, was hired by LLC and began working as a pipefitter on December 6, 2010. On March 31, 2011, Brock was severely injured in a traffic accident while traveling in a company-owned vehicle with Price and another LLC employee, resulting in Brock becoming quadriplegic. On April 6, 2011, WSI issued a notice of decision accepting Brock’s claim and awarding him benefits, which noted "[o]n the above injury date, the injured worker was employed by [LLC]" and "[t]he evidence shows the injured worker sustained an injury by accident arising out of and in the course of employment." Brock began receiving benefits under LLC’s WSI account.

[¶3] In June 2012, Brock, WSI, and LLC entered into a stipulation that Brock would continue to receive WSI benefits while seeking workers' compensation benefits in California from KS Industries, LP ("LP"). The stipulation further provided that WSI would cease paying benefits if his claim against LP’s insurance carrier were accepted and his attorney would act in trust for WSI in pursuing reimbursement of funds paid in connection with Brock’s claim. Brock then filed an application for California workers' compensation benefits claiming he was employed by LP at the time of the accident. In May 2013, following a trial, a judge of the California Workers' Compensation Appeals Board found:

1. HUEY BROCK born on 09/02/1970 while employed on 03/31/2011 as a pipefitter while working in the State of North Dakota, by, KS INDUSTRIES LP, whose workers' compensation insurance carrier was ACIG Insurance Company, sustained injury arising out of and occurring in the course of employment rendering him a quadriplegic as well as injury to his psyche.

2. As to issue of employment, applicant is found to be an employee of KS INDUSTRIES LP at the time of the injury.

3. As to the issue of jurisdiction, it is found that there is jurisdiction with the California Workers' Compensation Appeals Board over the industrial injuries the applicant sustained herein, and the applicant may proceed to collect such workers' compensation benefits within this State with credit to the defendants for workers' compensation benefits which the applicant may have received from the workers' compensation claim in North Dakota.

[¶4] In an opinion on his decision, the judge explained:

Based upon applicant’s credible testimony which establishes that he was offered and accepted employment from KS Industries LP via the telephone at his residence in Long Beach, California, as well [ ]as the fact that all other entities/campuses listed by defendant are merely alter egos of KS Industries LP (as evidenced by "Exhibit 16" for which applicant was required to submit forms for employment including reading the KS Industries LP safety manual as a requisite of employment and adhering the KS Industries LP "Cell Phone Policy". Also, all payroll was reviewed and approved at the KS Industries LP facility in Bakersfield, California with paychecks and W-2s being issued from KS Industries LP and all employee records, no matter which location/campus the employee worked at, were housed at the KS Industries LP facility in California. Also, all employee[s], once hired, maintained the same "Employee ID" number no matter which location/campus they may perform work. Additionally, applicant credibly testified that for the work in North Dakota, he accepted the employment via the telephone from his residence in Long Beach, California and took a 2 to 3 day bus ride from Long Beach, California to the site in North Dakota based on the belief and reliance that he had been offered and accepted the employment over the telephone.

A petition for reconsideration and a petition for writ of review to the California Court of Appeals were both denied.

[¶5] Based on the California administrative decision, LP’s workers' compensation carrier commenced paying benefits to Brock and reimbursed WSI all funds expended on Brock. On January 24, 2014, WSI issued a notice of decision reversing its prior decision accepting Brock’s claim. Although it is not in the record on appeal, the district court referenced it in its February 8, 2019, order. Prior to oral argument, Brock requested that we take judicial notice of the January 24, 2014, notice of decision, and we do so under N.D.R.Ev. 201(b)(2). The notice of decision reads:

Please read this notice as it may require action within 30 days. This notice is to inform you of Workforce Safety & Insurance’s (WSI) decision to reverse the Notice of Decision Accepting Claim dates 04/06/2011.

WSI denies liability for your injury sustained on 03/31/2011 and no workers' compensation benefits are payable on this claim. This decision is based on North Dakota Century Code Section 65-05-05, which states: If an employee applies for benefits from another state for the same injury, WSI will suspend all future benefits pending resolution of the application. If an employee is determined to be eligible for benefits through some other state act, no further compensation shall be allowed under this title and the employee must reimburse the organization for the entire amount of benefits paid.

WSI received information that your claim for benefits for the same injury has been accepted by the California Workers' Compensation system and you are eligible for benefits through the California Workers' Compensation system.

[¶6] In February 2015, Brock brought this negligence action against Price and LLC. Brock moved for summary judgment arguing collateral estoppel based on the California administrative proceedings precluded Price and LLC from arguing LLC was Brock’s employer rather than LP, and therefore his action was not barred by the exclusive remedy provisions of North Dakota law. The district court granted Brock’s motion and approved a stipulated scheduling order requiring dispositive motions be served by August 31, 2016.

[¶7] In November 2018, Price and LLC filed a motion for summary judgment arguing collateral estoppel did not apply and the exclusive remedy provisions applied to bar Brock’s action against LLC and his co-worker, Price. The district court agreed and dismissed the action. After concluding collateral estoppel did not apply, the court noted collateral estoppel was "secondary" to its analysis and concluded:

Even though, under California law, Brock was found to be an employee of KS Industries, LP, at the time he was injured, Brock was nevertheless doing work for KSI, LLC, in North Dakota, KSI, LLC, was paying premiums to WSI, and Brock applied for and received benefits through WSI. Under N.D.C.C. § 65-01-08 ; § 65-04-28; and § 65-05-06, KSI, LLC, and Price are immune from Brock’s claim of negligence. The later termination of Brock’s benefits and the reimbursement to WSI do not alter the fact that, following his injury, Brock opted to apply for and received WSI benefits. Notwithstanding California’s later acceptance of Brock’s cla[i]m for workers' compensation benefits in California, the Court finds, as a matter of law, that KSI, LLC, as a contributing employer, and Price, as an employee of KSI, LLC, were/are entitled to immunity under North Dakota law.

[¶8] Price and LLC filed a statement of costs and disbursements seeking $319,895.36 and Brock objected. Without holding a hearing, the district court reduced the expert witness fees by one-half and allowed costs and disbursements in the amount of $181,467.

II

[¶9] Brock argues the district court erred in granting summary judgment dismissing his action.

[¶10] Our standard for reviewing summary judgments is well established:

Summary judgment is a procedural device under N.D.R.Civ.P. 56(c) for promptly resolving a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. The party seeking summary judgment must demonstrate there are no genuine issues of material fact and the case is appropriate for judgment as a matter of law. In deciding whether the district court appropriately granted summary judgment, we view the evidence in the light most favorable to the opposing party, giving that party the benefit of all favorable inferences which can reasonably be drawn from the record. A party opposing a motion for summary judgment cannot simply rely on the pleadings or on unsupported conclusory allegations. Rather, a party opposing a summary judgment motion must present competent admissible evidence by affidavit or other comparable means that raises an issue of material fact and must, if appropriate, draw the court’s attention to relevant evidence in the

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