Knox v. Okla. Gas & Elec. Co.

549 P.3d 1260

2024 OK 37

Kathryn Louise KNOX, individually; and as Surviving Spouse of David Odell Knox, Deceased, Plaintiff,

v.OKLAHOMA GAS AND ELECTRIC COMPANY, d/b/a OG&E SunPower Corporation, Systems; Moss & Associates, LLC d/b/a Moss Solar; and BJ’S Oilfield, Defendants,andSunPower Corporation Systems, Third-Party Plaintiff/Appellant,

v.BJ’s Oilfield Construction, Inc., Third-Party Defendant/Appellee.

No. 121,047

Supreme Court of Oklahoma.

Filed May 21, 2024

As Corrected June 6, 2024

APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY

¶0 In a tort action brought against various entities by the widow of the deceased based upon alleged tortfeasor liability by alleged non-employers and after a worker’s compensation award, the employer filed a motion to dismiss a third-party petition filed against employer by one of the defendants. The Honorable Anthony L. Bonner, District Judge, sustained the motion to dismiss. Defendant appealed and the appeal was retained by the Supreme Court. We hold: (1) The exclusive remedy and liability language in 85A O.S.Supp.2014, § 5 does not prevent an employer from creating non-employer legal relationships, capacities, or roles, but those relationships, capacities, or roles cannot create a negligence tort liability for the same physical injury used by a party for a compensable workers’ compensation award; and (2) The language of 85A O.S.Supp.2014, § 5 does not prohibit an employer from creating an indemnity agreement holding others harmless for the employer’s intentional conduct not subject to exclusive workers’ compensation remedies.

ORDER OF DISTRICT COURT REVERSED AND CAUSE REMANDED FOR ADDITIONAL PROCEEDINGS

Victor F. Albert, Ogletree, Deakins, Nash, Smoak, & Stewart, P.C., Oklahoma City, Oklahoma, for Third-Party Plaintiff/Appellant.

Thomas R. Kendrick and Emma C. Kincade, De Witt Paruolo & Meek, P.L.L.C., Oklahoma City, Oklahoma, for Third-Party Defendant/Appellee.

EDMONDSON, J.

[1] ¶1 We hold: An employer may not contractually create a common-law negligence liability for the employer by creating additional non-employer roles or capacities when this negligence liability is based upon the same physical injury for a compensable workers’ compensation award.

[2] ¶2 SunPower’s third-party petition alleged an intentional tort by BJ’s Oilfield Construction. The exclusive remedy and liability language of 85A O.S.Supp.2014, § 5 does not prevent an employer from creating an additional capacity or role and contractually agreeing to indemnify and hold harmless another for the employer’s intentional torts. The contract between BJ’s Oilfield Construction and Moss contained an indemnity clause that expressly included SunPower as a beneficiary of an indemnity clause. The order dismissing SunPower’s third-party petition against BJ’s Oilfield Construction is reversed and the cause is remanded to the District Court for additional consistent proceedings.

I. Summary

¶3 An employee died at a construction work site while working for his employer. The employee’s spouse brought an action in a District Court against the owner of the work site, contractor, subcontractor, and employer. The appellate controversy is between the contractor, SunPower Corporation Systems (SunPower), and the employer/subcontractor, BJ’s Oilfield Construction, Inc. (BJ’s, BJ’s Oilfield, or BJ’s Oilfield Construction).

II. Trial Court Proceedings and Prior Related Appeals

¶4 Oklahoma Gas and Electric (OG&E) contracted with SunPower Corporation Systems (SunPower) to develop OG&E’s property for a solar power facility. SunPower contracted with Moss & Associates (Moss) with the latter as contractor for construction of the facility. Moss contracted with BJ’s to prepare this construction site.

¶5 David Knox was an employee of BJ’s and while working at the construction site he died as a result of a fellow employee’s use of a trenching machine augur. Knox’s spouse of the deceased sought and received Oklahoma workers’ compensation benefits.

¶6 Knox’s spouse brought a wrongful death claim in Oklahoma County District Court. She alleged SunPower, Moss, and OG&E (1) controlled and/or supervised the work performed by BJ’s, (2) knew employees of BJ’s lacked proper supervision and disregarded safety protocols, (3) knew the trenching machine created an unreasonably dangerous work environment, and (4) failed to provide proper supervision for safety purposes. She also included BJ’s as a defendant.

¶7 Defendants filed separate motions to dismiss Knox’s petition and they were granted. Three appeals were filed. Two appeals reviewed separate dismissals of plaintiff’s claims against Moss and SunPower. These two dismissals were based upon the two defendants identifying themselves with "prime contractor" status. The order granting dismissal to Moss was reversed because prime contractor status for Moss was asserted by unsupported assertions in a brief and oral argument, and without evidence or stipulation on the issue.¹ SunPower’s dismissal order was reversed because its assertion of prime contractor status was based upon counsel's oral argument and not evidence.²

¶8 The third appeal involved OG&E’s dismissal request based upon an argument Knox failed to state a claim upon which relief may be granted. The appellate court reversed the trial court's dismissal because OG&E’s argument was based upon denying the factual assertions in Knox’s petition that OG&E directed, operated, controlled and/or supervised the work which resulted in Knox’s death, The appellate court concluded that disputes of fact were not proper for adjudicating the legal sufficiency of plaintiff’s petition.³ The three appeals remanded the controversy to the District Court.

III. Trial Court Proceedings and Current Appeal

¶9 SunPower’s answer raised affirmative defenses, and asserted a cross-claim against Moss based upon a previous written agreement providing that Moss defend and indemnify SunPower. A third-party petition was filed by SunPower against BJ’s Oilfield, and then an amended third-party petition.

¶10 SunPower’s amended petition included allegations: SunPower’s agreement with Moss, Moss agreed to indemnify SunPower regarding claims arising from events on the job site, Moss was subcontractor, BJ’s was a second tier subcontractor, and BJ's was responsible for any claim against SunPower based upon the death of Knox and principles of contribution and indemnity.

¶11 BJ’s Oilfield filed a motion to dismiss SunPower’s third-party petition. The motion cited 12 O.S. § 2012(B)(1) & (6), and argued: (1) BJ’s legal liability was determined and jurisdictionally limited by 85A O.S. § 5 due to a previous workers’ compensation award against BJ’s; (2) No exception to imposing liability upon BJ’s was allowed by 85A O.S. § 5; (3) Breach of Occupational Safety and Health Act regulations by BJ’s Oilfield could not be used to impose legal liability in a wrongful death negligence action against BJ’s Oilfield; (4) SunPower’s claim for indemnity failed because no contractual, implied, or equitable right to indemnity existed; and (5) SunPower’s contribution claim failed because SunPower previously alleged it was not a joint tortfeasor.

¶12 SunPower responded and argued a contractual indemnity existed. SunPower argued it possessed the status of a third-party beneficiary to BJ’s contract with Moss. SunPower urged contribution and implied indemnity claims. SunPower also argued two provi- sions in 85A O.S. § 5 authorized its claim against BJ’s Oilfield, (1) an independent legal relationship exception and (2) an intentional tort exception. SunPower alleged the contracts between the various parties created a legal identity for BJ’s Oilfield that was in addition to BJ’s Oilfield’s identity as an employer of the deceased. Further, that BJ’s Oilfield’s legal identity as an employer was the identity adjudicated by the Workers’ Compensation Commission.

¶13 BJ’s Oilfield replied and argued no claim existed for an indemnity, a third-party claim, or a claim for contribution. BJ’s Oilfield also argued that if SunPower’s petition was an attempt to state a claim for indemnity or contribution, then such claims were barred by the exclusive workers’ compensation remedy provision in 85A O.S. § 5.

¶14 The trial court granted BJ’s Oilfield’s motion to dismiss SunPower’s third party petition. The trial court’s order granted the motion without stating whether the order was based upon 12 O.S. § 2012(B)(1) (lack of jurisdiction based upon 85A O.S. § 5), or 12 O.S. § 2012(B)(6)(failure to state a claim), or both of the these grounds urged by BJ’s Oilfield.

¶15 SunPower filed a petition in error and the appeal was sua sponte retained in this Court. A previous order of this Court required the appeal to proceed pursuant to 12 O.S. § 994(A).⁴

IV. Assignments of Error and Appellate Review

¶16 The assignments of error by SunPower’s petition in error are: Whether the trial court erred when granting the motion to dismiss SunPower’s amended third-party petition; Whether the workers’ compensation exclusive remedy against an employer provided by 85A O.S.Supp.2014, § 5 may be used as a defense to claims for indemnity and contribution; Whether SunPower stated a claim for contractual and/or implied indemnity; Whether SunPower may assert a claim for indemnity as a third-party beneficiary of the agreement between Moss & Associates; Whether BJ’s agreement to indemnify SunPower falls under the independent legal relationship exception to the exclusive remedy provision of the OAWCA (Oklahoma Administrative Workers’ Compensation Act); and Whether SunPower’s claims against. BJ’s fall under the intentional tort exception to the exclusive remedy provision of the OAWCA.

¶17 In summary, the order brought for appellate review sustained BJ’s motion to dismiss SunPower’s third-party petition, and the assignments of error focus on application of 85A O.S.Supp.2014, § 5, contractual indemnity, a third-party beneficiary contract, and tortfeasor contribution.

[3, 4] ¶1...