PRICE v. HOWARD (2010)

¶ 1 We retained this cause to answer two questions: 1) whether the various defendants/appellees are entitled to the protection of the exclusive remedy provision¹ of the Oklahoma Workers' Compensation Act; and 2) if so, whether the actions of the respective parties were sufficient to take them outside that protection under this Court's opinion in Parret v. UNICCO Serv. Co. ., 2005 OK 54, 127 P.3d 572.

¶ 2 The employee, ServiCenter's President, and a majority stockholder in the company were killed when the airplane crashed. There is no evidence that the pilot or any of the other passengers on the plane had any intention of harming themselves or others. Under these facts and assuming ServiCenter was aware that the airplane was carrying passengers in violation of its temporary flight restrictions,² that it was overweight, and that it took off in foul weather, the record does not demonstrate that the employer understood there was a substantial certainty of injury. Therefore, we determine that the evidence is insufficient under Parrett v. UNICCO Service Co., 2005 OK 54, 127 P.3d 572 to subject the employer to liability outside that provided by the Workers' Compensation Act. Nevertheless, material questions of fact exist as to whether the employer was engaged in a joint venture sufficient to extend the protections of Oklahoma's workers' compensation law to other members of the alleged agreement and to a third party claiming status as a co-employee under the Act.

FACTUAL AND PROCEDURAL HISTORY

¶ 3 On October 15, 2006, an airplane crash took the life of Perry Price (Price/employee). It is undisputed that: 1) Price was an employee of ServiCenter; and 2) on the day of the plane crash, he was going to the convention as a part of that employment at the request of Wayne Radco, ServiCenter's President.³ Along with Price and Radko, Charles Howard, M.D. (Howard), a major stockholder in ServiCenter, and John Olsen (Olsen), Howard's son-in-law and the registered owner of the plane, also died in the crash. It is also undisputed that ServiCenter had done significant modifications to the plane. It is contended that the modifications and refurbishments, including the use of an improved experimental five-bladed propeller and the addition of slipper fuel tanks, arose from an agreement among Radco, on the behalf of ServiCenter, Howard, and Olsen to utilize the modified aircraft as a marketing tool to current and prospective customers of ServiCenter in an attempt to attract additional business.⁴

¶ 4 After recovering workers' compensation death benefits, Mrs. Price filed suit in district court on May 29, 2007 naming as defendants the Howard and Olsen estates, and an individual, David Hobza. Price alleged that the individually named defendants' negligence was the proximate cause of her husband's death. The first amended petition was filed on June 21, 2007. Mrs. Price added ServiCenter as a defendant, claiming the employer was negligent in performing maintenance and in making repairs and modifications to the plane. Mrs. Price also contended that, when the maintenance, repairs, and modifications were made, ServiCenter had assumed a persona independent of its employer/employee relationship with her husband.⁵

¶ 5 On February 1, 2008, Hobza filed a motion for summary judgment. Hobza alleged that, when the plane crashed, he was an employee of the ServiCenter entitled to the same protections under the Workers' Compensation Act as his employer. Three days later, ServiCenter filed a similar motion claiming immunity from suit in district court pursuant to the exclusivity provision of the Workers' Compensation Act. Thereafter, the Howard and Olsen estates also sought summary judgment claiming that, at the time of the accident, ServiCenter, Howard, and Olsen were engaged in a joint venture to develop and market the modification/refurbishment package implemented on the plane. Howard and Olsen contended that, as joint venturers with ServiCenter, they were immune from suit under the exclusive remedy provisions of the Workers' Compensation Act.

¶ 6 After conducting an extensive hearing on April 11, 2008, the trial court entered judgment in favor of each of the defendants/appellees which was filed on May 9th. Price filed a timely appeal and requested that the cause be retained. The request was granted on August 22, 2008. Although the cause stood ready for assignment on that date, it was not received in these chambers until October 22, 2009.

Standard of Review on Summary Judgment

¶ 7 On summary judgment all inferences and conclusions to be drawn from the underlying facts contained in the record are to be considered in the light most favorable to the party opposing the motion.⁶ Even when the basic facts are undisputed, motions for summary judgment should be denied, if, under the evidentiary materials, reasonable individuals could reach different factual conclusions.⁷ The trial court granted summary judgment based on a legal determination that all the defendants/appellees were entitled to the protection of the exclusive remedy provision of the Workers' Compensation Act. The district court concluded it had no jurisdiction to proceed. Jurisdictional issues present questions of law⁸ which this Court reviews de novo.⁹

The limited exception provided under Parrett v. UNICCO Service Center to the exclusive remedy protections afforded to employers under the Workers' Compensation Act.

¶ 8 Regardless of fault, 85 O.S. Supp.2006 § 11 of the Workers' Compensation Act places the duty upon employers to bear the responsibility for compensating employees for accidental personal injuries arising out of and in the course of employment.¹⁰ Section 12 provides in pertinent part:

“The liability prescribed in Section 11 of this title shall be exclusive and in place of all other liability of the employer and any of his employees ․ at common law or otherwise, for such injury, loss of services, or death, to the employee, or the spouse, personal representative, parents, or dependents of the employee, or any other person․”

The statutory language makes it clear that the Legislature intended that accidental injuries will fall within the confines of the Workers' Compensation Act and that an employer's liability for these injuries is exclusive under the Act.¹¹ Each of the defendants/appellees seeks protection from suit in district court under § 12's exclusive remedy provision.

¶ 9 Price invokes the intentional tort exception to workers' compensation liability as outlined by this Court in Parret v. UNICCO Service Co., 2005 OK 54, 127 P.3d 572. The employee in Parret died as a result of injuries occurring when he was electrocuted while replacing emergency lights. We determined that tort liability could be imposed upon the employer if the injuries were the result of actions the employer knew were substantially certain to cause injury.

¶ 10 Before tort liability may be imposed under Parret's substantial certainty test, the employer's conduct must amount to an intentional tort; and, the employer must have: 1) desired to bring about the worker's injury; or 2) acted with the knowledge that such injury was substantially certain to result from the employer's conduct. To remove the injured worker's claim from the exclusive remedy provision of the Workers' Compensation Act and allow the worker to proceed in district court, nothing short of a demonstration of the employer's knowledge of the substantial certainty of injury will suffice. The employer's cognizance of a foreseeable risk, high probability, or substantial likelihood of injury are insufficient to impose tort liability.

¶ 11 a) THE RECORD IS DEVOID OF ANY EVIDENCE THAT THE SERVICENTER/EMPLOYER BELIEVED THAT THE PLANE ON WHICH THE EMPLOYEE WAS TRANSPORTED WAS SUBSTANTIALLY CERTAIN TO CRASH.

¶ 12 Mrs. Price contends that it was error to grant summary judgment to ServiCenter on multiple grounds. She does not assert that the employer desired to bring about her husband's injury. Nevertheless, she does argue that ServiCenter had information sufficient to fall within the second exception to the exclusive remedy provision of the Workers' Compensation Act outlined under Parret. The wife asserts that a question of fact exists as to whether ServiCenter was substantially certain that her husband would be injured while in flight.

¶ 13 Having paid death benefits under the Workers' Compensation Act, ServiCenter, as Price's employer, claims the protection of the Act's exclusive remedy provision, 85 O.S. Supp.2005 § 12.¹² The employer contends that no one could reasonably determine that it wanted to see its President, a major stockholder, or Price die in a crash or that it was substantially certain that the crash was likely. We agree with ServiCenter's contentions.

¶ 14 The employee was given the assignment to travel on the plane on company business and was accompanied on the trip by ServiCenter's President, Wayne Radco (Radco).¹³ Radco both directed Price to fly to Florida on the plane and also died in the same crash. Earlier, aircraft fitted with the experimental five-bladed propellers had traveled successfully to remote convention locations.¹⁴ The airplane had flown some twenty to thirty hours while fitted with the experimental five-bladed propellers and the slipper tanks without incident. It had also been airborne with representatives from the company through which ServiCenter hoped to market the propellers.¹⁵ Nevertheless, the plane had not flown with the additional tanks fueled.¹⁶

¶ 15 There is evidence that David Hobza (Hobza), a defendant/appellee, had knowledge that the plane was approximately one thousand (1,000) pounds too heavy at takeoff and that he passed that information along to the plane's pilot, Olsen. Testimony indicated that takeoff during a rainstorm and the overweight condition of the plane “substantially increased the likelihood that complications could occur.”¹⁷ It also appears that Hobza was aware that Price should not have been included as a passenger pursuant to restrictions imposed on the aircraft under its experimental operating limitations.¹⁸ At a management meeting following the crash, Hobza was: accused of being reckless in allowing the plane's take-off; told he should have done anything necessary to have stopped the flight; and terminated.¹⁹ Hobza was rehired at a stockholders' meeting in February, 2007.

¶ 16 There is nothing in the record indicating that Radco, ServiCenter's President and Price's supervisor, was ever advised that there were facts indicating the flight would not be safe. Even if we were to impute actual knowledge to ServiCenter,²⁰ the record is devoid of evidence that any of the parties who occupied the plane that day appreciated the risk or were intent on committing suicide by boarding the plane for takeoff. Undoubtedly, the employer's conduct in allowing the plane to take flight may have been reckless. Nevertheless, absent some evidence of impaired judgment, none of which exists here, we do not expect individuals to engage in self-destructive behavior.²¹ Furthermore, violation of government safety regulations, even if wilful and knowing, does not rise to the level of an intentional tort²² or an actual intent to injure.²³

¶ 17 Establishing that an employer has acted in a manner resulting in an employee's injuries being substantially certain presents a formidable barrier to recovery in tort.²⁴ Under the facts presented, we cannot say that the employer's conduct amounted to an intentional tort or that the employer desired to bring about the worker's injury or acted with the knowledge that such injury was substantially certain to result from the employer's conduct. Therefore, we hold that the evidence is insufficient under Parret v. UNICCO Service Co., 2005 OK 54, 127 P.3d 572 to subject the employer to liability outside that provided by the Workers' Compensation Act.

¶ 18 b) THE EVIDENCE PRESENTS A QUESTION OF FACT AS TO WHETHER THE SERVICENTER, HOWARD [A MAJORITY STOCKHOLDER], AND OLSEN [THE PLANE'S PILOT], WERE ENGAGED IN A JOINT VENTURE SUFFICIENT TO ENTITLE THE STOCKHOLDER AND THE PILOT TO THE PROTECTIONS OF THE EXCLUSIVE REMEDY PROVISIONS OF THE WORKERS' COMPENSATION ACT.

¶ 19 Mrs. Price contends that her husband died as a result of Howard's and Olsen's negligence in piloting the plane and in failing to adhere to the aircraft's design and experimental operating limitations. She also asserts that there is no evidence of an agreement among the ServiCenter, Howard, and Olsen arising to that of a joint venture. Therefore, Price argues there is no basis upon which to extend the protection of the exclusive remedy provisions of the Workers' Compensation Act to either Howard or Olsen.

¶ 20 In contrast, Howard and Olsen argue that they, along with ServiCenter, were involved in a joint venture for the purpose of developing and marketing the five-bladed propellers, interior modifications, and other improvements. As members of a joint venture with the employer, Howard and Olsen claim the protection of the exclusive remedy provisions of the Workers' Compensation Act.

The nature of a joint venture.

¶ 21 A joint adventure is a special combination of two or more persons where, in some specific venture, a profit is jointly sought without any partnership or corporate designation; and, by special agreement, the parties may limit their respective profits and provide which particular part of the expenses each should bear before participation in any profit.²⁵ Corporations have the power to enter into joint ventures with individuals.²⁶ An employee engaged in the activities of a joint venture is an employee of each of the joint venturers.²⁷

¶ 22 While the chief characteristic of a joint venture is the seeking of joint profits from a transaction,²⁸ no single factor is sufficient to establish that parties are engaged in a joint venture. Three requisite elements exist. They are: 1) a joint interest in property; 2) an express or implied agreement to share profits and losses of the venture; and 3) action or conduct showing cooperation in the project.²⁹ The existence of a joint venture presents a question of fact.³⁰

Disputed material facts.

¶ 23 Both Howard and Olsen died in the crash along with Price's husband. Howard was an officer and director of ServiCenter, owning approximately forty-nine percent (49%) of the stock in the company. Howard purchased the aircraft from ServiCenter in 2005. His son-in-law, Olsen, was the plane's registered owner. Howard and Olsen assert that they, along with ServiCenter, agreed to cooperate in obtaining a supplemental type certificate (STC)³¹ for the five-bladed propellers to promote sales through the company. They also insist that Radco, ServiCenter's President, agreed that modifications such as the propellers, the addition of slipper tanks, and other modifications would be incorporated into Olsen's plane for purposes of demonstrating their utility to potential customers. Under the alleged agreement, Howard paid for the parts installed on the airplane; ServiCenter stood the expense of the labor; and, Olsen received the benefit of an upgraded craft for allowing ServiCenter to utilize it to promote sales.³² Presumably, the employer was to benefit from the arrangement by utilizing the aircraft as a demonstration piece for the exclusive rights to sell the five-bladed propellers³³ and the stockholder would enjoy the increase in profits from his holdings in the company.

¶ 24 Although Hobza testified that Howard, in association with the joint venture, would pay only for parts, there is some indication in the record that at least a portion of the modifications made to the plane may not have been included within that agreement and were paid for by Howard, personally.³⁴ Additionally, the record also indicates that ServiCenter, which was to be responsible for only the labor, made at least a $20,000.00 deposit on the propellers installed on the aircraft.³⁵ Furthermore, a board member testified that it was understood that: Hobza had been directed to sell the project involving the experimental propellers; that he was surprised to discover that there had been a renewed effort to market them through the ServiCenter; the project proceeded without his approval; and, he was unaware of any separate entity formed involving the ServiCenter to pursue the propeller project.³⁶ Finally, the decision to proceed with the venture was made without consultation of the entire ServiCenter Board. Nevertheless, Radco had apparent authority to enter such an agreement with Howard and Olsen.³⁷

¶ 25 Howard and Olsen assert the agreement exists while Price argues that there is no evidence of any contract. The evidence involving the alleged agreement is contradictory. It is not for this Court to determine the efficacy of material facts. However, we are charged with looking at those facts in the light most favorable to Price.³⁸ There is disputed evidence of: the existence or the nature of any agreement among ServiCenter, Howard, and Olsen; whether, if an agreement existed, the parties' actions fell within the contract; and, whether ServiCenter's President had the authority to bind its principle to a marketing stratagem involving the modifications made to the aircraft. The evidence of a joint venture is contradictory. Therefore, we hold that this cause presents issues of material fact precluding an award of summary judgment entitling Howard and Olsen to the exclusive remedy protections of the Workers' Compensation Act.

¶ 26 c) MATERIAL ISSUES OF FACT EXIST AS TO WHETHER HOBZA WAS PRICE'S CO-EMPLOYEE ENTITLED TO THE PROTECTIONS AFFORDED BY THE EXCLUSIVE REMEDY PROVISIONS OF THE WORKERS' COMPENSATION ACT.

¶ 27 Mrs. Price argues that Hobza, the individual providing information to the pilot about the overweight condition of the aircraft on the day of the crash, was not a co-employee of her husband but an independent contractor associated with the ServiCenter. As such, she contends Hobza is not entitled to the limited liability protections of the Workers' Compensation Act. Conversely, Hobza insists that he is a long time ServiCenter employee entitled to the same protections under the Workers' Compensation Act as his employer.³⁹

Disputed material facts.

¶ 28 Mayer, held a forty-nine percent (49%) interest in the ServiCenter and prepared the agreement defining the arrangement between the employer and Hobza. The agreement is entitled “Contractor Agreement between the ServiCenter, Inc. And David Hobza” providing in the first paragraph that the document is to serve as “the Contractor agreement ․ between (the ‘Contractor’) and the Servicenter, Inc․”. Mayer testified that the intent of the agreement was for Hobza to act as a contractor for ServiCenter rather than to be considered an employee.⁴⁰ When Mayer was asked how Hobza should be characterized on the date of the crash, he indicated that Hobza could be described as a member of the Board of Directors of the ServiCenter, as their contractor, and as an agent for Jon Olsen.⁴¹ This testimony is supported by a document in the record giving Hobza the authority to act as Olsen's agent to change, modify, and or place the aircraft in the experimental category.⁴² Despite his statements that ServiCenter, in executing the agreement with Hobza, intended that the relationship be that of independent contractor, he also testified that there were other indicators that the agreement might be construed to be that of employer-employee.⁴³

¶ 29 Generally, the question of whether an individual serves as an independent contractor or an employee is for the trier of fact.⁴⁴ The issue becomes a one of law when no other inference can be drawn from the facts presented other than that the individual serves in the capacity of one or the other.⁴⁵ The facts here are highly contested. Reasonable people could differ in their implications. Therefore, we hold that this cause presents issues of material fact precluding an award of summary judgment entitling Hobza to the exclusive remedy protections of the Workers' Compensation Act.

CONCLUSION

¶ 30 On the day of the crash, the flight conditions were not optimum, the plane was flying with more weight than was advisable, and the flight took place in violation of standards set forth in its experimental certificate. Nevertheless, there is nothing in the record to demonstrate that the employer was substantially certain that its employee would be injured. Therefore, the evidence is insufficient under Parrett v. UNICCO Service Co., 2005 OK 54, 127 P.3d 572 to subject the employer to liability outside that provided by the Workers' Compensation Act. However, there are disputed facts which must be resolved by the trier of fact regarding both the existence of a joint venture and the status of employee versus independent contractor. Therefore, we reverse the cause and remand it for proceedings consistent with the provisions of this opinion.

AFFIRMED IN PART; REVERSED IN PART; REMANDED.

¶ 1 Because I did not join the court's pronouncement in Parret v. UNICCO Service Co., 2005 OK 54, 127 P.3d 572, I cannot concur in today's entire opinion. Insofar as the court appears to extend to some appellees full protection of the Workers' Compensation Act's exclusive remedy found in 85 O.S. Supp.2005 § 12, by exonerating them from all tort liability at common law, I concur. But I am compelled to recede from all other parts of the court's holding.

WATT, J.

EDMONDSON, C.J., TAYLOR, V.C.J., HARGRAVE, KAUGER, WATT, WINCHESTER, COLBERT, REIF, JJ., concur. OPALA, J., concurring in part.