Cornell v. Liberty Mutual Group, Inc. et al

Filing 62

MEMORANDUM OPINION AND ORDER. Signed by Honorable Robert T. Dawson on March 16, 2012. (cnn)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
EL DORADO DIVISION
MELINDA CORNELL, Individually, and as
Parent and Next Friend of TSA and JMT,
minor children
v.

PLAINTIFF

CASE No. 11-1021

LIBERTY MUTUAL GROUP, INC.

DEFENDANT

MEMORANDUM OPINION AND ORDER
Currently

before

the

Court

are

Defendant

Liberty

Mutual

Group, Inc.’s Motion for Summary Judgment (Doc. 33), Memorandum
Brief

(Doc.

34),

Statement

of

Facts

(Doc.

36),

Motion

for

Hearing (Doc. 40) and Plaintiff’s Response in Opposition (Doc.
44).

Also before the court are Plaintiff’s Motion to Certify

Arkansas Constitutional Legal Questions to the Arkansas Supreme
Court (Doc. 49), Defendant’s Response in Opposition (Doc. 50)
and Plaintiff’s Reply (Doc. 60).
I.

Background
On or about June 18, 2008, Plaintiff sustained work-related

injuries at her place of employment and for which she filed a
workers’ compensation claim. (Doc. 1). Her employer’s workers’
compensation carrier was Liberty Mutual Group, Inc. (“Liberty
Mutual”).

Plaintiff’s workers’ compensation claim was accepted

and she received certain benefits from Liberty Mutual Group,
Inc.

(Doc. 50).

Plaintiff brought this action against Liberty
1 

Mutual1, alleging that, as her employer’s carrier, Liberty Mutual
negligently inspected her worksite and failed to warn her of a
dangerous condition that led to her injury. (Doc. 1).
II. Standard of Review
Summary judgment is appropriate when, viewing the facts and
inferences in the light most favorable to the nonmoving party,
“the pleadings, the discovery and disclosure materials on file,
and any affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as a
matter of law.”

Fed.R.Civ.P. 56(c).

The plain language of Rule

56(c) mandates the entry of summary judgment, after adequate
time for discovery and upon motion, against a party who fails to
make

a

showing

sufficient

to

establish

the

existence

of

an

element essential to that party’s case, and on which that party
will

bear

the

burden

of

proof

at

Catrett, 477 U.S. 317, 322 (1986).

trial.

Celotex

Corp.

v.

“A party seeking summary

judgment always bears the initial responsibility of informing
the district court of the basis for its motion, and identifying
those

portions

interrogatories,

of
and

the

pleadings,

admissions

on

depositions,
file,

answers

together

with

to
the

1

Upon investigation, it was determined that the part or parts
of the hydraulic press machine that malfunctioned were never
part of the inventory distributed by McMaster-Carr Supply
Company and no such springs had been sold to Plaintiff’s
employer, Hubbell Lighting, by McMaster-Carr. Upon joint
stipulation, McMaster-Carr was dismissed with prejudice on
December 6, 2011. (Doc. 29).
2 

affidavits, if any, which it believes demonstrate the absence of
a genuine issue of material fact.”

Id. at 323.

If the moving

party meets the initial burden, the burden then shifts to the
opposing party to produce evidence of the existence of a genuine
issue for trial.

Id. at 324.

The evidence must be viewed in the light most favorable to
the nonmoving party, giving the nonmoving party the benefit of
all reasonable inferences.

Kenney v. Swift Transport, Inc., 347

F.3d 1041, 1044 (8th Cir. 2003).
summary

judgment,

a

court

must

credibility determinations.”

Id.

“In ruling on a motion for
not

weigh

evidence

or

make

“Where the unresolved issues

are primarily legal rather than factual, summary judgment is
particularly appropriate.”

Koehn v. Indian Hills Cmty. Coll.,

371 F.3d 394, 396 (8th Cir. 2004).
III.

Discussion
Defendant

argues

that

the

benefits

available

under

Arkansas’ Workers’ Compensation Code are the exclusive remedy
for employees who suffer on-the-job injuries and bars any tort
claims against employers for such injuries.

A.C.A. § 11-9-105.

The

that

Code,

Defendant

asserts,

demonstrates

an

insurance

carrier was not intended to be a “third party” against whom an
injured employee could maintain a common law tort action for a
compensable injury.

(Doc. 34).

3 

Plaintiff
unconstitutional

claims
in

that

that

the

A.C.A.

§

legislature

11-9-409(e)
did

not

authority to grant immunity to insurance carriers.

is

have

the

She cites

the common law rules applicable to third parties who perform
negligent workplace safety inspections and asserts that immunity
is not absolute but must be determined on a case by case basis.
Plaintiff also claims that she is a third party beneficiary to
the workers’ compensation insurance policy between her employer
and the Defendant and that she has a constitutional right to
make a claim of breach of that contract.
In
extending

support

of

immunity

her

from

argument,
tort

to

(Doc. 50).

Plaintiff

insurers

is

contends
a

that

violation

of

Article 5, Section 32, of the Arkansas Constitution, as amended
by Amendment 26 which states in pertinent part:
The General Assembly shall have the power to enact
laws prescribing the amount to be paid by employers
for injuries to or death of employees, and to whom
said
payment
shall
be
made....Provided,
that
otherwise no law shall be enacted limiting the amount
to be recovered for injuries resulting in death or
for injuries to person or property....
Plaintiff

contends

that

the

Arkansas

Constitution

extends

immunity from tort only to employers, not to insurers. (Doc.
50).
The

question

of

the

constitutionality

of

The

Workers’

Compensation Act in light of Amendment 26 was decided as far
back as 1946, when the Arkansas Supreme Court found the Act to
4 

be valid as against objections that it is class legislation and
makes unreasonable classifications, denies equal protection and
due

process

of

law,

impairs

the

obligation

of

existing

contracts, and interferes with right to contract, the right to
jury trial, and vested rights by abolishing existing statutory
and common law remedies, and that it abridges privileges and
immunities.

Hagger v. Wortz Biscuit Co., 1946, 210 Ark. 318

(1946).
The issue of an insurer’s liability is not, as Plaintiff
contends, a case of first impression in Arkansas.

In Neal v.

Oliver, 246 Ark. 377, 380 (1969), the Supreme Court defined a
“third party” as used in the Act as “some person or entity other
than the first and second parties involved, and the first and
second

parties

can

only

mean

the

injured

employee

employer or one liable under the compensation act.”

and

the

In Johnson

v. Houston General Insurance Co., 259 Ark. 724, 725 (1976), the
Supreme Court held that the benefits payable pursuant to the
workers' compensation act, and the procedure set out in that act
for obtaining those benefits, constitute an exclusive remedy,
and

that

remedy

precludes

an

action

at

law,

even

for

an

intentional tort arising out of the non-payment of benefits.  
Relying

upon

Neal,

the

Court

later

held

that

a

workers’

compensation insurer has no independent liability to a worker
because of the immunity provisions of the workers’ compensation
5 

law.

Burkett v. PPG Industries, Inc., 294 Ark. 50, 55 (1987)

(emphasis

added).

The

Court

in

Burkett

also

relied

on

the

Eighth Circuit’s decision in Kifer v. Liberty Mutual Insurance
Company, 777 F.2d 1325 (1985), which had made “an exhaustive
study of the law with respect to whether a workers’ compensation
act such as [Arkansas’] precluded[d] such liability.” Burkett at
54.

In both Kifer and Burkett, the question was whether an

employee

could

sue

his

employer’s

workers’

compensation

insurance carrier for its failure to inspect the premises and
warn the employee of danger.

The Eighth Circuit found that the

Act did preclude such liability as did the Arkansas Supreme
Court.

“We hold that a workers’ compensation insurance carrier

has the same immunity from suit by an injured employee as is
provided the employer by [the workers’ compensation statute].”
Burkett at 57.
intent

of

The Court agreed with Kifer that the legislative

the

statute

independent liability.
construe
against

the
a

Act

to

workers'

was
Id

permit

to

preclude

the

insurer

from

at 55-56. “[T]o conclude that to
an

compensation

employee's
carrier

common

for

law

action

negligent

safety

inspections of the employer's premises would be contrary to the
purposes and policies underlying the Act.”

Kifer at 1337.

In 1993, the Arkansas Supreme Court determined that any
change concerning the exclusivity of the statutory remedies or
the form of those remedies must come from the legislature, not
6 

the

courts.

Liberty

(1993)(granting

Mut.

Ins.

Liberty

Co.

v.

Mutual’s

Coleman,

petition

313

212

writ

for

Ark.

of

prohibition to St. Francis County Circuit Court and stating that
Coleman’s

exclusive

remedy

resided

in

his

pending

workers’

compensation case.)
Arkansas Constitutional Amendment 26 empowered the General
Assembly to enact laws prescribing the amount of compensation to
be paid by employers for injuries to employees.

According to

the Eighth Circuit, the purpose was to grant to the Legislature
the right to adopt a workers’ compensation act.
to

substitute

employees

for

common-law

exclusive

right

their

the

right

under

of

the

Such act serves
damages
act

of

all

against

the

employer. This only applies where the employer has secured for
the employee the compensation payments as required by the act.
Ark.Stats. §§ 81-1304, 81-1306; Const. Ark. Art. 5, § 32, and as
amended by Const. Amend. No. 26; Huffstettler v. Lion Oil Co.,
208 F.2d 549 (8th Cir. 1953) (finding that where subcontractor
fails

to

secure

contractor

shall

workers’

be

liable

compensation
for

insurance,

compensation

to

prime

employees

of

subcontractor.)
The purpose of workers' compensation statutes was to change
the

common

injuries
consuming

law

from

by

shifting

individual

public.

Employers

the

employers
were
7 

burden

of

and

compelled

all

work-related

employees
to

give

to

the

up

the

common-law defenses of contributory negligence, fellow servant,
and assumption of risk.

Employees were required to give up the

chance of recovering unlimited damages in fault-related cases in
return

for

a

certain

recovery

in

all

work-related

cases.

Simmons First Nat. Bank v. Thompson, 285 Ark. 275 (1985).

The

plaintiff is attempting to return to the common-law system based
on fault, when it is to her advantage to do so, but at the same
time to retain the assured benefits of workers' compensation
regardless of fault.
Defendant’s basis for liability, according to Plaintiff, is
that

the

agreement

insurance
with

company

was

Plaintiff’s

obligated

employer

by

to

contract

and/or

periodically

and

regularly inspect the work place in order to detect dangerous
working conditions, Plaintiff being a third-party beneficiary to
any contract or agreement there may have been.

She asserts that

Defendant negligently failed to properly detect the hazardous
nature of the hydraulic press she was using when she was injured
and

that

Defendant’s

negligence

contributed

to

her

injuries.

(Doc. 1).
Pursuant

to

A.C.A.

§

11-9-409(d),

in

order

to

provide

casualty insurance in the State of Arkansas and write workers’
compensation insurance in the state,

Defendant is required to

provide accident prevention services as a prerequisite.

The

statute

who

goes

on

to

provide

that
8 

an

insurance

company

performs a safety consultation under this provision shall have
no

liability

allegation

with

that

respect

the

to

accident

any

was

accident

caused

or

based
could

on

the

have

been

prevented by a program, inspection, or other activity or service
undertaken

by

the

insurance

company

for

the

prevention

accidents in connection with operations of the employer.
§

11-9-409(e)(1)

(emphasis

added).

The

argument

of

A.C.A.

that

the

Legislature intended to place the insurer in the same position
as the employer is elevated based upon the last sentence of the
statute:

“EXCLUSIVE REMEDY.

This section does not create an

independent cause of action at law or in equity.”

A.C.A. § 11-

9-409(f).

Even without the benefit of the Supreme Court having

ruled

numerous

on

occasions

that

insurers

are

immune

from

liability, this provision would resolve any question.
The facts are undisputed that Plaintiff was injured at her
place of employment and that she filed a workers’ compensation
action against her employer as a result of those injuries. It is
further undisputed that her claim was accepted and that she has
received workers’ compensation benefits through her employer’s
Worker’s Compensation policy.

(Doc. 50).

Applying

precedent,

Defendant is immune from liability to Plaintiff in this matter.
Because the Defendant is entitled to Summary Judgment in
its favor, a hearing on its Motion (Doc. 40) is unnecessary and
the Motion is DENIED.
9 

On February 8, 2012, Plaintiff filed a Motion to Certify
Arkansas Constitutional Legal questions to the Arkansas Supreme
Court and to Hold in Abeyance Ruling on Defendants’ Summary
Judgment

Motion

Herein

Until

Such

Constitutional

Issue

Questions are Answered by the Arkansas Supreme Court.

Legal
(Doc.

49).
Section

(a)(1)

of

the

Arkansas

Supreme

Court

Rule

6-8

provides:
“The [Arkansas] Supreme Court may, in its discretion,
answer questions of law certified to it by order of a
federal court of the United States if there are
involved in any proceeding before it questions of
Arkansas law which may be determinative of the cause
then pending in the certifying court and as to which
it appears to the certifying court there is no
controlling
precedent
in
the
decisions
of
the
[Arkansas] Supreme Court.”

Because this is not a case of first impression and there is
clear authority from the Arkansas Supreme Court on this issue,
the question of the constitutionality of the exclusive remedy
provisions of the Act is not appropriate for certification and
Plaintiff’s Motion (Doc. 49) is DENIED.
IV.

Conclusion
Defendant’s

GRANTED

and

its

Motion
Motion

for
for

Summary
Hearing

Judgment
(Doc.

(Doc.
40)

is

33)

is

DENIED.

Plaintiff’s Motion to Certify (Doc. 49) is DENIED. Plaintiff’s

10 

Complaint (Doc. 1) is DISMISSED WITH PREJUDICE. Each party is to
bear their own costs.

IT IS SO ORDERED this 16th Day of March, 2012.
/s/ Robert T. Dawson
Honorable Robert T. Dawson
United States District Judge

11