Friend v. Remac America, Inc.
MEMORANDUM OPINION AND ORDER GRANTING 38 DEFENDANTS RESPONSE/CROSS-MOTION FOR SUMMARY JUDGMENT AND DENYING 35 PLAINTIFFS MOTION FOR PARTIAL SUMMARY JUDGMENT. Signed by District Judge Gina M. Groh on 2/14/13. (njz)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
CIVIL ACTION NO. 3:12-CV-17
REMAC AMERICA, INC.,
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT’S
RESPONSE/CROSS-MOTION FOR SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
This matter is currently before the court on Plaintiff’s Motion for Partial Summary
Judgment on the Issue of Plaintiff’s Burden of Proof [Doc. 35], filed on October 9, 2012.
Defendant, Remac America, Inc., filed its Response/Cross-Motion for Partial Summary
Judgment on the Issue of the Cause of Action which Plaintiff is Allowed to Bring [Doc. 38]
on October 23, 2012. Plaintiff filed a Response to Defendant’s Cross Motion for Partial
Summary Judgment and a Reply in Support of Plaintiff’s Motion for Partial Summary
Judgment [Doc. 40] on November 5, 2012. Defendant filed its Reply to Plaintiff’s Response
[Doc. 41] on November 13, 2012. Thus, these motions are ripe for the Court’s review. For
the following reasons, the Court GRANTS Defendant’s Response/Cross-Motion for
Summary Judgment [Doc. 38] and DENIES Plaintiff’s Motion for Partial Summary Judgment
on the Issue of Plaintiff’s Burden of Proof [Doc. 35].
II. Factual Background
In August 2009, Maryland corporation Remac America, Inc. (“Remac”) hired
Mineral County, West Virginia, resident Joseph Friend (“Friend”) to work at its scrap tire
facility in Brandywine, Maryland. On January 29, 2010, Friend moved to Remac’s
facilities in West Virginia. On March 26, 2010, Friend suffered a head injury when the
chain hook attached between two bull dozers broke, causing the end of the chain to fly
back and strike him in the head. At the time of his injuries, Friend was working at a site
near Martinsburg, Berkeley County, West Virginia for Defendant Remac.
Friend concurrently filed claims for workers’ compensation benefits in West
Virginia and Maryland, though Remac only had workers’ compensation insurance
coverage in Maryland. The West Virginia Workers’ Compensation Uninsured
Employers’ Fund accepted Friend’s claim for payment on May 11, 2010. The Maryland
Injured Workers’ Insurance Fund (“IWIF”) accepted Friend’s claim for payment by letter
dated December 8, 2010.
Meanwhile, the West Virginia Offices of the Insurance Commissioner (“OIC”) filed
state actions in West Virginia and Maryland against Remac to recover more than
$24,000 of medical benefits it paid to Friend since May 2010. In October 2010, these
lawsuits were resolved pursuant to a Global Agreement and Settlement with Release
entered into among Remac, Friend, the Maryland IWIF, and the West Virginia OIC. The
Maryland IWIF agreed to reimburse the West Virginia Fund for the paid medical
benefits. Remac agreed to pay the West Virginia OIC a fine of $10,000 and the costs of
litigation. Friend agreed to “withdraw, as though it were never filed, his West Virginia
workers’ compensation claim . . . and to waive his right to receive any additional West
Virginia workers’ compensation benefits from the [West Virginia] Fund as of October 1,
2011.” [Doc. 5-32 at 7]. However, Friend “specifically preserve[d] his right to bring a
civil action under W. Va. Code § 23-4-2(d)(2)(ii),” which is a deliberate intent action. Id.
III. Procedural Background
Friend filed his Complaint in the Circuit Court of Berkeley County, West Virginia on
January 24, 2012. Remac filed a Notice of Removal within thirty days after it was served
with the Complaint [Doc. 1]. Friend is a citizen of West Virginia, and Remac is a Maryland
corporation with its principal place of business in Maryland. Remac asserts that the matter
in controversy exceeds $75,000. Thus, this case was removed pursuant to diversity
On March 6, 2012, Remac filed a Motion to Dismiss or in the alternative, Motion
for Summary Judgment [Doc. 4]. Friend responded on March 20, 2012 [Doc. 7]. On April
3, 2012, Remac filed its reply [Doc. 10]. On May 7, 2012, this Court entered its Order
denying Remac’s Motion to Dismiss as Converted to a Motion for Summary Judgment
[Doc. 16]. The Court held that the language of West Virginia Code § 23-2-1c(c) did not
preclude Friend’s civil action because the statutory language applies only when “the
employee is a resident of a state other than this State . . . .” [Doc. 16, at 7]. The Court held
that Friend is a West Virginia resident; thus, Remac’s reliance on West Virginia Code
§ 23-2-1c(c) was misplaced as it applies only when a non-resident employee is involved.
On October 9, 2012, Friend filed a Motion for Partial Summary Judgment on the
Issue of Plaintiff’s Burden of Proof [Doc. 35]. On October 23, 2012, Remac filed a
Response/Cross Motion for Partial Summary Judgment on the Issue of the Cause Which
Plaintiff is Allowed to Bring [Doc. 38]. On November 5, 2012, Friend filed his response in
opposition to Remac’s cross motion [Doc. 40]. On November 13, 2012, Remac filed its
reply [Doc. 41]. Thus, both motions are ripe for the Court’s review.
IV. Legal Standard
Rule 56 of the Federal Rules of Civil Procedure governs summary judgment. See
FED. R. CIV. P. 56. Summary judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” Celotex Corp. v. Catrett, 106 S. Ct. 2548, 2552, 477
U.S. 317, 322 (1986). A genuine issue exists “if the evidence is such that a reasonable jury
could return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 106
S. Ct. 2505, 2510, 477 U.S. 242, 248 (1986). Thus, the Court must conduct “the threshold
inquiry of determining whether there is the need for a trial- whether, in other words, there
are any genuine factual issues that properly can be resolved only by a finder of fact
because they may reasonably be resolved in favor of either party.” Anderson, 106 S. Ct.
at 2511, 477 U.S. at 250.
The party opposing summary judgment “must do more than simply show that there
is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd.
v. Zenith Radio Corp., 106 S. Ct. 1348, 1356, 475 U.S. 574, 586 (1986). That is, once the
movant has met its burden to show an absence of material fact, the party opposing
summary judgment must then come forward with affidavits or other evidence demonstrating
there is indeed a genuine issue for trial. FED. R. CIV. P. 56(c); Celotex Corp., 166 S. Ct.
at 2552-54, 477 U.S. at 323-25; Anderson, 106 S. Ct. at 2510, 477 U.S. at 248. “If the
evidence is merely colorable, or is not significantly probative, summary judgment may be
granted.” Anderson, 106 S. Ct. at 2511; 477 U.S. at 249 (citations omitted).
When both parties file motions for summary judgment, as here, the court applies the
same standards of review. ITCO Corp. v. Michelin Tire Corp., 722 F.2d 42, 45 n. 3 (4th
Cir. 1983) (“The court is not permitted to resolve issues of material facts on a motion for
summary judgment–even where . . . both parties have filed cross motions for summary
judgment.”) (emphasis omitted), cert. denied, 469 U.S. 1215 (1985). A motion for summary
judgment should be denied “if the evidence is such that conflicting inferences may be
drawn therefrom, or if reasonable men might reach different conclusions.” Phoenix Sav.
& Loan, Inc. v. Aetna Cas. & Sur. Co., 381 F.3d 245 (4th Cir. 1967); see also Anderson,
106 S. Ct. at 2513, 477 U.S. at 253 (noting that “[c]redibility determinations, the weighing
of the evidence, and the drawing of legitimate inferences from the facts are jury functions,
not those of a judge.”).
In this case, cross motions for summary judgment have been filed on the issue of
Friend’s burden of proof. There are no genuine facts in dispute regarding this issue,
and the issue is purely a matter of law as the Court is interpreting a statute. Friend
contends that he may pursue a negligence action against Remac because the West
Virginia OIC made a finding that Remac was required by West Virginia law to subscribe
and pay premiums for West Virginia Workers’ Compensation insurance coverage and
Remac failed to do so. Thus, Friend argues that Remac is stripped of its immunity
under the Workers’ Compensation Act pursuant to West Virginia Code § 23-2-8.
Remac argues that Friend, pursuant to the Global Agreement and Settlement
With Release that both parties entered into, waived his right to bring a claim against
Remac in simple negligence because Friend specifically preserved only his right to bring
a deliberate intent action pursuant to W. Va. Code § 23-4-2(d)(2)(ii). Thus, Remac
contends that under the plain and unambiguous language of the settlement and release
agreement, Friend is permitted to pursue only a deliberate intent action against Remac.
The crux of the issue is whether the Global Agreement and Settlement With Release is
void under West Virginia Workers’ Compensation Act, and, if not, whether the
settlement agreement restricts Friend to pursuing a deliberate intent action against
A. Settlement Agreement
Applying West Virginia law, if a statute is clear and unambiguous, the court must
apply the statutory language as written. State v. Boatright, 399 S.E.2d 57, 58 (W. Va.
1990). If the statute is ambiguous, the primary goal is to determine the legislative intent,
looking first to the language of the statute. Smith v. State Workmen’s Compensation
Comm’r, 219 S.E.2d 361, 365 (W. Va. 1975). In this case, there are two statutes at
issue: West Virginia Code sections 23-5-7 and 23-2-7. The statutes are part of the
Workers’ Compensation Act, and the West Virginia Supreme Court of Appeals has
noted that the Act is “remedial in its nature, and must be given a liberal construction to
accomplish the purpose intended.” Repass v. Workers’ Compensation Div., 569
S.E.2d 162, 168 (W. Va. 2002).
The Act voids any contract between an employer and employee that waives the
Act’s burdens or benefits . See W. VA. CODE § 23-2-7. The language in West Virginia
Code § 23-2-7 is very broad, and it provides:
No employer or employee shall exempt himself from the burden or waive
the benefits of this chapter by any contract, agreement, rule or regulation,
and any such contract, agreement rule or regulation shall be pro tanto
W. VA. CODE § 23-2-7 (emphasis added). However, the Act specifically permits the
compromise and settlement of workers’ compensation claims. West Virginia Code
section 23-5-7 provides, in pertinent part:
With the exception of medical benefits for nonorthopedic occupational
disease claims, the claimant, the employer and the workers’ compensation
commission, the successor to the commission, other private insurance
carriers and self-insured employers, whichever is applicable, may
negotiate a final settlement of any and all issues in a claim wherever
the claim is in the administrative or appellate processes. . . . Except in
cases of fraud, no issue that is the subject of an approved settlement
agreement may be reopened by any party, including the commission,
the successor to the commission, other private insurance carriers and selfinsured employers, whichever is applicable.
W. VA. CODE § 23-5-7 (emphasis added).
Although the Act specifically states that any contract or agreement is void if it
waives the benefits of the Act, the section of the Act providing for compromise and
settlement agreements would be rendered meaningless if section 23-2-7 could be
applied to invalidate final settlements under section 23-5-7 because a compromise or
settlement necessarily entails waiving some of the benefits of the Act. The West
Virginia Supreme Court of Appeals has never applied section 23-2-7 to void a final
compromise or settlement agreement made pursuant to section 23-5-7. Rather, the
West Virginia Supreme Court of Appeals has utilized section 23-2-7 to void an
employment contract that required an employee to file workers compensation claims
under the laws of another state as a prerequisite to employment. Jenkins v. Sal
Chem. Co., 280 S.E.2d 243, 244 (W. Va. 1981) (holding that “[i]f [the Court] permitted
an employer to waive West Virginia law by agreement, without legislative authority or
statutory compliance, [the Court] would do a grave disservice to West Virginia
employees.). In Jenkins, Sal Chemical Company and its employee, Donald Jenkins,
entered into a contract stating that Jenkins would file any work-related injury claims
exclusively under Ohio’s Workmens’ Compensation Act. Id. After Jenkins was injured
at the employer’s plant, located in West Virginia, Jenkins sought compensatory
damages from his employer for negligence and loss of consortium in the Brooke County
Circuit Court in West Virginia. Id. The employer argued that the contract barred
Jenkins’ suit in West Virginia. Id. The West Virginia Supreme Court of Appeals held
that the contract was void as it attempted to waive the employer’s burdens and the
employee’s benefits under the Act. Id.
Here, unlike the contract at issue in Jenkins, the settlement agreement entered
into by Remac and Friend is specifically provided for by statute under West Virginia
Code section 23-5-7. The West Virginia Supreme Court of Appeals has held that “[a]ny
contract between an employer and employee, not specifically provided for by
statute, that waives the burdens or benefits of the Workmen’s Compensation Act, is
void.” Kanawha Valley Power Co. v. Justice, Syl. Pt. 2, 383 S.E.2d 313 (W. Va.
1989). Thus, the settlement agreement was specifically provided for under the Act, and
section 23-2-7 does not invalidate the settlement agreement.
Friend’s Burden of Proof
The next issue is whether Friend must pursue a deliberate intent cause of action
or may pursue a negligence cause of action. Friend made two claims for workers’
compensation benefits after the accident: one in West Virginia and one in Maryland.
Friend, in settling his West Virginia workers’ compensation claim, executed the
settlement agreement, which contractually transferred his workers’ compensation claim
to Maryland’s IWIF program as his sole source of workers’ compensation benefits.
However, the agreement specifically preserved his right to bring a deliberate intent
cause of action against REMAC pursuant to West Virginia Code section 23-4-2(d)(2)(ii).
The West Virginia Supreme Court of Appeals has held that “‘[a] valid written
instrument which expresses the intent of the parties in plain and unambiguous language
is not subject to judicial construction or interpretation but will be applied and enforced
according to such intent.’” Syl. Pt. 2, Cabot Oil & Gas Corp. v. Lawson Heirs, Inc.,
705 S.E.2d 806 (W. Va. 2010). As established above, the settlement agreement is
proper because Friend and Remac negotiated a final settlement of the claim pursuant to
West Virginia Code section 23-5-7. The plain and unambiguous language of the
settlement agreement permits Friend to file only a deliberate intent action, and the
statute prohibits a party from reopening any issue of an approved settlement agreement
absent a showing of fraud. W. VA. CODE § 23-5-7 (“Except in cases of fraud, no issue
that is the subject of an approved settlement agreement may be reopened by any party
. . . .”). Friend has made no allegation or showing of fraud to permit the reopening of
any issues addressed by the settlement agreement. Accordingly, Friend is restricted to
filing a deliberate intent action and is prohibited from filing a negligence action against
his employer pursuant to the terms of the settlement agreement.
For the foregoing reasons, this Court hereby GRANTS the Defendant’s
Response/Cross-Motion for Partial Summary Judgment on the Issue of the Cause of
Action Which Plaintiff is Allowed to Bring and DENIES the Plaintiff’s Motion for Partial
Summary Judgment on the Issue of Plaintiff’s Burden of Proof.
It is so ORDERED.
The Clerk is directed to transmit copies of this Order to all counsel of record
DATED: February 14, 2013
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