Opposition Brief — Potomac Edison Co. v. Helmick

wre TES stat, ee

FILED

SEP 3 199}

Qifioe OF THE CLERK

—

No. 91-265

——

IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

POTOMAC EDISON COMPANY,

Petitioner,

Joe D. HELMICK, TAMMY HELMICK, CARL BELT, INC.,

and HESTER INDUSTRIES, INC..,

Respondents.

On Petition for a Writ of Certiorari to the

Supreme Court of Appeals of West Virginia

RESPONSE BRIEF IN SUPPORT OF PETITION

FOR A WRIT OF CERTIORARI

JOSEPH A, WALLACE

WALLACE, Ross & HARRIS

P.O. Box 1669

Elkins, West Virginia 26241

(304) 636-1111

Attorney for Respondent

Hester Industries, Inc.

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON, D.C. 20001

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES cece ii

OPINIONS BELOW oocooo-.cosssccosscccosecscscecsssesssseesesseeesesteee 2

STATEMENT OF THE CASE occcccccccccccccccccccccsseeesssseeee 2

REASONS FOR GRANTING THE WRIT 6

I. THE SYSTEM OF TORT LIABILITY TO

COMPENSATE INJURED WORKERS IN

WEST VIRGINIA IS VIOLATIVE OF THE

FOURTEENTH AMENDMENT PRINCIPLES

OF EQUAL PROTECTION AND DUE PROC-

ESS AS APPLIED TO THIRD PARTIES 6

CONCLUSION ........................ A eM IOI DS FEIN ALS ns EEE 13

il

TABLE OF AUTHORITIES

CASES: Page

Bartlett v. New Mexico Welding Supply, Ine., 98

N.M. 152, 646 P.2d 579 (1982) 12

Bowman v. Barnes, 168 W Va. 111, 282 S.E.2d 613

(1981) BONS Mh tone toe as ee sige 6

Carlson v. Smogard, 298 Minn. 362, 215 N.W.2d

615 (1974). puiiinateniinud ete ete ee Bn s.28 11

Couch v. Thomas, 26 Ohio App. 3d 55, 497 N.E.2d

1372 (1985) ........ See is 1]

L.M. Duncan & Sons v. City of Clearwater, 478

So.2d 816 (Fla. 1985) _.. ai 10

Leonard v. Johns-Manville Sales Corp., 309 N.C,

91, 305 S.E.2d 528 (1983) 12

Mandolid S Uv. Elkins Industri¢ Ss, Ine., ——— W. Va.

, 246 S.E.2d 907 (1978) Sekai 6

Martinez v. California, 444 U.S. 277 (1980) 9,10

Miller v. Gibson, —— W. Va. —--, 355 S.E.2d

23 (1987) sueconieteedoudataiae te 7

Miller v. Monongahela Power Co., ——- W. Va.

——, 403 S.E.2d 406 (1991), cert. pending, No.

91-146 (July 11, 1991) 5, 6, 7

Mullane v. Ce ntra? Hanove r Bank & Trust C0.

339 U.S. 306 (1950) 9

National Fruit Product Co. v. Baltimore & Ohio

R.R., —— W. Va. ——, 329 S.E.2d 125 (1985). 8

Rinaldi v. Yeager, 384 U.S. 305 (1966) 9

Runcon v. Shearer Lumber Products, Inc., 107

Idaho 389, 690 P.2d 324 (1984) 12

Scales v. St. Louis-San Francisco R., 2 Kan.

App.2d 491, 582 P.2d 300 (1978) a 12

Schweiker v. Wilson, 450 U.S. 221 (1981) 9

Sunspan Engineering & Construction Co. v. Spring-

Lock Scaffolding Co., 310 So.2d 4 (Fla. 1975)... 10,11

Tsarnas v. Jones & Laughlin Steel! Corp., 418 Pa.

513, 412 A.2d 1094 (1980) fae as 8

Williams v. White Mountain Construction Co., 749

P.2d 423 (Colo. UL } eee w=sine\ecasihbndpindeacisoitan ae

ili

TABLE OF AUTHORITIES—Continued

STATUTES AND RULES:

West Virginia Code

3 23-2-6

West Virginia Code § 23-2A-1

West Virginia Code § 23-4-2

OTHER AUTHORITIES:

V. Schwartz, Comparative Neglig

& 1990 Supp.)

Cw OO

IN THE

Siyreme Court of the Wuited States

OCTOBER TERM, 1991

No. 91-265

PoTOMAC EDISON COMPANY,

Petitioner,

¥.

JOE D. HELMick, TAMMY HELMICK, CARL BELT, INC.,

and HESTER INDUSTRIES, INC.,

Respondents.

On Petition for a Writ of Certiorari to the

Supreme Court of Appeals of West Virginia

RESPONSE BRIEF IN SUPPORT OF PETITION

FOR A WRIT OF CERTIORARI

Respondent Hester Industries, Inc. respectfully submits

that it supports the position of Petitioner Potomac Edison

Company and prays that a writ of certiorari issue to re-

view the opinion of the Supreme Court of Appeals ot West

Virginia, entered in this matter on June 27, 1991, only as

it relates to the matters set forth in Petitioner Potomac

Edison’s Petition for a Writ of Certiorari. Due to the

compelling nature of the issues raised in the Petition for

a Writ of Certiorari, Respondent Hester Industries, Inc.,

supports Petitioner Potomac Edison in its Petition.

2

OPINIONS BELOW

The opinion of the Supreme Court of Appeals of West

Virginia, not yet reported, is reprinted in Petitioner Po-

tomac Edison’s Appendix A, at la-19a. The Jury Order

of the Circuit Court of Hardy County, West Virginia, was

entered on July 26, 1989, and is reprinted in Petitioner

Potomac Edison’s Appendix B at 20a-23a.

STATEMENT OF THE CASE

Petitioner Potomae Edison Company, (hereinafter ‘“Po-

tomac Edison”), is an electric utility that provides service

in western Maryland and certain portions of Virginia

and West Virginia. Hester Industries, Inc., (hereinafter

“Hester” ), operates a poultry processing plant in Moore-

field, West Virginia. In 1984, Hester was in the process

of expanding its Moorefield facilities, and retained the

services ¢, a contractor, Carl Belt, Inc., (hereinafter “Carl

Belt”), to perform the renovation construction work at its

facility. Carl Belt, Ine. was an independent contractor,

and Hester at no time had any control over any of the

employees of Carl Belt, Ine.

Hester had contracted with Potomae Edison for addi-

tional electrical service. A power pole with electrical

apparatus was placed by Potomac Edison on Hester’s

property. Carl Belt, Inc. discovered that the guy wire

attached to the electrical power pole prevented necessary

excavation around the pole. Carl Belt employees contacted

Potomac Edison requesting that the guy wire be moved,

but allegedly Potomac Edison refused their request. Hes-

ter was not aware of the need to move the guy wire nor

Was it privy to any contact between Carl Belt and Po-

tomac Edison.

In order to complete the excavation work for which

they were hired, Carl Belt’s supervisors decided to remove

the guywire. The guywire was removed from the pole and

attached to a come-along. This attachment of the guy wire

to the come-along, provided Car] Belt the necessary means

to remove the guy wire to excavate around the pole and

the guy wire was so removed without incident several

times.

On October 24, 1986, while respondent Joe D. Helmick

(hereinafter “Helmick”), was assisting in the removal

of the guy wire, an uninsulated portion of the slackened

wire came into contact with an energized lightning ar-

rester at the top of the utility pole. The guy wire became

electrified. and Helmick, who was handling the wire, was

electrocuted, suffering severe burns to his left forearm

and soles of his feet. Later, Helmick’s left arm was am-

putated at the elbow, as a result of his injuries.

Helmick later filed a claim for benefits with West Vir-

ginia Workers’ Compensation. On September &, 1988,

Helmick received a workers’ compensation award in the

amount of Fifty Three Thousand Seven Hundred Sixty

Dollars ($53,760.00), predicated upon a sixty percent

(60% ) permanent partial disability finding. This award

was charged against the account of his employer, Car!

selt.

Helmick and his wife brought suit against Potomac

Edison and Carl Belt, Inc. in the Cireuit Court of Hardy

County. Potomac Edison. removed the case to United

States District Court for the Northern District of West

Virginia. Thereafter, Plaintiffs filed a new suit in the

Circuit Court of Hardy County adding Hester as a De-

fendant. Helmick alleged that Potomac Edison negli-

gently designed and constructed the utility pole. West

Virginia Code § 23-2-6 provides that employers are im-

mune from suit by an employee, unless the employee

can prove that the employer acted with deliberate intent.

Helmick alleged that Carl Belt wilfully and intentionally

exposed him to danger, under the West Virginia ““delib-

erate intent’ statute codified at West Virginia Code

$ 23-4-2. The claim against Hester was premised only

upon the fact that Potomac Edison alleged that Hester

owned the electrical pole, since it was located on Hester

property. Potomac Edison filed a cross-claim against Carl

Belt for contribution and indemnity and a cross-claim

against Hester for contractual indemnity.

Prior to the trial, Helmick dismissed his claim against

Carl Belt. At the close of Petitioner’s case-in-chief on

its cross-claims, the Cireuit Court directed a verdict

against Potomac Edison on its claim against Carl Belt.

and directed a verdict against Potomae Edison on its

contractual claim for indemnity against Hester. A special

verdict form was prepared for the jury. The jury found

Potomae Edison was 40° negligent and Carl Belt 60°

negligent. Damages were assessed for Joe Helmick in the

amount of $473,232.84 and for Tammy Helmick in the

amount of $25,000.00. The jury further found that Hes-

ter did not breach Paragraph Fifteenth of its contract

with Potomac Edison.

According to West Virginia law under the principles

of joint and several liability and workers’ compensation

immunity for employers from third-party claims for con-

tribution, the entire jury verdict was assessed against

Potomae Edison, which including prejudgment interest,

totalled Five Hundred Fifteen Thousand Six Hundred

Twenty-One Dollars and Eighty-Six Cents ($515,621.86).

Potomac Edison filed post-trial motions seeking modi-

fication of the judgment to reduce Potomac Edison’s lia-

bility to the Helmicks by 60%, proportionate to its per-

centage of fault as determined by the jury; a set-off of

the Helmick verdict that already had been paid by work-

ers’ compensation benefits; and entry of a judgment in

its favor, or a new trial on its cross-claim for contribu-

tion against Carl Belt, which were all denied by the trial

court,

On September 18, 1990, the West Virginia Supreme

Court of Appeals granted Potomac Edison’s Petition for

Appeal. Potomac Edison urged the West Virginia Su-

J

preme Court of Appeals to rewrite the law of contribution

and indemnity, arguing that a deprivation of a third

party’s right to seek contribution and indemnity from a

negligent employer protected by the West Virginia Work-

ers’ Compensation Act, violated the Fourteenth Amend-

ment to the United States Constitution, as well as the

West Virginia Constitution. The West Virginia Supreme

Court of Appeals rejected this argument, based upon its

recent ruling in Miller v. Monoigahela Power Co., —-

W. Va. ——, 403 S.E.2d 406 (1991), cert. pending, No.

91-146 (July 22, 1991). In Miller, the Court held thar

the combination of: (1) West Virginia’s system of com-

parative negligence; (2) West Virginia’s rules on joint

and several liability; and (3) West Virginia’s statutory

workers’ compensation immunity does not violate federal

due process and equal protection principles. In its opin-

ion, the West Virginia Supreme Court noted that although

it did concede that Potomac Edison’s argument was logi-

cal, it was reluctant to overturn one hundred years of

West Virginia tort law, 403 S.E.2d at 408 (See Potomac

Edison’s Appendix A, at 12a). In an opinion dated June

27, 1991, the West Virginia Supreme Court of Appeals

affirmed the Trial Court’s judgment.

6

REASON FOR GRANTING THE WRIT

Il. THE SYSTEM OF TORT LIABILITY TO COMPEN-

SATE INJURED WORKERS IN WEST VIRGINIA

IS VIOLATIVE OF THE FOURTEENTH AMEND-

MENT PRINCIPLES OF EQUAL PROTECTION

AND DUE PROCESS AS APPLIED TO THIRD

PARTIES.

The Supreme Court of Appeals of West Virginia has

ruled in this case and in Miller v. Monongahela Power

Co., —— W. Va.——, 403 S.E.2d 406 (1991), cert. pend-

ing, No. 91-146 ‘July 22, 1991), that the combination

of West Virginia’s system of comparative negligence,

West Virginia’s rules on joint and several liability and

West Virginia’s statutory workers’ compensation im-

munity does not violate federal due process and equal

protection. These rulings by the Supren.e Court of Ap-

peals of West Virginia violate a third-party defendant's

rights of due process and equal protection.

In West Virginia, under the decision of Bowman v.

Barnes, 168 W. Va. 11, 282 S.E.2d 613 (1981), the jury

is presented with a special verdict form to assess the

comparative fault of a third party defendant and an em-

ployer for an injured worker's claim, even though the

employer enjoys statutory immunity from liability under

the Worker’s Compensation Act, West Virginia Code

$ 23-2-6.'

In the instant case, the jury found the employer, Carl

Belt, Inc., 60% negligent. The conclusion of the jury,

is rendered meaningless because under the principles of

'The only exception to the principle of statutory employer im-

munity was first recognized by the Supreme Court of Appeals of

West Virginia in its decision in Mandoiidis v. Elkins Industries,

Tac., W. Va. , 246 S.E.2d 907 (1978), wherein the injured

employee was successful in arguing that his employer acted with

deliberate intention in exposing him to a known hazard.

7

joint and several liability the non-employer defendant is

held responsible for the entire amount of the verdict. In

essence, Potomac Edison is precluded from seeking con-

tribution from Carl Belt, who is more negligent, and

Helmick’s verdict cannot be reduced to equal Potomac

Edison’s comparative fault."

The Supreme Court of Appeals of West Virginia has

endorsed a system of comparative negligence while ad-

hering to the doctrine of joint and several liability. The

result is, that a negligent third party must pay 100%

of the verdict, despite the jury’s finding that its percent-

age of comparative fault is much less. Even a 1% negli-

gent party would have to pay ail the damages awarded

to an injured employee, despite the jury’s determination

that the employee was 10% negligent and his employer

was responsible for the 89° of the total fault. See, Mil-

ler v. Monongahela Power Co., supra., 403 8.E.2d at 414.

The absurd result unfairly shifts the burden of liability

and responsibility for the work related ».cident from the

more culpable employer to the less culpable defendant.

As the development of tort law has vastly increased

the injured worker’s possible recoveries, there has also

deen an increasing potential for inequity as between third

party and employer. This potential has fostered legisla-

tive and judicial involvement in finding an “equitable”

compromise. Unfortunately, West Virginia, through its

legislation and its decisions of the Supreme Court of Ap-

peals has resolved this inequity in a manner that violates

the federal constitutional guarantees of equal protection

and due process. There is an overwhelming unfairness in

- The Supreme Court of Appeals of West Virginia has been con-

sistent in its interpretation of the statutory immunity afforded to

employers under the Workers’ Compensation Act, West Virginia

Code § 23-2-6, to preclude actions for contribution by third parties,

even though that result was not expressly ordained by the West

Virginia legislature. See, Miller v. Gibson, —— W. Va. ——, 355

S.E.2d 28, 31-32 (1987).

WW UT Sauccy ates ,

) O! f y\ Virgil) Cs atu whnicn ni

rete al f ed DO e supreme ( |

ant Il Gail © Onl L W1tn the decisions OF sé

( ‘ { ‘ ~ ()) i") } } } f cere

I lia) spe Ol tne OW! system or t

] { { t} fact

Cale and IADLIILY are Olallye Ol ile ecrelra Ct

guar ef I the Frourtes : (mename

t of e Workers Compensation Act preciudes <%

nol a Cae dant liabliity DY tne certain percent-

he employer has been found liable. It has only bee

‘ ‘7 ' , P

tna ne Wi virginia stem OI to) Wabdlil

; i ‘ ‘ ‘ ; : . ] | . + iy «or4

ned ne allowance » injured workers ot duplicat

Or Workel ( mpensatllol penents pius any dam

awarded at trial or obtained throug} ettlement

‘ é‘

an ; red third party rtieasor SEE Vation

Pro ( ( Ba PLOTE q\ } a ie V V;

) ( ‘),] or > )

329 S.E.2d 125, at 129 n.2.

s Court has established numerous and varied test

decide whnetner < articular statute violates the kqu:

| ]

ection ( ise Or tne Amendment In al

npt to 1daentlii PYuarantees unde his Clause l}

I

sé 4 le es" + ley+ 2 ts,

urt CONSISUf Nas ret ured na PISIALION ClaSSITY

‘ trite ( ! a } nave llowe i tne Wi

preme Court Appeal ting tl titutie

er! presented t} i n White Mount

/ [ ( ¢ 749 P ; 123 ( ] S23 I rie ] Mle ra

Che, ( rv 11 } = | \ Pd 1094 1980

one % nia Code & 23-2A-1 hich became effective J

, ;

ly applies to claims a1 ifter that date, all

1 form rf ibrogatior } y n empl ©) to re (

] enent ) id mae ) eyes compel it ' t m

obta the emnlovee ir a third part actior TI an ]

t ceed 50 of tl mployee’s recovery from the third part

anv attornev’s fees and costs

i)

the person it affects in a manner ratior ally related to

legitimate governmental objectives.” Schweiker v. Wilson.

450 U.S. 221, 230 (1981). This classification must “ra-

tionally advane{e] a reasonable and identifiable govern-

mental objective.” Jd. at 235. This Court has an obli-

gation to view the classificatory system, in order to de-

termine whether the disparate treatment accorded the

affected classes is arbitrary. Rinaldi v. Yeager, 384 U.S.

305 (1966). Furthermore, if the classification is not in-

herently invidious or one that impinges upon a funda-

mental right, a state statute is to be upheld against equal

protection attack, if it is rationally related to the achieve-

ment of legitimate governmental ends. Schweiker v.

Wilson, 450 U.S. at 230.

This Court has stated “that the State’s interest in

fashioning its own rules of tort law is paramount to

any discernable federal interest, except perhaps an in-

terest in protecting the individual citizen from state ac-

tion that is wholly arbitrary or irrational.” Martinez v.

California, 444 U.S. 277, 282 (1980). Third party tort-

feasors are not a party to the compromise achieved

through workers’ compensation legislation, wherein em-

ployees are given immediate benefits, regardless of fault

in exchange for giving up their right to sue their em-

ployer. In West Virginia what happens to the third

party tortfeasor, in this combination of workers’ com-

pensation and tort principles is that it becomes part of

the scheme of mutual compromise, by giving “» its rights

with no gain. It is clear that the West Virginia Supreme

Court of Appeals does not acknowledge the teachings of

Martinez because this is arbitrary and irrational appli-

cation of the tort system to a third party tortfeasor.

In Mullane v. Central Hanover Bank & Trust Co., 339

U.S. 306 (1950), the Court states: “Many controversies

have raged about the cryptic and abstract words of the

Due Process Clause but there can be no doubt that at

a minimum they require that deprivation of life, liberty

10

or property by adjudication be preceded by notice and

opportunity for hearing appropriate to the nature of the

case.” Jd. at 313. This leads to the inquiry of what is

the deprivation of a protected interest, if any, and if

there is, what process is due. In this West Virginia tort

system, the third party tortfeasor is denied access to the

courts because he cannot seek contribution from the more

negligent employer, nor is the injured employee’s verdict

reduced in a proportionate manner to the third party

tortfeasor’s comparative fault. This is definitely a dep-

rivation of a right without adequate due process.

Although the Supreme Court of Appeals of West Vir-

ginia has rejected Petitioner Potomac Edison’s Four-

teenth Amendment arguments, other state courts of last

resort have determined otherwise.

’

For example, in Suuspan Engineering & Construction

Co. v. Spring-Lock Scaffolding Co., 310 So.2d 4 (Fla.

1975), the Florida Supreme Court examined the state

workers compensation law which gave both the injured

employee and his employer the right to sue an alleged

third party tortfeasor, “but unequally and unreciprocally

the tortfeasor is precluded from suing in turn in a third-

party action the employer who may be primarily liable

instead of the tortfeasor for the employee’s industrial

accident.” 310 So.2d at 7. The Florida Court concluded

that the Worker’s Compensation Act singled out only

those alleged tortfeasors who had provided goods for serv-

ices to employers involved in accidents covered by work-

ers’ compensation and such a classification was deemed

arbitrary in violation of the Fourteenth Amendment's

Equal Protection Clause. /d. at 8.°

The Supreme Court of Minnesota reviewed a provision

of that state’s worker’s compensation law that “the em-

*The Sunspan decision was recently affirmed by the Florida

Supreme Court in L.M. Duncan & Sons v. City of Clearwater, 478

So.2d 816 (Fla. 1985).

1]

ployer shall have no liability to reimburse or hold (a

third-party tortfeasor harmless on such judgments or set-

tlements (obtained by his employee) in absence of a writ-

ten agreement to do so executed prior to the injury.”

Carson v. Smogard, 298 Minn. 362, 215 N.W.2d 615 at

617 (1974). This provision of the Act was challenged on

federal due process grounds by the third party tortfeasor.

This legislative decision concerning the common-law right

of contribution or indemnity did not pass the due process

scrutiny; the Minnesota legislature had proveded no rea-

sonable substitute for the third-party’s rights nor was

the legislation rationally related to a legitimate state ob-

jective. The Minnesota Court therefore held that this

provision which gave immunity to employers from third-

party contribution claims “violates the due process of the

Fifth and Fourteenth Amendment of the United States

Constitution. ..,”. Jd. at 620.

In the Ohio intermediate Court of Appeals in Couch v.

Thomas, 26 Ohio App. 3d 55, 497 N.E.2d 1371 (1985),

the Court determined that a co-worker of an injured

worker was protected by worker’s compensation immunity

from a claim for contribution by a third party tortfeasor.

However, under the State system of comparative negli-

gence the third-party should be entitled to a jury deter-

mination of the co-worker’s percentage of fault and

should be held liable only for his proportionate share of

the total negligence contributing to the injured employee's

damages. The Ohio Court found that obligating the third

party to pay more than his share would violate his right

to due process of law and equal protection under the law.

To be certain, there is a conflict in the law concerning

the principles of federal due process and equal protec-

tion and their application to worker’s compensation law

concerning a third party tortfeasor’s rights and remedies

against a negligent employer. While some courts have

rejected the constitutional arg:‘ments as has the Supreme

Court of Appeals of West Virginia, others have found

these principles to be applicable. Interestingly, some of

the courts that have rejected federal constitutional chal-

length to workers’ compensation immunity from third

party claims for contribution have done so expressly rely-

ing on the proposition that the third party would not be

subjected to joint and several liability for the employer’s

proportionate share of the injured party’s damages." See,

e.g., Williams v. White Mountain Construction Co., 749

P.2d 423, 428-29 (Colo. 1988). Additionally, in some com-

parative negligence states, the legislature or the courts

have required that the immune employer’s percentage of

negligence be determined by the jury, and the third

party’s liability to the plaintiff be reduced to reflect only

its proportionate share of the total fault, or reduced to

reflect benefits received by the injured worker from the

employer through worker’s compensation benefits. See,

e.g., Runcon v. Shearer Lumber Products, Inc., 107

Idaho 389, 690 P.2d 324, 330-31 (1984); Scales v. St.

Louis-San Francisco Ry., 2 Kan. App. 2d 491, 582 P.2d

300 (1978); Bartlett v. New Mexico Welding Supply,

Inc., 98 N.M. 152, 646 P.2d 579 (1982); Leonard v.

Johns-Manville Sales Corp., 309 N.C. 91, 305 S.E.2d 528

(1983).

In light of the fact that the decisions of the West Vir-

ginia Supreme Court of Appeals in this case and other

similar cases is in direct conflict with other state courts

of last resort reviewing these federal constitutional ques-

tions and the significance of the matters concerning the

application of federal due process and equal protection

principles to the statutory immunity to third party claims

for contribution, the decision of the West Virginia Su-

preme Court of Appeals should be reviewed. For the

‘Eight of the forty-five states that have adopted some form of

comparative negligence, whether by legislation or judicial decision,

have abolished the doctrine of joint and several liability. See,

V. Schwartz, Comparative Negligence § 16.4 (2d ed. 1986 & 1990

Supp. )s

roregoing reasons, Respondent Hi

submits its Brief in Su t of Pe