Opinion
No. CV-02-0172497S
June 3, 2004
MEMORANDUM OF DECISION RE MOTION TO STRIKE #107
The plaintiff's complaint is based on an accident that occurred on June 13, 2001. The plaintiff alleges that the decedent, Wilfredo Martinez, was employed by Lake Compounce, LP at its amusement park in Bristol CT, as a grounds maintenance laborer. On June 13, 2001, prior to the park opening, Mr. Martinez was directed by his supervisor, the grounds manager, to cut the grass and weeds under the roller coaster with a gas powered weed cutter. While Mr. Martinez was clearing weeds from underneath the tracks of the roller coaster, the roller coaster was released, by the ride's mechanic, for a pre-opening test run. The roller coaster struck and killed Mr. Martinez.
On July 3, 2002, the plaintiff, Timothy F. Sullivan, Esq., Administrator, filed a three-count complaint on behalf of the Estate of Wilfredo Martinez against three defendants: Lake Compounce, LP, Lake Compounce Theme Park, Inc. and Kennywood Entertainment Company. In his first count, the plaintiff alleges that the defendant, Lake Compounce, LP knew of the fourteen unsafe and hazardous conditions specifically alleged with respect to Mr. Martinez' work place, "any one of which was and is substantially certain to result in death or serious bodily injury" but intentionally failed to remedy or correct them. In his second count, the plaintiff alleges "negligent and careless misconduct of the defendant, Lake Compounce Theme Park," this defendant allegedly being "the sole general partner of Lake Compounce LP." In the third count, the plaintiff alleges that "the defendant, Kennywood Entertainment Company, was and is the alter ego and/or instrumentality of the defendant, Lake Compounce Theme Park Inc." and Lake Compounce Theme Park Inc. ("the Theme Park Inc.") "was and is undercapitalized for the foreseeable risks it would and does encounter as a business entity and, as such, has defrauded plaintiff as a creditor." Thus, the plaintiff seeks to pierce the corporate veil between Lake Compounce Theme Park Inc., and Kennywood Entertainment Company ("Kennywood"), concluding that Kennywood is liable to the plaintiff.
On November 5, 2002, the defendants moved to strike the plaintiff's complaint, on certain grounds. With respect to Count 1, as against Lake Compounce LP, it is the defendants' position that plaintiff fails to allege sufficient facts to place the defendants' behavior outside the workers' compensation provisions. With respect to Count 2, as against the Theme Park, it is the defendants' position that plaintiff fails to allege sufficient facts to assert a separate cause of action against the Theme Park, as general partner of Compounce LP because the general partner is protected by the workers' compensation exclusivity provision just as the limited partnership is protected. With respect to Count 3, it is the defendants' position that plaintiff fails to allege sufficient facts to demonstrate that the employer of Mr. Martinez, Kennywood Entertainment, is an alter ego [of the Theme Park Inc., the general partner] and, even if Kennywood Entertainment is an alter ego, it would be entitled to the same exclusivity bar as an employer.
THE LEGAL STANDARDS
"The purpose of a motion to strike is to contest . . . the legal sufficiency of the allegations of any complaint . . . to state a claim upon which relief can be granted." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). "For the purpose of ruling upon a motion to strike, the facts alleged in a complaint, though not the legal conclusions it may contain, are deemed to be admitted." Murillo v. Seymour Ambulance Assn., Inc., 264 Conn. 474, 476, 822 A.2d 1202 (2003).
"General Statutes § 31-284(a) exempts employers from liability for civil damages `on account of personal injury sustained by an employee arising out of and in the course of his employment . . .'" Stebbins v. Doncasters, Inc., 47 Conn. Sup. 638, 639, 820 A.2d 1137 (2002), aff'd, 263 Conn. 231, 819 A.2d 287 (2003). The Workers' Compensation Act is remedial and should be construed generously to accomplish its purpose . . . The exclusivity afforded by § 31-284(a) manifests a legislative policy decision that a limitation on remedies under tort law is an appropriate trade-off for the benefits provided by workers' compensation." (Citations omitted; internal quotation marks omitted.) Id., 639-40.
Count 1
With respect to Count 1, as against Lake Compounce LP, it is the defendants' position that plaintiff fails to allege sufficient facts to place the defendant's behavior outside the workers' compensation provisions. In the first count of his complaint, the plaintiff alleges that the defendant, Lake Compounce, LP knew of the fourteen unsafe and hazardous conditions specifically alleged with respect to Mr. Martinez' work place, "any one of which was and is substantially certain to result in death or serious bodily injury" but intentionally failed to remedy or correct them. Thus, the plaintiff seeks to fall within the substantial certainty prong of the exception to exclusivity.
In Suarez v. Dickmont Plastics Corp., 242 Conn. 255, 257-58, 698 A.2d 838 (1997) ( Suarez II), the "Supreme Court described its earlier ruling as establishing an exception to the workers' compensation exclusivity provision if the employee can prove either that the employer actually intended to injure the plaintiff (actual intent standard) or that the employer intentionally created a dangerous condition that made the plaintiff's injuries substantially certain to occur (substantial certainty standard).'" Stebbins v. Doncasters, Inc., supra, 47 Conn. Sup. 642. "[T]he substantial certainty test differ[s] from a pure intent test in that the employee need only show that the employer believed there was a substantial certainty that the employee would suffer injury from its deliberate conduct rather than a requirement that the employer intended the injury to occur." Id., 641.
"The substantial certainty standard requires a showing that the activity producing the injury to the employee `was intentional or deliberate and the resulting injury, from the standpoint of the employer, was substantially certain to result from the employer's acts or conduct.'" Id., 644. "It is not the gravity of the employer's conduct which comes under scrutiny but, rather, the employer's subjective belief." Id. Allegations of wrongdoing that "amount to no more `than a mere failure to provide appropriate safety or protective measures' cannot satisfy the substantial certainty standard." Id. "Failure to take affirmative remedial action, even if wrongful, does not demonstrate an affirmative intent to create a situation that causes persons injury . . . Such delinquencies are not circumstantial evidence of a subjective belief that injury is substantially certain to occur." (Citation omitted.) Id. Evidence that demonstrates "a lackadaisical or even cavalier attitude toward worker safety" will not satisfy the substantial certainty test. (Internal quotation marks omitted.) Stebbins v. Doncasters, Inc., 263 Conn. 231, 234, 819 A.2d 287 (2003).
"For the purpose of ruling upon a motion to strike, the facts alleged in a complaint, though not the legal conclusions it may contain, are deemed to be admitted." Murillo v. Seymour Ambulance Assn., Inc., 264 Conn. 474, 476, 822 A.2d 1202 (2003) For purposes of the present motion, the court deems the factual allegations of the complaint admitted. The plaintiff's factual allegations concern the defendant's failure to implement safety procedures found under various federal statutes, regulations and industry standards. These allegations, while taken as admitted, and while demonstrating a disturbingly poor attitude toward workplace safety, worker protection and remedial action, do not meet the requisite intent for the substantial certainty test.
The plaintiff also alleged that the plaintiffs failed to ensure proper workplace safety despite the death of two individuals in the two years prior to the incident at issue here. Again, failure to take effective remedial action does not translate to an affirmative intent to create an injury-causing situation.
Motion to strike the First Count is granted.
Count 2
With respect to Count 2, as against the Theme Park Inc., it is the defendants' position that plaintiff fails to allege sufficient facts to assert a separate cause of action against the Theme Park Inc, as general partner of Lake Compounce LP because the general partner is protected by the workers' compensation exclusivity provision in the same way as is the limited partnership. In his second count, the plaintiff alleges "negligent and careless misconduct of the defendant, Lake Compounce Theme Park," this defendant allegedly being "the sole general partner of Lake Compounce LP." In its objection to the motion to strike, the plaintiff argues "As the employer [Compounce] the LP can attempt to assert the exclusivity provision of the Act . . . On the other hand, [stet] the General Partner [Theme Park Inc.] nor Kennywood, can attempt to avail itself of the exclusivity provision because neither was Martinez's employer." (Plaintiff's memorandum, unnumbered p. 16.)
"For the purpose of ruling upon a motion to strike, the facts alleged in a complaint, though not the legal conclusions it may contain, are deemed to be admitted." Murillo v. Seymour Ambulance Assn., Inc., 264 Conn. 474, 476, 822 A.2d 1202 (2003). For purposes of the present motion, the court deems the factual allegations of the complaint admitted.
"Except as provided in [the Uniform Limited Partnership Act], a general partner of a limited partnership shall have all the liabilities of a partner in a partnership without limited partners to persons other than the partnership and the other partners." General Statutes § 34-17(b); Konover Development Corp. v. Zeller, 228 Conn. 206, 218 n. 9, 635 A.2d 798 (1994). "[A]ll partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law." General Statutes § 34-327(a). "So long as the employer and the alleged tortfeasor are one, the plaintiff is limited to the benefits provided by workmen's compensation." Velardi v. Ryder Truck Rental, Inc., 178 Conn. 371, 377, 423 A.2d 77 (1979). "[A] member of a partnership . . . is still in law the employer of employees of the partnership and cannot be sued [if the partnership pays workmen's compensation." 6 A. Larson, Workers' Compensation Law (1997) § 72.15, p. 14-116. Where a corporation serves as a general partner of a limited partnership, an injured employee who receives workers' compensation benefits from the limited partnership cannot sue the corporation. Jackson v. Tivoli Towers Housing Co., 176 App.Div.2d 918, 919, 575 N.Y.S.2d 370 (1991).
Plaintiff alleges in its complaint that Theme Park, Inc. is the general partner of Compounce, LP. That is, even though Theme Park, Inc. is a separate corporate entity, the plaintiff alleges that Theme Park, Inc., as the general partner, "controls or can control the manner in which the Limited Partnership conducts its business, including the working conditions . . ." and in that role was negligent in failing to remedy or correct hazardous working conditions. Under Connecticut General Statutes § 34-17(b), general partners in a limited partnership have the same liabilities as partners in a standard partnership. Under Connecticut General Statutes § 34-327(a) a general partner in a partnership is jointly and severally liable for all partnership obligations. The plaintiffs have not alleged a different agreement between the defendant parties. Thus, since Theme Park, Inc., as a general partner is jointly and severally liable for the obligations of Lake Compounce, LP, they are not distinguishable legal entities for purposes of employer exclusivity under the workers' compensation statute. Motion to strike the Second Count is granted.
Count 3
In the third count, the plaintiff alleges that "the defendant, Kennywood Entertainment Company, was and is the alter ego and/or instrumentality of the defendant, Lake Compounce Theme Park Inc." and Lake Compounce Theme Park Inc. "was and is undercapitalized for the foreseeable risks it would and does encounter as a business entity and, as such, has defrauded plaintiff as a creditor." Thus, the plaintiff seeks to pierce the corporate veil between Lake Compounce Theme Park Inc., and Kennywood Entertainment Company, concluding that Kennywood is liable to the plaintiff. With respect to Count 3, it is the defendants' position that plaintiff fails to allege sufficient facts to demonstrate that the employer of Mr. Martinez, Kennywood, is an alter ego [of the Theme Park Inc., the general partner] and, even if Kennywood Entertainment is an alter ego, it would be entitled to the same exclusivity bar as an employer.
"Courts will . . . disregard the fiction of a separate legal entity to pierce the shield of immunity afforded by the corporate structure in a situation in which the corporate entity has been so controlled and dominated that justice requires liability to be imposed on the real actor." (Internal quotation marks omitted.) Angelo Tomasso, Inc. v. Armor Construction Paving, Inc., 187 Conn. 544, 552, 447 A.2d 406 (1982). "Ordinarily the corporate veil is pierced only under exceptional circumstances, for example, where the corporation is a mere shell, serving no legitimate purpose, and used primarily as an intermediary to perpetuate fraud or promote injustice." (Internal quotation marks omitted.) Id., 557. The Connecticut Supreme Court has approved two tests, either of which is sufficient for determining when piercing the corporate veil is appropriate: the instrumentality rule and the identity rule. Id., 553-54.
"The instrumentality rule requires, in any case but an express agency, proof of three elements: (1) Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; (2) that such control must have been used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or a dishonest or unjust act in contravention of plaintiff's legal rights; and (3) that the aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of." (Internal quotation marks omitted.) Id., 553.
"The identity rule has been stated as follows: If plaintiff can show that there was such a unity of interest and ownership that the independence of the corporations had in effect ceased or had never begun, an adherence to the fiction of separate identity would serve only to defeat justice and equity by permitting the economic entity to escape liability arising out of an operation conducted by one corporation for the benefit of the whole enterprise." (Internal quotation marks omitted.) Id., 554. "The identity rule primarily applies to prevent injustice in the situation where two corporate entities are, in reality, controlled as one enterprise because of the existence of common owners, officers, directors or shareholders and because of the lack of observance of corporate formalities between the two entities." Id., 560. Undercapitalization alone "is an insufficient reason to pierce the corporate veil." Al Sayegh Bros. Trading LLC v. Doral Trading Export, Inc., 219 F. Sup.2d 285, 294 (E.D.N.Y. 2002).
"For the purpose of ruling upon a notion to strike, the facts alleged in a complaint, though not the legal conclusions it may contain, are deemed to be admitted." Murillo v. Seymour Ambulance Assn., Inc., 264 Conn. 474, 476, 822 A.2d 1202 (2003). "The purpose of a motion to strike is to challenge the legal sufficiency of the allegations of a complaint for failure to state a claim on which relief can be granted. Practice Book § 10-39. The motion admits all facts that are well pleaded . . . but does not admit legal conclusions or the truth or accuracy of opinions . . . On a motion to strike, the trial court's inquiry is to ascertain whether the allegations in each count, if proven, would state a claim on which relief could be granted. Practice Book § 10-39(a). A motion to strike is properly granted if the complaint alleges mere conclusions of law that are not supported by the facts alleged." (Citations omitted.) In Re Michael D., 58 Conn. App. 119, 122-23, 752 A.2d 1135 (2000). Although a trial court, in ruling on a motion to strike, must take as true all facts alleged; the [plaintiff] must still plead sufficient facts that, if proven, would support his legal claim. (Citations omitted) A bald assertion . . . without more, is insufficient to survive a motion to strike. Commissioner of Labor v. C.J.M. Services, Inc., 73 Conn. App. 39 at 64-65 (2002); Higgins v. Fleet Bank CT, N.A., No. CV 02 0461058 S (Mar. 20, 2003) 2003 Ct. Sup. 3797.
Here, the plaintiff's legal ground for piercing the corporate veil — Kennywood's purported status as the alter ego/instrumentality of Theme Park, Inc. — is dependent upon alleging underlying facts needed to prove the elements of either the instrumentality rule or the identity rule. Plaintiff's bald legal assertion in its complaint that Theme Park Inc. "was and is organized and operated by [Kennywood] with total dominion and control" is unsupported by any factual allegations in the pleadings.
Plaintiff also pleads that "[and] further Theme Park Inc was and is undercapitalized for the foreseeable risks it would and does encounter." However, while factually pled, undercapitalization is not enough to satisfy identity rule. The rule is utilized by the courts primarily to prevent injustice where corporations share officers, directors, shareholders, and overall ignore corporate formalities. Plaintiff alleges no facts as to these critical components of the identity rule. Motion to strike the Third Count is granted.
ALVORD, J.