Windom v. FM Industries, Inc.

Full title: WILLIAM PETE WINDOM, Plaintiff, vs. FM INDUSTRIES, INC., a corporation…

Court: United States District Court, D. Nebraska

Date published: Mar 12, 2002

8:00CV580 (D. Neb. Mar. 12, 2002)

Opinion

8:00CV580.

March 12, 2002

MEMORANDUM AND ORDER

Joseph F. Bataillon, United States District Judge.

I. Introduction

Before the court are the following: 1) the motion, Filing No. 51, of defendant Railcar America, Inc., d/b/a American Hydraulics, Inc. (American Hydraulics), to dismiss Count II of the crossclaim, Filing No. 46, of defendant FM Industries, Inc.; 2) the motion, Filing No. 62, of defendant Dynamic Alliance, Inc. to dismiss the plaintiff's amended complaint, Filing No. 43; 3) the motion of Dynamic Alliance, Filing No. 70, to dismiss the crossclaims of FM Industries, Filing No. 46, and of Aramark Uniform and Career Apparel (Aramark), Filing No. 55; 4) the motion, Filing No. 72, of American Hydraulics for oral argument on its motion to dismiss; and 5) the stipulated dismissal, Filing No. 73, of FM Industries' crossclaim against Dynamic Alliance, Filing No. 46. The stipulated dismissal of FM Industries' crossclaim against Dynamic Alliance is approved without further discussion. American Hydraulics' motion for oral argument is denied.

II. Background

The plaintiff, an employee of American Hydraulics, seeks to recover for severe personal injuries he sustained in June 1997 while working on a railroad car cushion unit manufactured in 1990 by FM Industries. In addition to claims against FM Industries, the plaintiff also raises claims against Aramark, the manufacturer of the uniform he was wearing when injured, and Dynamic Alliance, the successor in interest to Electro Seal Corporation, the manufacturer of the sight glass component in the railroad car cushion unit. American Hydraulics is also a defendant, in theory named only to preserve its workers' compensation subrogation interest; FM Industries, however, disputes that American Hydraulics is without blame.

FM Industries crossclaimed against Aramark and Dynamic Alliance for contribution and indemnity and against American Hydraulics for an apportionment of its fault. American Hydraulics moved to dismiss FM Industries' crossclaim against it.

Dynamic Alliance moved to dismiss the amended complaint. It also moved to dismiss the crossclaims of Aramark and FM Industries. Dynamic Alliance and FM Industries have stipulated that FM Industries' crossclaim should be dismissed.

III. American Hydraulic's Motion to Dismiss

Count II of FM Industries' Crossclaim

(Filing No. 51)

American Hydraulics brings its motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). In considering a motion to dismiss a complaint under Rule 12(b)(6), the court must assume all the facts alleged in the complaint are true, and must liberally construe the complaint in the light most favorable to the plaintiff. Schmedding v. Tnemec Co., 187 F.3d 862, 864 (8th Cir. 1999). A Rule 12(b)(6) motion to dismiss a complaint should not be granted unless it appears beyond a doubt that the plaintiff can prove no set of facts which would entitle him to relief. Id. Thus, as a practical matter, a dismissal under Rule 12(b)(6) should be granted only in the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief. Id.

American Hydraulics, the plaintiff's employer, contends that Count II of FM Industries' crossclaim asks a jury to reduce any judgment for the plaintiff by the percentage of fault attributable to American Hydraulics and to reduce any recovery by American Hydraulics of its workers' compensation subrogation interest by its percentage of negligence. American Hydraulics argues that by phrasing the crossclaim in terms of the contributory negligence doctrine, FM Industries seeks to circumvent the exclusive remedy provision of the Nebraska Workers' Compensation Act, Neb. Rev. Stat. § 48-148. Section 48-148 provides that if an employee of an employer subject to the Nebraska Workers' Compensation Act

files any claim with, or accepts any payment from such employer, or from any insurance company carrying such risk, on account of personal injury, or makes any agreement, or submits any question to the Nebraska Workers' Compensation Court under such act, such action shall constitute a release to such employer of all claims or demands at law, if any, arising from such injury.

American Hydraulics argues that under Nebraska law, this section covers all claims arising from an injury to an employee, not just the claims which the employee raises. See Vangreen v. Interstate Machinery Supply Co., 246 N.W.2d 652, 654 (Neb. 1976).

In Vangreen, an employee filed suit against a third party for work-related injuries, adding his employer as a defendant only to determine its subrogation rights under the Nebraska Workers' Compensation Act. The third-party settled with the plaintiff, then crossclaimed against the employer, seeking indemnity or contribution on the ground that the employer's negligence was the proximate cause of the accident. The employer demurred, and both the trial court and supreme court sustained the demurrer. The supreme court observed,

To hold otherwise would nullify the exclusive-remedy provision in the statute and the statutory right of subrogation. If an injured workman recovers from a third party tort-feasor and such tort-feasor is permitted to recover from the employer, the protection accorded the employer by the Workmen's Compensation Act is circumvented as in the end the employer pays not only the compensation provided by statute but must pay all other damages.

Id. at 655.

FM Industries contends that its crossclaim is proper, since unlike the third party in Vangreen, FM Industries seeks neither contribution nor indemnity from American Hydraulics, the plaintiff's employer. Rather, FM Industries insists that it seeks "only allocation or, in the alternative, a reduction of Plaintiff's recovery to the extent American Hydraulics is apportioned fault at trial." FM Industries Responsive Brief at 5. As authority for its position, FM Industries relies on Neb. Rev. Stat. § 25-21,185.11, which provides that a release between a claimant and liable party discharges only the claims against that party; the claimant's claims against other parties are "to be reduced by the amount of the released person's share of the obligation as determined by the trier of fact." Neb. Rev. Stat. § 25-21,185.11(1).

FM Industries further cites to comments of the Nebraska Supreme Court Committee on Civil Practice and Procedure, found in the workers' compensation section of the Nebraska Jury Instructions, in which the committee endorses the application of section 25-21,185.11 to situations where an employer pays workers' compensation benefits to an employee who files suit against a third party. The committee indicates the employer would be a released party whose negligence would be taken in account in the suit from which the employer had been released. If the released employer were not negligent, no reduction in the liability of other parties would occur; if the released employer were negligent, then that negligence would be taken into account in determining the other parties' obligation to the employee. The committee acknowledges that some party other than the released employer would have to prove the employer either negligent or not negligent since the employer would no longer be a party. See N.J.I.2d at 377-78, 5.04, Caveat No. 3: Workers' Compensation (West 2001).

Using this rationale, FM Industries argues that American Hydraulics is a released party because it paid workers' compensation benefits to the plaintiff. As a result, FM Industries insists that it is entitled to submit evidence of American Hydraulics' negligence to the jury so that any award might be reduced by American Hydraulics' "share of the obligation," as determined by the jury. FM Industries states that the Vangreen exclusive remedy holding does not apply here since FM Industries seeks neither indemnification nor contribution.

Nebraska courts seem not to have decided the precise issue here: whether a third party may assert a contributory negligence crossclaim against an employer supposedly named as a party only to protect its workers' compensation subrogation interest. But the Nebraska Supreme Court ruled, on somewhat similar facts, that a third party may enforce an express indemnification contract against an employer without running afoul of the exclusive remedy provision of the Nebraska Workers' Compensation Act. Union Pacific R.R. Co. v. Kaiser Agricultural Chemical Co., 425 N.W.2d 872, 879 (Neb. 1988). Furthermore, in a case decided even before the 1992 enactment of the Nebraska Comparative Fault Act, Neb. Rev. Stat. §§ 25-21,185.07 — 25- 21,185.12, the Nebraska Court of Appeals ruled that while an employer cannot be sued in tort for injuries suffered by an employee covered by the Nebraska Workers' Compensation Act, a third party nevertheless is not "barred from arguing in a negligence action that the employer's negligence was actually the sole proximate cause of the employee's injuries." Steele v. Encore Mfg. Co., 579 N.W.2d 563, 568 (Neb.Ct.App. 1998).

While FM Industries apparently does not allege that American Hydraulics' conduct was the sole proximate cause of the plaintiff's injuries, it does allege that the plaintiff was injured as a proximate result of American Hydraulics' negligence and failure to train the plaintiff. Given the Nebraska courts' willingness to allow third-party negligence claims against employers in contexts other than contribution or indemnification actions such as those in Vangreen, I conclude that FM Industries is not precluded from presenting evidence to the jury of American Hydraulics' alleged negligence nor raising its allocation crossclaim against American Hydraulics pursuant to section 25-21,185.11. Accordingly, American Hydraulics' motion to dismiss Count II of FM Industries' crossclaim is denied.

IV. Dynamic Alliance's Motion to Dismiss the Amended Complaint

(Filing No. 62)

Dynamic Alliance moves to dismiss the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. I find that the amended complaint should be dismissed as to Dynamic Alliance on the latter ground.

Dynamic Alliance is the successor in interest to Electro Seal Corporation, the company which allegedly manufactured and sold sight glass to FM Industries for use in the railroad car cushion units which it manufactured, distributed, and sold. The plaintiff alleges that his injuries were caused, at least in part, by a defect in the sight glass in a FM Industries' railroad car cushion unit manufactured in December 1990. See Filing No. 43, Amended Complaint, ¶¶ 8, 9, 13, 15-20, 27-32, 34-36, 40, 43-45.

Dynamic Alliance contends that application of Nebraska's statute of repose for product liability actions, Neb. Rev. Stat. § 25-224, requires the court to dismiss the plaintiff's claims against it. At the time the plaintiff brought this action, the statute of repose in a product liability action was "ten years after the date when the product which allegedly caused the personal injury, death, or damage was first sold or leased for use or consumption."¹ Neb. Rev. Stat. § 25-224(2) (Reissue 1995). If FM Industries manufactured the railroad car cushion unit in December 1990, as the plaintiff alleges, then Electro Seal, as a matter of logic, could not have manufactured and sold the sight glass any later than December 1990. Nebraska's ten-year statute of repose would therefore require the plaintiff to have filed the amended complaint naming Dynamic Alliance as a defendant no later than December 31, 2000. The plaintiff did not file the amended complaint until June 8, 2001, however — six months after the ten years allowed by the statute of repose.

1 The statute of repose was amended in 2001, but the result would be the same under either version of the statute. The amended statute provides that for products manufactured outside of Nebraska, a product liability action shall be commenced "within the time allowed by the applicable statute of repose, if any, of the state or county where the product was manufactured, but in no event less than ten years." Neb. Rev. Stat. § 25-224(2)(a)(ii).The plaintiff alleges that Dynamic Alliance is an Indiana corporation. Filing No. 43, Amended Complaint, ¶ 6. Indiana also has a ten-year statute of repose. See Ind. Code Ann. § 34-20-3-1 (West 2001).

Thus, assuming that all the facts alleged in the amended complaint are true, and liberally construing the amended complaint in the light most favorable to the plaintiff, I find that the plaintiff can prove no set of facts which would entitle him to relief. The amended complaint is therefore dismissed as to Dynamic Alliance. Having reached this conclusion, I do not need to address Dynamic Alliance's Rule 12(b)(2) personal jurisdiction argument.

V. Dynamic Alliance's Motion to Dismiss

(Filing No. 70)

the Crossclaim of FM Industries and Aramark

Since FM Industries and Dynamic Alliance have stipulated to the dismissal of FM Industries' crossclaim against Dynamic Alliance, see Filing No. 73, I need only consider Dynamic Alliance's motion to dismiss as it relates to Aramark's crossclaim, Filing No. 55.

I have dismissed the plaintiff's claims against co-defendant Dynamic Alliance in this suit. I am aware of no statute of repose for claims of indemnification or contribution between parties or third parties. However, the instant claim is between defendants. It therefore follows that Aramark's crossclaim, which is wholly based on the plaintiff's allegations in the amended complaint, is extinguished. Further, Aramark has not offered any authority or independent factual basis that would support this court's exercise of long-arm personal jurisdiction over Dynamic Alliance. Consequently, Aramark's crossclaim, which seeks to apportion fault among the co-defendants should a judgment be rendered in the plaintiff's favor, cannot stand and is hereby dismissed.

VI. Conclusion

For the foregoing reasons,

IT IS ORDERED:

1. The motion, Filing No. 51, of defendant Railcar America, Inc., d/b/a American Hydraulics, Inc., to dismiss Count II of the crossclaim, Filing No. 46, of defendant FM Industries, Inc. is denied;

2. The motion, Filing No. 62, of defendant Dynamic Alliance, Inc., to dismiss the plaintiff's amended complaint, Filing No. 43, is granted, and Dynamic Alliance is hereby dismissed as a party to this action;

3. The motion of Dynamic Alliance, Filing No. 70, to dismiss the crossclaim of FM Industries, Filing No. 46, is denied as moot;

4. The motion of Dynamic Alliance, Filing No. 70, to dismiss the crossclaim of Aramark Uniform and Career Apparel, Filing No. 55, is granted;

5. The motion, Filing No. 72, of American Hydraulics for oral argument on its motion to dismiss is denied; and

6. The stipulated dismissal, Filing No. 73, of FM Industries' crossclaim against Dynamic Alliance, Filing No. 46, is approved.