Editor’s note: This analysis of a recent Vermont Supreme Court ruling is by Daniel Richardson, the founder of SCOV Law Blog.
Hemond v. Frontier Communications of America, Inc., 2012 VT 94 (mem.).
To truly under understand why defendants fought against the action and took the appeal, read this summary, and then read the last line of the published decision.
Here are the facts. Defendant and its predecessor corporation owned a number of transmission lines. In 2002, it undertook the reconstruction of a substation in Richford. As part of this work, defendant redesigned and installed Switch 14E. At the time, plaintiff was employed by defendant as a lineman, albeit not from Wichita.
In 2004, defendant sold all of its assets to the Vermont Electric Cooperative Inc. This included the Richford substation and Switch 14E. As part of the sale, plaintiff was moved over to VEC and continued to work for them as a lineman.
In 2006, plaintiff was ordered to open Switch 14E by VEC as part of his job. In doing so, he was electrocuted, suffering severe burns and the loss of two limbs.
Whenever there is a workplace accident, you should always think worker’s compensation. And that is exactly what happened here. VEC immediately compensated plaintiff for his injuries through its worker’s compensation policy.
But wherever there is a serious accident, there is always the possibility that more than one party is responsible for the situation both factually and from a legal perspective.
For example, a landlord has an obligation to provide a safe space to tenants and is obligated to repair problems as she becomes aware of them. But if the tenant is a business that business also has a duty to provide a safe workplace. So if there is a hole in the middle of the floor, and an employee falls through and breaks his legs, there are two entities on the hook. First the employer will be through worker’s compensation, but then the employee can also go after the landlord for creating or negligently failing to repair the hole.
Going back to today’s case, defendants looked at the facts and realized that if they had not sold the substation and switch to VEC, they would have been the employer and immune from a personal injury suit. Setting aside the legal arguments, defendants appear to argue the primal response: Why should a sale suddenly lead to separate liability?
It is a potential double recovery, but the law allows this because it gives both employer and landlord the incentive to repair holes in the floor (something they are in a good position to do) to the benefit of the employee and all other members of society.
Going back to today’s case, defendants looked at the facts and realized that if they had not sold the substation and switch to VEC, they would have been the employer and immune from a personal injury suit. Setting aside the legal arguments, defendants appear to argue the primal response: Why should a sale suddenly lead to separate liability?
The problem for defendants, though, is that it does, and the SCOV is OK with the concept.
This liability is based on a very important distinction in duty, which makes all the difference to plaintiff’s claim.
Plaintiff’s potential cause of action against his employer (if the worker’s compensation had not been there) would have been for creating (or allowing) an unsafe work environment. If that had been plaintiff’s cause of action against defendants as well, the case might have fallen into the worker’s compensation arena. Defendants might have enjoyed the same protection that other non-employer entities enjoy when they share a duty with the employer that is at the heart of the employee’s injury. To this end, the SCOV cites a number of cases that analyze when and where the SCOV has extended worker’s compensation immunity to third parties whose liability really comes through the ongoing workplace duties of the employer.
Plaintiff’s cause of action against defendants, though, is different. His action is a personal injury claim based on negligent design and reconstruction work performed in 2002. In other words, his cause of action has nothing to do with the maintenance or his ongoing employment servicing these lines. It has everything to do with the one-time event of the switch’s initial installation and design back in 2002.
And this is what drives defendants nuts. If they had kept the substation, plaintiff would have been their employee, and worker’s compensation would have covered them. Why should a sale change things? As the SCOV notes, this is a very important change. By selling the assets, defendants left behind the connection to plaintiff as an employee and lost that right of immunity that worker’s compensation allows. This is the difference, and it is substantial.
So due to the lack of immunity, defendants are on the hook to plaintiff under the personal injury regime. Since this was an interlocutory appeal, the decision resolves the immunity issue, and the matter is returned to the trial court where there is likely to be little dispute about the nature and amount of plaintiff’s injuries. Without immunity, defendants are likely to be on the hook for a shocking amount of damages.
