Branda Hall v. Dallman Contractors, LLC, Shook LLC, and AT&T Services, Inc.

• Court: Indiana Court of Appeals
• Decided: February 3, 2016
• Docket: 49A02-1502-CT-67
• Status: Published

Opinion

Feb 03 2016, 9:49 am

ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE David B. Wilson James D. Ahern Indianapolis, Indiana Brandon Kroft Heather T. Gilbert CASSIDAY SCHADE LLP Crown Point, Indiana

IN THE COURT OF APPEALS OF INDIANA

Brenda Hall, February 3, 2016 Appellant-Plaintiff, Court of Appeals Case No. 49A02-1502-CT-67 v. Appeal from the Marion Superior Court No. 4 Dallman Contractors, LLC, The Honorable Cynthia J. Ayers, Shook LLC, and AT&T Judge Services, Inc., Trial Court Cause No. Appellees-Defendants 49D04-0802-CT-8563

Altice, Judge.

Case Summary

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 1 of 12 [1] This case arises out of a negligence action filed by Brenda Hall (Hall) against

AT&T Services, Inc. (AT&T Services), among others,1 for injuries she sustained

when she tripped and fell on her way into work. AT&T Services filed a motion

for summary judgment asserting that Hall’s negligence claim against it was

barred by the exclusive remedies provision of the Worker’s Compensation Act

(the Act). See Ind. Code § 22-3-2-6. The trial court agreed, finding that the

designated evidence established that under the corporate structure of AT&T,

Inc., AT&T Services and Ameritech, Hall’s employer, were both subsidiaries of

AT&T, Inc., and as such, were joint employers of Hall. Consequently, Hall’s

negligence action against AT&T Services could not stand because Hall had

already received a worker’s compensation settlement from Ameritech. The trial

court therefore granted summary judgment in favor of AT&T Services.

[2] We affirm.2

Facts & Procedural History

[3] On December 5, 2007, Hall, while on her way into work for Ameritech, tripped

and fell over the snow-covered legs of a construction sign placed in a walkway

adjacent to an ongoing construction project at the AT&T building in downtown

Indianapolis. As a result of the fall, Hall injured her arm. On June 8, 2008,

1 Hall has also named Dallman Contractors, LLC, and Shook LLC as defendants in the negligence action. They are not participating in this appeal. 2 We held oral argument in this matter on January 14, 2016. We commend counsel on the quality of their written and oral advocacy.

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 2 of 12 Hall filed for worker’s compensation benefits. On September 21, 2009, the

Worker’s Compensation Board of Indiana issued a stipulated award to Hall to

compensate her for a twenty-nine percent permanent partial impairment of her

right arm.

[4] On February 25, 2008, Hall filed her complaint for damages against Dallman

Contractors, LLC (Dallman). On June 30, 2008, Dallman named “AT&T” 3 as

a non-party. Appellant’s Appendix at 27. Hall filed an amended complaint on

April 29, 2009, in which she added Shook LLC and “American Telephone &

Telegraph Company f/k/a AT&T, Inc. d/b/a AT&T Property Management”

(AT&T Property Management) as additional defendants. Id. at 33. On

October 20, 2009, AT&T Property Management filed an Ind. Trial Rule 17

motion to “substitute AT&T Services, Inc. in its stead as the real party in

interest.” Id. at 54. AT&T Management alleged that “responsibility for

physical building maintenance at the AT&T property in question, such as snow

and ice removal, is properly designated as AT&T Services, Inc.” Id. AT&T

Management maintained that it was responsible only for administrative

management of the AT&T properties, including the property in question. The

trial court granted the motion and AT&T Services was substituted for AT&T

Management.

3 Dallman referred only to “AT&T” and not a specific corporate entity.

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 3 of 12 [5] On January 30, 2012, AT&T Services filed its first motion for summary

judgment in which it claimed that Hall’s claim against it was barred under the

exclusive remedy provision of the Act. On June 4, 2012, the trial court granted

summary judgment in favor of AT&T Services, thereby dismissing Hall’s claims

against AT&T Services with prejudice. After her motion to correct error was

denied, Hall appealed. This court reversed and remanded, finding that

questions of fact remained as to whether AT&T Services was Hall’s employer

or a joint employer for purposes of the exclusive remedy provision of the Act.

Specifically, the court found that AT&T Services’ designated evidence did not

establish that it was a subsidiary. See Hall v. Dallman Contractors, LLC, 994

N.E.2d 1220 (Ind. Ct. App. 2013) (Hall I).

[6] On May 30, 2014, AT&T Services filed its second motion for summary

judgment, again claiming that Hall’s claim was barred by the exclusive remedy

provision of the Act. AT&T Services designated evidence it argued established

that Ameritech and AT&T Services are both subsidiaries of AT&T, Inc., and

therefore joint employers of Hall. On January 9, 2015, the trial court entered

an order granting AT&T Services’ second motion for summary judgment. In

support of its decision, the trial court determined that AT&T Services and

Ameritech were both subsidiaries of AT&T, Inc., and therefore, for purposes of

the Act, were joint employers of Hall. The court concluded that Hall’s prior

worker’s compensation action “was her sole and exclusive remedy against them

for the injuries she sustained as a result of her fall on December 5, 2007. [Hall],

therefore, cannot proceed in this action against [AT&T Services] and

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 4 of 12 accordingly; [AT&T Services] is entitled to Summary Judgment as a matter of

law.” Appellant’s Appendix at 22-23.

Discussion & Decision

[7] Hall maintains that summary judgment is inappropriate. We review summary

judgment de novo, applying the same standard as the trial court: “Drawing all

reasonable inferences in favor of . . . the non-moving parties, summary

judgment is appropriate ‘if the designated evidentiary matter shows that there is

no genuine issue as to any material fact and that the moving party is entitled to

judgment as a matter of law.’” Williams v. Tharp, 914 N.E.2d 756, 761 (Ind.

2009) (quoting Ind Trial Rule 56(C)). “A fact is ‘material’ if its resolution

would affect the outcome of the case, and an issue is ‘genuine’ if a trier of fact is

required to resolve the parties’ differing accounts of the truth, or if the

undisputed material facts support conflicting reasonable inferences.” Id.

(internal citations omitted).

[8] The initial burden is on the summary-judgment movant to “demonstrate . . . the

absence of any genuine issue of fact as to a determinative issue,” at which point

the burden shifts to the non-movant to “come forward with contrary evidence”

showing an issue for the trier of fact. Id. at 761-62 (internal quotation marks

and substitution omitted). And “[a]lthough the non-moving party has the

burden on appeal of persuading us that the grant of summary judgment was

erroneous, we carefully assess the trial court’s decision to ensure that [s]he was

not improperly denied h[er] day in court.” McSwane v. Bloomington Hosp. &

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 5 of 12 Healthcare Sys., 916 N.E.2d 906, 909-10 (Ind. 2009) (internal quotation marks

omitted).

[9] Indiana law is clear that the Act provides “the exclusive remedy for recovery of

personal injuries arising out of and in the course of employment.” Hall I, 994

N.E.2d at 1224 (citing GKN Co. v. Magness, 744 N.E.2d 397, 401-02 (Ind.

2001)). “‘Although the Act bars a court from hearing any common law claim

brought against an employer for an on-the-job injury, it does permit an action

for injury against a third-party tortfeasor provided the third-party is neither the

plaintiff’s employer nor a fellow employee.’” Id. (quoting GKN Co., 744 N.E.2d

at 402). In its definition of “employer,” the Act provides that “[a] parent

corporation and its subsidiaries shall each be considered joint employers of the

corporation’s, the parent’s, or the subsidiaries’ employees for purposes of IC 22-

3-2-6 [exclusive remedies] and IC 22-3-3-31 [apportionment of award].” I.C. §

22-3-6-1(a).

[10] Hall directs us to McQuade v. Draw Tite, Inc., 659 N.E.2d 1016 (Ind. 1995),

wherein our Supreme Court held that an employee was not precluded under the

Act from bringing a negligence action against the parent corporation of her

employer. At that time, however, the statutory definition of “employer” for

purposes of the Act did not include a parent or subsidiary of the defendant’s

employer. Finding the statutes in the Act were silent as to its applicability to an

injured worker seeking recourse against his employer’s parent corporation, the

court held that the parent corporation fell within the language of I.C. § 22-3-2-

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 6 of 12 13, which left intact the injured employee’s right to pursue a legal claim against

any “other person than the employer.”

[11] Hall also directs us to Ritter v. Stanton, 745 N.E.2d 828 (Ind. Ct. App. 2001),

trans. denied, wherein this court refused to depart from the McQuade holding.

We held that an injured employee could maintain an action against The Kroger

Company, which was the parent corporation of his employer 4 from which he

had already received a worker’s compensation settlement.

[12] Effective July 1, 2000, the definition of employer under the Act was amended to

provide that “[a] parent or a subsidiary of a corporation or a lessor of employees

shall be considered to be the employer of the corporation’s, the lessee’s, or the

lessor’s employees for purposes of IC 22-3-2-6.” In 2001, the legislature further

amended the definition of “employer” for purposes of the Act to provide “[a]

parent corporation and its subsidiaries shall each be considered joint employers

of the corporation’s, the parent’s, or the subsidiaries’ employees for purposes

of IC 22-3-2-6 and IC 22-3-3-31.” We find that the amendment to the Act’s

definition of “employer” abrogated the holdings in Ritter and McQuade.

[13] Hall nevertheless argues that we should strictly construe the statutory language

and find that the Act’s definition of employer limits a “joint employer” to the

subsidiaries of a single “parent corporation.” In other words, Hall argues that

the legislature’s use of “parent corporation” in the singular signifies its intent to

4 Stanton worked for Gateway Freightline Corporation, which was a wholly owned subsidiary of Kroger.

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 7 of 12 limit “parent corporation” to a direct or immediate parent corporation and

exclude any higher tiered “parent” corporations. Hall maintains that the

evidence shows only that the Bell Companies own 100% of Ameritech and not

whether any one of the Bell Companies owns a majority of the voting shares of

Ameritech. Hall asserts that if only one of the Bell Companies owns a majority

of Ameritech’s shares, then that company is the parent corporation of

Ameritech, thereby making AT&T Holdings and AT&T, Inc. the grandparent

and great-grandparent corporations, respectively, of Ameritech. Hall designates

them as such because, according to Hall, Ameritech cannot have multiple

parent corporations. In the alternative, Hall argues that if none of the Bell

Companies holds a majority of shares of Ameritech, then AT&T Teleholdings

should be deemed the parent corporation, not AT&T, Inc. Under Hall’s

interpretation of what constitutes a parent corporation, AT&T Services and

Ameritech are not subsidiaries of the same parent corporation and therefore

they are not joint employers of Hall such that AT&T Services can assert the

exclusive remedy provision of the Act.

[14] We disagree with Hall’s reading of the statutory language. As noted by this

court in Hall I, the Act does not define subsidiary. In Hall I, this court therefore

looked to the Indiana Business Corporation Law’s (BCL) definition of

subsidiary, which provides that a subsidiary of a resident domestic corporation

“‘means any other corporation of which a majority of the outstanding voting

shares entitled to be cast are owned (directly or indirectly) by the resident

domestic corporation.’” Hall I, 994 N.E.2d at 1226 (quoting Ind. Code § 23-1-

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 8 of 12 43-16). The court in Hall I determined that the evidence presented did not

establish that AT&T Services and Ameritech were subsidiaries pursuant to this

definition. To be sure, in addition to the uncertainty as to which entity was

Hall’s employer, the court noted that the designated evidence showed only that

Ameritech owned 8.15% of AT&T Services at the time of Hall’s fall, which was

clearly not a majority of the outstanding voting shares. No further evidence

was presented concerning the “complex corporate structure” involved. Id. at

1224.

[15] In its second motion for summary judgment, AT&T Services again argued that

Hall’s claim was barred by the exclusive remedy provision of the Act. This

time, AT&T Services sought to establish that it and Ameritech were subsidiaries

within the meaning of that term as defined in the BCL and to answer the factual

questions this court found were left unanswered in Hall I. In support of its

second motion, AT&T Services designated the Affidavit of Stacy Hitzemann,

Senior Data Analyst for AT&T Services, who affirmed that Hall was employed

by Ameritech at the time of the occurrence. AT&T Services also designated the

Affidavit of Steven Threlkeld, who explained the relevant portions of AT&T,

Inc.’s corporate structure and the relationship between AT&T Services and

Ameritech at the time of the occurrence. AT&T Services argues that this

evidence establishes that it and Ameritech were both subsidiaries of AT&T, Inc.

(the parent corporation) as defined by Section 16 of the BCL at the time of

Hall’s fall. An organizational chart showing the corporate relationship between

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 9 of 12 AT&T Services and Ameritech was attached to Threlkeld’s affidavit and is

reproduced below.

[16] AT&T Services argues that because AT&T, Inc. owns 83.1% of AT&T

Services, AT&T Services is a subsidiary of AT&T, Inc. AT&T Services further

asserts that because AT&T, Inc. owns 100% of AT&T Teleholdings, Inc.,

which in turn owns 100% of Illinois Bell Telephone Company, Wisconsin Bell,

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 10 of 12 Inc., Indiana Bell Telephone Company, Inc., Michigan Bell Telephone

Company, and The Ohio Bell Telephone Company (the Bell Companies),

which collectively owned 100% of Ameritech, Ameritech is also a subsidiary of

AT&T, Inc., albeit a third-tier subsidiary.

[17] In support of its position that there can be multiple tiers of subsidiaries and

Ameritech should be deemed a subsidiary of AT&T, Inc., AT&T Services notes

that the comments to the BCL’s definition of subsidiary elaborate that the term

“includes all ‘tiered’ subsidiaries: If Corporation A owns a majority of the

voting shares of Corporation B, which in turn owns a majority of the voting

shares of Corporation C, Corporation C is a “subsidiary” of Corporation A for

purposes of Chapter 43.” This comment squarely addresses the question

presented and leads us to conclude that Ameritech is a subsidiary of AT&T,

Inc. The fact that Ameritech is a third-tier subsidiary does not alter our

conclusion.

[18] Further, we agree that AT&T Services is also a subsidiary of AT&T, Inc.

Because Ameritech and AT&T Services are both subsidiaries of AT&T, Inc.,

they should be considered joint employers pursuant to the Act’s definition of

“employer.” As such, Hall’s negligence action against AT&T Services is barred

by the exclusive remedies provision of the Act because Hall has already

received a worker’s compensation settlement from Ameritech. The trial court

did not err in granting summary judgment in favor of AT&T Services.

[19] Judgment affirmed.

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 11 of 12 [20] Riley, J., and Brown, J., concur.

Court of Appeals of Indiana | Opinion 49A02-1502-CT-67 | February 3, 2016 Page 12 of 12