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Kelly v. Kraemer Construction, Inc.

Supreme Court of Minnesota

June 7, 2017

Jessica Kelly, as Trustee for the heirs and next-of-kin of Richard Roy Washburn, Deceased, Appellant,
v.
Kraemer Construction, Inc., Respondent.

         Court of Appeals Office of Appellate Courts

          Wilbur W. Fluegel, Fluegel Law Office, Minneapolis, Minnesota, for appellant.

          Timothy R. Murphy, Cara C. Passaro, Murphy & Passaro, PA, North Oaks, Minnesota, for respondent.

         SYLLABUS

         1. Because respondent's crane crew was working interdependently with the general contractor's crew, they were engaged in a common activity, establishing the second requirement of a common-enterprise defense to third-party liability under the Minnesota Workers' Compensation Act. Minn. Stat. § 176.061, subds. 1, 4 (2016).

         2. Respondent's crane crew was subject to the same or similar hazards as the general contractor's crew, establishing the third requirement of a common-enterprise defense to third-party liability under the Minnesota Workers' Compensation Act. Minn. Stat. § 176.061, subds. 1, 4.

         Affirmed.

          OPINION

          CHUTICH, Justice.

         Appellant Jessica Kelly, as trustee for the next-of-kin of Richard Washburn, sued respondent Kraemer Construction, Inc. (Kraemer), alleging that Kraemer's negligence caused Washburn's death by electrocution at a construction site. Kraemer moved for summary judgment, arguing that it was engaged in a common enterprise with Washburn's employer, Ulland Brothers, Inc. (Ulland), and that the election-of-remedies provision of the Minnesota Workers' Compensation Act requires dismissal of Kelly's suit. See Minn. Stat. § 176.061 (2016). The district court denied summary judgment. A divided panel of the court of appeals reversed the district court's decision and remanded for entry of summary judgment in favor of Kraemer. Kelly v. Kraemer Constr., Inc., No. A15-1751, 2016 WL 3961817, at *5 (Minn.App. July 25, 2016). Kelly appeals, arguing that a genuine issue of material fact precludes summary judgment. Because we hold that Kraemer was in a common enterprise with Ulland as a matter of law and that the election of remedies provision requires dismissal of Kelly's suit, we affirm.

         FACTS

         The summary judgment standard mandates that we view the facts in the light most favorable to the nonmoving party, Kelly. State Farm Fire & Cas. v. Aquila Inc., 718 N.W.2d 879, 883 (Minn. 2006). Ulland, a general contractor, won a bid to repair two bridges in Carlton County. Ulland subcontracted for Kraemer to provide the crane work needed to lift and place heavy sections of concrete box culvert. Ulland did not own any equipment capable of lifting the 22, 000-pound steel-reinforced culvert sections. The culverts, once placed, create a channel for water to pass underneath the road.

         This case centers on the placement of two concrete culverts on October 4, 2012, at a bridge on Highway 23, near the city of Wright. Ulland had a crew of four at the site: Terry Rassier, Richard Washburn, Jeremy Wright, and Matthew Kisley. Ulland also provided the culvert sections, specialized rigging equipment to connect the culvert sections to the crane cable, tie bars to connect the culvert sections, and a bulldozer. Kraemer provided the crane and a crew of two, Michael Bergstrom (the crane operator) and Roger Poukka (the signalman and oiler).

         The bridge on Highway 23 runs north to south over a stream running west to east. Before the Kraemer crew arrived with the crane, Ulland had made preparations by diverting the stream through a temporary bypass culvert, draining the streambed, and removing the old culverts. To the east of the worksite, a powerline ran parallel to the road. Ulland marked off a 10-foot buffer zone around the powerline to avoid contact between the crane and the powerline. The parties do not dispute that it was necessary for the crane cable to remain at least 10 feet from the powerline to prevent electrocution.

         The general procedure for laying the culverts was as follows: Rassier (Ulland), in the bulldozer, pushed each culvert section into the rigging area, where Wright (Ulland) and Poukka (Kraemer) attached it to the crane. Bergstrom (Kraemer) operated the crane, lifting the culvert section over to the excavated bridge area and then lowering it. Washburn (Ulland), Kisley (Ulland), and Poukka manually guided the culvert section as it was lowered. Rassier brought the bulldozer into the streambed to push the culvert section into position after the crane set it down. Some combination of the four workers in the streambed then attached the lowered section to its neighbor and removed the crane rigging. As the spotter and signalman, Poukka was responsible for giving signals to Bergstrom to raise and lower the crane load and for preventing the crane from getting too close to the powerline.

         As the crane lowered the last culvert section, Washburn grabbed it and was electrocuted. Poukka testified that, when he touched the culvert section, he felt a jolt. The crane operator, Bergstrom, testified that the crane cab was not insulated from electric shock, but that he did not feel any shock when Washburn and Poukka did. Workers at the site administered CPR and called for an ambulance, but Washburn was declared dead shortly after the ambulance arrived.

         Washburn's survivors have received workers' compensation benefits through Ulland. Kelly is the mother of Washburn's two children and was appointed trustee for Washburn's next of kin to sue Kraemer for its alleged negligence in causing Washburn's death. Kraemer moved for summary judgment. Kraemer argued that it was engaged in a common enterprise with Ulland when Washburn was killed and that the election-of-remedies provision of the Minnesota Workers' Compensation Act prevents Kelly from bringing a civil action against Kraemer when her children have already recovered workers' compensation benefits from Ulland. See Minn. Stat. § 176.061, subds. 1, 4.

         In its summary judgment motion, Kraemer relied on the depositions of the workers at the site, as well as an affidavit and report from a construction-risk expert. The expert identified a number of hazards at the construction site to which both Ulland and Kraemer employees were exposed. Kelly produced a report from a forensic engineering consultant. He opined that Washburn's death was caused by physical contact between the crane and the powerline, and that it was "mathematically implausible" that electricity "arced" or "jumped" from the powerline. Kelly's expert did not comment on any other potential hazards at the site.

         The district court denied Kraemer's summary judgment motion. The court considered the three requirements of a common-enterprise defense: (1) the employers must be engaged on the same project, (2) the employees must be working together in a common activity, and (3) the employees must be working in such a fashion that they are subject to the same or similar hazards. McCourtie v. U.S. Steel Corp., 93 N.W.2d 552, 556 (Minn. 1958). Kelly conceded that the first requirement was met.

         The district court found that genuine issues of material fact existed concerning the two remaining requirements: whether the Kraemer and Ulland employees were engaged in a common activity and whether they were subject to the same or similar hazards. The court found that "the Kraemer employees' duties were very different and arguably separate from those of the Ulland employees" and that there was "a question of fact as to whether or not the Ulland employees were even necessary for the Kraemer employees to perform the crane work and vice versa." Further, the district court concluded that "the risks associated with the Kraemer employees' jobs and Ulland employees' jobs were for the most part distinct, " finding that the crane operator Bergstrom was not in danger of electrocution and that the signalman Poukka was exposed to that danger only when he acted outside the scope of his duties at the job site.

         A divided panel of the court of appeals reversed. The court reviewed the denial of summary judgment to determine whether the election-of-remedies provision prevented the district court from exercising subject-matter jurisdiction over Kelly's negligence action. Kelly v. Kraemer Constr., Inc., No. A15-1751, 2016 WL 3961817, at *2 (Minn.App. July 25, 2016); see McGowan v. Our Savior's Lutheran Church, 527 N.W.2d 830, 833 (Minn. 1995) ("Where the [Workers' Compensation] Act provides the employee's exclusive remedy, the district courts have no jurisdiction."). The court of appeals determined that the common-activity requirement was met because "the two crews could not have accomplished the project by working separately." Kelly, 2016 WL 3961817, at *4. The court further held that "Kraemer offered the only expert evidence on summary judgment regarding general risks, " which established that the two crews were subject to "similar, if not identical, hazards at the worksite." Id. at *5. The court accordingly concluded that Kraemer was entitled to summary judgment because it had established the three requirements of the common-enterprise test as a matter of law, and therefore the Minnesota Workers' Compensation Act provided Kelly's exclusive remedy. Id. A dissenting judge disagreed with the majority's evaluation of the similar-hazards requirement. Id. at *6 (Bratvold, J., dissenting).

         ANALYSIS

         A district court may grant summary judgment when "there is no genuine issue as to any material fact" and one party "is entitled to a judgment as a matter of law." Minn. R. Civ. P. 56.03. We review the district court's summary judgment decision de novo. Stringer v. Minn. Vikings Football Club, LLC, 705 N.W.2d 746, 754 (Minn. 2005). We consider two questions: "whether a genuine issue of material fact exists, and whether an error in the application of law occurred." Fairview Hosp. & Health Care Servs. v. St. Paul Fire & Marine Ins. Co., 535 N.W.2d 337, 341 (Minn. 1995). A genuine issue of material fact arises when there is sufficient evidence regarding "an essential element . . . to permit reasonable persons to draw different conclusions." DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997). The evidence must be viewed in the light most favorable to the nonmoving party, Kelly. See id. at 72.

         When a worker is injured "under circumstances which create a legal liability for damages on the part of a party other than the employer . . . at the time of the injury, " and the third party carries proper workers' compensation insurance and was engaged in a "common enterprise" with the employer, the Minnesota Workers' Compensation Act mandates an election of remedies. Minn. Stat. § 176.061, subds. 1, 4. The party seeking recovery "may proceed either at law against [the third] party to recover damages or against the employer for benefits, but not against both." Id., subd. 1. Washburn's survivors have received workers' compensation benefits through Ulland, and Kraemer carries workers' compensation insurance. Consequently, Kelly's suit may not proceed if Kraemer and Ulland were engaged in a common enterprise when Washburn was killed.

         In McCourtie v. United States Steel Corp., we set out a three-part test for the common-enterprise defense:

1) The employers must be engaged on the same project;
2) The employees must be working together (common activity); and
3) In such fashion that they are subject to the same or similar hazards.

93 N.W.2d at 556. By placing emphasis on "the common activities of the workers rather than the common goals of the employers, " Schleicher v. Lunda Constr. Co., 406 N.W.2d 311, 313 (Minn. 1987), the test determines whether the employers have, "in effect . . . put the [employees] into a common pool, " Gleason v. Geary, 8 N.W.2d 808, 814 (Minn. 1943) (emphasis added). Kelly concedes that Kraemer and Ulland were engaged on the same project. The issue on appeal is this: Does a genuine issue of material fact exist regarding whether the employees were engaged in a common activity and subject to the same or similar hazards?

         I.

         We first consider whether the Ulland and Kraemer crews were working together in a common activity. Kelly argues that the Kraemer and Ulland crews were not engaged in a common activity because they had distinct functions that were not interdependent. Kelly further contends that we should disregard favors or accommodations between crews when determining whether they were working together in a common activity, and that Poukka was acting as a volunteer when he manually guided the culvert sections and assisted with rigging.

         Kraemer asserts, in contrast, that the key consideration is interdependence. It argues that the crews' work was interdependent because they could not have moved the culvert sections ...


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