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From Products Liability Law Daily, November 17, 2015

Fault of non-party employer can be considered by jury under Georgia apportionment statute

By Susan Lasser, J.D.

A Georgia apportionment of damages statute allows the jury to assess a percentage of fault to the non-party employer of a plaintiff who sues a product manufacturer and seller for negligence in failing to warn about a product danger, even though the non-party employer has immunity under the exclusive remedy provision of the state's Workers’ Compensation Act, according to the Georgia Supreme Court in answer to a certified question from a federal district court in Georgia. The court followed its ruling in a recent decision which found that in cases in which the apportionment statute applies, the trier of fact is to “consider the fault of all persons or entities who contributed to the alleged injury or damages,” including tortfeasors “whose commission of a tort as against the plaintiff was a proximate cause of his injury, regardless of whether such tortfeasor would have actual liability in tort to the plaintiff.” The state high court found no compelling reason to treat non-party employers with immunity under the Workers’ Compensation Act differently from non-parties with other defenses or immunities against liability (Walker v. Tensor Machinery, Ltd., November 16, 2015, Blackwell, K.).

Background. A worker was injured while operating a machine designed and manufactured by Tensor Machinery, Ltd., and Tensor Fiber Optic Technologies, Ltd. (collectively, Tensor or manufacturer). After reaching a settlement with his employer for workers’ compensation benefits, the worker filed suit against Tensor, alleging that it negligently failed to warn him of safety-related defects in the machine. The manufacturer gave notice under OCGA §51-12-33 that it intended to ask the trier of fact to assign some responsibility for the worker’s injuries to his employer. The worker, in response, moved to exclude all evidence concerning fault on the part of his employer, asserting that OCGA §51-12-33 did not allow a plaintiff to apportion fault to a non-party employer that had immunity from liability in tort by virtue of the exclusive remedy provision of the state Workers’ Compensation Act, OCGA §34-9-11. The U.S. District Court for the Northern District of Georgia certified the following question to the Georgia Supreme Court: Does OCGA §51-12-33(c) allow the jury to assess a percentage of fault to the non-party employer of a plaintiff who sues a product manufacturer and seller for negligence in failing to warn about a product danger, even though the non-party employer has immunity under OCGA §34-9-11?

Zaldivar v. Prickett. In Zaldivar v. Prickett, 297 Ga. 589 (774 SE2d 688) (2015), the Georgia Supreme Court held that OCGA §51-12-33(c), the provision of the apportionment statute directing the trier of fact in certain cases to “consider the fault of all persons or entities who contributed to the alleged injury or damages,” refers to the “fault” of “all persons or entities who have breached a legal duty in tort that is owed with respect to the plaintiff, the breach of which is a proximate cause of the injury sustained by the plaintiff … regardless of whether such tortfeasor would have actual liability in tort to the plaintiff.” Further, the court said that the apportionment statute generally allows consideration of the “fault” of a tortfeasor—even if he has “a meritorious affirmative defense or claim of immunity against any liability to the plaintiff.”

The defendant in Zaldivar sought to assign some responsibility to the plaintiff’s employer. The court found that an affirmative defense or immunity did not “eliminate ‘fault’ or cut off proximate cause, it only bars liability notwithstanding that the ‘fault’ of the tortfeasor was a proximate cause of the injury in question.”

Workers argument. The worker argued that OCGA §51-12-33(c) could not reasonably be understood to permit an allocation of fault to non-party employers with immunity under the Workers’ Compensation Act because it would upset the Act’s careful balance between the respective interests of employers and employees as determined by the state’s general assembly.

Apportionment of damages statute. The state supreme court rejected the worker’s argument. It found that the state general assembly determined that the exclusive remedy provision and limited benefits of the workers’ compensation system were “the quid pro quo for workers receiving a guarantee of prompt benefits for work-related injuries without regard to fault or common-law defenses and without the delay inherent in tort litigation.” This quid pro quo relationship between an employee and his or her employer, or the underlying legislative policy, was not disturbed by the allocation of fault to an immune employer, according to the court, because a plaintiff still can obtain benefits without having to prove his or her employer’s negligence, and the employer remains immune from liability. In addition, it was equitable to allow the allocation of fault to the exempt employer even though this diminished the injured plaintiff’s ultimate recovery in the tort action because the injured plaintiff could also recover under the workers’ compensation law from his or her employer. Immunizing employers from fault allocation in third-party tort suits would go against the spirit of the bargain between employers and employees underlying workers’ compensation

Subrogation. The court also rejected the worker’s argument that the assignment of fault to a non-party employer would “eviscerate” the role that subrogation plays in the workers’ compensation system. Under the state’s Workers’ Compensation Act, if an employer or its insurer has at least partially paid its workers’ compensation liability to an injured employee, the employer or insurer has a right of subrogation against damages that the employee recovers from a third party. This right of subrogation is limited to the amount of certain benefits paid to the employee and is available only “if the injured employee has been fully and completely compensated, taking into consideration both the benefits received … and the amount of the recovery in the third-party claim, for all economic and noneconomic losses incurred as a result of the injury.” The purpose of these provisions is to prevent a double recovery by the employee and to allow the employer to recoup its loss while making the injured employee whole.

Although the right of subrogation can be further limited in some cases by an allocation of fault to a non-party employer, the court found that this was not so inequitable for employers as to lead it to conclude that the apportionment of damages statute was not meant to permit the allocation of fault to non-party employers. It was not inherently unfair for an employer to bear some cost (limited to its liability for workers’ compensation benefits) for its own fault, as opposed to that cost being borne by another tortfeasor.

Employers litigation costs. Finally, under the exclusive remedy provisions of the Workers’ Compensation Act, the employer entirely avoids having to defend against tort litigation and remains immune from tort liability regardless of any assignment of fault under the apportionment of damages statute. The employer, though not a party to the suit, still has to answer discovery requests. In a products liability action such as the case at bar, discovery requests could have many purposes other than to discover fault on the part of the employer, including supporting or refuting the elements of the employee’s tort action, as well as the potential defenses available to the non-employer defendant against the employee’s action. According to the court, the allocation of fault to non-party employers simply adds one additional subject about which employers can be subject to non-party discovery.

Conclusion. The court found no reason to limit its interpretation of the apportionment of damages statute outlined in Zaldivar or to prohibit a trier of fact from assigning fault to a non-party employer with immunity under the exclusive remedy provisions of the state’s Workers’ Compensation Act. The statute allows consideration of the “fault” of a tortfeasor whether or not that tortfeasor has a meritorious affirmative defense or claim of immunity against liability to the plaintiff. Therefore, the court answered the federal district court’s certified question in the affirmative.

Dissent. In a dissent written by Justice R. Benham and joined by Justice C. Hunstein, it was first noted that workers’ compensation issues, not a part of theZaldivar decision, were “front and center” in the current case. The Justice concluded that when construing the apportionment statute’s subsection (c) together with the exclusive remedy provision of Georgia’s workers’ compensation law, “a jury is not permitted to assess a percentage of fault to a non-party employer of a plaintiff who sues a product manufacturer and seller for negligence in failing to warn about a product danger.” He said that the relevant terms of the workers’ compensation law provide the “compelling reason” referenced by the majority in the current case to treat non-party employers with immunity from suit differently from other non-parties against whom apportionment may be assessed. Therefore, he stated that he believed the answer to the certified question was no.

The case is No. S15Q1222.

Attorneys: Brian Scott Parker (The Parker Firm, LLC) for Jock L. Walker. Jason Daniel Hergenroether (Gray Rust St. Amand Moffet & Brieske LLP) for Tensor Machinery Ltd.

Companies: Tensor Machinery Ltd.

MainStory: TopStory DamagesNews IndustrialCommercialEquipNews GeorgiaNews

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