                                                                                             July 28 2015


                                            DA 14-0582
                                                                                          Case Number: DA 14-0582

              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                            2015 MT 209



ROBERT GEORGE and TINA GEORGE,

               Plaintiffs and Appellants,

         v.

CURTIS K. BOWLER, JEAN L. BOWLER,
and JOHN DOES 1-5,

               Defendants and Appellees.


APPEAL FROM:           District Court of the Fourth Judicial District,
                       In and For the County of Missoula, Cause No. DV 12-629
                       Honorable John W. Larson, Presiding Judge


COUNSEL OF RECORD:

                For Appellant:

                       James G. Hunt, Jonathan McDonald, Hunt & McDonald Law Firm,
                       Helena, Montana

                For Appellee:

                       Mark S. Williams, James D. Johnson, Williams Law Firm, P.C., Missoula,
                       Montana



                                                    Submitted on Briefs: April 29, 2015
                                                               Decided: July 28, 2015


Filed:

                       __________________________________________
                                         Clerk
Justice Beth Baker delivered the Opinion of the Court.

¶1    Plaintiffs Robert George and Tina George (the Georges) appeal the Fourth Judicial

District Court’s grant of summary judgment to defendants Curtis Bowler and Jean

Bowler (the Bowlers). The dispositive issue on appeal is:

      Did the District Court correctly grant summary judgment to the defendants on the
      basis of the Workers’ Compensation Act’s exclusivity provision?

We affirm.

                 PROCEDURAL AND FACTUAL BACKGROUND

¶2    The Georges filed a complaint against the Bowlers arising from injuries Robert

sustained on the Bowlers’ property. Robert was employed as a warehouse manager for

Carpets Plus, a corporation whose sole shareholder and president is Curtis and whose

secretary and treasurer is Jean. Carpets Plus operates on rented property owned by Curtis

and Jean individually. In 2008, the Bowlers applied for a building permit to construct a

warehouse on their property for use by Carpets Plus. The Bowlers listed “owners” as the

general contractors for the warehouse construction.

¶3    On September 4, 2009, Robert was asked by Curtis to assemble carpet racks in the

uncompleted warehouse. While assembling the racks, Robert fell and sustained injuries.

Robert was on the clock, working for and being paid by Carpets Plus, when he fell.

Robert claimed and received workers’ compensation benefits for his injuries through

Carpets Plus’s compensation insurance.

¶4    On May 30, 2012, Robert filed suit against the Bowlers in their individual

capacities as the property owners and general contractors of the warehouse, alleging that
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the Bowlers were negligent in supervising and controlling assembly of the carpet racks

and failed to provide a safe place to work in violation of the Montana Occupational

Safety and Health Act, §§ 50-71-201 thru -202, MCA.

¶5     In their answer, the Bowlers pleaded the Workers’ Compensation Act’s (WCA’s)

exclusivity provision, § 39-71-411, MCA, as an affirmative defense. In his deposition,

Curtis testified that he was acting as the president of Carpets Plus when he instructed

Robert to assemble the carpet racks. Curtis further testified that he was acting on behalf

of Carpets Plus for all aspects of the warehouse construction because the warehouse was

solely for use by Carpets Plus.

¶6     After discovery, the Bowlers moved for summary judgment on the basis of the

WCA’s exclusivity provision. The Bowlers argued that as corporate directors they were

co-employees of Robert at Carpets Plus and thus were exempt from suit for Robert’s

workplace injuries.

¶7     The Georges filed a cross-motion for summary judgment, arguing that the Bowlers

as individual property owners and general contractors were separate legal entities from

the Bowlers as corporate officers acting on behalf of Carpets Plus, and thus that the

exclusivity provision did not apply. The Georges pointed to tax returns showing that the

warehouse, including the carpet racks, were depreciated on the Bowlers’ individual tax

returns, rather than on Carpets Plus’s tax return, arguing that this showed that the carpet

racks were built for the benefit of the property owners, not for Carpets Plus.




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¶8    The District Court granted the Bowlers’ motion for summary judgment and denied

the Georges’ motion. The court held that the Bowlers were acting at all relevant times in

their capacities as corporate officers of Carpets Plus and, thus, were immune from suit

under the WCA’s exclusivity provision. The Georges appeal.

                              STANDARD OF REVIEW

¶9    We review summary judgment orders de novo.             Albert v. City of Billings,

2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate

when the moving party demonstrates an absence of a genuine issue of material fact and

entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Albert, ¶ 15. After

the moving party meets its initial burden, the burden shifts to the party opposing

summary judgment to establish with substantial evidence, as opposed to mere denial,

speculation, or conclusory assertions, that a genuine issue of material fact does exist or

that the moving party is not entitled to judgment as a matter of law. Phelps v. Frampton,

2007 MT 263, ¶ 16, 339 Mont. 330, 170 P.3d 474.

                                     DISCUSSION

¶10 Did the District Court correctly grant summary judgment to the defendants on the
basis of the Workers’ Compensation Act’s exclusivity provision?

¶11   The WCA provides the exclusive remedy against an employer or a co-employee

when an employee is injured on the job. Sections 39-71-411 thru -412, MCA. The

exclusivity provision is an affirmative defense, Brown v. Ehlert, 255 Mont. 140, 146,

841 P.2d 510, 514 (1992), timely asserted here by the Bowlers.



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¶12    The Georges argue that the WCA’s exclusivity provision applies only to the

employer, Carpets Plus, and its employees. They argue that the Bowlers as individual

property owners are separate legal entities from Carpets Plus.           While true, the

corporation, Carpets Plus, can act only through its agents. The Bowlers are agents of

Carpets Plus as well as the property owners. The Georges maintain that the case turns on

the fact that the warehouse was under construction at the time of Robert’s injury, and

they seek relief against the Bowlers as the general contractors for the warehouse

construction rather than as corporate officers of Carpets Plus.

¶13    The Bowlers argue that the Georges’ argument already was rejected by this Court

in Herron v. Pack & Co., 217 Mont. 429, 705 P.2d 587 (1985). In Herron, the plaintiff

sued her husband’s employer for wrongful death, alleging that her husband died as a

result of negligent brake maintenance performed by the defendant. The decedent worked

as a truck driver for the defendant, and his heirs had received workers’ compensation

benefits for his death. The defendant argued that § 39-71-411, MCA, precluded the suit.

The plaintiff argued that Montana should adopt the “dual capacity” doctrine embraced by

a minority of states, which allows suit against the employer for negligence committed in

a capacity separate from its capacity as employer.          The plaintiff argued that the

defendant’s truck maintenance activities constituted a separate capacity and the defendant

should not be shielded from liability for negligence committed in that capacity. We

rejected the argument, noting that the dual capacity doctrine would “go a long way

toward destroying the exclusive remedy principle.” Herron, 217 Mont. at 431, 705 P.2d

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at 588 (quoting 2A Larson, Workmen’s Compensation Law § 72.81 (1982)). Herron is

not dispositive, however, because the Georges are not arguing that the same entity was

acting in two capacities, but rather that an entity separate from the employer committed

the alleged negligence at issue.

¶14    The District Court held that the Bowlers were acting as co-employees of Robert at

all times relevant to the dispute and, therefore, are covered by the exclusivity provision of

the WCA. In a footnote in their opening brief, the Georges attempt to portray Jean

Bowler as a volunteer—and thus not considered an employee under the WCA—because

she receives no compensation from Carpets Plus. See § 39-71-118(2)(b), MCA.

However, the Georges do not dispute that they conceded that point at oral argument

before the District Court. We conclude that this argument is waived on appeal, as we will

not place the District Court in error for an action to which the appealing party acquiesced.

See Horn v. Bull River Country Store Props., 2012 MT 245, ¶ 25, 366 Mont. 491, 288

P.3d 218.

¶15    Welton v. Lucas, 283 Mont. 202, 940 P.2d 112 (1997), on which the Georges rely,

is not controlling.   We held in Welton that an injured plaintiff was not barred by

§ 39-71-411, MCA, from suing the owners of property on which the plaintiff was injured,

even though the owners also were shareholders in the company that employed the

plaintiff. As landlords, the defendants were “strangers to the employment relationship,”

and they still owed a duty to maintain the premises in a safe condition.             Welton,

283 Mont. at 206–08, 940 P.2d at 114–15.          The Welton complaint alleged that the

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defendants were negligent by allowing a dangerous condition to remain on their

premises. Welton, 283 Mont. at 204, 940 P.2d at 113. Here, in contrast, the Georges

alleged that the Bowlers “failed to provide and enforce the use of proper safety

equipment and practices on the project.” The alleged negligent acts that caused Robert’s

injuries were just that—acts taken by Curtis while supervising Robert’s work; they had

nothing to do with the condition of the premises. The Georges’ complaint does not

invoke premises liability as the basis for their allegations against the Bowlers.

¶16    The Georges argue nonetheless that the undisputed evidence shows that the

Bowlers were acting in their capacity as the property owners, not as corporate officers of

Carpets Plus, when the carpet racks were being installed in the Bowlers’ warehouse.

Alternatively, the Georges argue that there is a disputed issue of material fact as to

whether the Bowlers were operating as co-employees of Carpets Plus or as the property

owners.

¶17    Though not cited by the parties, on point here is Massey v. Selensky, 212 Mont. 68,

685 P.2d 938 (1984) (Massey I):

       It is well settled in Montana that a co-employee is immune from liability
       for negligent acts resulting in injuries which are compensable under the
       Workers’ Compensation Act. . . . However, the simple fact that two
       persons have the same employer would not necessarily cause this rule to
       apply. We must therefore determine when a co-worker is an “employee” as
       that term is used in Section 39-71-412, MCA, for purposes of applying the
       co-employee immunity rule.
                                         . . .

       We hold that the proper test is whether the co-worker was acting within the
       course and scope of his employment at the time the negligent acts occurred.
       If the allegedly negligent co-worker was acting within the course and scope
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       of his employment at the time he engaged in the purported negligent acts,
       then he is an “employee of his employer,” and immune from suit by the
       injured claimant.

Massey, 212 Mont. at 71–72, 685 P.2d at 940 (internal citations omitted). If the Bowlers

were acting in the course and scope of their employment with Carpets Plus when Robert

was injured by their alleged negligence, then the exclusivity provision applies.

¶18    The Bowlers point to Curtis’s deposition testimony stating that he was solely

responsible for supervising and controlling the carpet rack assembly, and that he was

acting on behalf of Carpets Plus at all times that he was supervising the carpet rack

assembly. They further point to the undisputed fact that Robert was an employee of

Carpets Plus, was being paid by Carpets Plus at all relevant times, and was working at his

place of employment when the injury occurred. This is sufficient to meet their burden for

summary judgment purposes and shift the burden to the Georges to show some disputed

issue of material fact or that the evidence does not demonstrate that the Bowlers are

entitled to judgment as a matter of law.

¶19    The Georges point to evidence that the Bowlers individually were the general

contractors on the warehouse construction on their property and that the carpet racks

were fixtures in the warehouse, which was under construction at the time of the accident.

The Georges argue that the carpet racks were being installed for the benefit of the

property owners as part of the warehouse construction and, thus, that the Bowlers were

necessarily acting as property owners and general contractors when they supervised and

controlled the carpet rack assembly project.      The Georges point to the tax returns

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showing that the carpet racks were treated for tax purposes as part of the warehouse and

depreciated on the Bowlers’ individual tax returns.

¶20    The Georges’ argument fails because it assumes that if the carpet racks were part

of the warehouse and benefitted the property owners, then the assembly of the carpet

racks was necessarily supervised by the Bowlers individually rather than by Carpets Plus.

As noted earlier, however, Carpets Plus rents the warehouse from the Bowlers, and

Robert is the company’s warehouse manager. The carpet racks undisputedly were for use

by Carpets Plus. There likewise is no dispute that Curtis was Robert’s supervisor at

Carpets Plus, that Robert was working for Carpets Plus at the time of his accident, and

that Robert received benefits through the workers’ compensation coverage of Carpets

Plus for his injuries. The Georges offer no substantial evidence to contradict Curtis

Bowler’s testimony that he was acting on behalf of Carpets Plus while supervising the

rack assembly. The Georges have failed to demonstrate a triable issue of fact.

¶21    The Georges also fail to present argument establishing that the Bowlers are not

entitled to judgment as a matter of law. They argue that the property owners are separate

legal entities from Carpets Plus and that third parties are subject to suit under

§ 39-71-412, MCA, and Article II, § 16 of the Montana Constitution. Both of those

propositions are true, except that separate legal entities are not third parties when they are

acting within the course and scope of their employment as co-employees of the plaintiff

at the times the plaintiff alleges they were negligent. Massey, 212 Mont. at 71–72,

685 P.2d at 940. Because the undisputed evidence shows that the Bowlers were acting

                                              9
within the course and scope of their employment for Carpets Plus at the time they were

alleged to have failed to provide a Carpets Plus employee with a safe place to work, they

are protected from suit by the exclusivity provision.

¶22    The Georges raise a second issue regarding the District Court’s denial of their

motion for sanctions against the Bowlers. That ruling was discretionary, Johnson v.

Booth, 2008 MT 155, ¶ 13, 343 Mont. 268, 184 P.3d 289, and—given the resolution of

the summary judgment issue—we decline to disturb the court’s sanction ruling.

                                     CONCLUSION

¶23    The District Court’s judgment in favor of Curtis and Jean Bowler is affirmed.



                                                 /S/ BETH BAKER

We concur:

/S/ LAURIE McKINNON
/S/ MICHAEL E WHEAT
/S/ JAMES JEREMIAH SHEA
/S/ JIM RICE




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