Tuesday, December 08, 2009, 10:29 AM

Negligence Suit Against Employer's Affiliate Company Gets Green Light

In Van Dyke v. CMI Terex, the COA dismissed as interlocutory an appeal by a "grandparent" company of an employee killed on the job.

The deceased employee's estate brought suit against, among others, the parent corporation of the member-manager of the employee's employer. That "grandparent" company, Lane Corporation, argued that it was entitled to workers' compensation exclusivity and thus shielded from the plaintiff's negligence suit under Hamby v. Profile Products, 361 N.C. App. 630 (2007). Lane also argued that, as in Hamby, because the possibility of inconsistent verdicts existed, its interlocutory appeal was proper.

The COA disagreed. The COA noted that being a related entity is not, in itself, sufficient for workers' comp. protection, but that, to be shielded from suit for workplace injuries, the non-employer entity must conduct the employer's business. Moreover, the plaintiff did not make the same claims against "grandparent" Lane as against the employer or the parent, therefore creating no risk of inconsistent verdicts.

The COA went even further, however, than just dismissing the appeal. It said that if it were to address the merits, the outcome would be the same -- that there was a genuine issue of material fact as to whether Lane's allegedly negligent actions were taken in its own interests or in conducting the employer's business, making summary judgment improper.


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