{ "id": 6139507, "name": "ZENITH INSURANCE COMPANY v. VNE, INC., d/b/a TGI Fridays, Jerry D. Gardner, and Sierra Hotel Corporation", "name_abbreviation": "Zenith Insurance Co. v. VNE, Inc.", "decision_date": "1998-04-01", "docket_number": "CA 97-994", "first_page": "165", "last_page": "174", "citations": [ { "type": "official", "cite": "61 Ark. App. 165" }, { "type": "parallel", "cite": "965 S.W.2d 805" } ], "court": { "name_abbreviation": "Ark. Ct. App.", "id": 13370, "name": "Arkansas Court of Appeals" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "283 Ark. 191", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1879997 ], "weight": 2, "year": 1984, "opinion_index": 0, "case_paths": [ "/ark/283/0191-01" ] }, { "cite": "246 Ark. 377", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1604140 ], "weight": 2, "year": 1969, "opinion_index": 0, "case_paths": [ "/ark/246/0377-01" ] }, { "cite": "Ark. Code Ann. \u00a7 11-9-401", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "pin_cites": [ { "parenthetical": "b" } ], "opinion_index": 0 }, { "cite": "330 Ark. 687", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 298587 ], "weight": 4, "year": 1997, "opinion_index": 0, "case_paths": [ "/ark/330/0687-01" ] }, { "cite": "Ark. Code Ann. \u00a7 11", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "weight": 2, "opinion_index": 0 }, { "cite": "Ark. Code Ann. \u00a7 11-9-1001", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "year": 1996, "opinion_index": 0 }, { "cite": "Ark. Code Ann. \u00a7 11-9-101", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "opinion_index": 0 }, { "cite": "Ark. Code Ann. \u00a7 11-9-105", "category": "laws:leg_statute", "reporter": "Ark. Code Ann.", "weight": 3, "pin_cites": [ { "page": "(a)" }, { "page": "(a)" }, { "parenthetical": "a" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 525, "char_count": 12841, "ocr_confidence": 0.738, "pagerank": { "raw": 1.1746385318992565e-07, "percentile": 0.5872572107485803 }, "sha256": "07b499de16d715df468f9eb4943672c48cc162cd960900ab26f15a638f2979db", "simhash": "1:b7586587c8cfecf1", "word_count": 2101 }, "last_updated": "2023-07-14T22:49:17.261540+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Meads and Roaf, JJ., agree." ], "parties": [ "ZENITH INSURANCE COMPANY v. VNE, INC., d/b/a TGI Fridays, Jerry D. Gardner, and Sierra Hotel Corporation" ], "opinions": [ { "text": "Sam Bird, Judge.\nThis is an appeal from an order of the Sebastian County Circuit Court, which granted the appellee\u2019s motion to dismiss appellant\u2019s complaint for lack of subject-matter jurisdiction pursuant to Ark. R. Civ. P. 12(b)(1). The court held that jurisdiction for appellant\u2019s claims lies in the Workers\u2019 Compensation Commission. We agree and affirm.\nAppellee VNE, Inc. (hereinafter VNE), obtained a policy of workers\u2019 compensation insurance from appellant, Zenith Insurance Company, covering the period of October 1, 1994, through October 1, 1995. Appellant contends that in its application for that insurance, VNE misrepresented to appellant that it did not own, lease, or use an airplane. On October 24, 1994, Jerry D. Gardner (hereinafter Gardner), who, with his wife, owned both VNE and Sierra Hotel Corporation (hereinafter Sierra), was piloting an airplane owned by Sierra and occupied by Michael Coats, an employee of VNE, when the airplane crashed. As a result of the crash, Coats sustained injuries. The appellant investigated the airplane accident and paid Coats temporary total disability benefits and medical expenses.\nAppellant later filed a complaint against VNE, Gardner, and Sierra seeking to recover the amount of workers\u2019 compensation benefits it had paid to Coats. In its complaint and amended complaints, appellant asserted four reasons it should be entitled to recover. First, it alleged that Gardner had misrepresented that VNE did not own, lease, or use an airplane, that appellant had relied upon those misrepresentations when it issued its workers\u2019 compensation policy, and that it would not have issued the policy had Gardner not made such misrepresentations. Second, appellant alleged that Gardner had been negligent in operating the airplane in which Coats was injured and that Gardner\u2019s negligence was the proximate cause of Coats\u2019s injuries. Third, appellant alleged that it had paid Coats\u2019s workers\u2019 compensation claims in rebanee upon representations by Coats that he was on an employment-related trip for VNE at the time of the airplane crash, but that during his deposition Coats admitted that he and Gardner were on a recreational trip at the time of the crash and that he had eariier bed about the purpose of the trip at Gardner\u2019s insistence. And finahy, appebant abeged that Coats should not have been entitled to workers\u2019 compensation benefits because VNE continued to pay his salary during the time he was receiving temporary total disabbity payments from appebant.\nIn response to appebant\u2019s complaint, appebee filed a motion contending that appebant\u2019s cause of action for misrepresentation about VNE\u2019s ownership, l\u00e9ase, or use of an airplane should be dismissed under Ark. R. Civ. P. 12(b)(6) for fabure to state a claim upon which rebef could be granted, and that the other three claims should be dismissed under Ark. R. Civ. P. 12(b)(1) because, pursuant to Ark. Code Ann. \u00a7 ll-9-105(a) (Repl. 1996), these claims were within the exclusive jurisdiction of the Workers\u2019 Compensation Commission. The court granted appebees\u2019 motion.\nAppebant does not appeal the court\u2019s dismissal of the claim of misrepresentation about the ownership, lease, or use of an airplane. Appebant appeals only that part of the trial court\u2019s order that dismissed its second, third, and fourth claims. We affirm the circuit court\u2019s order because jurisdiction of appebant\u2019s second, third, and fourth claims properly lies in the Workers\u2019 Compensation Commission.\nNegligence Claim Against Gardner and Sierra\nIn accordance with Ark. Code Ann. \u00a7 11-9-105(a), the rights and remedies granted to employees under the Arkansas Workers\u2019 Compensation Law (Ark. Code Ann. \u00a7 11-9-101 through Ark. Code Ann. \u00a7 11-9-1001 (Repl. 1996)) are within the exclusive jurisdiction of the Arkansas Workers\u2019 Compensation Commission. Simply stated, an employer that has secured to its employees the benefits of workers\u2019 compensation cannot be sued in tort by its employees for injury or death arising out of their employment. Only when the employer fails to secure the payment of compensation for the benefit of an employee who is injured or killed in the course of his employment can the employee or his legal representative elect to maintain a legal action in court for damages. Ark. Code Ann. \u00a7 11 \u2014 9\u2014105(b) (1).\nHowever, an injured employee or the legal representative of a deceased employee may, in addition to pursuing a claim for workers\u2019 compensation benefits, maintain an action in court against any \u201cthird party\u201d who may be responsible for such injury or death. Ark. Code Ann. \u00a7 ll-9-410(a) (Repl. 1996); Wilson v. Rebsamen Ins., 330 Ark. 687, 957 S.W.2d 678 (1997). Arkansas Code Annotated section ll-9-410(a) states that the employer or its workers\u2019 compensation insurance carrier has the right to receive notice of the employee\u2019s third-party action and to join in that action if it wishes. Under Ark. Code Ann. \u00a7 ll-9-410(b), the employer or its carrier that is liable for the payment of workers\u2019 compensation benefits may be subrogated to the employee\u2019s claim and assert an action against a third party, but it must notify the employee in writing that he has the right to pursue any benefits to which he may be entitled in addition to the subrogation interest.\nIn the case at bar, appellant contends that Gardner and Sierra are third parties within the meaning of Ark. Code Ann. \u00a7 ll-9-410(b) and claims that Coats\u2019s injuries resulted from Gardner\u2019s negligence in the operation of Sierra\u2019s airplane. We do not agree that Gardner is a third party within the meaning of Ark. Code Ann. \u00a7 11-9-401 (b). The Arkansas Supreme Court has defined a third party under section 11-9-410 as \u201csome person or entity other than the first and second parties involved, and the first and second parties can only mean the injured employee and the employer or one liable under the compensation act.\u201d Wilson v. Rebsamen Ins., supra (citing Neal v. Oliver, 246 Ark. 377, 438 S.W.2d 313 (1969)). Thus, under section 410, neither a workers\u2019 compensation carrier nor an employer can be a third party. Wilson v. Rebsamen Ins., supra.\nIn this case, the first party is the injured employee, Coats; and the second party is the employer, VNE, or its workers\u2019 compensation insurance carrier, which is the appellant. Since appellant\u2019s claim against third parties exists only by virtue of Ark. Code Ann. \u00a7 ll-9-410(b), as a subrogee of Coats, appellant stands in the same position as Coats, who is prohibited by Ark. Code Ann. \u00a7 ll-9-105(a) from suing VNE. Also, Gardner cannot be a third party in this case because he is the sole owner and an officer (and therefore a \u201cpersona\u201d) of VNE, Coats\u2019s employer, that is protected by the exclusive remedy provisions of Ark. Code Arm. \u00a7 11-9-105(a). Since no third party exists in the case at bar, section ll-9-410(b) is simply not applicable.\nAppellant argues that Sierra qualifies as a third party within the meaning of Ark. Code Ann. \u00a7 ll-9-410(b), but its complaint alleges no acts of negligence on Sierra\u2019s part that would subject it to liability as a result of the plane crash. The complaint filed by appellant states:\nThat in the alternative, the plaintiff is entitled to reimbursement for sums paid to and to be paid to Coats based on the Workers\u2019 Compensation claim from defendants Gardner and Sierra, jointly and severally. That on the 23rd day of October, 1994, Gardner, acting as an owner, agent and employee of Sierra, failed to exercise reasonable case (sic) in the operation of the 703SR. SeaRey amphibian airplane, owned by Sierra, in that when piloting the plane on said date, Gardner attempted to land on the Arkansas River on pontoons but negligently failed to cause the wheels to be raised, thereby causing the airplane to crash nose-first into the river where it first touched down, all of which was the proximate cause of Coats\u2019 injuries.\nEven if this court could construe the above-quoted portion of appellant\u2019s complaint to mean that Gardner\u2019s negligence should be imputed to Sierra, jurisdiction still remains in the Workers\u2019 Compensation Commission pursuant to Ark. Code Ann. \u00a7 11-9-105(a), which clearly states,\nNo role, capacity, or persona of any employer, principal, officer, director, or stockholder other than that existing in the role of employer of the employee shall be relevant for consideration for purposes of this chapter, and the remedies and rights provided by this chapter shall in fact be exclusive regardless of the multiple roles, capacities, or personas the employer may be deemed to have.\nAppellant argues that Gardner and Sierra are two distinct legal entities. However, Sierra is a persona of Gardner in that, as the complaint states, Gardner was acting as owner, agent, and employee of Sierra at the time of the airplane crash that resulted in Coats\u2019s injuries. Therefore, section ll-9-105(a) places jurisdiction before the Workers\u2019 Compensation Commission.\nAppellant also argues that the exclusive remedy provision of Ark. Code Ann. \u00a7 ll-9-105(a) applies only to the claims of employees against their employers and not to claims of insurance carriers against employers. However, this argument overlooks the fact that a workers\u2019 compensation insurance carrier\u2019s right to pursue a tort claim against third parties arises solely by virtue of Ark. Code Ann. \u00a7 11 -9-410(b), which grants to the carrier a right of subrogation only. As a subrogee, appellant\u2019s claim stands on the same footing as the claim of Coats, to whose claim appellant is subrogated. Since Coats is precluded by Ark. Code Ann. \u00a7 11-9-105 (a) from pursuing a claim against his employer, so is appellant.\nCourse and Scope of Employment\nThe trial court also found that it did not have jurisdiction because the appellant alleged in its complaint that appellee was not working in the course and scope of his employment in that the airplane trip was not related to Coats\u2019s employment with VNE. Appellant argues that it originally paid Coats\u2019s claims because it relied upon representations by Coats that he was on an employment-related trip at the time of the accident. However, during a deposition, Coats admitted that he and Gardner were on a recreational trip. The appellant originally paid compensation benefits to Coats and is now seeking to recover the amount it paid from Coats\u2019s employer by claiming that Coats was not working in the course and scope of his employment when his injury occurred. Arkansas Code Annotated section ll-9-102(5)(A) (Repl. 1996) defines a compensable injury as \u201c[a]n accidental injury . . . arising out of and in the course of employment. . . .\u201d Thus, whether an injury is compensable for purposes of workers\u2019 compensation depends, in part, on whether the injury occurred within the course and scope of the injured employee\u2019s employment. This is necessarily an issue to be determined by the Commission in deciding whether to award benefits. Therefore, appellant\u2019s contention in this action that Coats was not acting within the course and scope of his employment when his injury occurred is one that should be made before the Workers\u2019 Compensation Commission because of the exclusive remedy provisions of Ark. Code Ann. \u00a7 ll-9-105(a).\nSalary Payment in Addition to Workers\u2019 Compensation Benefits\nIn its second amended complaint, appellant asserts that it learned that while it was paying benefits to Coats, Coats was in turn receiving a salary from VNE. The appellant contends that since Coats was being paid a full salary by VNE while he was disabled, appellant should not have been required to pay temporary total disability to Coats at the same time. Appellant seeks to recover from VNE the amounts of disability compensation it alleges that it erroneously paid to Coats. While under Ark. Code Ann. \u00a7 ll-9-807(b) (Repl. 1996) Coats may not be entitled to receive disability compensation while also receiving a full salary from his employer, this is a defense that should be asserted before the Workers\u2019 Compensation Commission.\nAffirmed.\nMeads and Roaf, JJ., agree.\nGardner was the sole owner of all the outstanding stock in Sierra Hotel Corporation, and Gardner and his wife, Vonda J. Gardner, owned all of the outstanding stock in VNE.\nAn exception to this rule exists when the injury or death of the employee results from an employer\u2019s intentional act to bring about the injury or death of the employee, Sontag v. Orbit Valve Co., 283 Ark. 191, 672 S.W.2d 50 (1984); but this exception has no application to the case at bar.", "type": "majority", "author": "Sam Bird, Judge." } ], "attorneys": [ "Brazil, Adlong, Murphy & Osment, by: William Clay Brazil, for appellant.", "Thompson & Llewellyn, P.A., by: James M. Llewellyn, Jr., for appellees." ], "corrections": "", "head_matter": "ZENITH INSURANCE COMPANY v. VNE, INC., d/b/a TGI Fridays, Jerry D. Gardner, and Sierra Hotel Corporation\nCA 97-994\n965 S.W.2d 805\nCourt of Appeals of Arkansas Division II\nOpinion delivered April 1, 1998\nBrazil, Adlong, Murphy & Osment, by: William Clay Brazil, for appellant.\nThompson & Llewellyn, P.A., by: James M. Llewellyn, Jr., for appellees." }, "file_name": "0165-01", "first_page_order": 189, "last_page_order": 198 }