Claims arising out of injuries sustained at work are generally prosecuted in the Missouri Labor and Industrial Relations Commission (the “Commission”). However, it is not uncommon for an injured worker to elect to either file suit in circuit court or file in both venues. Missouri’s Workers’ Compensation Law (the “Act”) provides that if an injury comes within the definition of the term “accident” as defined in R.S.Mo. §287.020.2, then it is included within the exclusivity provisions of the Act, and recovery can be had, if at all, only under the terms set out in the Act. In other words, if an injury arising out of the course and scope of employment falls within the statutory definition of “accident”, any relief must be obtained through the Commission, to the exclusion of circuit court.

The Act’s exclusivity provision is set forth in R.S.Mo. §287.120.1, which provides that:

Every employer subject to the provisions of this chapter shall be liable,
irrespective of negligence, to furnish compensation under the provisions
of this chapter for personal injury or death of the employee by accident
arising out of and in the course of the employee’s employment, and shall
be released from all other liability therefore whatsoever, whether to the
employee or any other person.

Beginning in the 1980’s, Missouri courts interpreted the Act’s exclusivity provision as a jurisdictional issue, meaning that the circuit courts lacked jurisdiction over the subject matter of the claim. Because circuit courts can only adjudicate issues over which they possess jurisdiction over the subject matter of the claim, a motion to dismiss for lack of subject matter jurisdiction may be raised at any time. That was the case in McCracken v. Wal-Mart Stores East, LP, 298 S.W.3d 473 (Mo. banc 2009), where Wal-Mart filed a motion to dismiss McCracken’s negligence claim on the morning trial was set to begin. Wal-Mart alleged McCracken was its statutory employee, therefore, the court lacked subject matter jurisdiction over McCracken claim.

The circuit court agreed, finding the exclusive jurisdiction of his claim was vested in the Commission. In reversing the circuit court, the Missouri Supreme Court overruled 30+ years of case law in holding that, “to the extent that some cases have held that a court has no jurisdiction to determine a matter over which it has subject matter and personal jurisdiction, those cases have confused the concept of a circuit court’s jurisdiction — a matter determined under Missouri’s constitution — with the separate issue of the circuit court’s statutory or common law authority to grant relief in a particular case.”

The Missouri Supreme Court concluded that the exclusivity provisions of the Act must be raised as an affirmative defense to the court’s statutory to proceed with resolving the claim, and the defense will be deemed waived if not asserted. Following publication of McCracken, the Missouri Court of Appeals – Western District issued its opinion in Fortenberry v. Buck, 307 S.W.3d 676 (Mo.App.W.D. 2010), in which the court noted the requirement of raising the exclusivity provision as an affirmative defense, and found that “a defendant, seeking a pre-trial dismissal based on workers’ compensation exclusivity, must file a motion for summary judgment.” The court further noted, however, that, “[w]hen the applicability of section 287.120 appears from the face of the petition, a defendant can also properly file a motion to dismiss for failure to state a claim upon which relief can be granted, see Rule 55.27(a)(6), or for judgment on the pleading pursuant to Rule 55.27(b) if the affirmative defense appears from the petition and other pleadings.”

Several appellate opinions have followed the procedural guidelines for asserting the exclusivity provision announced in Fortenberry. See, e.g., Treaster v. Betts, 324 S.W.3d 487 (W.D.Mo. 2010); Heirien v. Flowers, 343 S.W.3d 699 (Mo.App.S.D. 2011); Cooper v. Chrysler Group, LLC, 2011 Mo.App. LEXIS 1647 (Mo.App.E.D. Dec. 13, 2011).

The court in Cooper identified another alternative to the motion to dismiss/motion for summary judgment option. In Cooper, the injured worker first filed a claim with the Commission, and while that claim was pending, filed suit in circuit court. Chrysler Group raised the exclusivity provision of the Act as an affirmative defense and moved for summary judgment, in accord with Fortenberry, arguing that “plaintiff’s exclusive remedy for damages caused by injuries arising from a slip and fall on his employer’s premises was with the Commission.” The trial court agreed.

On appeal, the appellate court reversed and remanded with directions to stay the circuit court proceedings until the Commission determined whether there had been an “accidental injury” as defined by the Act. The court reasoned that the Commission retained primary jurisdiction to determine “questions includ[ing] determinations of whether there was an accident arising out of and in the course of employment and whether an employee’s injury resulted from an accident or an intentional act.” The court concluded that, “under the primary jurisdiction doctrine, the circuit court does not have the authority to determine the question of whether there was an “accidental injury” within the definitions of the Workers’ Compensation Law.”

The court notes that prior to McCracken, the exclusivity defense was permissibly raised as a motion to dismiss for lack of subject matter jurisdiction, but that dismissal on jurisdictional grounds “did not prevent a plaintiff from refiling his common law action and litigating it on the merits if the Commission subsequently determined that the plaintiff’s injury was not compensable under the Workers’ Compensation Law.” The court reasoned that since the exclusivity defense is based on the existence of accidental injury, which is an issue of fact to be determined by the Commission, it would be inappropriate for a court to enter summary judgment on the defense before the Commission decided the question of accidental injury, “because summary judgment would bar the refiling of the lawsuit if the Commission does not find an accidental injury.” As a result, the court found summary judgment to be premature, and remanded the case back to the circuit court with instructions to stay the proceedings until the Commission determines whether there was an “accident” as defined by the Act. Both parties in Cooper filed a motion for rehearing/transfer to the Missouri Supreme Court, and both motions were denied by the appellate court on January 23, 2012.

McCracken and its progeny make clear that a defense predicated on the exclusivity provision of the Missouri Workers’ Compensation Law is no longer considered a subject matter jurisdictional defect, but rather is an affirmative defense to the circuit court’s statutory authority to proceed. The defense must therefore be timely raised or it will be deemed waived. However, in light of Cooper, it remains uncertain whether circuit courts will be inclined to stay civil actions which are filed contemporaneously with or before a claimant seeks relief in the Commission.

 By:  Christopher Zarda

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Negligence Claims in Kansas Home Construction Cases
Kansas Supreme Court Finds Economic Loss Doctrine Inapplicable to Home Construction Cases

 In David v. Hett, the Kansas Supreme Court held that the economic loss doctrine should not preclude claims by homeowners seeking to recover economic damages resulting from negligently performed residential construction services.  In reaching this holding, the David Court overturned the Kansas Court of Appeals’ 2004 decision, which had previously barred such negligence claims.   

The case arose from a claim for negligent workmanship brought by the Appellants, Scott and Sherry David, who had acted as their own general contractor in the construction of their home.  In the course of this venture, the Davids hired David Hett d/b/a Hett Construction to excavate and lay the foundation for their new home.  Hett’s bid was orally accepted by the Davids and then orally modified at a later date; there was some dispute regarding the terms of the modification.  Regardless, the Davids accepted Hett’s finished work in 1998.  In 2003, the Davids’ home began experiencing unusual settling, and in 2005 the Davids sued Hett for breach of contract, negligence, fraud, fraudulent concealment, and violation of the Kansas Consumer Protection Act.  Seeking damages to bring the house into compliance with the original plans, the Davids alleged that Hett had negligently performed the contractually required work.  The sole issue on appeal was whether the economic loss doctrine barred the Davids’ negligence claims.

As noted in David, the economic loss doctrine is “a judicially created doctrine that sets forth the circumstances under which a tort action is prohibited if the only damages suffered are economic losses.”  (internal citations omitted).  The rationale for the doctrine, which arises out of product liability law, is that a manufacturer is tasked with guarding against dangerous products, but cannot be expected to protect against a product not meeting a consumer’s expectations.  The Supreme Court of the United States previously approved the practicality of the economic loss doctrine by offering the following justifications:  1) the damage to a product is substantially less than that of personal injury; 2) warranty and contract law were better positioned to handle commercial disputes; and 3) allowing negligence theories exposed the manufacturers to an unlimited number of claimants who might not have privity with the manufacturer. 

The Kansas Supreme Court previously identified situations where the law imposed a duty irrespective of the existence of a contract.  In such instances any negligence actually arises out of the breach of the actual or implied duty, rather than under the terms of a contract.  In applying this theory in the context of medical malpractice claims, the Kansas Supreme Court held that “an injury is remediable in tort if it traces back to the breach of tort duty arising independently of the terms of the contract.”  (internal citations omitted). 

The Kansas Court of Appeals had been the highest court in Kansas to consider whether the economic loss doctrine should apply in negligent home construction claims in Prendiville v. Contemporary Homes, Inc.  The Court of Appeals reasoned that the plaintiff’s claims were governed by contract and warranty, and therefore were more properly disposed under those areas of the law.  Accordingly, the court decided that any claims for negligent home construction were barred by the economic loss doctrine. 

The Kansas Supreme Court overruled Prendiville because it found that a contractor has a duty to perform their obligations in a workmanlike manner and exercise reasonable care in the course of such performance.  As a foundation for this point, the Court demonstrated that the workmanlike manner and reasonable care standards were widely recognized in Kansas case law.  The David Court found this result equitable because service contracts are not armed with the warranty protections afforded goods under the Kansas Uniform Commercial Code.  As further rationale for this holding, the Court demonstrated that the home buyer, who is typically not in the same bargaining position as the contractor, should be afforded additional protections.  Lastly, the Court felt that the application of the economic loss doctrine could potentially expose two contractors to different results of liability on the basis of when the damage was discovered. 

As it was unclear from the record whether the Davids had sufficiently plead an alleged breach of duty, the Court remanded the case for that determination. 

 By: Mike Meyer, Associate

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 The deceased’s next of kin brought a law suit alleging that the defendants (local businessmen) negligently entrusted a motor vehicle to the deceased because they allegedly should have known he was an alcoholic.  The deceased was killed in a one car accident. 

Joe Roper and Mike Belancio filed a motion to dismiss the law suit.  In what the trial court recognized was an issue of first impression in Missouri, the Firm demonstrated that there was no duty for the defendants to protect the deceased from injuries inflicted on himself, as opposed to third parties.

The Missouri Dram Shop Act already precludes suits by the consumers of alcohol for their own self-imposed injuries after they are served alcohol.  Thus, with even greater certainty, the Firm argued there should be preclusion of law suits by the consumers of alcohol for injuries sustained based on provision of a vehicle.

Plaintiff made a pre-suit demand of $3.75 million dollars.

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In Paula Kingman, et al. v. Dillards, Inc., Case No. 10-2636 (8^th Circuit, July 6, 2011), the United States Court of Appeals for the Eighth Circuit considered (among other things) whether the invalid spouse of an injured plaintiff could recover loss of consortium damages for the cost of extended professional care-giver services under Missouri law.

In 2004, Mrs. Kingman was shopping at a Dillard’s store when a high-hanging rack of clothing came loose from the wall and struck her on the right shoulder.  Mrs. Kingman reached back violently to protect her face, twisting her right shoulder in the process.  Mrs. Kingman developed pain in her shoulder and sought medical treatment, including three separate surgeries to address her shoulder injury.  Despite her extensive medical care, Mrs. Kingman’s shoulder injury persisted. 

Mrs. Kingman and her husband filed an action against Dillard’s, seeking damages for negligence and loss of consortium in Missouri state court.  The action was removed to the U.S. District Court for the Western District of Missouri.  Mrs. Kingman’s expert, Dr. Swaim, concluded that Mrs. Kingman would have shoulder pain, decreased motion and weakness indefinitely.  Additionally, testimony from three other experts established that due to Mrs. Kingman’s shoulder injury, she could no longer care for her husband, a 300-pound quadriplegic.  These experts testified Mrs. Kingman’s shoulder could not tolerate lifting, pushing, or pulling her husband.  Prior to the accident, Mrs. Kingman was the primary care-giver for her husband, assisting him with bathing and dressing, feeding, urinary and bowel care, stretching to avoid joint contractures and, importantly, hoisting and turning him to prevent bedsores.

After a nine-day bench trial, the District Court held Dillard’s liable and awarded Mrs. Kingman $186,388 in damages for her past and future medical care and disability and awarded Mr. Kingman $1,000,000 in damages to cover the cost of professional care- giver services for fifteen years – that is, until Mrs. Kingman reached the age of 62, at which point she could no longer be expected to continue moving her husband.  Dillard’s appealed both damage awards.  The damage award in favor of Mrs. Kingman was upheld, but the damage award in favor of Mr. Kingman was reversed and remanded.  The Court held that, “no Missouri court has ever allowed a spouse to recover on a consortium claim for life-long professional nursing care.  Indeed, as far as the court’s research reveals, extending the law of consortium claim to embrace such a claim would be unprecedented nationwide.  Further, our review of related Missouri case law does not foreshadow an expansion of the law of consortium…”  Id. at 10.  The Court also stated it found no Missouri authority for the proposition that a consortium award may exceed by a factor of five the damages awarded to the injured spouse.  Id. at 12-13.  In light of these findings, the $1,000,000 award in favor of Mr. Kingman was reversed and remanded.

Although this issue has not been squarely addressed by Missouri state courts, this Eight Circuit opinion indicates that Missouri state courts would likely not allow a loss of consortium award that: (a) included the cost of extended professional care-giver services; or (b) greatly exceeded the value of the injured plaintiff’s damage award.

By:   Philip V. Sumner 

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          Missouri’s Western District Court of Appeals recently held that “because a letter, by its plain language, added to an original settlement offer an indemnification provision, it was not a mirror image of the original offer and was not an unequivocal acceptance.”  Reppy v. Winters, 2011 Mo. App. LEXIS 1025 (August 9, 2011).[1]  The appellate court reviewed the judgment of the trial court granting Winters’s Motion to Dismiss and to Enforce Settlement because Reppy argued that the evidence did not support the trial court’s conclusion that the parties had achieved an agreement to settle.[2] 

             Reppy was injured in a head-on vehicular collision between Winters’s vehicle and a vehicle in which Reppy was a passenger.[3]  Counsel for Reppy sent a pre-suit settlement demand for Winters’s policy limits.[4]  The demand letter did not mention indemnification nor any medical liens.[5]  Winters’s counsel then replied stating an acceptance of Reppy’s demand, but also included an indemnity provision for any type of lien.[6]  Because Winters’s counsel and insurer required Reppy’s counsel and/or Reppy to indemnify all liens, Reppy filed suit against Winters because his insurer failed to timely accept the offer by meeting Reppy’s conditions for a policy limit settlement.[7] 

             The appellate court found that Winters did not establish by clear and convincing evidence that the parties had agreed to all of the essential terms of the settlement as of the purported acceptance date or thereafter.[8]  Because Winters’s reply, “by its plain language, added to Reppy’s original offer a term requiring Reppy’s counsel to indemnify Winters, his insurer, and his attorney of any type of lien, it was not a mirror image of the original offer and was not an unequivocal acceptance.”[9]  The trial court erred in concluding that there were no material deviations in Winters’s purported acceptance.[10]  The case was remanded to the trial court for further proceedings not inconsistent with the appellate court’s ruling.[11] 

             Based on this ruling, careful consideration must be undertaken in determining how to proceed when faced with a policy limits demand that does not address the indemnification of liens.  As noted by the appellate court, there must be clear and convincing evidence that the parties agreed to all of the essential terms of the settlement.  If terms are added to the original offer as in the Reppy case, it is not a mirror image of the original offer and therefore, not an unequivocal acceptance.       

[1] NOTICE:  This Opinion is not final until expiration of the rehearing period.

[2] Id.

[3] Id.

[4] Id. at *2.

[5] Id.

[6] Id. at *3.

[7] Id. at *5.

[8] Id. at *9.

[9] Id.

[10] Id.

[11] Id.

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