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Huf v. Arctic Alaska Drilling Co. (3/3/95), 890 P 2d 579
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NOTICE: This is subject to formal correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, (907) 264-0607.
THE SUPREME COURT OF THE STATE OF ALASKA
JOSEPH C. HUF, )
) Supreme Court No. S-5680
Appellant, )
) Superior Court No.
v. ) 3KN-92-595 CI
)
ARCTIC ALASKA DRILLING )
COMPANY, INC., ) O P I N I O N
)
Appellee. ) [No. 4175 - March 3, 1995]
______________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Kenai,
Charles K. Cranston,
Judge.
Appearances: Mark A. Sandberg,
Sandberg, Smith, Wuestenfeld & Corey,
Anchorage, for Appellant. Timothy M. Stone
and Alex R.M. Vasauskas, Stone, Waller &
Jenicek, Anchorage, for Appellee.
Before: Moore, Chief Justice,
Rabinowitz, Matthews and Compton, Justices,
and Bryner, Justice pro tem.*
COMPTON, Justice.
A drilling company built a drill rig for use in its
business. Later the drilling company, and another company which
provided drilling related services, formed a partnership. After
formation of the partnership, a partnership employee was injured
when a component of the drill rig collapsed. The employee filed
a third party liability suit against the drilling company. The
superior court granted summary judgment to the drilling company,
based on the exclusive remedy provision of the Alaska Workers'
Compensation Act. We conclude that the drilling company is not
immune from liability; therefore, we reverse the judgment of the
superior court.
I. FACTUAL AND PROCEDURAL BACKGROUND
Arctic Alaska Drilling Co. (AADCO), an Alaska
corporation, and Pool Alaska, Inc., a Texas corporation, formed a
partnership under the name Pool Arctic Alaska (PAA) in 1983.1
AADCO contributed to the partnership a portable drill rig, which
it had built prior to entering the partnership.
In 1991 Joe Huf, a PAA employee, was assembling the
drill rig. He was injured when a metal ladder, an integral
component of the drill rig, broke loose. The injury arose out of
and in the course of Huf's partnership employment. Huf received
workers' compensation benefits from PAA's insurance carrier.
Huf filed a third party liability suit against AADCO,
AS 23.30.015(b), claiming that AADCO negligently built the
component ladder. The issue before the superior court was
whether AADCO, a partner in the PAA partnership, was immune from
liability by virtue of the exclusive remedy provision of the
Alaska Workers' Compensation Act (Act), AS 23.30.010 et seq. For
the purpose of the summary judgment motion, AADCO conceded that
it was negligent and that its negligence was the proximate cause
of Huf's injuries. The superior court held AADCO immune and
granted AADCO's motion for summary judgment. Huf appeals.
Alaska R. App. P. 202(a); AS 22.05.010.
II. DISCUSSION
Alaska Statute 23.30.055 provides in part: "The
liability of an employer prescribed in AS 23.30.045 is exclusive
and in place of all other liability of the employer . . . ."
"'[E]mployer' means . . . a person employing one or more persons
in connection with a business or industry coming within the scope
of this chapter . . . ." AS 23.30.265(13). We must decide
whether AADCO is an "employer"in the context of this case.2
This raises an issue of first impression in Alaska.
Huf argues that AADCO was not his employer, and thus is
not immune by virtue of AS 23.30.055. He concedes that the
majority rule is that an employee of a partnership is also the
employee of each partner.3 This is also the rule which we
adopted in Williams v. Mammoth of Alaska, Inc., ___ P.2d ___, Op.
No. 4174 (Alaska, March 3, 1995).
We discussed the policies supporting this rule in
Williams. Where a partner's negligence arises out of and in the
course of partnership business, it is logical to hold that
partner and all other partners immune from liability by virtue of
the exclusive remedy provision of the Act. When the partner is
carrying on partnership business, "the partnership is liable for
the . . . injury to the same extent as the partner so acting."
AS 32.05.080. Because the liability of the partner and the
partnership are co-extensive, both should be treated the same
with respect to immunity from liability. More importantly,
because the partner's conduct arises out of and is within the
course of partnership business, each partner has an equal right
to oversee the conduct, and each partner acts as an agent for the
other. AS 32.05.040. Thus, it is proper to treat each partner
as an "employer"of the partnership employee.
However, where an individual partner acts negligently
outside of and not in the course of partnership business, the
partnership normally would not be liable.4 In the present case,
if AADCO's negligence in building the drill rig occurred during
its original construction, and a person who was not a partnership
employee was injured as a result, the partnership and the other
partner would not be liable. Huf's tort claim against AADCO
therefore is not one he could make against the partnership or
Pool Alaska.
Our holding today is supported by our prior worker's
compensation decisions arising in non-partnership contexts, where
this court historically has construed "employer"narrowly. In
Miller v. Northside Danzi Construction Co., 629 P.2d 1389, 1391
(Alaska 1981), we held that a contractor who was statutorily
liable for a subcontractor's workers' compensation liability, and
who in fact had paid compensation to an employee of the
subcontractor, was not an "employer"for the purpose of immunity.
In Croxton v. Crowley Maritime Corp., 817 P.2d 460, 466 (Alaska
1991), we held that a parent corporation was not immune by virtue
of its subsidiary's immunity, where an employee of the parent
corporation was negligent, resulting in the death of an employee
of the subsidiary. We noted that "[b]ecause Crowley attained
advantage from operating in [corporate form], simple fairness and
the weight of analogous precedent require it to accept the
incidental disadvantage of liability for its employee's
negligence." Id. at 467. See also Everette v. Alyeska Pipeline
Servs. Co., 614 P.2d 1341, 1346 n.5 (Alaska 1980) (holding
similar to Miller).
AADCO's alleged negligence occurred during the building
of the drill rig. This occurred prior to the formation of, and
obviously not in the course of the business of, the partnership.
Whatever separate rights and liabilities exist in a partnership,
they did not exist at the time the drill rig was built. The fact
that a partnership which included AADCO was later formed does not
divest AADCO of its prior identity.
Partner liability issues appeared in our recent opinion
in Williams v. Mammoth of Alaska, Inc., ___ P.2d ___, Op. No.
4174 (Alaska, March 3, 1995), where the estate of an employee of
a limited partnership sued the general partner in tort. The
superior court granted summary judgment for the general partner.
In upholding the grant, we agreed with the majority rule that
exempts partners from suits by employees. We also held that no
facts existed showing that the partner was acting in any capacity
other than the decedent's employer. The holdings in Williams and
the instant case are harmonious. Here, the acts giving rise to
the alleged tort occurred prior to the formation of the
partnership. Williams did not present such a factual scenario.
In State v. Purdy, 601 P.2d 258 (Alaska 1979), we
rejected the "dual capacity"doctrine. We do not retreat from
that rejection in this case. Our conclusion is not based on
AADCO acting in dual capacities respecting Huf. Purdy involved
one entity, the State, allegedly acting in two capacities. In
the case before us we have two entities, PAA and AADCO, acting in
separate capacities.
III. CONCLUSION
Although a partner of PAA, AADCO was not Huf's
"employer" when it built the drill rig. Thus it is not immune
from third party liability by virtue of AS 23.30.055.
Accordingly, we REVERSE the judgment of the superior court.
_______________________________
*Sitting by assignment made pursuant to article IV, section
16 of the Alaska Constitution.
1 The partnership was formed "for the purpose of engaging
in the business of conducting drilling and related services in
the state of Alaska."
2 Because this case involves statutory construction, this
court applies its independent judgment. Croft v. Pan Alaska
Trucking, 820 P.2d 1064 (Alaska 1991); Summerville v. Denali
Center, 811 P.2d 1047 (Alaska 1991).
3 See, e.g., Bertrand v. Forest Oil Corp., 441 F.2d 809,
810-11 (5th Cir.), cert. denied, 404 U.S. 863 (1971); Sonberg v.
Bergere, 34 Cal. Rptr. 59, 60 (Cal. Dist. App. 1963); Carlson v.
Carlson, 346 N.W.2d 525, 526-27 (Iowa 1984); Cockerham v.
Consolidated Underwriters, 262 So. 2d 119, 121 (La. App. 1972);
McKinney v. Truck Ins. Exch., 324 S.W.2d 773, 775 (Mo. App.
1959); Swiezynski v. Civiello, 489 A.2d 634, 638 (N.H. 1985);
Mazzuchelli v. Silberberg, 148 A.2d 8, 12 (N.J. 1959); Williams
v. Hartshorn, 69 N.E.2d 557, 559 (N.Y. 1946); Watson v. G.C.
Assocs. L.P., 691 P.2d 417, 419 (Nev. 1984); Greenya v. Gordon,
133 A.2d 595, 596-97 (Pa. 1957); Daniels v. Roumillat, 216 S.E.2d
174, 176 (S.C. 1975); Lawler v. Dallas Statler-Hilton Joint
Venture, 793 S.W.2d 27, 34 (Tex. App. 1990); Cook v. Peter Kiewit
Sons Co., 386 P.2d 616, 618 (Utah 1963); Candler v. Hardware
Dealers Mut. Ins. Co., 203 N.W.2d 659, 661 (Wis. 1973); Brebaugh
v. Hales, 788 P.2d 1128, 1135 (Wyo. 1990); contra Monson v.
Arcand, 58 N.W.2d 753, 756 (Minn. 1953).
4 The "dual persona"doctrine provides that
[a]n employer may become a third person,
vulnerable to tort suit by an employee, if --
and only if -- he possesses a second persona
so completely independent from and unrelated
to his status as employer that by established
standards the law recognizes it as a separate
legal persona.
2A Arthur Larson & Lex K. Larson, The Law of Workmen's
Compensation 72.81 (1994). Our holding is based on the fact
that the ladder was manufactured prior to the formation of the
partnership. Whether a partner could be sued for actions taken
during the existence of the partnership, but in another
"persona," is not before the court. Hence we do not address
applicability of the "dual persona"doctrine in Alaska.
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