Massachusetts rejects all efforts to bring employer into lawsuit by injured employee. Workers comp immunity thwarts indemnity.
FRACO PRODUCTS, LTD. v BOSTONIAN MASONRY84 Mass App Ct 296 (2013)
FACTS On a construction project, a masonry subcontractor rented a mast climber from Fraco. Employees of the mason were on the equipment when it toppled killing the employee. The employee’s estate received workers compensation benefits from the employer.
The employee’s estate sued the equipment lessor Fraco claiming negligence in design, manufacture, installation and service of the equipment. The employee did not sue his employer. Fraco sued the employer on the theory that if Fraco was liable, the employer was liable to Fraco either completely (indemnification) or partially (contribution). The judge dismissed Fraco’s claim against the employer.
Fraco argued the employer’s negligence caused the accident and that Fraco’s role in causing the accident was miniscule, derivative or purely vicarious. Fraco challenged the loss of its right to make a claim (or have a jury consider its claim) against the masonry subcontractor employer.
In the equipment lease the employer agreed to indemnify Fraco the lessor. That provision was governed by the law of the state of Georgia.
ISSUE 1 – Implied Indemnity When a work injury happens with rented equipment and a party is sued over equipment it rented to the employer, does the employer’s payment of workers’ compensation keep the employer completely out of the personal injury lawsuit?
HOLDING 1 Payment of worker’s compensation constitutes a bar to all tort claims against an employer. Its fault is not measured; other liable parties fight it out among themselves.
REASONS Workers comp is 100 years old and the broad immunity from all lawsuit activity does not make intellectual sense for measuring out fault. It makes practical sense because it is a hard and fast rule –upheld again here.
ISSUE 2 – Contract Indemnity under Georgia Law Does the agreement by the employer to indemnify Fraco violate Georgia’s indemnity law?
HOLDING 1 Yes.
REASONS The mason agreed not to hold Fraco liable for damages from the rented equipment. Under Georgia law if you are negligent and expect indemnity, the agreement has to have the other person explicitly agreeing to cover your negligence. Since Fraco’s form did not have that its indemnity claim failed.
CHUCK COBB COMMENT Fraco specified that the law of Georgia would apply to its indemnity agreement but the agreement terms violated Georgia law -destroying the claim for contractual indemnity.
Workers compensation gives employers – even very negligent ones, complete immunity from lawsuits. This is a roadblock for parties who do get sued, to seeking indemnity or even contribution from those employers.