274 P.3d 202
Or. Ct. App.2012Background
- Cortez, plaintiff, is an employee of Sun Studs, LLC, a Sun Swanson Group subsidiary; Swanson Group, Inc. is the sole member/owner of Sun Studs. Sun Studs owned and operated a forklift that injured Cortez; the forklift was an asset Sun Studs acquired when SwansonGroup purchased Sun Studs, Inc. Cortez received workers’ compensation benefits from Sun Studs’ insurer and then sued Swanson Group for damages. Plaintiff asserted ELL, negligence, and noncompliance claims; defendant moved for summary judgment on multiple theories. The trial court granted summary judgment on the exclusive remedy defense (ORS 656.018(3)); denied summary judgment on ELL and limited liability defenses; dismissed all claims with prejudice based on exclusive remedy. On appeal, Cortez argues exclusive remedy does not shield Swanson Group as an LLC member; court agrees in part and remands for negligence proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ORS 656.018(3) shields LLC members from liability | Cortez contends LLC members are not protected unless explicitly listed; Sun Studs’ member status does not immunize Swanson Group | Swanson Group, as sole LLC member, falls within ORS 656.018(3) protection | Exclusive remedy does not apply to LLC members |
| Whether Swanson Group was in an ELL “employer” position to expose it to ELL liability | Swanson Group controlled Sun Studs’ safety and thus should be liable under ELL | Swanson Group did not control day-to-day safety or common enterprise with Sun Studs | ELL claim failed as Swanson Group lacked control/common enterprise |
| Whether ORS 63.165 shield protects Swanson Group from liability for its own torts | 63.165 should not shield member for its own management conduct affecting safety | 63.165 provides shield to members for LLC debts/liabilities | 63.165 does not shield members from their own tortious conduct |
| Whether negligence claim can proceed after ELL dismissal | Even if ELL fails, negligence remains viable | If ELL fails, negligence is precluded by Boothby/Howard rationale | Negligence claim remanded for factual development; not barred by ELL dismissal |
Key Cases Cited
- Woodbury v. CH2M Hill, Inc., 335 Or. 154 (2003) (ELL liability depends on control or common enterprise; substantial control required for liability under ELL)
- Boothby v. D.R. Johnson Lumber Co., 341 Or. 35 (2006) (negligence liability generally no more extensive than ELL liability when ELL applies)
- Howard v. Foster & Kleiser Co., 217 Or. 516 (1958) (if recovery fails under ELL, no recovery under common-law due to higher ELL standard)
- Fields v. Jantec, Inc., 317 Or. 432 (1993) (officer/director exemption under ELL; corporate form discussed in context of liability)
- J.C. Compton Co. v. Brewster, 185 Or. App. 382 (2002) (63.165 does not preclude independent tort claims against LLC members)
- Wienke v. Ochoco Lumber Co., 276 Or. 1159 (1976) (lack of actual control over instrumentality weighs against ELL liability)