Gunderson v. HarringtonGunderson v. Harrington
Lead Opinion
Appellant Corliss Gunderson was employed as a receptionist by Harrington Orthodontics, a closely held corporation owned by respondent Dr. Mark Harrington (Harrington), an orthodontist. Gun-derson resigned in July of 1998 and brought a civil action against Harrington alleging assault, battery, intentional infliction of emotional distress and negligence. Gunderson’s complaint was dismissed by the district court on summary judgment on the basis, in part, that as her employer, Harrington is immune from common law claims for damages arising in the course and scope of employment under the Minnesota Workers’ Compensation Act, MinmStat. §§ 176.001-.862 (2000) (WCA). The court of appeals affirmed. Gunderson appeals, arguing that Harrington is not an employer under the act. In the alternative, she argues that she has raised a genuine issue of material fact that Harrington’s conduct was actionable under the intentional injury exception to the WCA. We affirm.
Harrington practices orthodontics in Plymouth, Minnesota and is the president and sole shareholder of Harrington Orthodontics.
Gunderson testified that in approximately August of 1997, Harrington again hit her on the head with his hand while she sat at the reception desk and expressed annoyance at her failure to write a patient’s name in the scheduling book. She stated that she felt a tingling sensation on the top of her head for a couple of minutes and felt “embarrassed.” When asked at deposition “Do you think Dr. Harrington meant to hurt you on that occasion?” Gunderson answered, “I don’t know.”
Gunderson claims that the third incident occurred when Harrington hit her on the top of the head with a heavy ballpoint pen in November of 1997, again criticizing her for a mistake connected with her job duties. She stated that this blow “hurt more” than the earlier incidents and she felt embarrassed and intimidated. When asked “Do you think he meant to hurt you when he hit you with the pen?” Gunder-son again responded, “I don’t know.”
Gunderson alleges that Harrington hit her the fourth time in February of 1998 with his open hand on the back of her head in front of three patients and reproached her for not knowing whether a patient had scheduled a follow-up appointment. Gun-derson testified that this blow was harder than the ones before and recalled “rubbing the area” for half an hour after the incident. Gunderson again testified in deposition that she did not know whether Harrington intended to hurt her with the blow. Following this incident, Gunderson complained to her co-workers about Harrington’s behavior but did not raise the issue with Harrington or his wife.
Gunderson testified that she did not speak with Harrington and finished her work quickly that day so she could leave the office. Later in the evening she discussed the incident with her husband and friends. They urged her to go to the police and quit her job. The next day Gunderson went to the Plymouth police station and filed a report, and on the advice of the police she then went to an urgent care center. Gunderson testified that a physician examined her head and noted swelling. The record does not contain a medical report.
Gunderson testified that she suffered from head and neck pain following the July 10 incident and she had feelings of insecurity, embarrassment and humiliation. She also stated that bruising and swelling on the back of her head made it difficult for her to comb her hair or rest her head on a pillow for one to two weeks.
The workers’ compensation insurer for Harrington Orthodontics, Berkley Administrators, accepted Gunderson’s claim for a July 10, 1998 head injury and agreed to pay reasonable medical expenses. In an application for reemployment insurance benefits, Gunderson characterized the first four incidents as “little swats on the head.”
Harrington was charged with fifth-degree assault for the July 10 incident. According to Harrington, he paid $100 in costs, completed anger management classes, and committed no similar offenses for one year, in exchange for the city dismissing the charge.
Gunderson brought this civil action against Harrington alleging assault, battery and intentional infliction of emotional distress. The complaint was later amended to include claims of negligent failure to refrain from making offensive contact with Gunderson and negligent failure to take reasonable steps to ensure that the workplace at Harrington Orthodontics was free from violence.
Harrington submitted an affidavit stating that Gunderson “was one of my most valued and trusted employees, and I considered her a friend. I would never do anything to intentionally injure anyone, certainly not a valued employee whom I considered to be a friend.” At deposition, Harrington testified that he does not recall the first four alleged incidents and that, “I do believe that it is possible that I could have done that, but I don’t have a specific recollection of any particular incidents.” Harrington denied hitting Gunderson on July 10, 1998 and stated that he never intended to injure her. Harrington identi
The district court dismissed Gunderson’s suit on summary judgment. The court held that because Dr. Harrington is the alter ego of Harrington Orthodontics, Harrington is Gunderson’s employer, and because the alleged injuries arose in the course of employment, Gunderson must seek the remedies provided by the WCA unless some exception applies. The court further held that the intentional injury exception does not apply because, accepting all of Gunderson’s allegations as true, the record does not support a reasonable inference that Harrington acted with conscious and deliberate intent to injure Gunderson. The court noted that Gunderson stated she did not think that Dr. Harrington meant to hurt her when he first hit her on the top of the head in late spring of 1997, and that she did not know if Harrington meant to hurt her when he hit her on the other occasions. The court stated, “[t]o allow an employee a civil tort action for what Gun-derson herself has characterized as little swats on the head would trivialize the intentional injury exception and eviscerate the exclusive remedy doctrine.” Finally, the court concluded that Gunderson’s claims for intentional infliction of emotional distress fail as a matter of law because she offered no proof of extreme emotional distress nor physical manifestation of her emotional distress.
The court of appeals affirmed in a divided opinion. The court held that Harrington is the only agent of Harrington Orthodontics and as such, a “[hjolding that respondent was not appellant’s employer would ignore reality.” Gunderson v. Harrington,
The court also affirmed the dismissal of Gunderson’s claim under the intentional injury exception to the WCA, ruling that she failed to present facts supporting a reasonable inference that Harrington acted with a conscious and deliberate intent to injure her. The dissent agreed with the majority that the intentional injury exception does not apply under the facts, but asserted that Harrington is an employee of Harrington Orthodontics and therefore subject to suit as Gunderson’s co-employee. Gunderson,
On review here, Gunderson argues that dismissal was error as a matter of law because the corporation and not Harrington is her “employer” under the WCA,
Gunderson asserts that her position is supported by a recent decision of the court of appeals, Buck v. Freeman,
Finally, Gunderson argues that even if the court determines Harrington is her employer for purposes of the WCA, she has raised genuine issues of material fact regarding Harrington’s liability under the intentional injury exception to the statute. She argues that Minnesota law does not immunize employers who assault and batter their employees. Gunderson maintains that the court of appeals improperly intruded on the province of the trier of fact by making a credibility determination at the summary judgment stage and making a factual determination as to Harrington’s intent. Further, Gunderson asserts that the ruling below has created an impossible burden of production requiring an admission by the employer that he intended to injure the employee.
Harrington counters that the workers’ compensation definition of employer, “any person who employs another to perform a service for hire,” Minn.Stat. § 176.011, subd. 10, unambiguously establishes that he was Gunderson’s employer at the time of the alleged assaults. Further, Harrington argues that changing the form of his business from a sole proprietorship to a corporation, without change as to substance, should not strip him of the protection he would have had as a sole proprietor under the workers’ compensation statute. Harrington asserts that if Gunderson is allowed to maintain a common law suit against him it would frustrate the legislative intent of mutual renunciation of common law rights and defenses embodied in the workers’ compensation scheme.
I.
On review of summary judgment, we view the evidence in the light most favorable to the party against whom summary judgment was rendered. Fabio v. Bellomo,
As an initial observation, we note that the WCA is based on a policy of “mutual renunciation of common law rights and defenses by employers and employees.?’ Minn.Stat. § 176.001 (2000). The exclusive remedy provision of the WCA states that “[t]he liability of an employer prescribed by this chapter is exclusive and in the place of any other liability to such employee * * * entitled to recover damages on account of such injury or death.” Minn.Stat. § 176.031 (2000). The WCA defines an employer as “any person who employs another to perform a service for hire; and includes [a] corporation, partnership, limited liability company, association, group of persons, state, county, town, city, school district, or governmental subdivision.” Minn.Stat. § 176.011, subd. 10.
Both parties argue that the clear and unambiguous language of the WCA supports their position regarding whether Harrington is Gunderson’s employer. Gunderson emphasizes that the act states that a corporation may be an employer but doesn’t list “shareholder” or “alter ego” in the definition of employer. She also notes, that a corporation is a legal entity separate-from its shareholders. Harrington argues that as the court of appeals held, the “common sense” reading of “any person who employs another to perform a service for hire” includes Harrington, and that as sole shareholder and president of Harrington Orthodontics, a corporation organized solely to support his professional practice as an orthodontist, he and the corporation are virtually indistinguishable.
Recognizing Harrington as Gun-derson’s employer is consistent with the reality that the form but certainly not the substance of his business changed when Harrington incorporated. The corporation was for all practical purposes Harrington personally as its sole principal and shareholder, and it could act only through him. To rigidly cling to the form of the corporation, ignoring Harrington’s sole authority to manage and direct Gunderson’s employment, would frustrate the purpose of the WCA: “mutual renunciation of common law rights and defenses by employers and
The dissent correctly indicates that our holding is not based on an equitable pierce of the corporate veil. The dissent cites our decision in Wessin v. Archives Corp.,
We hold that Harrington Orthodontics is so completely dominated by and identified with Harrington that he must be considered Gunderson’s employer for purposes of the WCA. Therefore, Gunderson is restricted to the remedies provided by the WCA for injury by Harrington in the course of her employment.
II.
We turn next to Gunderson’s claim that even if Harrington is deemed to be her employer, the intentional injury exception
No case has been cited where it has been held that one who willfully assaults and injures a workman while in thecourse of his employment, be he an employe[e], employer or a stranger, when sued for the tort, can successfully interpose as a defense that the plaintiff and his employer are under the workmen’s compensation act, and his sole remedy is thereunder. And we think none can be found, for it would be a perversion of the purpose of the act so to hold.
Later in Hildebrandt v. Whirlpool Corp. we rejected the argument that an employer’s knowledge of a “substantial certainty” of injury to an employee should trigger the intentional injury exception and reiterated the “conscious and deliberate intent to inflict injury” standard.
To successfully oppose summary judgment Gunderson must identify material facts in the record creating a genuine issue as to whether Harrington consciously and deliberately intended to injure her. The stated purpose of the Rules of Civil Procedure — securing a just, speedy, and inexpensive determination of an action — is furthered by allowing a court to dispose of an action on the merits if there is no genuine dispute regarding the material facts, and a party is entitled to judgment under the law applicable to such facts. Minn. R. Civ. P. 1, 56.03. To raise a genuine issue of material fact, Gunderson must provide more than “evidence which merely creates a metaphysical doubt as to a factual issue and which is not sufficiently probative with respect to an essential element of [her] case to permit reasonable persons to draw different' conclusions.” DLH, Inc. v. Russ,
While Gunderson alleges that Harrington struck her on five different occasions, as to the first incident she testified that she did not think Harrington intended to injure her, and as to the next three incidents she testified that she did not know if he intended to hurt her. She characterized .them as “little swats on the head,” failed to mention the first three incidents to anyone, and sought no medical
While the evidence supports a finding that Harrington’s conduct was inappropriate, Gunderson has failed to present sufficiently probative evidence to establish the existence of a genuine issue of material fact for trial on the question of whether Harrington acted with a conscious and deliberate intent to inflict physical injury. We hold that Gunderson has failed to raise a genuine issue of material fact regarding an essential element necessary to maintain an action under the intentional injury exception — that Harrington acted with a conscious and deliberate intent to inflict injury. Therefore Gunderson may not maintain a common law action for damages under the intentional injury exception to the exclusive remedy provided by the WCA.
Affirmed.
Notes
. The record refers to the corporation as both Harrington Orthodontics, Ltd. and Harrington Orthodontics, Inc.
. The record does not contain an official disposition of the criminal case.
. The WCA defines an employer as "any person who employs another to perform a ser
. In response to Gunderson’s arguments regarding Buck v. Freeman, Harrington argues that the issue presented here was not before the court of appeals in that case. Buck v. Freeman,
. See also 6 Larson's Workers' Compensation Law § 111.02[3] (2000) (stating that where "the defendant so dominates the corporation, perhaps as stockholder, president, and manager, that the defendant can honestly be said to be the alter ego of the corporation, this in itself may suffice to bar any action against him or her.”)
. The cases from other jurisdictions cited by Gunderson are not consistent with this court's interpretation of the WCA and fail to persuade this court to hold in Gunderson's favor. We declined to apply the "dual capacity” doctrine in Kaess v. Armstrong Cork Co. without clear indication that the employer possesses a second persona so separated from the status as employer that it is a separate legal entity.
. We utilize the term 'intentional injury exception' rather than 'intentional tort exception' throughout this opinion, as it most closely conforms with the well-settled standard 'conscious and deliberate intent to inflict injury. See, e.g., Kaess,
. The dissent argues that Breimhorst cannot stand for the principle that there must be an intent to inflict injury for the exception to apply because the facts presented in that case indicated the employer did not know of the device that injured the employee and was at most negligent. In response to arguments regarding newly discovered evidence that the employer knew that the device was on the premises and had once accidentally discharged tear gas, we held that "such knowledge only served to put him on notice * * * [of] a tear-gas mechanism which, if used for the purpose for which it was intended, might inflict temporary discomfort but not bodily harm.” Breimhorst,
Dissenting Opinion
DISSENT
(dissenting).
I respectfully dissent from the majority’s opinion. This case arises from the district court’s granting of a motion for summary judgment. The court ruled that a co-employee’s intentional tort claims against a sole shareholder of a corporation who undisputedly committed the tort were precluded by the exclusive remedy provision of the WCA, and that the assaults were not intentional torts subject to the intentional torts exception of the exclusive remedy provision. The court of appeals held that an “employer” does not lose the protection of the exclusive liability provision of the WCA by choosing to incorporate.
By affirming decisions of the district court and court of appeals, the majority permits a co-employee/sole shareholder of a closely held corporation to use the WCA to shield himself from liability for intentional assaults on another employee. It is hard to fathom that the legislature intended such a result. Doing business in the corporate form does establish some limits of liability for shareholders, even sole shareholders, and this is often a reason for incorporation. Victoria Elevator Co. v. Meriden Grain Co.,
However, the corporate shield is not without bounds. In certain circumstances, it is possible to “pierce the corporate veil” and hold a shareholder personally hable where there is fraud or where the shareholder is the “alter ego” of the corporation. Victoria Elevator Co.,
The majority reasons that Harrington is not personally responsible for his own intentional tort because of his status as the “sole principal and shareholder” and that the corporation is “completely dominated by and identified with Harrington.” The majority argues Harrington should be transformed into being the employer when applying the WCA even though Harrington Orthodontics, a duly authorized Minnesota corporation, is the employer under the law. The reasoning that the majority uses in making its argument is the type of reasoning usually used by the courts when applying an equitable remedy, such as an alter ego theory, in order to pierce the corporate veil to attach liability to the individual shareholder. See id. Instead, the majority uses this same equitable reasoning hére to shield Harrington from the consequences of his own active wrongful conduct. It concludes that Harrington is the employer for the purposes of the WCA. Therefore, he is personally immune from liability for his intentional assault on an employee. Even though the majority might not label it as such, this is an inappropriate application of the alter ego theory. The alter ego theory was never meant to shield either sole proprietors or co-employees from liability for intentional torts.
The majority’s decision also violates one of the maxims of equity: “he who seeks equity must do equity, and he who comes into equity must come with clean hands.” Gully v. Gully,
The majority’s rhetoric about changing the form and not the substance of Harrington’s business upon incorporation is added without citing to any authority. This statement is in fact contrary to Minn. Stat. § 302A.161 (2000), which lists the powers held by a corporation independent of its shareholders, and case law where we have stated that “a closely held corporation is still a corporation with all of the
If Harrington Orthodontics is the employer, Harrington should be considered Gunderson’s co-employee under the WCA. Importantly, the WCA does not shield co-employees from liability for intentional torts. A co-employee is not liable for personal injury of another employee unless the injury was a result of gross negligence or was intentionally inflicted by the co-employee. Minn.Stat. § 176.061, subd. 5(c) (2000). Gunderson’s injuries did not happen by accident. Harrington intentionally inflicted them when he hit Gunderson on the back of the head.
In addition to Minn.Stat. § 176.061, subd. 5(c), our case law indicates that the WCA does not shield individuals from liability for intentional torts. The majority concludes that the intentional tort exception to the WCA does not apply. It should be noted that the majority labels this exception the “intentional injury exception” because the “well-settled standard [is] ‘conscious and deliberate intent to inflict injury.’ ” This court has in fact repeatedly referred to this exception as the “intentional tort” exception even in those cases cited by the majority. See Kaess,
The majority also cites Hildebrandt and Kaess for the proposition that in order for the intentional tort exception to apply, there must be a “conscious and deliberate intent to inflict injury.” Both eases involved injuries arising from exposure to toxic materials. The plaintiffs alleged that the course of conduct was intentional and injury was foreseeable. Neither case involved an intentional tort — assault—like we have here. Boek v. Wong Hing did involve an intentional assault.
Summary judgment is only appropriate where a review of the evidence shows that there is no genuine issue as to material fact and that either party is entitled to
I would therefore reverse and remand for trial on the merits.
Dissenting Opinion
(dissenting).
I join in the dissent of Justice Gilbert.
Dissenting Opinion
(dissenting)
I join in the dissent of Justice Gilbert.