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Nancy Doty, Inc. v. Wildcat Haven, Inc.

Court of Appeals of Oregon

April 17, 2019

NANCY DOTY, INC., Personal Representative of the Estate of Renee Radziwon-Chapman, Deceased, Plaintiff-Appellant,
v.
WILDCAT HAVEN, INC., Defendant, and Michael TULLER; Cheryl Tuller; and WildCat Haven Holdings I, LLC, Defendants-Respondents.

          Argued and submitted April 26, 2018

          Clackamas County Circuit Court CV15060002; Susie L. Norby, Judge.

          J. Randolph Pickett argued the cause for appellant. Also on the briefs were R. Brendan Dummigan, Kimberly O. Weingart, Ron K. Cheng, and Pickett Dummigan McCall LLP; Jeffrey A. Bowersox and Bowersox Law Firm PC; and Todd B. Newlin and Newlin Law Offces PC.

          Jonathan Henderson argued the cause for respondents Michael Tuller and Cheryl Tuller. Also on the brief were Daniel S. T. Hasson, Christopher Parker, and Davis Rothwell Earle & Xochihua, P.C.

          Dane E. Johnson argued the cause for respondent WildCat Haven Holdings I, LLC. Also on the brief was Inspiration Spaceship LLC.

          Before Lagesen, Presiding Judge, and DeVore, Judge, and Linder, Senior Judge.

         [297 Or.App. 96] Case Summary: This appeal concerns the interpretation of an exception to the exclusive remedy provision of the Workers' Compensation Law, ORS 656.018(3) (d), and its application to an employer's officer or director who personally owns the property where the workplace injury occurred. Plaintiff is the personal representative of the estate of Renee Radziwon-Chapman, an animal keeper who was killed in a cougar attack at the wildcat sanctuary that employed her, WildCat Haven, Inc. (WildCat Haven). Defendants Michael and Cheryl Tuller are officers and directors of WildCat Haven, but they personally owned the land on which the sanctuary was operated, and WildCat Haven leased it from them. After plaintiff brought claims against them individually, the Tullers invoked the immunity extended by ORS 656.018(3). That preliminary question of immunity was tried to the court, which dismissed the claims on the ground that the Tullers had not acted negligently "outside of the capacity" as officers and directors and, thus, were entitled to immunity on plaintiff's claims. The court therefore dismissed those claims and further dismissed a claim against a separate limited liability company owned by the Tullers, WildCat Haven Holdings I, LLC (Haven Holdings). On appeal, plaintiff argues that the trial court's ultimate finding-that neither of the Tullers acted "outside of the capacity" of their immunity-resulted from an erroneous view of the exception in ORS 656.018(3)(d); plaintiff also argues that the trial court erred in dismissing the claim against Haven Holdings, because it was not Radziwon-Chapman's employer or otherwise within the list of persons entitled to immunity under ORS 656.018(3). Held: The trial court did not err in dismissing plaintiff's claims against the Tullers individually. ORS 656.018(3) (d) carves out an exception to immunity in circumstances in which a person's negligent conduct occurs wholly outside the immune capacity-i.e., when the negligent conduct is not inextricably intertwined with conduct giving rise to immunity. The trial court found as fact that all of the Tullers' decisions regarding staffing, supervision, policies and procedures, and the equipment used at the sanctuary were made in their capacity as officers and directors of WildCat Haven. Therefore, the Tullers were entitled to immunity with regard to plaintiff's claims, all of which are based on acts and omissions involving those very same decisions, albeit grounded in different legal obligations. However, the trial court erred in dismissing plaintiff's claim against Haven Holdings, which was not plaintiff's employer or otherwise entitled to immunity under ORS 656.018(3). Whether or not plaintiff can ultimately prevail on the merits of the claim, it was not subject to dismissal based on judicial factfinding in a preliminary trial under ORS 656.595(3).

         Limited judgment dismissing plaintiff's claims against Michael Tuller and Cheryl Tuller affirmed; limited judgment dismissing plaintiff's claim against WildCat Haven Holdings I, LLC, reversed and remanded.

         [297 Or.App. 97] LAGESEN, P. J.

         The "exclusive remedy" provision of the Workers' Compensation Law, ORS 656.018, generally makes an employer that satisfies its insurance obligations for subject workers immune from civil liability for injuries to a worker arising out of the worker's employment. That immunity extends to, among others, the employer's officers, directors, and employees. ORS 656.018(3). But there is an exception to that immunity: It does not apply "[i]f the negligence of a person otherwise exempt * * * is a substantial factor in causing the injury * * * and the negligence occurs outside of the capacity that qualifies the person for exemption under this section." ORS 656.018(3)(d) (emphasis added).

         This appeal concerns the scope of that exception, and requires us to assess how it applies to an officer or director who personally owns the property where the workplace injury occurred. Plaintiff is the personal representative of the estate of Renee Radziwon-Chapman, [1] who was killed in a cougar attack at the wildcat sanctuary that employed her, WildCat Haven, Inc. (WildCat Haven). Defendants Michael and Cheryl Tuller are officers and directors of WildCat Haven, but they personally owned the land on which the sanctuary was operated, and WildCat Haven leased it from them. After plaintiff brought claims against them individually, the Tullers invoked the immunity extended by ORS 656.018(3). As required by ORS 656.595(3), that preliminary question of immunity was tried to the court, which determined that the Tullers had not acted negligently "outside of the capacity" as officers and directors and, thus, were entitled to immunity on plaintiffs claims. The court therefore dismissed those claims and, further, dismissed a claim against a separate limited liability company owned by the Tullers, WildCat Haven Holdings I, LLC (Haven Holdings). Based on our review of ORS 656.018(3) and its legislative history, we conclude that the court was correct to dismiss the claims against the Tullers individually on the grounds of immunity, but reverse and remand the judgment dismissing the claim against Haven Holdings, which is not entitled to immunity.

         [297 Or.App. 98] I. STANDARD OF REVIEW

         Our standard of review derives from the procedural posture of this appeal. The question of defendants' immunity was tried to the court pursuant to ORS 656.595(3), which provides that challenges concerning the right to bring third-party actions in cases involving an injured worker "shall be determined by the court as a matter of law." The trial court took evidence on the question of immunity over the course of two days before making factual findings and issuing its ruling. In this posture, we review the trial court's factual findings for "any evidence" to support them, and we review its legal conclusions for errors of law. See Cornelison v. Seabold, 254 Or. 401, 408-09, 460 P.2d 1009 (1969) (holding that appellate review of a trial court's factual findings in a proceeding under ORS 656.595(3) is for "any evidence"); M. K. F. v. Miramontes, 352 Or. 401, 411, 287 P.3d 1045 (2012) (discussing Cornelison and stating that the question "whether the workers' compensation statute applied to the employee's claim and provided his sole remedy" involved "a preliminary question of law" for the court).

         II. BACKGROUND

         With that standard of review in mind, we recite the facts consistently with the trial court's factual findings (which are supported by evidence in the record), and we provide additional procedural context to frame the narrow issues on appeal.[2]

         Michael and Cheryl Tuller started WildCat Haven, a nonprofit corporation that operates a wildcat sanctuary. [297 Or.App. 99] Michael Tuller is the president of WildCat Haven, and Cheryl Tuller is its executive director. At the time of the events giving rise to this action, the sanctuary operated on land in Sherwood, Oregon, that the Tullers owned themselves. They leased the land to WildCat Haven for it to use as a wildcat sanctuary, and it housed approximately 60 cats, including tigers, cougars, bobcats, and other wildcats. WildCat Haven relied on volunteer workers and, in addition, had three paid employees: the decedent in this case, Renee Radziwon-Chapman, Cheryl Tuller, and Timothy Adams. Those three employees served as the primary animal keepers for the sanctuary.

         Keepers were required to enter the wildcat enclosures for cleaning and maintenance. With regard to cougars, WildCat Haven's 2009 Facility Plan stated that "contacts" with the cats required a minimum of two qualified staff members. The policy further provided that "[t]wo qualified staff members shall work together during the lockout of dangerous animals. Once the animals are locked out, one staff member can safely enter the enclosure to clean or make repairs." The lockout procedure involved keepers luring the cougars into a "lockout" chamber, closing the lockout door, and securing that door with a light-duty gate latch; at that point, the keeper would finalize the lockout process by actually entering the enclosure and attaching a carabiner to the gate latch.

         On November 9, 2013, Radziwon-Chapman was working alone at the sanctuary. At approximately 6:30 p.m., Michael Tuller discovered Radziwon-Chapman's body, fatally mauled, inside an enclosure where three cougars lived. Only one of the cougars was in a lockout chamber, and the other two were roaming freely in the enclosure. Because no one was working with Radziwon-Chapman at the time of her death, the circumstances that led to it are not fully known.

         On the date of the accident, Cheryl Tuller and Adams were both out of town. Cheryl Tuller was in Minnesota to assist another animal sanctuary that had experienced a shortage of workers. She had become friends with the director of that sanctuary while networking among the small wildlife sanctuaries in the United States, which exchange [297 Or.App. 100] professional courtesies, including sharing knowledge, practices, and resources. Tuller understood that her decision, as executive director of WildCat Haven, to assist the sanctuary during crisis would help ensure that WildCat Haven would receive reciprocal courtesy if the need arose.

         Adams, meanwhile, was in Scotts Mills, Oregon, building enclosures on property that was intended as a new site for WildCat Haven. The Scotts Mills property was owned by defendant Haven Holdings, a limited liability company whose sole members are the Tullers. Adams resided on the Scotts Mills property to facilitate the construction of the new enclosures necessary for the transition from Sherwood, but he was paid by WildCat Haven regardless of whether he was working in Sherwood or at Scotts Mills.

         Plaintiff, the personal representative of Radziwon-Chapman's estate, subsequently brought tort claims against WildCat Haven, the Tullers, and Haven Holdings, but she settled the claims against WildCat Haven, which is not a party to this appeal. Her claim against the Tullers alleged five separate counts: one count based on a theory that the Tullers knew that they were leasing their land to WildCat Haven for a highly dangerous activity and were strictly liable for permitting it to carry on that activity in the manner it did and for failing to warn Radziwon-Chapman of the hazard of working around the animals without proper precautions; one count of negligence based on similar allegations; two counts based on a theory that the Tullers failed to furnish a safe workplace as owners of the property under Oregon's Employers' Liability Law (ELL), ORS 654.305 to 654.336; and one count based on the Tullers' failure as owners to comply with requirements of the Oregon Safe Employment Act (OSEA). As for the claim against Haven Holdings, plaintiff alleged that it was a joint employer of Adams and negligently exposed Radziwon-Chapman to a hazardous condition by instructing Adams to work at the Scotts Mills property, leaving Radziwon-Chapman to work alone at the sanctuary.[3]

         [297 Or.App. 101] The Tullers and Haven Holdings answered by asserting immunity under ORS 656.018(3). The immunity offered by ORS 656.018(3) has existed since ORS 656.018 was enacted in 1965, but the statute was amended effective June 2013, just before the accident in this case. Or Laws 2013, ch 488, §§ 2, 3. As a result of the amendments, the immunity does not apply "[i]f the negligence of a person otherwise exempt * * * is a substantial factor in causing the injury * * * and the negligence occurs outside of the capacity that qualifies the person for exemption under this section." ORS 656.018(3)(d).

         The parties agreed that the preliminary question of immunity under ORS 656.018(3) was a matter for the court to decide by way of a bench trial, but they disagreed as to the law and the facts bearing on whether the Tullers had been negligent "outside of the capacity" in which they were immune. At trial, the Tullers and Haven Holdings adduced evidence that all of the Tullers' conduct-from staffing, to supervision, to policies and procedures, to the equipment used at the sanctuary-were taken as officers and directors of WildCat Haven, roles in which they are immune under ORS 656.018(3). They further argued that, under this court's decision in Varland v. Smith, 112 Or.App. 271, 274, 828 P.2d 1053, rev den, 313 Or. 628 (1992), and under generally accepted principles of workers' compensation exclusivity, an employer's principals do not lose that immunity and subject themselves to liability merely by owning the company property on which the workplace injury occurred. See Lex K. Larson, 10 Larson's Workers' Compensation Law § 113.02 (Matthew Bender rev ed 2018) ("[I]f the circumstances are such that a president and sole stockholder of a corporation would be immune to suit by an employee, he or she does not lose that immunity by being also the owner of the land." (Footnote omitted.)). In their view, the 2013 amendments did not alter the rule applied in Varland.

         Plaintiff, on the other hand, argued that the plain text of the new exception in ORS 656.018(3)(d) had precisely that effect, expressly creating an exception to immunity whenever an officer or director owes legal duties to the worker in another capacity. And, plaintiff argued, by entering into a lease with WildCat Haven, the Tullers had "dual [297 Or.App. 102] responsibilities" in which they assumed certain nondelegable duties as landowners under the ELL and OSEA. Moreover, plaintiff argued that Cheryl Tuller had left Oregon on the weekend of November 9 to volunteer in a personal capacity in Minnesota out of friendship rather than professional courtesy, that Michael Tuller had directed Adams to Scotts Mills in his capacity as a member of Haven Holdings rather than president of WildCat Haven, and that, in any event, Haven Holdings was not Radziwon-Chapman's employer or otherwise entitled to the extension of immunity.

         After the parties presented their cases, the trial court issued a letter opinion in which it largely rejected plaintiffs legal and factual theory and concluded that "[t]he evidence proved that in this case, neither Michael Tuller nor Cheryl Tuller acted negligently outside the capacity that qualified them for exemption as the plaintiffs employers. This applies to the Tullers individually, collectively as landlords of the Sherwood property, and in their incarnation as [Haven Holdings]."[4] The court, however, invited additional briefing from the parties with regard to plaintiffs ELL and OSEA claims against the Tullers. The letter opinion stated, "If the plaintiff believes that Michael and Cheryl Tuller lose their immunity under workers' compensation law on the no fault claims, regardless of the court's ruling that their actions in this case were only those of the President and Executive Director of WildCat Haven, Inc., then plaintiff must make its argument on that theory more clear."

         In supplemental briefing, plaintiff reiterated her argument that the 2013 amendments had changed the legal framework and that, as a matter of law, the Tullers could be sued as landlords: "[A]ny action [the Tullers] took-or legally relevant omission they made-in furtherance of their lessee-lessor relationship with WildCat Haven Inc. is [297 Or.App. 103] by definition 'outside the capacity' as officer or director." The Tullers continued to rely on Varland and Larson's Workers' Compensation to argue that "[i]t is blackletter law that a corporate officer does not lose her immunity merely because she also owns the land where the injury occurs."

         After receiving the supplemental briefing, the trial court issued a second letter opinion. In it, the court explained that plaintiff still had not identified "precisely what actions the plaintiff believes the Tullers took as landlords to implicate those claims" and that the Tullers had presented "stronger legal authority" that they were immune as landowners. The court then confirmed that its previous findings "encompass and extinguish the ELL and OSEA claims against the Tullers in their personal capacities as well." The court entered ...


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