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Thompson v. Mehlhaff6/8/2005
sent the minority rule.
[ .] The majority rule is that the liability for benefits only runs up the ladder, not down. 6 Larson, Worker 's Compensation Law, §111.04 (2004) and (2002). Baltzer could collect worker 's compensation from Mehlhaff but, if Mehlhaff did not pay, Baltzer could also collect worker's compensation from Spencer Quarries. Since Spencer Quarries would be liable for Baltzer's worker's compensation if Mehlhaff did not pay, Spencer Quarries would be immune from suit by Baltzer for negligence. See Metzger v. J.F. Brunken & Son, Inc., 84 SD 168, 172, 169 NW2d 261, 263-64 (1969). The general contractor receives immunity because the general contractor is the back-up provider of worker's compensation coverage. 6 Larson, Worker's Compensation Law, §111.04 111-27 (2004). The opposite is not true.
When the positions are reversed, and an employee of the general contractor, or the general contractor as subrogee, sues the subcontractor in negligence, the great majority of jurisdictions have held that the subcontractor is a third party amenable to suit. The reason for the difference in result is forthright: the general contractor has a statutory liability to the subcontractor's employee, actual or potential, while the subcontractor has no comparable statutory liability to the general contractor's employee.
6 Larson, Worker 's Compensation Law, §111.04 (2002). Thompson could not collect worker 's compensation from Mehlhaff if Spencer Quarries did not pay. Mehlhaff was not an insurer of Spencer Quarries' employees even though Spencer Quarries was an insurer of Mehlhaff's employees.
[ .] The quid pro quo for the employer's assumption of liability for worker 's compensation is immunity from suit by the employee. Spencer Quarries was liable for and paid worker 's compensation benefits for Thompson and therefore is entitled to immunity. Mehlhaff was not liable for and did not pay worker's compensation benefits for Thompson and therefore is not entitled to the quid pro quo of immunity from suit by Thompson. When Thompson took a job with Spencer Quarries, he waived his right to sue Spencer Quarries in return for a sure thing on liability. Thompson did not go to work for Mehlhaff and did not waive his right to sue Mehlhaff. Mehlhaff had no worker 's compensation obligation to Thompson. As a result there was no quid pro quo between Thompson and Mehlhaff. Therefore, Mehlhaff was not an employer of Thompson under SDCL 62-3-10 entitled to immunity because Mehlhaff had no duty to provide compensation for Thompson.
[ .] As the final argument in support of the common employment theory, Mehlhaff contends that Spencer Quarries was the "statutory employer" of Baltzer because it was also liable for worker 's compensation insurance and benefits for Baltzer under SDCL 62-3-10. That statute provides:
A principal, intermediate, or subcontractor shall be liable for compensation to any employee injured while in the employ of any one of his subcontractors and engaged upon the subject matter of the contract, to the same extent as the immediate employer. Any principal, intermediate, or subcontractor who shall pay compensation under the provisions of this section may recover the amount paid from any person, who, independently of this section, would have been liable to pay compensation to the injured employee. Every claim for compensation under this section shall in the first instance be presented to and instituted against the immediate employer, but such proceeding shall not constitute a waiver of the employee's rights to recover compensation under this title from the principal or intermediate contractor, but the collection of full compensation from one employer sha
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