Oregon Court Says Landlord Employers Are Immune From Tort Liability

An Oregon appellate court, construing a specialized exception to the exclusive remedy provision of the state’s Workers’ Compensation Law, agreed in relevant part with a trial court that the personal representative of the estate of an employee individual who was killed in a cougar attack at the wildcat sanctuary that employed her could not maintain a separate cause of action against two officers and directors of her employer on the basis that they individually owned the land on which the sanctuary was located [Nancy Doty, Inc. v. WildCat Haven, Inc., 2019 Ore. App. LEXIS 533 (Apr. 17, 2019)]. Citing Larson’s Workers’ Compensation Law extensively, the court reasoned that while a 2013 amendment to Or. Rev. Stat. § 656.018(3) broadened a so-called “dual capacity” exception to the state’s exclusive remedy rule for torts committed by an officer and/or director “outside the capacity” of his or her immunity, that exception remained quite narrow and the plaintiff here had not alleged any actions on the part of the individual defendants to bring the exception into play.

Background

Michael and Cheryl Tuller started WildCat Haven, a nonprofit corporation that operates a wildcat sanctuary. 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 provided for a special lockout procedure to prevent the cougars from coming into direct contact with the keepers during the cleaning actitivies.

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 the special lockout chamber; 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.

Civil Action

Plaintiff, the personal representative of Radziwon-Chapman’s estate, subsequently brought tort claims against WildCat Haven, the Tullers, and a separate, although related corporation. The Tullers answered by asserting immunity under Or. Rev. Stat. § 656.018(3).

The 2013 Amendment

Parenthetically, it should be noted that the immunity offered by § 656.018(3) has existed since enactment of the statute in 1965. 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” [Or. Rev. Stat. § 656.018(3)(d)].

At trial, the Tullers 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 § 656.018(3). They further argued that, under the court’s decision in Varland v. Smith, 112 Ore. App. 271, 274, 828 P2d 1053, rev. den., 313 Ore. 628, 835 P.2d 917 (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.

“Dual Responsibilities” Argument

Plaintiff, in relevant part, argued that the plain text of the new exception in § 656.018(3)(d) had created an exception to immunity whenever an officer or director owed legal duties to the worker in another capacity. And, plaintiff argued, by entering into a lease with WildCat Haven, the Tullers had “dual responsibilities” in which they assumed certain nondelegable duties as landowners. 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 employee Adams to a different location in his capacity as a member of Haven Holdings (the related corporation) rather than president of WildCat Haven.

The trial court agreed with the legal position put forth by the Tullers and dismissed the claims both them and Haven Holdings (that latter issue is not discussed herein).

Plaintiff’s Argument on Appeal

On appeal, plaintiff argued that the trial court’s ultimate finding—that neither of the Tullers acted “outside of the capacity” of their immunity—resulted from the court’s erroneous view of the exception in Or. Rev. Stat. § 656.018 (3)(d). According to plaintiff, the Tullers’ ownership of the property meant that they were acting outside their immune capacity as a matter of law. As a result of leasing the property to WildCat Haven, the Tullers were landlords, and plaintiff’s decedent was not employed by them in that capacity. As such, any acts and omissions which the Tuller defendants undertook with respect to their role as landlords were outside the capacity of their immunity for purposes of the exception and exposed the Tullers to strict premises liability, negligence, and other claims

Implicit Argument

The court said that an implicit premise of plaintiff’s argument was that, for purposes of ORS 656.018(3)(d), acts or omissions occur in either an immune capacity or a nonimmune capacity, and the immunity afforded by § 656.018 to an individual turned on whether a plaintiff had alleged that the individual had breached a legal duty owed in the person’s nonimmune capacity.

The Tullers disagreed with that premise. In their view, the availability of immunity turned on the conduct underlying the claims, not the claims themselves. Further, they contended, the same conduct could occur in multiple capacities and still remain within a person’s immune capacity. That is, the Tullers argued that the exception was intended to address circumstances in which an otherwise immune person’s negligent conduct occurred exclusively “outside of” the immune capacity.

Appellate Decision

The court observed that in Varland, it had specifically held that immunity under § 656.018(3) turned on whether the conduct occurred in an immune capacity, not on whether the same conduct was alleged to breach duties owed in a nonimmune capacity. Citing Larson, the court noted that its holding in Varland—that the employer’s president could not be liable as an owner for conduct that occurred in his immune capacity—was consistent with the manner in which many other courts had approached the issue at the time.

The court continued that In Cortez v. Nacco Materials Handling Group, 248 Ore. App. 435, 274 P3d 202 (2012), rev’d in part on other grounds, 356 Ore. 254, 337 P3d 111 (2014), the court had been presented with a case involving the intersection of workplace liability and a new corporate form—the “member-managed LLC.” In Cortez, the court concluded that the text of Or. Rev. Stat. § 656.018(3) did not cover LLC members.

The court stressed that the 2013 amendment was “a Cortez fix, that is to say, the amendment was to clarify that LLC members had the same sorts of immunity that shareholders of other corporations enjoyed. The 2013 amendment was not a repudication of Varland. Nor was it a more dramatic revision of the balance struck by Oregon’s workers’ compensation statutes.

The court concluded that the immunity afforded by § 656.018(3) continued to operate in the way that expressed in Varland, which appeared to be consistent with the majority rule among other jurisdictions: Persons listed in the statute enjoy a broad grant of immunity for workplace injuries, even if they are acting in more than one capacity at the time of the injury. Or. Rev. Stat. § 656.018 (3)(d) carved out an exception to that broad grant in circumstances in which a person’s negligent conduct occurred wholly outside the immune capacity—i.e., when the negligent conduct was not inextricably intertwined with conduct giving rise to the immunity.

The appellate court agreed with the trial court’s conclusion that plaintiff had not identified precisely what actions the Tullers took or failed to take as landlords that were separate and distinct from acts or omissions in their capacity as the officers and directors of WildCat Haven. Accordingly, the trial court was correct in its dismissal of the case.

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