Turner v. Richmond Power & Light Decision May Lead To Increased Liability for Municipalities

By Buddy Downs and Dennis Otten
Ice Miller

A recent decision of the Court of Appeals, if not overturned by the Supreme Court, may lead to an increase in the liability of municipalities resulting from worker's compensation or other claims. In Turner v. Richmond Power and Light Company, 756 N.E.2d 547 (Ind. Ct. App. 2001), reh'g denied (2/19/02), the court held that an employee of the sanitary district of the City of Richmond ("City") who was injured while on the job by a power line under the control of the City's electric utility could collect worker's compensation benefits from the City and bring an action for negligence against the utility. In essence, the court cleared the way for the employee to recover twice from the City, once for worker's compensation benefits and a second time on a negligence claim.

The Worker's Compensation Act ("Act"), through an exclusivity provision, generally prevents an employee from bringing an action against his or her employer with the sole remedy being the collection of worker's compensation benefits from the employer. The Act, however, does not prevent an employee from bringing a cause of action against third parties. In Turner, the court determined that the City's electric utility was not the City, the employer, but was separate and distinct from the City and, therefore, was not shielded from liability under the exclusivity provision of the Act and could be sued for negligence. The court based its decision upon several cases which have established that an injured employee may bring an action against a parent or subsidiary corporation of his or her employer. These cases generally provide that a corporation which has structured itself into parent/subsidiary corporations may not disregard its corporate structure in an effort to shield the parent or subsidiary corporation from liability under the exclusivity provision of the Act.

The City is seeking to have the Turner decision overturned by the Supreme Court. If the decision stands, it may result in municipal departments, including municipal electrics, being exposed to legal actions arising from injuries incurred by employees of the municipality while on the job.

Ice Miller, on behalf of the Indiana Municipal Lawyers Association and the Indiana Association of Cities and Towns, has filed an amicus brief with the Indiana Supreme Court. For additional information, please feel free to contact Buddy Downs at (317) 236-2339 or Dennis Otten at (317) 236-5911.

Editor's Note: The Indiana Municipal Electric Association (IMEA) has filed an amicus brief on behalf of all Members of IMEA with the Indiana Supreme Court. For more information, please contact Leona Draper at IMEA by calling (317) 877-5600 or Michael B. Cracraft, IMEA General Counsel at (317) 636-5401.

Return to Legislation/Regulation page