Patsy Dean Fletcher v. Martin Electronics, Inc., Kdi Corporation and National Union Fire Insurance Company, 825 F.2d 301, 11th Cir. (1987)

825 F.
2d 301
56 USLW 2163
Patsy Dean FLETCHER, Plaintiff-Appellant,

v.
MARTIN ELECTRONICS, INC., KDI Corporation and
National Union
Fire Insurance Company, Defendants-Appellees.
No. 86-3456.
United States Court of Appeals,

Eleventh Circuit.
Aug. 21, 1987.
Rainey C. Booth, Booth & Walborsky, P.A., Tallahassee, Fla., Thorwald

J. Husfeld, DeLand, Fla., for plaintiff-appellant.
William L. Lee, Jr., Shell, Fleming, Davis & Menge, P.A., Pensacola, Fla.,
Richard A. Sherman, Ft. Lauderdale, Fla., for defendants-appellees.
Appeal from the United States District Court for the Northern District of
Florida.
Before RONEY, Chief Judge, HATCHETT, Circuit Judge, and TUTTLE,
Senior Circuit Judge.
RONEY, Chief Judge:
In this diversity action for third-party negligence, Patsy Fletcher appeals the
district court's grant of summary judgment to KDI Corporation on the finding
that KDI was not vicariously liable to Fletcher because it owed Fletcher no
independent common law duty to provide Fletcher with a safe workplace. We
affirm.
Fletcher was an employee injured in an explosion of chemicals at a Martin

Electronics plant. Martin is a wholly owned subsidiary of KDI. All claims
made for the injuries have been resolved, except for the claim of third-party
negligence against KDI. The district court found that in order for Fletcher to
recover against KDI for unsafe working conditions, she had to show that KDI
had assumed a duty to act by affirmatively undertaking to provide a safe
working environment at Martin Electronics. The district court granted summary
judgment on the conclusion that KDI had assumed no such duty.
3
Fletcher argues on this appeal that sufficient evidence existed from which a jury
could reasonably have found that KDI owed her an independent common law
duty of care. The essence of Fletcher's argument is that KDI as sole stockholder
of Martin Electronics is liable through the acts of Louis Matthey and Charles
Hartsock, the only directors of Martin Electronics elected by KDI. She argues
that Matthey and Hartsock affirmatively assumed management responsibilities
at Martin Electronics which included the duty to provide Fletcher a safe
workplace; that Matthey and Hartsock knew or should have known of the
dangerous working conditions at the Martin Electronics facility and negligently
failed to take steps to correct them; and that KDI is vicariously liable as
Matthey and Hartsock were working within the limits of their agency
relationship with KDI while they served as directors of Martin Electronics.
Relying on Jaar v. University of Miami, 474 So.2d 239 (Fla. 3d DCA 1985),
Fletcher argues that KDI may be held vicariously liable for the negligent acts
or omissions of its agents, Matthey and Hartsock, even though those acts
occurred while they were performing their duties at Martin Electronics and
even if they are personally immune, if the performance of their duties as
directors of Martin Electronics was within the scope of their agency
relationship with KDI.
Jaar involved a wrongful death action brought on behalf of a private paying

patient at a county hospital. The deceased was admitted to the hospital burn
unit for treatment for minor burns and died after being administered an excess
amount of anesthetic by three resident doctors in the hospital burn unit. The
hospital had contracted with the University of Miami for the operation of its
burn unit. Pursuant to this contract, Dr. Ward, an employee and professor at the
university's medical school, served as head of the hospital burn unit, treated
patients, and supervised resident doctors. Dr. Ward was the treating physician
for Jaar. The estate sued the university, Dr. Ward, the three resident doctors,
and the hospital. The trial court, relying on Florida's sovereign immunity
statute, entered judgment completely absolving the university, Dr. Ward, and
the resident doctors of liability, and limited the amount of the hospital's
liability. On appeal, the district court of appeals held that Dr. Ward and the
resident doctors were immune from suit under Florida's sovereign immunity
law, but held that the immunity enjoyed by Dr. Ward did not extend to the
university. 474 So.2d at 244-45.

6
In addressing the university's liability for the negligent acts of its agent Dr.
Ward, the court focused entirely upon the contracts between the university and
the hospital and the contract between the university and Dr. Ward. Focusing on
the contract between the university and the hospital, the court found that the
university had assumed the responsibility to providemedical care to hospital
patients and to supervise resident doctors in their treatment of patients. Those
responsibilities were performed through Dr. Ward. The court then focused on
the contract between the university and Dr. Ward and found, as a matter of law,
that Dr. Ward was acting within his agency relationship with the university
when the negligent acts occurred.
Several factors distinguish Jaar from the present case. First, Jaar was a private
paying patient at the hospital and not an employee, therefore the Workers'
Compensation Laws did not apply. Second, the court based its finding that the
university had assumed a direct duty toward Jaar on a clear, detailed, and
unambiguous written contract between the university and the hospital. Third,
the university undertook to perform its duties by placing one of its employees at
the hospital who actually treated patients, served as head of the burn unit, and
supervised hospital resident doctors in their treatment of patients. There is no
showing in this record that either Matthey or Hartsock were involved in the
day-to-day operations of Martin Electronics. Fourth, the university was a
private enterprise which was not entitled to sovereign immunity protections.
Fletcher argues that Gulfstream Land and Development Corp. v. Wilkerson,

420 So.2d 587 (Fla.1982), authorizes a third-party claim of negligence against a
parent corporation, notwithstanding the protection of the workers'
compensation laws. Gulfstream is distinguishable from the present case. In
Gulfstream, Wilkerson, an employee of Gulfstream's wholly owned subsidiary,
was injured while working for the subsidiary on property owned by
Gulfstream. Wilkerson fell into a hole located on the property and, after
receiving workers' compensation benefits from the subsidiary, filed a
negligence suit against Gulfstream as the property owner. The Florida Supreme
Court held that the parent of a wholly owned subsidiary in that case was not
immunized by the workers' compensation laws from third-party tort liability by
virtue of its subsidiary having paid out workers' compensation benefits. The
facts in Gulfstream did not relate to employment. The court based its holding on
the showing of an independent common law duty imposed on the parent as a
property owner. By contrast, Fletcher alleges a breach of the duty to provide a
safe workplace, a nondelegable duty of the employer. See Clark v. Better
Const. Co., Inc., 420 So.2d 929, 931 (Fla. 3d DCA 1982); Zurich Insurance Co.
v. Scofi, 366 So.2d 1193 (Fla. 2d DCA), cert. denied, 378 So.2d 348
(Fla.1979). See also Love v. Flour Mills of America, 647 F.2d 1058, 1061-63
(10th Cir.1981); Neal v. Oliver, 438 S.W.2d 313 (Ark.1969). The injury here
occurred on property owned by Martin Electronics, not KDI.
9
Fletcher makes two arguments to support her contention that Matthey and
Hartsock assumed management responsibilities at Martin Electronics. First, she
points to the fact that Martin Electronics paid an annual management fee to
KDI. This fact, Fletcher argues, raises a reasonable inference that Martin
Electronics delegated a certain degree of management responsibilities to KDI.
The record does not support the contention that Matthey and Hartsock assumed
management responsibility to provide a safe workplace. Fletcher's original
complaint was filed on August 30, 1983, and discovery continued until
November 7, 1985. It is undisputed that Matthey and Hartsock did not
participate in the day-to-day management of Martin Electronics. It is also clear
that Martin Electronics was an independent autonomous corporation which
made its own contracts, owned its own property and equipment, maintained
separate bank accounts, was liable for its own loans, and maintained its own
financial records. Matthey and Hartsock, as directors of Martin Electronics,
appointed the president and general manager for the corporation and delegated
management of the corporation to him. Martin Electronic's president and
general manager hired the individual who had responsibility to supervise safety
at the facility. Outside of electing the directors of the corporation, a right
derived from stock ownership, Fletcher has established no services provided to
Martin Electronics by KDI and has not identified any management employees
who were also employees of KDI.
10
Fletcher's second argument is that Matthey and Hartsock assumed a high duty
of fiduciary care and diligence, as a matter of law, by accepting their positions
as directors of Martin Electronics. Skinner v. Hulsey, 103 Fla. 713, 138 So. 769
(1931). Fletcher argues that no further act was required to create a duty to
Fletcher. This argument is also not helpful. As noted, the duty urged here, to
provide a safe workplace, is a nondelegable duty of an employer. Matthey and
Hartsock, as directors of Martin Electronics, assumed no duty directly to
Fletcher simply by accepting their positions as directors. KDI, as a shareholder
owner, had no duty to furnish a place for Fletcher to work--safe or otherwise,
Neal v. Oliver, 438 S.W.2d at 319, and Fletcher has failed to show conduct
sufficient to create a legal duty. See Boggs v. Blue Diamond Coal Company,
590 F.2d 655 (6th Cir.1979); Heinrich v. Goodyear Tire and Rubber Company,
532 F.Supp. 1348 (D.Md.1982); Muniz v. National Can Corporation, 737 F.2d
145 (1st Cir.1984).
11
12
Finally, Fletcher argues that a jury question was presented with respect to
whether Matthey and Hartsock were acting within the course and scope of their
agency relationship with KDI when they performed their duties as directors of
Martin Electronics. The question need not be addressed because even if they
were acting as agents of KDI they owed no independent duty to Fletcher.
AFFIRMED.

Patsy Dean Fletcher v. Martin Electronics, Inc., Kdi Corporation and National Union Fire Insurance Company, 825 F.2d 301, 11th Cir. (1987)

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825 F.

Patsy Dean FLETCHER, Plaintiff-Appellant,

United States Court of Appeals,

Rainey C. Booth, Booth & Walborsky, P.A., Tallahassee, Fla., Thorwald

Fletcher was an employee injured in an explosion of chemicals at a Martin

Jaar involved a wrongful death action brought on behalf of a private paying

university. 474 So.2d at 244-45.

Fletcher argues that Gulfstream Land and Development Corp. v. Wilkerson,

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