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Ex parte Ultratec Special Effects, Inc.

Supreme Court of Alabama

November 8, 2019

Ex parte Ultratec Special Effects, Inc.
v.
Ultratec Special Effects, Inc., et al. In re: David J. Cothran, as administrator of the Estate of Aimee Cothran, deceased Ex parte Ultratec Special Effects, Inc. In re: Donald Ray Sanderson, as administrator of the Estate of Virginia Marie Sanderson, deceased
v.
Ultratec Special Effects, Inc., et al.

          Madison Circuit Court, CV-15-902114 and CV-15-902098)

         On Application for Rehearing

          PETITION FOR WRIT OF MANDAMUS

          BOLIN, JUSTICE.

         Ultratec Special Effects, Inc. ("Ultratec"), filed two petitions for a writ of mandamus in this Court asking us to direct the Madison Circuit Court to vacate its order of October 25, 2018, denying Ultratec's motion for a summary judgment on claims asserted against it by David J. Cothran, as the administrator of the estate of his sister, Aimee Cothran, and by Donald Ray Sanderson, as the administrator of the estate of his wife, Virginia Marie Sanderson (hereinafter referred to collectively as "the Estates"), based on, among others, Ultratec's claim that it was immune from suit based on the exclusivity provisions of the Workers' Compensation Act, § 25-5-1 et seq., Ala. Code 1975 ("the Act"). This Court denied those petitions without an opinion on January 24, 2019. On February 7, 2019, Ultratec filed applications for rehearing. On March 15, 2019, this Court entered an order in each case granting Ultratec's application for a rehearing as to the sole issue whether Ultratec is entitled to immunity under the Act. We consolidated the petitions for the purpose of issuing one opinion.

         Factual and Procedural History

         On September 21, 1988, Adrian Segeren formed 793862 Ontario, Inc. ("Ontario"), a Canadian corporation created for the purpose of manufacturing lighting equipment. In 1993, Le Maitre, Ltd. ("Le Maitre U.K."), a company based in the United Kingdom that manufactured pyrotechnics and fog machines, reached an agreement with Ontario whereby Le Maitre U.K. purchased 50% of the shares of stock in Ontario. Le Maitre U.K. supplied its products to Ontario on favorable terms, and Ontario sold Le Maitre U.K.'s products in North America using the Le Maitre trademark. Ontario formed Le Maitre Special Effects, Inc. ("Le Maitre Canada"), a Canadian corporation and wholly owned subsidiary of Ontario, for the purpose of operating the business entered into with Le Maitre U.K. In addition to selling the Le Maitre U.K. products, Le Maitre Canada continued Ontario's business of manufacturing and selling lighting equipment. Le Maitre Canada also began manufacturing and selling its own line of fog machines.

         In 2001, Le Maitre Canada formed Wow Works, a Buckley/Wymek Company, Inc. ("Wow Works"), a Florida corporation, engaged in the business of show design. In 2002, Le Maitre Canada became the sole shareholder of Wow Works. Wow Works sold all of its assets, and the name of the company was changed to Le Maitre Orlando, Inc. ("Le Maitre Orlando").

         In 2005, Segeren began negotiations with Luna Tech, Inc. ("Luna Tech"), an Alabama corporation, to purchase Luna Tech's assets. Luna Tech was engaged in the business of manufacturing pyrotechnic items at a plant in Owens Cross Roads, Alabama. In December 2006, Segeren reached an oral agreement with Luna Tech whereby Le Maitre Canada would purchase Luna Tech's assets and begin operations at the Owens Cross Roads plant on March 1, 2007. The parties' oral agreement was to be reduced to a writing and the sale was to close on March 1, 2007. However, the closing date was delayed because of prior litigation Luna Tech was involved in and because the Le Maitre U.K. partners had sued Le Maitre Canada in Canada to enjoin the purchase of Luna Tech. Nevertheless, Le Maitre Canada and Luna Tech reached an agreement that permitted Le Maitre Canada to begin operations at the Owens Cross Roads plant on March 1, 2007. On March 6, 2007, Le Maitre Orlando was incorporated in Alabama ("Le Maitre Alabama") as a wholly owned subsidiary of Le Maitre Canada.

         The Le Maitre U.K. partners retained the exclusive use of the name "Le Maitre" following the Canadian litigation. Therefore, on April 6, 2009, Segeren formed Ultratec in Ontario, Canada, to continue the business operations of Le Maitre Canada. Ontario and Le Maitre Canada were merged into Ultratec. Additionally, on June 9, 2009, the name Le Maitre Alabama was changed to Ultratec Special Effects (HSV), Inc. ("Ultratec HSV").

         With the Canadian litigation being resolved, Ultratec HSV entered into an asset-purchase agreement with Luna Tech on August 3, 2009, whereby Ultratec HSV purchased all of Luna Tech's assets. Ultratec HSV initially entered into a lease agreement with MST Properties, LLC ("MST"), who was leasing the property on which the Owens Cross Roads plant was located from Thomas Dewille, the property owner. On August 16, 2017, Ultratec HSV purchased the Owens Cross Roads property from Dewille.

         In sum, Ultratec is a Canadian corporation that manufactures special-effects equipment such as fog machines and lighting equipment. Ultratec HSV is an Alabama corporation, and a wholly owned subsidiary of Ultratec, that manufactures pyrotechnics articles -- specifically indoor and close-proximity pyrotechnics for use at concerts and other similar events -- at its Owens Cross Roads plant in Alabama. Segeren is the sole member of the Ultratec board of directors and the company's president, secretary, and treasurer. Segeren's wife, Marnie Styles, serves as a vice-president of Ultratec. Stephen Habermehl serves as Ultratec's chief financial officer. Ultratec owns 100% of the stock of Ultratec HSV. Segeren is the sole officer and director of Ultratec HSV.

         On February 6, 2015, Aimee Cothran and Virginia Sanderson were working at the Ultratec HSV plant when they were killed by an explosion. In November 2015, the Estates separately sued Ultratec, among others, [1] alleging against Ultratec negligence, negligent supervision, wantonness, conspiracy, and strict liability. Ultratec answered the complaints, raising as an affirmative defense the exclusivity provisions of the Act.

         On April 20, 2018, Ultratec moved the trial court for a summary judgment, arguing that the claims asserted against it were barred by the exclusivity provisions of the Act. Specifically, Ultratec argued that it was immune because it and Ultratec HSV were a single employer group for purposes of the Act; because Aimee and Virginia were jointly employed by both Ultratec and Ultratec HSV; and because Ultratec HSV operated as a division of Ultratec. On August 6, 2018, the Estates filed a response in opposition to the motion for a summary judgment, arguing that a parent corporation is not entitled to the immunity provided by the exclusivity provisions of the Act in a tort action for the injury or death of an employee of the corporation's subsidiary; that questions of fact exists as to whether Ultratec and Ultratec HSV are separate entities; and that the joint-employer doctrine is inapplicable as a matter of law. Following a hearing, the trial court, on October 25, 2018, entered an order denying Ultratec's motion for a summary judgment, holding that Ultratec was not protected by the exclusivity provisions of the Act as a "group employer or otherwise."

         Standard of Review

"'While the general rule is that the denial of a motion for summary judgment is not reviewable, the exception is that the denial of a motion for summary judgment grounded on a claim of immunity is reviewable by petition for writ of mandamus.' Ex parte Rizk, 791 So.2d 911, 912 (Ala. 2000). A writ of mandamus is an extraordinary remedy available only when there is: '(1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court.' Ex parte BOC Group, Inc., 823 So.2d 1270, 1272 (Ala. 2001)."

Ex parte Nall, 879 So.2d 541, 543 (Ala. 2003). Also,

"whether review of the denial of a summary-judgment motion is by a petition for a writ of mandamus or by permissive appeal, the appellate court's standard of review remains the same. If there is a genuine issue as to any material fact on the question whether the movant is entitled to immunity, then the moving party is not entitled to a summary judgment. Rule 56, Ala. R. Civ. P. In determining whether there is a [genuine issue of] material fact on the question whether the movant is entitled to immunity, courts, both trial and appellate, must view the record in the light most favorable to the nonmoving party, accord the nonmoving party all reasonable favorable inferences from the evidence, and resolve all reasonable doubts against the moving party, considering only the evidence before the trial court at the time it denied the motion for a summary judgment. Ex parte Rizk, 791 So.2d 911, 912 (Ala. 2000)."

Ex parte Wood, 852 So.2d 705, 708 (Ala. 2002).

"'When the movant makes a prima facie showing that there is no genuine issue of material fact, the burden shifts to the nonmovant to present substantial evidence creating such an issue. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala. 1989). Evidence is "substantial" if it is of "such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." Wright [v. Wright], 654 So.2d [542, ] 543 [(Ala. 1995)] (quoting West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala. 1989)).'"

Wilson v. Manning, 880 So.2d 1101, 1102 (Ala. 2003) (quoting Hobson v. American Cast Iron Pipe Co., 690 So.2d 341, 344 (Ala. 1997)).

         Discussion

         Ultratec argues that it is entitled to immunity under the exclusivity provisions of the Act from the claims asserted against it by the Estates because, it says, Ultratec and Ultratec HSV operate as a single employer group within the meaning of the definition of "employer" in § 25-5-1(4), Ala. Code 1975.

         Initially, we note that the exclusive-remedy provisions of the Act provide, in relevant part:

"Except as provided in this chapter, no employee of any employer subject to this chapter ... shall have a right to any other method, form, or amount of compensation or damages for an injury or death occasioned by an accident or occupational disease proximately resulting from and while engaged in the actual performance of the duties of his or her employment and from a cause originating in such employment or determination thereof."

§ 25-5-52, Ala. Code 1975.

"The rights and remedies granted in this chapter to an employee shall exclude all other rights and remedies of the employee ... at common law, by statute, or otherwise on account of injury, loss of services, or death. Except as provided in this chapter, no employer shall be held civilly liable for personal injury to or death of the employer's employee, for purposes of this chapter, whose injury or death is due to an accident or to an occupational disease while engaged in the service or business of the employer, the cause of which accident or occupational disease originates in the employment. In addition, immunity from civil liability for all causes of action except those based upon willful conduct shall also extend to the workers' compensation insurance carrier of the employer; to a person, firm, association, trust, fund, or corporation responsible for servicing and payment of workers' compensation claims for the employer; to an officer, director, agent, or employee of the carrier, person, firm, association, trust, fund, or corporation; to a labor union, an official, or representative thereof; to a governmental agency providing occupational safety and health services, or an employee of the agency; and to an officer, director, agent, or employee of the same employer, or his or her personal representative. Nothing in this section shall be construed to relieve a person from criminal prosecution for failure or neglect to perform a duty imposed by law."

§ 25-5-53, Ala. Code 1975. Additionally,

"The intent of the Legislature is to provide complete immunity to employers and limited immunity to officers, directors, agents, servants, or employees of the same employer and to the workers' compensation insurance carrier and compensation service companies of the employer or any officer, director, agent, servant, or employee of such carrier or company and to labor unions and to any official or representative thereof, from civil liability for all causes of action except those based on willful conduct and such immunity is an essential aspect of the workers' compensation scheme. The Legislature hereby expressly reaffirms its intent, as set forth in Section 25-5-53, as amended herein ...."

§ 25-5-14, Ala. Code 1975.

         Section 25-5-1(4), Ala. Code 1975, defines "employer" for purposes ...


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