J. MICHELLE CHILDS, District Judge.
Plaintiffs Kevin R. Vann and Kelli D. Vann (together "Plaintiffs") filed this action alleging that Kevin Vann was injured as a result of the negligence of Defendants Eastman Chemical Company ("Eastman") and Mundy Maintenance Services and Operations, LLC ("Mundy") (together "Defendants"). (ECF No. 1.)
This matter is before the court on Mundy's Motion for Reconsideration (ECF No. 121) of the Order entered on October 23, 2018 (the "October Order"), denying Mundy's Motion to Dismiss (ECF No. 55). (ECF No. 112 at 17.) Plaintiff opposes Mundy's Motion asserting that the October Order "is well founded, comports with the facts of the case, appropriately applies established law, and did not `clearly err[]' in its holding." (ECF No. 122 at 1.) For the reasons set forth below, the court
This case arises out of an industrial accident that occurred on December 6, 2016, at a chemical manufacturing facility (the "Facility") located "on the banks of the Congaree River near Sandy Run a few miles northeast of Gaston in Calhoun County, South Carolina." (ECF No. 59 at 2.) Eastman operated the Facility from 1967 until 2011 manufacturing polyethylene terephthalate ("PET"), a material "commonly used in soda bottles." (ECF No. 1 at 2 ¶ 8-3 ¶ 10.) On January 31, 2011, Eastman sold specified parts of the Facility to DAK Americas, LLC ("DAK"), "a subsidiary of Alpek S.A.B. de C.V., a Mexican chemical manufacturing company." (Id. ¶ 10.) "DAK purchased . . . polymer and chemical manufacturing lines, certain on-site utilities and services to support such operations, but specifically excluded some retained facilities at the Plant." (ECF No. 59 at 3.) "Among the retained assets [of Eastman] were: 1,000 acres of land, six to ten buildings and four production lines out of thirteen which are making substantially similar products to those produced prior to the sale (the `Retained Assets')." (Id. (citing ECF No. 78-1 at 29:14-30:25, 32:3-14, 53:1-25 & ECF No. 78-2 at 28:13-29:9, 53:3-15).) Additionally, "[w]hen Eastman sold the Facility to DAK, nearly all of Eastman's 400 employees at the site became DAK employees at the time of the sale and continued doing the same jobs." (ECF No. 54 at 4 (citing ECF No. 78-1 at 57:1-23).) As a result, DAK's employees "operate[d] and maintain[ed] Eastman's retained lines the same way that they did while they were employed by Eastman." (ECF No. 78-1 at 57:13-17.)
After purchasing the Facility, DAK contracted with Mundy to "provide[] maintenance services at the site." (ECF No. 78-2 at 126:19-20.) Mundy did not contract with Eastman nor was Mundy a party to the Operations Agreement and Services Agreement between Eastman and DAK. (Id. at 29:11-17, 126:4-12.) In this regard, there was no employment relationship between Mundy's employees and Eastman. (Id. at 29:18-30:21.)
On December 3, 2016, employees of Mundy were asked "to heat a drain pipe [] near the [AC-11] Pump with a torch flame." (ECF No. 55 at 3.) On December 6, 2016, Kevin Vann, along with DAK co-workers, Alton Ray Zeigler and Jacob S. Jackson, were assigned to perform preventative maintenance on line A, one of the four Eastman "Retained Asset" production lines, which involved draining the AC-11 loop to clean out any molten material and pulling/separating the AC-11 pump from its housing to replace a leaking seal. (ECF No. 78-1 at 109:5-11, 114:9-14, 115:7-15 & 135:2-24.) During the performance of this maintenance, "an explosion erupted shortly after Plaintiff Kevin Vann [] [, Zeigler, and Jackson] loosened bolts on the pump." (ECF No. 59 at 6.) The explosion sprayed hot molten polymer throughout the workspace, injuring Vann and Jackson and killing Zeigler. (Id.)
As a result of the foregoing, Plaintiffs filed an action in this court on April 19, 2017, alleging claims against Eastman for negligence, negligent failure to warn, and loss of consortium and against Mundy for negligence and loss of consortium. (ECF No. 1 at 8 ¶ 56-12 ¶ 77.) Additionally, Plaintiffs alleged that they are entitled to an award of punitive and exemplary damages. (Id. at 12 ¶ 78-13 ¶ 81.) After engaging in court-ordered jurisdictional discovery with Plaintiffs (see ECF No. 39 at 1 ¶ 2), Mundy filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction on November 30, 2017, asserting that its employees and Kevin Vann were "statutory employees" under the South Carolina Workers' Compensation Act (the "Act"), S.C. Code §§ 42-1-10 to -19-50 (2017), the "codified fellow servant doctrine" prevents the suit, and Plaintiff's exclusive remedy is under the Act. (ECF No. 55.) Thereafter, the court entered the October Order denying Mundy's Motion to Dismiss. (ECF No. 112.) On December 26, 2018, Mundy filed the instant Motion for Reconsideration. (ECF No. 121.)
In the October Order, the court made the following observations in denying Mundy's Motion to Dismiss (ECF No. 55) the claims alleged against it:
(ECF No. 112 at 15-16.)
Mundy seeks reconsideration of the October Order pursuant to Rule 54. (ECF No. 121 at 1.) Rule 54(b) provides the following:
Fed. R. Civ. P. 54(b).
Under Rule 54(b), the "district court retains the power to reconsider and modify its interlocutory judgments . . . at any time prior to final judgment when such is warranted." Am. Canoe Ass'n v. Murphy Farms, Inc., 326 F.3d 505, 514-15 (4th Cir. 2003); see also Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 12 (1983) (noting that "every order short of a final decree is subject to reopening at the discretion of the district judge"). The Fourth Circuit has offered little guidance on the standard for evaluating a Rule 54(b) motion, but has held motions under Rule 54(b) are "not subject to the strict standards applicable to motions for reconsideration of a final judgment." Am. Canoe Ass'n, 326 F.3d at 514; see also Fayetteville Investors v. Commercial Builders, Inc., 936 F.2d 1462, 1472 (4th Cir. 1991) (the Court found it "unnecessary to thoroughly express our views on the interplay of Rules 60, 59, and Rule 54"). In this regard, district courts in the Fourth Circuit, in analyzing the merits of a Rule 54 motion, look to the standards of motions under Rule 59 for guidance. See U.S. Home Corp. v. Settlers Crossing, LLC, C/A No. DKC 08-1863, 2012 WL 5193835, at *2 (D. Md. Oct. 18, 2012); R.E. Goodson Constr. Co., Inc. v. Int'l Paper Co., C/A No. 4:02-4184-RBH, 2006 WL 1677136, at *1 (D.S.C. June 14, 2006); Akeva L.L.C. v. Adidas Am., Inc., 385 F.Supp.2d 559, 565-66 (M.D.N.C. 2005). Therefore, reconsideration under Rule 54 is appropriate on the following grounds: (1) to follow an intervening change in controlling law; (2) on account of new evidence; or (3) to correct a clear error of law or prevent manifest injustice. Beyond Sys., Inc. v. Kraft Foods, Inc., C/A No. PJM-08-409, 2010 WL 3059344, at *2 (D. Md. Aug. 4, 2010) ("This threepart test shares the same three elements as the Fourth Circuit's test for amending an earlier judgment under Rule 59(e), but the elements are not applied with the same force when analyzing an[] interlocutory order.") (citing Am. Canoe Ass'n, 326 F.3d at 514).
In its Motion for Reconsideration, Mundy asserts that the court "clearly erred [in the October Order] in holding that: (1) Mundy is not immune from liability to Plaintiff by virtue of .. . []the Act[]; (2) the borrowed servant doctrine is inapplicable; and (3) Mundy could be liable for acts of Eastman[]'s [] statutory employees who were not acting in furtherance of Mundy's business." (ECF No. 121 at 1.) In support of its immunity, Mundy argues that the South Carolina Supreme Court's opinion in Parker v. Williams & Madjanik, Inc., is dispositive standing for the proposition that "if the defendant's W2 employee is `immune from suit' under `Section 42-5-10 as a co-employee of the deceased,' then the W2 employer `is likewise relieved of its vicarious liability.'" (ECF No. 121 at 5 (quoting Parker, 239 S.E.2d 487, 488-89 (S.C. 1977)).) Therefore, Mundy asserts that the October Order contains clear error "[b]ecause this [c]ourt already has determined that the Mundy employees are exempt from any liability to Plaintiff, then Mundy `is likewise relieved of its vicarious liability' for those employees' same actions." (Id.)
Mundy next argues the court erroneously applied the borrowed servant doctrine because it "only requires a contract between the workers and Eastman" and "such a contract may be implied." (Id. at 8 (citing Cooke v. Palmetto Health All., 624 S.E.2d 439, 443 (S.C. Ct. App. 2005) (noting that the borrowed servant doctrine requires "a contract of hire between the employee and the special employer"); Weitzman v. United States, No. 1:17CV82, 2018 WL 2291318, at *5 (M.D.N.C. May 18, 2018) (Explaining the elements of the borrowed servant doctrine as including a "contract of hire, express or implied" between the employee and the special employer)).) Based on the foregoing law, Mundy asserts that the court erred because "an implied contract for hire necessarily is embedded in that statutory employment relationship." (Id. at 9.)
Finally, Mundy argues that the court clearly erred in the October Order by "holding that Mundy could be vicariously liable for the alleged wrongdoing of workers whom this [c]ourt found distinctly were acting in the course of their statutory employment with Eastman at the time of the alleged negligence." (ECF No. 121 at 10.) Mundy asserts that "[a]s a result, under South Carolina law's doctrine of respondeat superior, Mundy is not liable for such negligence."
Plaintiffs oppose the Motion for Reconsideration asserting that Mundy misinterprets the Parker decision because its holding "relies upon the status of defendant's control over the injured person to determine if the defendant is immune." (ECF No. 122 at 1 (citing Parker, 239 S.E.2d at 488-89).) Therefore, because "there is no evidence, or suggestion, that Mundy exerted any control over Mr. Vann," the court was correct in its conclusion that Mundy was not de facto immune because its employees were statutory co-employees of Vann. (Id. at 1-2.) In this regard, Plaintiff argues that "[t]o reach the conclusion argued for by Mundy would require the [c]ourt to construe the pleadings in a manner most favorable to the Defendant without a record illustrating that scenario." (Id. at 2.)
In the instant Motion, Mundy seeks reconsideration of the October Order because it "contains clear errors of South Carolina law" in the interpretation of the fellow servant and borrowed servant doctrines. (ECF No. 121 at 14.) At the outset of this review, the court acknowledges that "[a]s a federal court sitting in diversity, [][it has] an obligation to apply the jurisprudence of South Carolina's highest court, the South Carolina Supreme Court." Private Mortg. Inv. Servs., Inc. v. Hotel & Club Assocs., Inc., 296 F.3d 308, 312 (4th Cir. 2002).
The court first considers Mundy's argument that when its direct employees were found by the court to be fellow servants of Kevin Vann and exempt from liability as statutory employees of Eastman (see ECF No. 112 at 15), that finding should have also derivatively exempted Mundy from liability because its own liability under respondeat superior is premised on the liability of its direct employees. As support for its position, Mundy cites to the aforementioned Parker decision and Smalls v. Coreas, Appellate Case No. 2011-196106, 2013 WL 8507830 (S.C. Ct. App. Mar. 27, 2013), an unpublished opinion of the South Carolina Court of Appeals. In the October Order, the court found that it could not clearly determine from the current record whether the immunity from liability of Mundy's employees "flows to Mundy because it did not have a statutory relationship with Kevin Vann." (Id. at 15.) After considering the specific language of Parker
The court also considers Mundy's argument that it cannot be held vicariously liable for injuries caused by its direct employees because those individuals qualified as borrowed servants of Eastman. In the October Order, the court concluded that Mundy failed to satisfy the borrowed servant test adopted by the appellate courts of South Carolina because "there was [not] a `contract of hire' between its employees and Eastman, as the alleged special employer." (ECF No. 112 at 16 ("[W]hen a general employer lends an employee to a special employer, that special employer is liable for workers' compensation if: (1) there is a contract of hire between the employee and the special employer; (2) the work being done by the employee is essentially that of the special employer; and (3) the special employer has the right to control the details of the employee's work." (quoting Cooke v. Palmetto Health All., 624 S.E.2d 439, 443 (S.C. Ct. App. 2005))).) To determine whether the instant Motion has merit, the court reassessed whether Mundy's employees were borrowed servants of Eastman leading up to the time of the accident that injured Kevin Vann.
Next, the court finds that because the heating of the drain pipe by Mundy's employees was part of the preventative maintenance to clean out one of Eastman's molten polymer production lines, Eastman specifically benefitted from the work conducted by Mundy's employees satisfying the second part of the test. Id. ("The second part of the test is met if the special employer benefits from the work." (citation omitted)). As to the third part of the borrowed servant test, the court must concern itself with whether Eastman as the special employer had the right to control the details of Mundy's employees' work. Parker, 239 S.E.2d at 489 ("The test generally used in determining whether an employee furnished by one person to another becomes the employee of the person to whom he is loaned is whether the employee passes under the latter's right of control with regard not only to the work to be done but also to the manner of performing it." (citing Young v. Warr, 165 S.E.2d 797 (S.C. 1969))). To resolve this inquiry, the court is to look at "`(1) direct evidence of the right to, or exercise of, control, (2) method of payment, (3) furnishing of equipment, and (4) right to fire.'" Eaddy, 325 S.E.2d at 583 (quoting Chavis v. Watkins, 180 S.E.2d 648, 649 (S.C. 1971)).
Upon its review, the court observes that the record lacks sufficient evidence as to the second, third, and fourth prongs of the Eaddy test for an outright determination that Eastman exercised special control over Mundy's employees to exempt it from liability.
Upon careful consideration of the parties' arguments and for the reasons set forth above, the court hereby
