KARL J. WILKERSON AND GLORIA WILKERSON, APPELLANTS,
v.
GULFSTREAM LAND AND DEVELOPMENT CORPORATION, APPELLEE

Fla. 4th DCA | 1981-08-19
No. 80-978
ANSTEAD and GLICKSTEIN, JJ., concur.
402 So. 2d 550 Florida District Court of Appeal, Fourth District (1981) Negative Treatment
Cited by 8 cases

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Synopsis

Karl Wilkerson, an employee of Gulfstream Utilities Corporation, was injured on property owned by its parent corporation, Gulfstream Land and Development Corporation. After receiving workmen's compensation benefits from his employer, Wilkerson sued the parent corporation for negligence. The court reversed summary judgment, holding that a parent corporation cannot use its subsidiary's payment of workmen's compensation benefits as a shield against independent tort liability.


Holding

A parent corporation is not immunized from an independent tort action brought by an employee of its wholly owned subsidiary merely because the subsidiary has paid workmen's compensation benefits and the corporations share the same insurance policy. The court reversed the summary judgment and remanded the case for proceedings consistent with this holding.


Headnotes

[1] A parent corporation is not immunized from third-party tort liability by virtue of its wholly owned subsidiary's payment of workers' compensation benefits.

[2] The corporate veil will only be pierced where the corporate structure is used fraudulently, and separate corporate identities should be recognized in other circumstances.

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Key Quotes

“a parent corporation of a wholly owned subsidiary is immunized from third party tort liability by virtue of its subsidiary's having paid out workmen's compensation benefits. We think not and therefore, we reverse.”

States the core holding that immunization does not occur through subsidiary's payment of workmen's compensation benefits.

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Facts & Procedural History

Karl J. Wilkerson was employed by Gulfstream Utilities Corporation, a wholly owned subsidiary of Gulfstream Land and Development Corporation. Wilkerso…

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Opinion of the Court
HURLEY, Judge.

HURLEY, Judge.

This appeal follows the entry of a summary final judgment which prevented appellants from maintaining a personal injury action against appellee. The issue presented on appeal is whether a parent corporation of a wholly owned subsidiary is immunized from third party tort liability by virtue of its subsidiary’s having paid out workmen’s compensation benefits. We think not and therefore, we reverse.

Karl J. Wilkerson sustained injuries while employed by Gulfstream Utilities Corporation, a wholly owned subsidiary of appellee, Gulfstream Land and Development Corporation. The injuries were incurred when Wilkerson fell into a hole located in certain real property owned by appellee. Following the accident, Wilkerson filed a workmen’s compensation claim against his employer Gulfstream Utilities Corporation and its workmen’s compensation carrier, and received benefits pursuant to that claim. In addition, the Wilkersons instituted this negligence suit against appellee as the owner of the premises on which the accident occurred, seeking to recover for personal injury and loss of consortium. Since its subsidiary had paid compensation benefits to Wilkerson and the two corporations shared the same insurance policy, appellee moved for summary judgment claiming immunity from an independent tort action. When summary final judgment was entered in favor of appellee, appellant took this appeal.

We acknowledge that in Goldberg v. Context Industries, Inc., 362 So. 2d 974 (Fla.3d DCA 1978), cert. denied, 370 So. 2d 459 (Fla.1979), our sister court found that an independent tort action against a parent corporation was barred where the plaintiff employee had collected workmen’s compensation benefits from the parent’s wholly owned subsidiary and the two corporations were jointly insured on the same compensation policy. However, we do not believe that a parent corporation must necessarily be shielded from suit by an employee of its subsidiary. Rather, we align ourselves with those jurisdictions which have dealt with this issue and have uniformly upheld the right of the subsidiary’s employee to maintain such an independent action. See, e.g., Boggs v. Blue Diamond Coal Co., 590 F. 2d 655 (6th Cir.), cert. denied, 444 U.S. 836, 100 S.Ct. 71, 62 L.Ed.2d 47 (1979) (applying Kentucky law); Choate v. Landis Tool Co., 486 F.Supp. 774 (E.D.Mich.1980); O’Brien v. Grumman Corp., 475 F.Supp. 284 (S.D.N.Y.1979) (applying Georgia law); Latham v. Technar, Inc., 390 F.Supp. 1031 (E.D.Tenn.1974); Thomas v. Hycon, Inc., 244 F.Supp. 151 (D.D.C.1965) (applying Maryland Law); Mingin v. Continental Can Co., 171 N.J.Super. 148, 408 A. 2d 146 (1979); Samaras v. Gatx Leasing Corp., 75 A.D.2d 890, 428 N.Y.S.2d 48 (2d Dep’t 1980); Phillips v. Stowe Mills, Inc., 5 N.C.App. 150, 167 S.E. 2d 817 (1969).

The result herein is dictated by basic corporate law principles which require that the corporate fiction be recognized and the corporate veil only be pierced where the corporate structure is used fraudulently. In analyzing the parent/subsidiary problem we now face, the court in Boggs v. Blue Diamond Coal Co., supra, explained:

[A] business enterprise has a range of choice in controlling its own corporate structure. But reciprocal obligations arise as a result of the choice it makes. The owners may take advantage of the benefits of dividing the business into separate corporate parts, but principles of reciprocity require that courts also recognize the separate identities of the enterprises when sued by an injured employee.

590 F. 2d at 662.

The fact that appellee and its subsidiary were covered under the same workmen’s compensation insurance policy would not alter this reasoning. O’Brien v. Grumman Corp., supra; Mingin v. Continental Can Co., supra.

Accordingly, the summary final judgment herein is reversed and the cause is remanded for proceedings consistent herewith.

Reversed and Remanded.

ANSTEAD and GLICKSTEIN, JJ., concur.


Cases With Similar Vibessemantic neighbors from the corpus


Citator

Cited By

  • Gulfstream Land & Dev. Corp. v. Wilkerson, 420 So. 2d 587 (Fla. 1982)
    …McDONALD, Justice. This cause is before the Court on petition to review Wilkerson v. Gulf stream Land & Development Corp., 402 So. 2d 550 (Fla. 4th DCA 1981), which conflicts with Goldberg v. Context Industries, Inc., 362 So. 2d 974 (Fla. 3d DCA 1978), cert. denied, 370 So. 2d 459 (Fla.1979). We have jurisdiction1 and approve the instant decision. The question presented in this case…
  • Perez v. Maule Indus., 411 So. 2d 960 (Fla. 3d DCA 1982)
    …are covered under the same worker’s compensation policy. On authority of Goldberg, supra, we again affirm the summary judgment granted in favor of the parent corporation. Affirmed. . In Wilkerson v. Gulfstream Land and Development Corporation, 402 So. 2d 550 (Fla. 4th DCA 1981), our sister court expressly declined to follow Goldberg v. Context industries, Inc., supra, and reversed a summary judgment granted in favor of the parent corporation.…
  • Perkins v. Scott, 554 So. 2d 1220 (Fla. 2d DCA 1990)
    …on to employ Mr. Perkins and having leased the building to that corporation, Mr. Scott does not have the luxury to now pierce the veil of his own corporation to receive the benefit of its immunity. Wilkerson v. Gulfstream Land and Development Corp., 402 So. 2d 550 (Fla. 4th DCA 1981), approved, 420 So. 2d 587 (Fla.1982). Cf § 607.401, Fla.Stat. (1985) (person acting as a corporation is estopped to deny corporate status). If Mr. Scott were sued by a third party who had been injured by an employee of S & S Pro…

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