Crippen v. Central Jersey Concrete Pipe Co./Opinion of the Court

by James H. Coleman

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The opinion of the Court was delivered by COLEMAN, J.

The critical issue in this appeal is whether an employer's conduct in failing to cure hazardous conditions in violation of a directive issued by the U.S. Department of Labor, Occupational Safety & Health Administration (OSHA), coupled with its intentional deception of OSHA, constitutes an “intentional wrong” under the exclusive remedy provision of the Workers' Compensation Act, N.J.S.A. 34:15-8. Based on this Court's holding in Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161, 501 A.2d 505 (1985), the trial court dismissed the common-law tort claim against the employer. The Appellate Division affirmed, and upon reconsideration after our decision in Laidlow v. Hariton Machinery Co., 170 N.J. 602, 790 A.2d 884 (2002), the Appellate Division reaffirmed the trial court's decision to dismiss plaintiff's intentional tort claim on summary judgment. Crippen v. Central Jersey Concrete Pipe Co., 350 N.J.Super. 313, 795 A.2d 284 (2002). We disagree and reverse.

I.

This wrongful death case arises out of a workplace accident that caused the death of Harold Crippen. On June 6, 1998, Crippen was working as a “material man” in the course of his employment with defendant Central Jersey Concrete Pipe Company at its plant in Farmingdale. As a “material man,” Crippen was responsible for controlling the movement of sand and gravel into loading hoppers located in an elevated shed referred to as the change-over room. Each hopper is about seventeen-feet deep and measures [p400] eight feet by ten feet. In order to activate the lever and regulate the inflow of sand or gravel, Crippen had to walk on a single two-inch by ten-inch wooden plank and stand on a six-foot high, unsecured ladder that rested on the wooden plank. That process consumed less than two minutes and was performed approximately ten times a day. On the day of the accident, while performing those duties, Crippen fell into the sand hopper and suffocated. Crippen's body was discovered buried in the sand when a co-worker released sand from the chute at the bottom of the hopper.

On January 22, 1999, Annabelle Crippen, Admini-stratrix ad Prosequendum and General Administra-trix, filed a wrongful-death complaint against Crip-pen's employer. The complaint alleges that the acci-dent was caused by the willful and wanton actions on the part of defendant, and as a result, the claim falls within the intentional wrong exception to N.J.S.A. 34:15-8. N.J.S.A. 34:15-8, commonly referred to as the “exclusive remedy provision,” provides:

Such agreement shall be a surrender by the parties thereto of their rights to any other method, form or amount of compensation or determination thereof than as provided in this article and an acceptance of all the provisions of this article, and shall bind the employee and for compensation for the employee's death shall bind the employee's personal representatives, surviving spouse and next of kin, as well as the employer, and those conducting the employer's business during bankruptcy or insolvency.

If an injury or death is compensable under this ar-ticle, a person shall not be liable to anyone at common law or otherwise on account of such injury or death for any act or omission occurring while such person was in the same employ as the person injured or killed, except for intentional wrong.

[Ibid.](emphasis added.)

Defendant argued successfully on its motion for summary judgment, based on Millison, that Crippen's work conditions did not create a substantial certainty that an injury would occur and that the death and the circumstances surrounding it fairly should be viewed as a fact of industrial employment. Plaintiff opposed the motion, arguing that an intentional wrong existed due to defendant's deliberate failure to correct OSHA violations and its fraudulent misrepresentations to OSHA that it had abated the unsafe work conditions. Additionally, plaintiff argued that the case was [p401] not ripe for summary judgment because discovery was incomplete, claiming that OSHA's Investigation Re-port was neither finalized nor available for public disclosure.

The trial court granted defendant's summary judgment motion, and held that the intentional wrong exception did not apply in this case because there was no “substantial certainty” of injury. The court reasoned that although defendant had knowledge of the dangerous work environment, “it didn't mean that [defendant] knew that someone was going to get killed as a result of it.”

Following the grant of partial summary judgment dismissing the intentional tort claim contained in the first count of plaintiff's complaint, plaintiff conducted further discovery demanded in the second count, in which she alleged that the manufacturer and/or seller of certain equipment might be liable under the New Jersey Products Liability Act. During that discovery, plaintiff obtained the complete OSHA file with respect to Crippen's death. The file revealed that prior to Crippen's death OSHA conducted an investigation at defendant's plant in the fall of 1996. As a result of that investigation, OSHA issued a Citation and Notification of Penalty on January 16, 1997, in which it cited defendant for, among other things: its failure to identify permit-required confined spaces^[1] in accordance with 29 C.F.R. § 1910.146(c)(1); its failure to develop and implement a “written permit space entry program” in accordance [p402] with 29 C.F.R. § 1910.146(c)(4);^[2] its failure to implement a lockout ^[3]/tagout^[4] procedure in accordance with 29 C.F.R. § 1910.147(c)(4)(i);^[5] and its failure to train employees adequately on “the safe application, usage, and removal of energy control devices” in accordance with 29 C.F.R. § 1910.147(c)(7)(i).^[6] OSHA [p403] categorized those violations as “[s]erious,” meaning that the condition can result in “a substantial probability [of] death or serious physi-cal harm [,]”29 C.F.R. 1960.2(v), and ordered defen-dant to abate them by February 18, 1997, which was approximately sixteen months prior to Crippen's death.

During the discovery, plaintiff also obtained the de-position of Charles Mason who was employed as defendant's Environmental Health and Safety Manager at the time of Crippen's death. Mason admitted that defendant failed, before the date of Crippen's accident, to abate many of the hazardous conditions cited by OSHA. Specifically, Mason testified that “[n]o real formal training” on lockout/tagout had occurred. Rather, Mason trained only five employees, not including Crippen, whose jobs involved confined space repairs or confined space procedures. Mason admitted that the confined space training program was not sufficient and that he knew an employee could die in one of the permit spaces. Mason also stated that, between January 1997 when OSHA ordered defendant to correct certain serious OSHA violations and Crippen's death in June 1998, there was no “list identifying permit required confined spaces” and that no signs were posted “identifying Confined Space Permit-Required locations.” Although managers were required to take effective physical measures to keep employees out of the permit spaces, he admitted “that nothing was done to effectively keep employees from entering [the permit] spaces, such as physical barriers or warning signs.” In addition, Mason testified that defendant failed to obtain the requisite harnesses and retrieval devices for permit spaces, and failed to implement a rescue procedure that conformed to OSHA's requirements. Mason stated that he, the General Manager, and the Plant Manager, intended to satisfy the OSHA citations first and finish the implementation later.

Plaintiff also acquired an expert opinion from Wayne F. Nolte, Ph.D., P.E., who performed “an engineering evaluation regarding the manner in which [defendant] attempted to comply with OSHA citations.” Based on his investigation, Nolte concluded:

[p404] [Defendant] was aware of serious, hazardous and dangerous conditions in their Farmingdale plant, identified by OSHA between September 1996 and January 1997. They deliberately provided information to OSHA indicating that they were addressing each of the violations in an attempt to abate the citations. Yet, they admitted to not following through with the statements made to OSHA regarding the abatements.

[Defendant] was informed by OSHA that the area where Mr. Crippen's death occurred was a confined space and that it was also a lockout/tagout area. Mr. Crippen died because he was allowed to enter a Permit Confined Space without a permit and without having the proper lockout/tagout so that the mixer operator would not open the pneumatic gate and cause a discharge of the hopper contents. Had the “Serious” citations of violations issued by OSHA been appropriately addressed, with a serious attitude toward making the plant safe for its workers, Mr. Crippen would have had a secured ladder supported on a proper surface, and a grate separating him from the contents in the hopper. In addition, the mixer operator would have known that Mr. Crippen was in the shed on top of the hopper and would not have been able to operate the pneumatic gate to discharge the hopper contents.

....

Mr. Crippen's death resulted not from [defendant] not being aware of some hazardous and dangerous conditions on this site, but from their deliberate, intentional decision not to address the violations cited by OSHA and identified as “Serious.” Their efforts were directed toward reducing the penalties and keeping OSHA away so they did not incur any further penalties, rather than making the plant safe and inviting OSHA back to assist them in moving toward a safe environment for their employees.

After the discovery had been completed and no basis was found to support a products liability claim, the parties agreed to dismiss the remaining count of the complaint. Plaintiff then appealed the summary judgment dismissing the intentional tort claim. In affirming the dismissal of the wrongful death claim, the Appellate Division concluded:

^[7]

The panel expressed its view that Mason's admission that “he knew an employee could die in one of the confined spaces if the violations were not abated” merely was evidence of defendant's awareness of the risk. Id. at 74-75, 775 A.2d 716. In addition, [p405] the panel noted “it is difficult to argue that [defendant] knew with substantial certainty that an injury was to occur when there was no evidence of any prior acci-dents in which the material man had been injured.” Id. (citing Laidlow v. Hariton Mach. Co., 335 N.J.Super. 330, 340-41, 762 A.2d 311 (App.Div.2000)). The panel also ruled that further discovery was unnecessary because “[t]he additional facts do not change the conclusion that plaintiff's claims are barred under N.J.S.A. 34:15-8.” Id. at 77, 775 A.2d 716.

We granted plaintiff's petition for certification and summarily remanded the matter to the Appellate Division for reconsideration in light of Laidlow, which was decided subsequent to the panel's decision. Crippen v. Central Jersey Concrete Pipe Co., 171 N.J. 440, 794 A.2d 179 (2002). In its second reported opinion, the Appellate Division held that “Laidlow [did] not alter [its] prior analysis[,]” and again affirmed the trial court's decision to grant summary judgment in defendant's favor. Crippen, supra, 350 N.J.Super. at 314-15, 795 A.2d 284.

We granted plaintiff's second petition for certification, 174 N.J. 361, 807 A.2d 193 (2002), and now reverse.

II.

A.

Plaintiff argues that the Appellate Division, on re-mand, failed to follow this Court's directives in Laid-low. Plaintiff asserts that the evidence from OSHA's investigation justified a reversal of the trial court's grant of summary judgment. Plaintiff contends that the Appellate Division failed to consider Mason's testimony “in the light most favorable to the non-moving party.” Laidlow,supra, 170 N.J. at 607, 620, 623, 790 A.2d 884. In addition, plaintiff argues that, contrary to Laidlow, supra, 170 N.J. at 621, 790 A.2d 884, the Appellate Division failed to consider the evidence from plaintiff's expert report.

Defendant, on the other hand, argues that the Appel-late Division properly applied the principles of Laid-low. Defendant contends [p406] that the facts do not rise to the level of an intentional wrong as they did in Laidlow because: (1) the record contains no evidence that defendant knew Crippen's accident was virtually certain to occur; (2) there were no prior incidents involving the hopper; (3) defendant's failure to fully implement the mandatory safety programs constitutes a mere toleration of a dangerous condition, and not an intentional wrong, see Laidlow, supra, 170 N.J. at 615, 790 A.2d 884; and (4) Mason's testimony demonstrates defendant's desire to comply with OSHA's directives, albeit with as little impact on defendant's business operations as possible.

B.

Our analysis of whether Crippen's accident satisfies the “intentional wrong” exception contained in N.J.S.A. 34:15-8 must begin with the landmark Milli-son decision.

There, we adopted Dean Prosser's definition of an intentional wrong:

“[T]he mere knowledge and appreciation of a risk-something short of substantial certainty-is not intent. The defendant who acts in belief or con-sciousness that the act is causing an appreciable risk of harm to another may be negligent, and if the risk is great the conduct may be characterized as reckless or wanton, but it is not an intentional wrong.” [ Millison, supra, 101 N.J. at 177, 501 A.2d 505 (quoting W. Prosser and W. Keeton, The Law of Torts, § 80 at 569 (5th ed.1984)).]

“[I]n adopting a ‘substantial certainty’ standard, we acknowledge[d] that every undertaking, particularly certain business judgments, involve [sic] some risk, but that willful employer misconduct must not go undeterred.” Millison, supra, 101 N.J. at 178, 501 A.2d 505 (emphasis added). In assessing whether an intentional wrong was committed, we not only required courts to determine whether a “virtual certainty” of injury or death existed under the conduct prong, but we also required courts to consider the context in which the conduct takes place. Id. at 179, 501 A.2d 505. Under the context prong, we held that courts must determine whether the resulting injury or death, and the circumstances [p407] surrounding it, fairly may be viewed as a fact of industrial life, or rather, whether it is “plainly beyond anything the legislature could have contemplated as entitling the employee to recover only under the Compensation Act[.]”Ibid.

In Millison, the employees of defendant du Pont sued du Pont and its company doctors on the grounds that they “ ‘intentionally injured the plaintiffs by deliberately exposing them to asbestos and aggravated these injuries by conspiring to [conceal] and fraudulently concealing from the plaintiffs knowledge of the diseases known by these defendants to have been caused by asbestos exposure and already contracted by the plaintiffs.’ ” Id. at 166, 501 A.2d 505 (citation omitted). The plaintiffs argued that the defendants' conduct fell within the “intentional wrong” exception to the exclusive remedy provision under N.J.S.A. 34:15-8. We concluded that the employer's conduct did not rise to the level of an intentional wrong:

Although defendants' conduct in knowingly exposing plaintiffs to asbestos clearly amounts to deliberately taking risks with employees' health, as we have ob-served heretofore the mere knowledge and apprecia-tion of a risk-even the strong probability of a risk-will come up short of the “substantial certainty” needed to find an intentional wrong resulting in avoidance of the exclusive-remedy bar of the compensation statute. [ Millison, supra, 101 N.J. at 179, 501 A.2d 505.]

We also held that the plaintiffs' “initial resulting oc-cupational diseases must be considered the type of hazard of employment that the legislature anticipated would be compensable under the terms of the Compensation Act.”Ibid. However, with respect to plaintiffs' claim against du Pont's medical staff, the Court concluded that the plaintiffs pleaded a valid cause of action:

There is a difference between, on the one hand, tole-rating in the workplace conditions that will result in a certain number of injuries or illnesses, and, on the other, actively misleading the employees who have already fallen victim to those risks of the workplace. An employer's fraudulent concealment of diseases already developed is not one of the risks an employee should have to assume. Such intentionally-deceitful action goes beyond the bargain struck by the Compensation Act.... The legislature, in passing the Compensation Act, could not have intended to insulate such conduct from tort liability. [Id. at 181-82, 501 A.2d 505.]

[p408] Seventeen years later in Laidlow, we revisited our holding in Millison and determined whether the plaintiff was barred from pursuing an intentional tort claim against his employer. Laidlow, supra, 170 N.J. at 606, 790 A.2d 884. We emphasized that, under Millison,“an intentional wrong is not limited to actions taken with a subjective desire to harm, but also includes instances where an employer knows that the consequences of those acts are substantially certain to result in such harm.” Id. at 613, 790 A.2d 884 (citing W. Prosser and W. Keeton, The Law of Torts, § 80 at 569 (5th ed.1984)). We reaffirmed that “in order for an employer's act to lose the cloak of immunity under N.J.S.A. 34:15-8,” both the conduct and context prongs, established in Millison, must be proved. Id. at 617, 790 A.2d 884. In addition, we noted that the same facts and circumstances generally will be relevant to both prongs, but the conduct prong ordinarily is to be determined by the jury, while the context prong is a question of law for the court. Id. at 623, 790 A.2d 884.

We made clear in Laidlow that the absence of a prior accident does not preclude a finding of an intentional wrong. Id. at 621, 790 A.2d 884. Reports of prior accidents and “close-calls,” are merely evidence “that may be considered in the substantial certainty analysis.” Id. at 621-22, 790 A.2d 884. We also noted that the Court was not establishing a per se rule that an intentional wrong has been committed whenever an employer violates an OSHA regulation. Id. at 622-23, 790 A.2d 884.

Laidlow involved the use of industrial production equipment that severely injured plaintiff when his hand became caught in an unguarded rolling mill that he was operating. Id. at 606-07, 790 A.2d 884. Thirteen years before the accident, the employer had disabled a safety guard on the rolling mill and replaced it in its proper position only during OSHA inspections at the plant. Id. at 608, 790 A.2d 884. Laidlow expressed concern about the safety guard to his supervisor, Richard Portman, several times during the period immediately preceding his accident, but Portman ignored his requests to restore the guard. Ibid. Despite the defendant's [p409] knowledge of the dangerous conditions and near-close injuries resulting from the removal of the safety guard, the defendant refused to sacrifice “speed and inconvenience” in exchange for the safety of its employees. Id. at 621, 790 A.2d 884.

Based on those facts, we held:

A reasonable jury could conclude, in light of all the surrounding circumstances, including the prior close-calls, the seriousness of any potential injury that could occur, [the plaintiff's] complaints about the absent guard, and the guilty knowledge of [the defen-dant] as revealed by its deliberate and systematic deception of OSHA, that [the defendant] knew that it was substantially certain that the removal of the safety guard would result eventually in injury to one of its employees. [ Id. at 622, 790 A.2d 884.]

We also concluded that if the plaintiff's allegations were proved, the context prong would be satisfied. We reasoned that:

[I]f an employee is injured when an employer deliberately removes a safety device from a dangerous machine to enhance profit and production, with substantial certainty that it will result in death or injury to a worker, and also deliberately and systematically deceives OSHA into believing that the machine is guarded, we are convinced that the Legislature would never consider such actions or injury to constitute simple facts of industrial life [and] ... would never expect it to fall within the Workers' Compensation bar. [ Id. at 622, 790 A.2d 884.]

III.

Applying the foregoing legal tenets to this case, we conclude that a jury reasonably could conclude that defendant had knowledge that its deliberate failure to cure the OSHA violations would result in a substantial certainty of injury or death to one of its employees. First, we find that the trial court improperly granted summary judgment without permitting plaintiff to complete discovery. Laidlow, supra, 170 N.J. at 619, 790 A.2d 884. During the discovery that was conducted subsequent to the dismissal of the wrongful death complaint, Mason provided informa-tion that is highly relevant to the determination of whether defendant had knowledge of a substantial certainty of injury or death resulting from the safety hazards. Like Portman in Laidlow, Mason is in a unique position to “ ‘shed light on what, if any appreciation [defendant] had concerning the risk of injury associated [p410] with its decision’ ” not to cure the serious OSHA violations. Ibid. (quoting Laidlow, supra, 335 N.J.Super. at 350, 762 A.2d 311). Mason admitted in his deposition that he knew there was a substantial certainty that an employee could die in one of its permit-required confined spaces. That admission may be imputed to defendant because Ma-son, as the environmental health and safety manager at defendant's company, was testifying on defendant's behalf. Barcello v. Biel, 137 N.J.L. 606, 607, 61 A.2d 42 (E. & A.1948) (stating that extrajudicial admission made by employee in execution of his duty to employer is admissible against employer). Despite defendant's knowledge of the dangerous conditions found by OSHA to have existed approximately eighteen months prior to Crippen's death, defendant deliberately failed to correct the OSHA violations and intentionally deceived OSHA into believing that it had abated the violations because it did not want OSHA to return to the plant. “By its deception, a jury could conclude that [defendant] evidenced an awareness of the ‘virtual’ certainty of injury from” its failure to correct the safety hazards. Laidlow, supra, 170 N.J. at 621, 790 A.2d 884.

In addition to Mason's testimony, there is additional evidence that demonstrates the inherently dangerous conditions that existed at defendant's plant. For ex-ample, Dr. Nolte's report suggests that defendant's failure to implement properly a permit-required confined space entry program and a lockout/tagout pro-gram created a substantial certainty that an injury or death would result from the dangerous conditions of the confined spaces and energy-isolating devices in the change-over room independent of his reference to a grate that OSHA did not require until after the accident. Moreover, many of the violations OSHA found during its inspection conducted in the fall of 1996 that had not been corrected at the time of the accident were categorized as serious. Under OSHA's regulations, that translates into conditions that create a substantial probability of death or serious injury. See29 C.F.R. 1960.2(v). Based on the totality of the circumstances, we conclude that a jury reasonably could conclude that the “substantial certainty” prong of the Millison test was satisfied.

[p411] Similarly, we find that plaintiff has satisfied the context prong. Defendant, contrary to OSHA's order, maintained the safety hazards that ultimately caused Crippen's death, and deliberately deceived OSHA into believing that the violations had been corrected. Defendant “effectively precluded OSHA from carrying out its mandate to protect the life and health of [defendant's] workers.” Laidlow, supra, 170 N.J. at 621, 790 A.2d 884. We are per-suaded that the Legislature never intended such con-duct to constitute a part of everyday industrial life and would not expect it to fall within the Workers' Compensation bar. Consequently, summary judgment was improperly granted.

IV.

The judgment of the Appellate Division is reversed and the matter is remanded to the Law Division for trial.

Footnotes

1. Under 29 C.F.R. § 1910.146(b), a permit-required confined space is: [A] confined space that has one or more of the following characteristics: (1) Contains or has a potential to contain a hazardous atmosphere; (2) Contains a material that has the potential for engulfing an entrant; (3) Has an internal configuration such that an entrant could be trapped or asphyxiated by inwardly converging walls or by a floor which slopes downward and tapers to a smaller cross-section; or (4) Contains any other recognized serious safety or health hazard. A confined space is a space that: “(1) Is large enough and so configured that an employee can bodily enter and perform assigned work; and (2) Has limited or restricted means for entry or exit (for example, ... hoppers ... are spaces that have limited means of entry); and (3) Is not designed for continuous employee occupancy.” 29 C.F.R. § 1910.146(b).
2. This provision basically requires an employer to “[d]evelop and implement the means, procedures, and practices necessary for safe permit space entry operations” and for emergency situations affecting the per-mit spaces. 29 C.F.R. § 1910.146(d).
3. Lockout means “[t]he placement of a lockout device on an energy isolating de-vice,” [“a mechanical device that physically prevents the transmission or release of ener-gy,” to] “ensur[e] that the energy isolating device and the equipment being controlled cannot be operated until the lockout device is removed.” 29 C.F.R. § 1910.147(b). The lockout device is “[a] device that utilizes a positive means such as a lock....”Ibid.
4. Tagout is defined as “[t]he placement of a tagout device on an energy isolating de-vice ... to indicate that the energy isolating device and the equipment being controlled may not be operated until the tagout device is removed.” Ibid. Tagout device is “[a] prominent warning device, ..., which can be securely fastened to an energy isolating de-vice....”Ibid.
5. 29 C.F.R. § 1910.147(c)(4)(i) states that “[p]rocedures shall be developed, do-cumented and utilized for the control of po-tentially hazardous energy when employees are engaged in the [control of hazardous energy (lockout/tagout)].”
6. 29 C.F.R. § 1910.147(c)(7)(i) states: (i) The employer shall provide training to ensure that the purpose and function of the energy control program are understood by employees and that the knowledge and skills required for the safe application, usage, and removal of the energy controls are acquired by employees. The training shall include the following: (A) Each authorized employee shall receive training in the recognition of applicable hazardous energy sources, the type and magnitude of the energy available in the workplace, and the methods and means necessary for energy isolation and control. (B) Each affected employee shall be instructed in the purpose and use of the energy control procedure. (C) All other employees whose work operations are or may be in an area where energy control procedures may be utilized, shall be instructed about the procedure, and about the prohibition relating to at-tempts to restart or reenergize machines or equipment which are locked out or tagged out.
7. The OSHA citations made [defendant] aware that continued operation of the plant without abatement of the violations presented a real possibility of injury to its employees, specifically the material man. However, the evidence does not support plaintiff's assertion that injury or death was virtually certain to occur. It only indicates that “a known risk blossom[ed] into reality.” [ Crippen v. Central Jersey Concrete Pipe Co., 342 N.J.Super. 65, 74, 775 A.2d 716 (2001) (quoting Millison, supra, 101 N.J. at 178, 501 A.2d 505).]