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Clark v. Insurance Company State of Pennsylvani

Supreme Court of Iowa

May 3, 2019

DILLON CLARK, AGNES DUSABE, MUSA EZEIRIG, ZARPKA GREEN, ABRAHAM TARPEH, and DUSTY NYONEE, Appellants,
v.
INSURANCE COMPANY STATE OF PENNSYLVANIA, Appellee.

          Appeal from the Iowa District Court for Jasper County, Terry Rickers and John D. Lloyd, Judges.

         Interlocutory appeal from district court judgment dismissing action. AFFIRMED.

          Matthew M. Sahag of Dickey & Campbell Law Firm, PLC, Des Moines, for appellants.

          Keith P. Duffy and Mitchell R. Kunert of Nyemaster Goode, P.C., Des Moines, for appellee.

          D. Brian Scieszinski of Bradshaw Fowler Proctor & Fairgrave, Des Moines, for amici curiae Iowa Association of Business and Industry, Employers Mutual Casualty Company, and United Fire & Casualty Company.

          APPEL, JUSTICE

         In this case, employees and former employees of an Iowa manufacturing company brought a common law tort claim against the employer's workers' compensation insurance carrier. The claim alleged that the insurance carrier failed to conduct or negligently conducted an insurance inspection at the company's manufacturing facility and that the omission or action caused serious health problems for plaintiffs.

         The insurance carrier moved to dismiss the petition based on Iowa Code section 517.5 (2017)[1]. This Code provision provides, "No inspection of any place of employment made by insurance company inspectors . . . shall be the basis for the imposition of civil liability upon the inspector or upon the insurance company . . . ." Id. Plaintiffs resisted, arguing that the statutory provision is unconstitutional as violative of equal protection, inalienable rights, and due process under article I, sections 1, 6, and 9 of the Iowa Constitution. The district court held the provision constitutional and dismissed the actions.

         We granted interlocutory review. For the reasons expressed below, we affirm the judgment of the district court.

         I. Factual and Procedural Background.

         TPI Iowa, LLC is a wind blade manufacturing facility located in Newton, Iowa. TPI employs hundreds of employees at its Newton plant. The Insurance Company of the State of Pennsylvania (ICSOP) is TPI's workers' compensation insurer. Plaintiffs Dillon Clark, Agnes Dusabe, Musa Ezeirig, Zarpka Green, Dusty Nyonee, and Abraham Tarpeh are current or former employees of TPI.

         Plaintiffs filed a petition in district court naming as defendants ICSOP, TPI, and various TPI affiliates, officers and employees. Plaintiffs' petition included a variety of claims against the various defendants, but the only claims against ICSOP were based on the failure to inspect the premises, or in the alternative, negligent inspection.

         Specifically, plaintiffs alleged that employees at TPI were exposed to hazardous chemicals while manufacturing wind blades at the TPI manufacturing facility. Plaintiffs alleged the acts or omissions of ICSOP caused them various injuries, including horrific skin ruptures, rashes, burns, swollen and wounded eyelids, irregular vaginal bleeding, extensive body itches, congestion in the throat and lungs, and erectile dysfunction. Plaintiffs sought compensatory damages for their personal injuries, medical expenses, and lost wages. Plaintiffs also sought punitive damages.

         ICSOP moved to dismiss plaintiffs' claims against it. ICSOP noted that the only claims against it arose from alleged failure to inspect or negligent inspections. ICSOP asserted that it had statutory immunity from such claims under Iowa Code section 517.5.

         Plaintiffs responded that section 517.5 is unconstitutional. They pointed to article I, sections 1, 6, and 9 of the Iowa Constitution.

         The district court granted the motion to dismiss. We granted interlocutory review.

         II. Standard of Review.

         We review motions to dismiss for failure to state a claim for corrections of errors at law. Rees v. City of Shenandoah, 682 N.W.2d 77, 78 (Iowa 2004). Constitutional claims are reviewed de novo. Godfrey v. State, 752 N.W.2d 413, 417 (Iowa 2008).

         III. Statutory and Constitutional Provisions. Plaintiffs challenge the constitutionality of Iowa Code section 517.5. That provision states,

No inspection of any place of employment made by insurance company inspectors or other inspectors inspecting for group self-insurance purposes shall be the basis for the imposition of civil liability upon the inspector or upon the insurance company employing the inspector . . . .

Id. Plaintiffs claim that Iowa Code section 517.5 violates the equal protection and privileges and immunities provisions of the Iowa Constitution, Iowa Const. art. I, § 6 ("All laws of a general nature shall have a uniform operation; the general assembly shall not grant to any citizen, or class of citizens, privileges or immunities, which, upon the same terms shall not equally belong to all citizens."), the inalienable rights clause of the Iowa Constitution, id. art. I, § 1 ("All men and women are, by nature, free and equal, and have certain inalienable rights . . . ."), and the due process clause of the Iowa Constitution, id. art. I, § 9 ("The right of trial by jury shall remain inviolate . . . [and] no person shall be deprived of life, liberty, or property, without due process of law.").

         IV. Positions of the Parties. A. Plaintiffs.

         1. Equal protection.

         With respect to equal protection, plaintiffs assert that similarly situated persons-nonemployee tortfeasors-are treated differently that other nonemployee tortfeasors under the workers' compensation statutes. Ordinarily, nonemployee tortfeasors are subject to common law liability. But, plaintiffs point out, ICSOP as a nonemployee tortfeasor receives absolute immunity under Iowa Code section 517.5. Further, plaintiffs assert the distinction between nonemployee tortfeasor insurance companies and other nonemployee tortfeasors impacts a fundamental interest in access to the courts, and as a result, the classification is subject to strict scrutiny.

         In support of their equal protection claim, plaintiffs cite Suckow v. NEOWA FS, Inc., 445 N.W.2d 776 (Iowa 1989). In Suckow, the plaintiff challenged a classification scheme arising out of the workers' compensation statute. Id. at 777. He asserted that because a coemployee could be liable for workplace injuries based on gross negligence under Iowa Code section 85.20 (1985), the employer should also be subject to liability under a gross negligence theory. Id. The plaintiff attacked the distinction between employers and coemployees both under a strict scrutiny and a rational basis analysis. Id. at 778-79. The Suckow court determined that a fundamental right was not involved and that the statute had a rational basis. As a result, the Suckow court affirmed the district court's dismissal of the claim. Id. at 778-80.

         Plaintiffs in this case recognize that the Suckow court concluded that the classification did not involve a fundamental right of access to the courts. Plaintiffs argue, however, that the Suckow court emphasized that the statutory immunity granted to employers did not eliminate an employee's ability to recover against the employer, but only required that any recovery be channeled through the workers' compensation process. Id. at 778-79. Plaintiffs thus emphasize that the immunity statute at issue in Suckow did not eliminate all potential claims ...


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