United States District Court, D. South Carolina, Florence Division
Vinnia C. Brayboy, Plaintiff,
MST-Maschinenbau GmbH; MST-Dranbedarf GmbH; Defendants/Third Party Plaintiff,
East Coast Erosion Blankets, LLC, Third-Party Defendant.
R. BRYAN HARWELL, District Judge.
This matter is before the Court on Third-Party Defendant East Coast Erosion Blankets, LLC's [ECF #28] motion to dismiss for failure to state a claim. Also before the Court are motions to amend the third-party complaint by Defendants, MST-Maschinenbau GmbH and MST-Dranbedarf GmbH [ECF ## 31, 41]. For the reasons stated below, the Court grants East Coast's motion to dismiss and denies MST's motions to amend the third-party complaint.
Procedural and Factual Background
This case arises out of Plaintiff employee Vinnia C. Brayboy's on the job injury while employed by Third-Party Defendant East Coast Erosion Blankets, LLC (hereinafter "East Coast"). Plaintiff was allegedly injured in connection with the use of a machine manufactured by Defendants, MST-Maschinenbau GmbH and MST-Dranbedarf GmbH, to make erosion control blankets. As a result of the on the job injury, Brayboy sought and was provided workers' compensation benefits. Brayboy then brought the current products liability action against Defendants MST-Maschinenbau GmbH and MST-Dranbedarf GmbH (collectively referred to as "MST") alleging causes of action for negligence, strict liability, and breach of implied warranty. MST filed an answer [ECF #13] and a third-party complaint [ECF #16] against Brayboy's employer, East Coast, alleging a cause of action for equitable indemnity against East Coast. East Coast filed an answer to the third-party complaint along with a motion to dismiss. MST then filed a motion and amended motion seeking to amend the third-party complaint to add a cause of action for implied contractual indemnity. East Coast responded arguing the proposed amendment to the complaint would be futile.
I. Motion to Dismiss
East Coast has moved to dismiss the third-party complaint arguing that it is immune from equitable indemnity claims based on the exclusivity provisions of the South Carolina Workers' Compensation Act. East Coast also argues that MST cannot obtain indemnity because South Carolina does not permit a tortfeasor to obtain equitable indemnity from another alleged tortfeasor. Additionally, East Coast argues that MST cannot recover its fees and costs in a third-party complaint because fees and costs are not derivative of any liability or amounts potentially owed by MST to Brayboy.
When reviewing motions made under Federal Rule of Civil Procedure 12(b)(6) or 12(c), the court must accept all well-pled allegations in the plaintiff's complaint as true and draw all reasonable factual inferences from those facts in the plaintiff's favor. Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009); Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). The plaintiff's "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 127 S.Ct. at 1969. A complaint attacked by a motion to dismiss will survive if it contains "enough facts to state a claim to relief that is plausible on its face." Id. at 1974; see also, Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008); Self v. Norfolk Southern Corp., No. 07-1242, 2008 WL 410284, at *1 (4th Cir. February 13, 2008) (unpublished).
In this case, MST manufactured the erosion control blanket machine that ulimtately injured East Coast employee, Vinnia Brayboy. MST does not allege that the equipment contract between it and East Coast provided for any express right of indemnification, nor that East Coast ever agreed to do so. MST seeks equitable indemnification from East Coast alleging that East Coast purchased the blanket machine, made alterations without MST's knowledge, and refused to install a recommended safety measure on the blanket machine. It is undisputed that Brayboy sought and collected workers' compensation benefits from East Coast for his on-the-job injury.
East Coast argues that under S.C. Code Ann. § 42-1-580, which addresses contribution and indemnity from an employer, East Coast is immune from any indemnification claims unless there is an express contract providing for indemnification. See BET Plant Servs., Inc. v. W.D. Robinson Elec. Co., Inc., 941 F.Supp. 54, 56 (D.S.C. 1996) (stating that § 42-1-580 generally satisfies all claims that third parties might have against the employer arising out of the same accident unless there is an express indemnification agreement). MST, relying on cases construing the Federal Employees' Compensation Act ("FECA"), the Longshoremen's and Harbor Workers' Compensation Act ("LHWCA"), and the Tennessee Workers' Compensation Act, argues that federal authority permits third-party indemnity claims against employers regardless of the exclusivity provisions in workers' compensation cases. MST also argues that South Carolina does not bar third-party indemnity claims in the workers' compensation context and that the S.C. Workers' Compensation Act governs rights between employer and employee and was not intended to control rights and interests of third parties such as MST.
S.C Code Ann. § 42-1-580, entitled "Effect of rights of third party against employer on employee's recovery, " provides:
When the facts are such at the time of the injury that a third person would have the right, upon payment of any recovery against him, to enforce contribution or indemnity from the employer, any recovery by the employee against the third person shall be reduced by the amount of such contribution of indemnity and the third person's right to enforce such contribution against the employer shall thereupon be satisfied.
S.C. Code Ann. § 42-1-580.
In BET Plant Servs., Inc. v. W.D. Robinson Elec. Co., Inc ., Judge Norton explained that § 42-1-580 generally satisfies all claims that third parties might have against the employer arising out of the same accident except in the limited circumstance where there is an express indemnification agreement. 941 F.Supp. 54, 56 (D.S.C. 1996). Drawing on the reasoning from a published South Carolina Supreme Court case, Fuller v. Southern Elec. Serv. Co., 20 S.E.2d 707 (S.C. 1942), and an unpublished South Carolina Court of Appeals case, Daniels v. Conrad Constr. Co. v. Joe Harden Builder, Inc., No. 93-UP-119 (S.C. Ct. App. April 22, 1993) (unpublished), the court held that a third party could not maintain an action against an employer who was covered under the S.C. workers' compensation statute unless there was a pre-existing express contractual agreement for indemnification. BET Plant Servs., Inc., 941 F.Supp. at 56-57. The reasoning and result in BET Plant Services is persuasive, especially in light of the unpublished S.C. Court of Appeals case referenced in BET Plant Services. The cases relied on by MST, on the other hand, do not involve the S.C. Workers' Compensation Act or provisions similar to § 42-1-580.
In Freeman Mech., Inc. v. J.W. Bateson Co., Inc., 447 S.E.2d 197 (S.C. 1994), the South Carolina Supreme Court held that a general contractor could not be sued by a sub-contractor for common law indemnity since the general contractor was covered under the exclusivity provisions of the S.C. Workers' Compensation Act. In that case, the South Carolina Supreme Court found that "because [general contractor] was potentially liable under the Act for workers' compensation benefits paid..., ...