Disability Law

WC Release Bars Claimant's Pending Tort Claim Against Employer's Sister Corporation

By David A. McCranie, Esq.

Is a workers' compensation settlement agreement which purports to release the employer along with "its subsidiaries, affiliates, [and] parent companies" broad enough to release not only the employer from further liability under the Florida Workers' Compensation Law, but also the employer's sister corporation from the claimant's tort claim against the sister corporation?  Yes,said the First District Court of Appeal in Churchville, et ux v. GACS, Inc., a 2-1 decision issued on 1/23/2008.

Both judges in the majority agree that the term "affiliate" was unambiguous and that therefore the Churchvilles' tort claim against GACS, his employer's sister corporation, was barred by the release which he had executed in favor of his employer, Allied Systems, Ltd.  The two judges in the majority don't agree on the precise reasoning in that regard, however.  Judge Wolf uses a rule of statutory construction known as noscitur a sociis - meaning that "a word is known by the company it keeps."  Judge Wolf reasons that because the word "affiliate" appears in the release along with the terms "subsidiaries" and "parent companies," an "affiliate" is an entity which is neither a "subsidiary" nor a "parent company."  Judge Wolf also concludes that "[w]hile the Release does not specifically the pending tort claim, the language of the Release belies the assertion that the tort claim was not to be covered by the Release."

Judge Van Nortwick, on the other hand, concludes that because the term "affiliate" is unambiguous it is therefore unneccessary to resort to rules of statutory construction like noscitur a sociis.

Dissenting, Judge Browning reasons that the term "affiliate" was ambiguous and that it was therefore improper to grant summary judgment on the Churvilles' tort claim against GACS. 

Full post as published by Florida Workers’ Compensation Law Blog on January 28, 2008 (boomark / email).