On August 10, 2022, the South Dakota Supreme Court issued its opinion in the matter of Althoff v. Pro-Tec Roofing, Inc., 2022 S.D. 49, affirming, in part, and reversing, in part, the Third Judicial Circuit Court of South Dakota’s decision to deny both parties’ motions for summary judgment related to the employer’s alleged intentional misconduct.
In 2016, Justin Althoff fell to his death while working on the roof of a community center project for Pro-Tec Roofing, Inc. (Pro-Tec). Pro-Tec paid Mr. Althoff’s estate (Estate) workers’ compensation benefits accordingly. The Estate then sued Pro-Tec in circuit court. The Estate alleged Pro-Tec intentionally violated several Occupational Safety and Health Administration (OSHA) guidelines related to fall prevention, despite having received citations for similar violations on three prior occasions. The Estate claimed Pro-Tec’s failure to provide adequate fall protection meant serious injury or death was “absolutely certain.”
Pro-Tec moved for summary judgment to dispose of the Estate’s claims by asserting workers’ compensation as the Estate’s only remedy under the “exclusivity provision” of SDCL 62-3-2 (providing workers’ compensation is the exclusive remedy for employee death or injury). In a cross-motion for summary judgment, the Estate argued Pro-Tec’s intentional misconduct fell under the “intentional tort exception” to the exclusivity provision of SDCL 62-3-2 (providing an exception for “rights and remedies arising from intentional tort”). The Third Circuit Court denied both motions, and the South Dakota Supreme Court permitted a discretionary appeal clarifying the standards for the intentional tort exception.
Importantly, the Court analyzed its prior precedent regarding the intentional tort exception under SDCL 62-3-2. The Court analyzed the following decisions in detai: McMillin v. Mueller, 2005 S.D. 41; Fyer v. Kranz, 2000 S.D. 125, Harn v. Continental Lumber Co, 506 N.W.2d 370 (S.D. 1993); and VerBouwens v. Hamm Wood Products, 334 N.W.2d 874 (S.D. 1983). The Court’s earliest decision, VerBouwens,defined intentional conduct as when “an ordinary, reasonable, prudent person would believe an injury was substantially certain to result from his conduct.” However, in subsequent cases Harn, and Fryer,the Court applied a “virtual certainty” standard. Later, in 2005, the Court reverted to the “substantial certainty” standard in the McMillin decision. As a result, there was a conflict among the Court’s prior rulings on whether a plaintiff needed to prove the employer was “substantially certain” or “virtually certain” about the occurrence of an injury.
To remedy this conflict, the Court clarified the intentional tort exception requires the employer to be “substantially certain” about the occurrence of serious injury or death. It explicitly stated “virtual certainty” is not a requirement to establish an intentional tort by an employer. Additionally, the Court also clarified the general negligence standard based on what an “ordinary, reasonable, prudent person would believe” is inadequate to establish an intentional tort committed by an employer.
Resultantly, the Court determined, despite Mr. Althoff’s tragic death, Pro-Tec’s conduct could only be described as reckless or negligent. The Court found, even if Pro-Tec knew failing to follow OSHA guidelines “could” have resulted in Mr. Althoff’s fall, Pro-Tec did not know the fall was “substantially certain” to occur, as required to meet the intentional tort exception. The Court unanimously reversed the Circuit Court’s decision to deny Pro-Tec’s motion for summary judgment.
The Court’s decision reaffirmed the criteria for meeting the intentional tort exception, eliminating the more stringent “virtual certainty” standard that favored the employer’s defense. However, the Court also confirmed that even when an employer acts recklessly or consciously ignores a known risk, “more than the knowledge and appreciation of that risk” is necessary. The employer must have had a “substantial certainty” of death or serious injury. If you have any questions about this clarified standard, please feel free to reach out to us.