Lloyd v. American Motor Inns, Inc.

Supreme Court of Virginia · Evidence

EvidenceRes judicataWorkers' compensationSubject matter jurisdictionres judicatasubject matter jurisdictionIndustrial Commissionworkers' compensation

Facts

Lloyd alleged she was injured when she fell on a sidewalk on the Inn's premises because the Inn negligently failed to maintain the sidewalk in a safe condition. Earlier, she had filed a workers' compensation claim with the Industrial Commission for the same injuries. The Commission first found that her accident did not arise out of and in the course of her employment. Despite that finding, the Commission also found that the accident was not the proximate cause of her injuries.

Issue

Whether Lloyd's tort action was barred by res judicata because the Industrial Commission had previously found, in her workers' compensation proceeding, that the accident was not the proximate cause of her injuries. More specifically, the question was whether the Commission had jurisdiction to decide causation after it had already found the accident did not arise out of and in the course of employment.

Rule

Res judicata applies only when the prior judgment was rendered by a tribunal with jurisdiction over both the subject matter of the controversy and the precise issue decided. When the Industrial Commission determines that an accident did not arise out of and in the course of employment, that threshold finding ends its jurisdiction to adjudicate the merits of the compensation claim, and any additional finding on causation cannot bar a later common-law damages action.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Tara Benson worked for Lakeview Linen Services in Richmond. After she slipped in a parking area, the Workers' Compensation Commission found the incident did not arise out of and in the course of her employment, but it also added that her later back surgery was unrelated to the fall. Tara then filed a negligence action against Lakeview Linen Services in circuit court.

If Lakeview argues that the Commission's causation finding bars Tara's negligence suit, how should the court rule?

Explanation. Res judicata requires a prior decision by a tribunal with jurisdiction over both the subject matter and the precise issue decided. The Commission had authority to decide the threshold question whether the injury arose out of and in the course of employment. After deciding that issue against coverage, however, it had no jurisdiction to adjudicate merits issues such as causation, so that later finding cannot preclude a subsequent tort action. (Derived from Lloyd v. American Motor Inns, Inc. (n.d.).)