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IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE Submitted on Briefs, June 19, 2007 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, v. UNITRAC RAILROAD MATERIALS, INC.
Direct Appeal from the Circuit Court for Knox County No. 2-50-04 Hon. Harold Wimberly, Circuit Judge

No. E2006-02679-COA-R3-CV - FILED AUGUST 29, 2007

Plaintiff sought to recover payment of workers compensation benefits via subrogation against the defendant. The Trial Court entered Judgment for defendant. We affirm.

Tenn. R. App. P.3 Appeal as of Right; Judgment of the Circuit Court Affirmed.

HERSCHEL PICKENS FRANKS, P.J., delivered the opinion of the court, in which CHARLES D. SUSANO , JR., J., and D. MICHAEL SWINEY , J., joined. Joseph L. Broy, Germantown, Tennessee, for appellants. Malcolm L. McCune, Nashville, Tennessee, for appellee.

OPINION

Plaintiff, Travelers Property Casualty Company of America ("Travelers"), brought this action against Unitrac Railroad Materials, Inc. ("Unitrac"), asserting that it was entitled to maintain a claim against Unitrac, since it had a contract of workers' compensation insurance with Labor Headquarters/Staffing Headquarters ("Labor"), and was thereby subrogated. Travelers asserted that on August 27, 2002, Calvin Jones, an employee of Labor, was loading a railroad track on a flat bed rail car, when a track hoe being operated by defendant Unitrac malfunctioned, causing the railroad track to fall on Jones, resulting in severe injuries. Travelers asserted that Unitrac was negligent in the operation of the track hoe and use of the support chains,

and that such negligence was the proximate cause of Jones' injuries. Further, that it had paid over $199,255.90 in benefits to Jones on behalf of Labor, and had a continuing obligation. Travelers asserted that Labor and Unitrac had a Service Agreement, whereby Unitrac agreed to use all due care in protecting Labor's employees from exposure to hazardous conditions/materials, and that under the terms of this agreement, Unitrac agreed to indemnify and hold Labor harmless from any claims for bodily injuries arising out of the use of Unitrac machinery or equipment by Labor's employees. Further, that Unitrac had breached the agreement, that Travelers had paid and continued to pay Jones' medical expenses, and was subrogated to the rights of Labor for full recovery of the payments. Unitrac moved to dismiss under Tenn. R. Civ. P. 12.06, asserting that the Complaint failed to state a claim upon which relief could be granted. Unitrac conceded that it had a service agreement with Labor, whereby Labor was to provide temporary employees to Unitrac, and Unitrac agreed to supervise and control the conduct of the employees, and that Labor agreed to maintain workers' compensation on all of such employees. Unitrac argued that it owed no duty of reasonable care to Travelers, and that Travelers was not a party to the service agreement, and was not a third-party beneficiary. Also it was a coemployer of Jones, such that he (and Travelers, derivatively) was barred from filing suit against Unitrac under the exclusivity provision contained in Tenn. Code Ann.

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