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C is corrent because Silk may recover damages from either Lake or Stone since it appears that Lake negligently struck Silk while s/he was acting within the scope of his/her employment. Consequently, both the principal and the agent would be liable for the agent’s negligence. However, in the event that Silk recovers damages from Lake or Stone, Silk must reimburse the workers’ compensation carrier to the extent the recovery duplicates benefits already received under workers’ compensation.
A is incorrect since Silk has the right to sue Lake regardless of whether both of them are covered under workers’ compensation laws.
B is incorrect because compliance with the state’s workers’ compensation laws will not protect an employer from suits brought against him/her for negligent acts of his/her employees.
D is incorrect because under agency laws a party who is injured by an employee’s negligent act, which occurs within the scope of his/her employment, may sue the employer, the employee, or both for recovery.