Anthony Equipment v. Irwin Steel Erectors

• Decision Date: 20 August 2003
• Docket Number: No. 05-02-00676-CV.,05-02-00676-CV.
• Citation: 115 S.W.3d 191
• Parties: ANTHONY EQUIPMENT CORP. d/b/a Anthony Crane Rental, L.P., Appellant, v. IRWIN STEEL ERECTORS, INC., Appellee.
• Court: Texas Court of Appeals

115 S.W.3d 191

ANTHONY EQUIPMENT CORP. d/b/a Anthony Crane Rental, L.P., Appellant, v. IRWIN STEEL ERECTORS, INC., Appellee.

No. 05-02-00676-CV.

Court of Appeals of Texas, Dallas.

August 20, 2003.

Rehearing Overruled September 29, 2003.

D. Patrick Long, Jennifer L. Keefe and Nishita S. Shah, Patton & Boggs, L.L.P., Dallas, for Appellant.

Daniel D. Davis, Davis Law Firm, Dallas, for Appellee.

John D. Ovard, pro se.

Before Justices WRIGHT, FARRIS,¹ and ROSENBERG.²

OPINION

Opinion by Justice BARBARA ROSENBERG, (Assigned).

Irwin Steel Erectors, Inc. (Irwin) sued Anthony Equipment Corp. d/b/a Anthony Crane Rental (Anthony) for damages arising from a construction incident.³ In three issues, Anthony argues (1) the trial court erred in rendering judgment against Anthony on the negligence issue because Anthony conclusively established its borrowed servant defense; (2) the trial court erred in admitting any evidence concerning Irwin's lost profits; and (3) the evidence is insufficient to support the award of lost profits to Irwin. In four issues on cross-appeal, Irwin claims that the trial court erred in granting Anthony's motion for judgment notwithstanding the verdict on the issues of (1) cost of repairs; (2) reasonable trial and appellate attorney's fees; and (3) Anthony's failure to perform in a good and workmanlike manner. Resolving Anthony's and Irwin's issues against them, we affirm the trial court's judgment.

FACTUAL AND PROCEDURAL BACKGROUND

In October 1996, Irwin was hired as a subcontractor to erect the steel structure for an arena on the Texas A & M University campus. Irwin rented a crane and an operator from Anthony. James Irwin, Irwin's owner, planned to raise a T-3 steel truss by "tandem lift," in which Irwin's crane, operated by Irwin's operator, in tandem and with the help of Anthony's crane, operated by Ed Cotton, would lift the trusses.

Anthony delivered the crane and operator on October 28. James directed Cotton where to set up the crane and described how the lift was to be conducted. The truss lift occurred on October 29. By using hand signals, James signaled the crane operators to lift the truss, slow down, or stop. When the truss reached the eighty-foot mark, Cotton intentionally released his end of the truss, without any direction from James to release. The truss fell to the ground causing property damage to the arena and Irwin's crane.

Irwin sued Anthony for negligence, breach of contract, breach of the implied warranty to perform in a good and workmanlike manner, and a knowing violation of the Texas Deceptive Trade Practices Act (DTPA). Irwin sought lost profits, cost of repairs, and attorney's fees. Anthony filed a general denial and asserted affirmative defenses, including the borrowed servant defense. A pretrial hearing was held pursuant to Anthony's objections to James Irwin's expert testimony on cost of repairs and lost profits. The trial court orally ruled that James could testify to lost profits, but the court reserved ruling on James's competence as a witness on cost of repairs until after trial.

Anthony moved for directed verdict on grounds that its borrowed servant defense was conclusively established and Irwin could not recover lost profits as a matter of law. The court denied the motion. The jury returned a verdict in favor of Irwin on the issues of negligence, breach of the implied warranty of good and workmanlike manner, and a knowing violation of the DTPA. The jury returned a verdict in favor of Anthony on the issue of breach of contract. After the jury returned its verdict, Anthony moved for judgment notwithstanding the verdict on all issues returned in Irwin's favor. The trial court denied Anthony's motion on the borrowed servant doctrine and the lost profits issue and granted its motion on the issues of implied warranty for good and workmanlike manner and cost of repairs. Irwin moved for entry of judgment and judgment notwithstanding the verdict on the contract and attorney's fees issues. The trial court denied Irwin's motion. The trial court awarded Irwin $351,461 in actual damages, pre- and postjudgment interest, and costs of court. This appeal followed.

BORROWED SERVANT DEFENSE

In its first issue, Anthony contends that the trial court erred in rendering judgment against Anthony on the negligence issue because it established its borrowed servant defense as a matter of law. Specifically, Anthony contends that the evidence conclusively established that Irwin had the right to control Cotton's actions because: (1) James was in control of the tandem lift pursuant to Occupational Health and Safety Act (OSHA) regulations; (2) Irwin entered into a contractual agreement that designated Cotton as a borrowed servant; and (3) James directed and supervised the project and Cotton was under his exclusive control.

Standard of Review

After the trial court denied Anthony's motion for directed verdict on the borrowed servant defense, the jury was asked whether Cotton was acting as Irwin's borrowed servant.⁴ The jury answered in the negative. Because Anthony is attacking the adverse finding to an issue upon which it had the burden of proof, we treat Anthony's challenge as if it were asserting that it had established its borrowed servant defense as a matter of law. See Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989). A party attempting to overcome an adverse fact finding as a matter of law must surmount two hurdles. First, we examine the record for evidence that supports the jury's finding, while ignoring all evidence to the contrary. Second, if there is no evidence to support the fact finder's answer, then the entire record must be examined to see if the contrary proposition is established as a matter of law. Id. Thus, if there is any evidence of probative force that supports the adverse finding, Anthony's challenge must fail. Holley v. Watts, 629 S.W.2d 694, 697 (Tex.1982).

Applicable Law

A general employee of one employer may become the special employee or borrowed servant of another employer. St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 537 (Tex.2003); Sparger v. Worley Hosp., Inc., 547 S.W.2d 582, 583 (Tex.1977). Whether a general employee of one employer has, in a given situation, become the special or borrowed employee of another employer is often a difficult question, particularly when the employee is furnished with machinery by his general employer to accomplish part of a project or contract undertaken by another. Producers Chem. Co. v. McKay, 366 S.W.2d 220, 225 (Tex. 1963). Resolution of the question rests in the right of control of the manner in which an employee performs the services necessary to accomplish his ultimate obligation. Id. If a general employee of one employer is placed under control of another employer in the manner of performing his services, he becomes the other employer's special or borrowed employee. Id. If the employee remains under control of his general employer in the manner of performing his services, he remains the employee of the general employer, and the general employer is liable for the consequences of the employee's negligence. Id. (citing Restatement (Second) of Agency § 227 (1958)). "[W]e must carefully distinguish between authoritative direction and control, and mere suggestion as to details or the necessary cooperation, where the work furnished is part of a larger undertaking." Standard Oil Co. v. Anderson, 212 U.S. 215, 222, 29 S.Ct. 252, 53 L.Ed. 480 (1909).

OSHA Standard and "Right of Control"

First, Anthony contends that the individual with the "right of control" is established by regulations promulgated under OSHA. See 29 C.F.R. § 1910.6(a), (e)(20) (2002) (providing that American National Standards Institute "Safety Code for Crawler, Locomotive, and Truck Cranes" is OSHA standard). The truck crane standard provides, in part:

When two or more cranes are used to lift one load, one designated person shall be responsible for the operation. He shall be required to analyze the operation and instruct all personnel involved in the proper positioning, rigging of the load, and the movements to be made.

Id. § 1910.180(h)(3)(xii).

Irwin complied with the above OSHA regulation, making James the sole party responsible for the planning and operation of the lift. Anthony claims that the OSHA standard precludes a general employer from maintaining control over a loaned employee because there can only be "one designated person responsible for the operation." According to Anthony, compliance with this regulation would necessarily give Irwin "right of control."

The purpose of OSHA is "to assure so far as possible every working man and woman in the nation the safe and healthful working conditions and to preserve our human resources." 29 U.S.C.A. § 651(b) (West 1999). OSHA is a safety code that neither enlarges nor diminishes "common law or statutory rights, duties, or liabilities of employers or employees under any law with respect to injuries ... arising out of, or in the course of, employment." Id. § 653(b)(4); see Melerine v. Avondale Shipyards, Inc., 659 F.2d 706, 709 (5th Cir.1981); Barrera v. E.I. Du Pont De Nemours & Co., 653 F.2d 915, 920 (5th Cir.1981) (holding that OSHA only creates duty between employer and employee, not between employers and third parties). The OSHA standard quoted above relates to the operational safety of a dual crane lift on the job site, not the right of control necessary to establish the borrowed servant defense. We conclude that the OSHA standard does not establish as a matter of law that Irwin had the "right of control" over Cotton so as to make Cotton Irwin's borrowed servant.

Express Right of Control

Next, Anthony claims that the terms and conditions of the crane rental agreement between Irwin and Anthony expressly assigned the "right of control" to Irwin. Irwin responds that the parties' agreement was an oral request by James for a crane and operator, memorialized in a job work order that...