Bliss v. Ernst Home Center, Inc.

• Decision Date: 07 November 1994
• Docket Number: Civ. No. 93-NC-138W.
• Citation: 866 F. Supp. 1362
• Parties: Darren BLISS, Plaintiff, v. ERNST HOME CENTER, INC., a Washington Corporation, dba ERNST HOME CENTER, Defendant.
• Court: U.S. District Court — District of Utah

866 F. Supp. 1362

Darren BLISS, Plaintiff, v. ERNST HOME CENTER, INC., a Washington Corporation, dba ERNST HOME CENTER, Defendant.

Civ. No. 93-NC-138W.

United States District Court, D. Utah, Northern Division.

November 7, 1994.

Edward T. Wells, Robert J. DeBry & Associates, Salt Lake City, UT, for plaintiff.

Anne Swenson, Snow, Christensen & Martineau, Salt Lake City, UT, for defendant.

ORDER DENYING AND GRANTING MOTIONS FOR SUMMARY JUDGMENT

WINDER, Chief Judge.

This matter is before the court on plaintiff's and defendant's cross-motions for summary judgment on the issue of whether plaintiff's complaint is precluded by Utah's workers' compensation statute. A hearing on both motions was held on September 9, 1994. Plaintiff Darren Bliss¹ ("Bliss") was represented by Edward T. Wells. Defendant Ernst Home Center ("Ernst"), was represented by Anne Swenson. Before the hearing, the court considered carefully the memoranda and other materials submitted by the parties. Since taking the matter under advisement, the court has further considered the law and facts relating to the various motions. Now being fully advised, the court enters the following memorandum decision and order.

I. BACKGROUND

This action arises from an injury suffered by Bliss while he was working on Ernst's premises. On November 30, 1990, Ernst requested a temporary employee. Earlier that same year, Bliss had applied to and was hired by Kelly Temporary Services ("Kelly"). Although Bliss now claims that he never considered himself to be an employee of Ernst, he had the option to refuse any assignment offered to him by Kelly. In response to Ernst's request, Kelly sent Bliss to the Ernst store located at 451 West 1500 North in Layton, Utah. Ernst directed Bliss to perform work on a rooftop. While attempting to descend from the roof after completing the assigned task, Bliss fell to the ground and was injured.

The essential facts relating to the relationship of Bliss, Kelly, and Ernst are undisputed. Ernst is responsible for supervising Kelly's temporary workers while they are on assignment at Ernst. Thus, at the time of his accident, Bliss was acting under the sole direction and control of Ernst. The financial arrangement between Kelly and Ernst dictates that Ernst pay a fee for each hour that a temporary employee works. Wages earned by Kelly's employees vary depending on where they work. Kelly deposits these payments in a general account. The workers' salary, workers' compensation insurance, and other employee benefits or overhead expenses are then paid from that fund leaving the surplus as Kelly's profit. Bliss has received workers' compensation benefits which have been paid solely by Kelly's workers' compensation carrier. Bliss now brings tort and contract claims against Ernst.²

II. STANDARD OF REVIEW

In reviewing a motion for summary judgment a court must determine whether, in the absence of a genuine issue of material fact, the moving party is entitled to judgment as a matter of law. Thompson v. Dulaney, 838 F.Supp. 1535 (D.Utah 1993). "Whether a worker is an employee within the meaning of the workers' compensation laws requires the application of a statutory standard to the facts." Bennett v. Industrial Comm'n, 726 P.2d 427, 429 (Utah 1986). Where the essential facts are undisputed, a court may determine as a matter of law the plaintiff's employment status in the context of the workers' compensation statute's exclusive remedy provision. Ghersi v. Salazar, 883 P.2d 1352, ___, No. 930243, 1994 WL 593196, at *1 (Utah 1994).

III. ANALYSIS

Bliss' ability to proceed with his civil claims is governed generally by Utah's Workers' Compensation Act, and more specifically by the exclusive remedy provision of that statute.³ Utah Code Ann. § 35-1-60 (Cum.Supp.1994). The statute does not expressly address the situation where an employer obtains an employee from a temporary service. The Utah Supreme Court, however, has recently treated this issue in Ghersi v. Salazar, 883 P.2d 1352 (Utah 1994).⁴

A. The Statute

The exclusive remedy provision, in pertinent part, reads:

The right to recover compensation pursuant to provisions of this title for injuries sustained by an employee ... shall be the exclusive remedy against the employer ... and the liabilities of the employer imposed by this act shall be in place of any and all other civil liability whatsoever ... on account of any accident or injury or death, in any way contracted, sustained, aggravated, or incurred by the employee in the course of ... his employment....

Utah Code Ann. § 35-1-60 (Cum.Supp.1994) (emphasis added).

This standard is, at least on its face, relatively straightforward. If Bliss was an "employee" and Ernst was his "employer,"⁵ his claims are barred and he is limited to the compensation provided by the statute itself. The term "employer" is defined as "each person ... who regularly employs one or more workers or operatives in the same business, or in or about the same establishment, under any contract of hire, express or implied, oral or written." Id. § 35-1-42(2). An "employee" is "each person in the service of any employer, as defined in Section 35-1-42 ... under any contract of hire, express or implied, oral or written ... but not including any person whose employment is casual and not in the usual course of the trade, business, or occupation of the employer." Id. § 35-1-43(1)(b). There is no question (and Bliss does not argue otherwise) that Ernst qualifies as an employer in the general sense, or that Bliss performed work in the usual course of Ernst's business. For the purposes of the parties' motions for summary judgment, then, the essential question is whether Bliss was "in the service of" Ernst "under any contract of hire."

B. Case Law

That question invokes three issues in reference to this case: (1) whether, under the exclusive remedy provision of the workers' compensation statute, an employee may have more than one employer; (2) whether such an employer-employee relationship existed between Bliss and Ernst; and (3) whether an employer-employee relationship necessarily precludes Bliss' negligence action in light of recent amendments to the workers' compensation statute permitting suits against statutory employers.

1. More than One Employer

With respect to the first question, the Utah Supreme Court has explicitly acknowledged that "an employee, for the purpose of workers' compensation, may have two employers." Kinne v. Industrial Comm'n, 609 P.2d 926, 928 (Utah 1980). Either employer may invoke the exclusive remedy provision if an employer-employee relationship (as that relationship is understood by the statute) existed at the time of the injury to the employee. Ghersi, at 1355; Bambrough v. Bethers, 552 P.2d 1286, 1289 (Utah 1976).

2. Employer-Employee Relationship

As for the second question, there are a number of factors which courts may examine to determine whether an employer-employee relationship exists. Bliss identifies certain indicia of an employment relationship and claims they are determinative. Most notably, he asserts that because Ernst did not directly issue his wages or arrange for workers' compensation, Ernst is not his employer. These elements of the employment relationship, however, are of little relevance to the fundamental issues surrounding workers' compensation. The route of payment is inconsequential in comparison to the question of who originally paid the wages. Deseret Architects & Eng'rs v. Industrial Comm'n, 21 Utah 2d 163, 442 P.2d 925, 926 (1968). Kelly and Ernst agreed that Kelly would issue Bliss' wages. This responsibility included workers' compensation insurance. Ernst could easily arrange for another business to handle its regular payroll and the various accompanying mandatory deductions and payments for tax withholding and insurance in a similar manner. Simply because another entity takes on the administrative responsibilities associated with a statutory duty does not significantly alter or impact the fundamental employment relationship.⁶

Bliss argues, however, that the contractual shift in responsibility is itself a reason for refusing to grant Ernst the protection of the exclusive remedy provision.⁷ The attempt to avoid the burden, in other words, should invoke an equitable principle denying the benefits associated with the burden. Otherwise, asserts Bliss, Ernst receives the best of both worlds, avoiding insurance payments yet claiming the benefit of the exclusive remedy provision. This argument has a visceral appeal, but is nonetheless misplaced. Bliss did not need double insurance coverage for his time at Ernst's store. So long as Ernst and Kelly made a legitimate arrangement to insure Bliss, the purposes of the statute were fulfilled.⁸ Ernst ultimately paid for the workers' compensation coverage even though Kelly processed those payments through its own carrier.

Bliss also observes that he was not hired through a formal interview process. The "hiring" of an employee, however, need not be formal to establish an employment relationship. Although Bliss was not "hired" in the sense that he was personally interviewed and selected by Ernst, the relationship between Bliss and Ernst was essentially voluntary, with both parties agreeing that Bliss would perform a particular service under Ernst's supervision.

Rather than focus on these tangential elements of employment status, the Utah Supreme Court in Ghersi adopted the analysis proffered by Arthur Larson, Larson's Workmen's Compensation § 48 (Desk ed. 1994). See Ghersi, at 1356-57. Professor Larson addresses the issue of temporary employees under the rubric of "lent employees and dual employment." In a lent employee situation, there are two employers. A "general" employer initially hires the employee and then directs the employee to temporarily perform work for a "special" employer.

Larson offers the following test for determining special employer status:

When a general

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