Cox v. Turner Const. Co.

• Decision Date: 13 April 1988
• Citation: 373 Pa.Super. 214,540 A.2d 944
• Parties: Robert COX and Gloria Cox, his wife v. TURNER CONSTRUCTION COMPANY, Appellant, v. OTIS ELEVATOR COMPANY.
• Court: Pennsylvania Superior Court

Page 944

540 A.2d 944

373 Pa.Super. 214

Robert COX and Gloria Cox, his wife v. TURNER CONSTRUCTION COMPANY, Appellant, v. OTIS ELEVATOR COMPANY.

Superior Court of Pennsylvania.

Argued Sept. 10, 1987.

Filed April 13, 1988.

Louis C. Long, Pittsburgh, for appellant.

Edward J. Balzarini, Jr., Pittsburgh, for Cox, appellees.

Before BECK, JOHNSON and HESTER, JJ.

HESTER, Judge:

Turner Construction Company ("Turner") appeals from the judgment entered following a jury verdict in favor of plaintiffs, Robert and Gloria Cox. Turner seeks reversal on the basis of alleged trial errors, chief among them the trial court's refusal to hold that Turner was plaintiff-Robert Cox's statutory employer under the Workmen's Compensation Act. Finding no merit to Turner's contentions, we affirm.

United States Steel Corporation planned to construct a skyscraper on a site which it owned on Grant Street in Pittsburgh. It designated USS Realty Development ("USR"), a division of United States Steel Corporation, as construction manager for the project. USR contracted with Turner to be the contractor, and negotiated a separate contract with Otis Elevator Company ("Otis") to install the elevators and escalators. Plaintiff, Robert Cox, whose injury led to this action, was an employee of Otis. Although it was Turner's responsibility to supervise the construction, it did not subcontract Otis; rather, USR itself subcontracted Otis. Turner's contract with USR provided:

Under no circumstances shall contractor without the express written consent of USR, enter into any contracts for the construction of the Dravo Tower, it being the intent of USR to enter into all such contracts directly and thereafter (except as to the obligations of USR to make payment for work satisfactorily completed by the subcontractor and accepted by USR, the Contractor, and Architect) USR shall assign all of its contracts to Contractor.

USR also reserved the right to receive payments from subcontractors in the event that it incurred special expenses or damages as a result of subcontractors' activities. The contract which USR entered into with Otis provided for the partial assignment of USR's rights and liabilities to Turner. ¹

During the course of construction, plaintiff, an elevator mechanic for Otis, was assigned to transport to the thirtieth floor a load of materials and a Johnson bar dolly. Contrary to standards set by the American National Standards Institute, the Associated General Contractors of America, and the National Safety Council, the hoist (elevator) in which plaintiff was riding was not completely enclosed, and the Johnson bar protruded out the unenclosed side. As the hoist passed the fifteenth floor, descending elevator counterweights struck the protruding Johnson bar, jolting the hoist and knocking the plaintiff down. His foot dangled off the side of the hoist and was crushed between the floor of the hoist and the door sills of two floors of the building. This action against Turner followed.

Following a jury trial, a verdict was entered in plaintiff's favor finding Turner sixty-five percent negligent in causing plaintiff's injuries and awarding damages in the sum of $119,619.50. The trial court rejected Turner's contention that it was plaintiff's statutory employer, finding it was not immune from common law liability. We agree. ²

In assessing Turner's contention that it was the injured employee's statutory employer, we are mindful of the following guidelines:

[V]ery great care ... must be exercised before allowing an employer to avoid his liability at common law by asserting that he is a statutory employer. Section 203 of the Workmen's Compensation Act, which was designed to extend benefits to workers, should not be casually converted into a shield behind which negligent employers may seek refuge....

Stipanovich v. Westinghouse Electric Corp., 210 Pa.Super. 98, 106, 231 A.2d 894, 898 (1967). See Grant v. Riverside Corp., 364 Pa.Super. 593, 528 A.2d 962 (1987).

In construing section 203 of the Workmen's Compensation Act, our courts have held that five elements must be present before a contractor may be considered the statutory employer of another contractor's employees.

To create the relation of statutory employer under section 203 of the act, all of the following elements essential to a statutory employer's liability must be present: (1) An employer who is under contract with an owner or one in the position of an owner. (2) Premises occupied by or under the control of the such employer. (3) A subcontract made by such employer. (4) Part of the employer's regular business entrusted to such subcontractor. (5) An employee of such subcontractor.

McDonald v. Levinson Steel Co., 302 Pa. 287, 294-95, 153 A. 424, 426 (1930). See Zizza v. Dresher Mechanical Contractors, 358 Pa.Super. 600, 518 A.2d 302 (1986) (en banc ); O'Boyle et ux. v. J.C.A. Corp., at al., --- Pa.Super. ----, 538 A.2d 915 (1988); Dume v. Elkcom Company, Inc., 368 Pa.Super. 280, 533 A.2d 1063 (1987); Grant v. Riverside Corp., supra. McDonald, supra, labeled these criteria as "essential." Stipanovich v. Westinghouse Electric Corp., supra, characterized them as "strict" requirements.

It is undisputed that Turner satisfied the first two and final two elements of the McDonald test. At issue is whether it satisfied the third element--"a subcontract made by such employer." Turner did not subcontract directly with Otis. Construing the third element of the McDonald test strictly, as Stipanovich, supra, stated we must, the absence of a "subcontract made by" Turner defeats its contention that it was plaintiff's statutory employer.

The viability of the requirement of a "subcontract made by" the contractor seeking statutory employer status was recently reaffirmed by this court in Grant v. Riverside Corp., supra. In Grant, the general contractor hired both Riverside Corporation and Reiling as subcontractors. Riverside agreed to install a hoist, and Reiling agreed to provide miscellaneous metal work and skilled ironworkers. Plaintiff's decedent, an employee of Reiling, fell to his death while working in the hoist. Plaintiff sued Riverside, and a jury verdict was entered in plaintiff's favor. On appeal, a panel of this court affirmed judgment, rejecting Riverside's contention that it should be afforded common law immunity as a statutory employer. We found that there was no "vertical relationship" between Riverside and Reiling as both were subcontractors hired by the general contractor. "Riverside," we wrote, "did not subcontract Reiling." Id. at 601, 528 A.2d at 966. Likewise in the instant case, Turner did not subcontract Otis; rather, Otis was subcontracted by USR. Therefore, Turner should not be afforded immunity from common law liability. ³

Turner argues that despite the absence of a subcontract made by Turner with Otis, Turner should not be denied statutory employer status since a subcontracting relationship existed between them.

The agreement gave Turner full control over the job site ... and directed Turner to coordinate the work of all subcontractors.... The contract between Otis Elevator and USR likewise recognized the centrality of Turner's role in the construction project by identifying Turner as the 'general contractor for the [p]roject' and instructing Otis, called the subcontractor, 'to deal with Turner in all matters relating to this [a]greement and [to] perform the [w]ork to the entire satisfaction of Turner.'

....

USR's own contract with Turner gave Turner full control.... USR's subcontract with Otis Elevator ratifies its laissez-faire attitude.... Moreover, Otis agreed to perform to the satisfaction of Turner, not USR....

Appellant's brief at 17 and 21. As these passages illustrate, Turner would have us hold that the control which it exercised over the construction project is evidence that the contractual arrangement was the "functional equivalent" of a subcontract. We disagree. Turner's control over the project is not an appropriate consideration in assessing whether the third prong of the McDonald test has been satisfied. Rather, a finding that Turner exercised control over the project would appear to support a holding that the second prong of the McDonald test--"premises occupied by or under the control of such employer"--has been satisfied. The second prong, however, is not at issue instantly; it is undisputed that it has been satisfied. Moreover, the second and third prongs of the McDonald test are distinct, and evidence which tends to prove the existence of one will not prove the existence of the other. We recently articulated this point in Grant v. Riverside, supra, where we denied Riverside statutory employer status since it did not enter into a subcontract with the injured worker's employer, Reiling. We noted, "Even were we to find that Riverside was in joint control of the work premises with [the general contractor], Riverside did not subcontract Reiling." Id. at 601, 528 A.2d at 966. Likewise instantly, Turner's control over the project lends no support to the argument that Turner subcontracted Otis.

In arguing that it should be considered plaintiff's statutory employer, Turner stresses the fact that USR assigned its contract with Otis to Turner and that the USR-Otis contract contemplated this assignment ab initio. We do not believe that the assignment of the USR-Otis contract to Turner, which was in reality a partial assignment, supports a holding that Turner subcontracted Otis.

It is well-settled that "[a]n assignment does not confer upon the assignee any greater right, power, or interest than that possessed by the assignor." Pennsylvania Higher Education Assistance Agency v. Devore, 267 Pa.Super. 74, 406 A.2d 343, 344 (1979). USR, standing in the owner's shoes, cannot be considered a statutory employer. McDonald v. Levinson Steel Co., supra; Zizza v. Dresher Mechanical Contractors, Inc., supra. Therefore, USR could not confer upon Turner, by means of...