Demars v. Fincantieri Marine Grp.

• Docket Number: 2023AP826
• Decision Date: 27 August 2024
• Parties: Mark Demars, Plaintiff-Appellant,Accident Fund General Insurance Company of America and Accident Fund Holdings, Inc., Involuntary-Plaintiffs, v. Fincantieri Marine Group, LLC and Marinette Marine Corporation, Defendants-Respondents, Starr Insurance Holdings, Inc. d/b/a Starr Indemnity and Liability Company, Defendant-Third-Party Plaintiff-Respondent, v. Bosk Corporation and Auto-Owners Insurance Group d/b/a Home-Owners Insurance Company, Third-Party Defendants-Respondents.
• Court: Wisconsin Court of Appeals

1

Mark Demars, Plaintiff-Appellant,Accident Fund General Insurance Company of America and Accident Fund Holdings, Inc., Involuntary-Plaintiffs, v. Fincantieri Marine Group, LLC and Marinette Marine Corporation, Defendants-Respondents, Starr Insurance Holdings, Inc. d/b/a Starr Indemnity and Liability Company, Defendant-Third-Party Plaintiff-Respondent, v. Bosk Corporation and Auto-Owners Insurance Group d/b/a Home-Owners Insurance Company, Third-Party Defendants-Respondents.

No. 2023AP826

Court of Appeals of Wisconsin, District III

August 27, 2024

Not recommended for publication in the official reports.

APPEAL from an order of the circuit court for BrownCounty, Cir. Ct.No. 2020CV1014THOMAS J. WALSH, Judge.Affirmed.

Before Stark, P. J., Hruz and Gill, JJ.

STARK P.J.

¶1This case addresses the negligence claims of a "loaned employee" against his borrowing employer under WIS STAT. § 102.29(7)(2021-22)^[1] of Wisconsin's Worker's Compensation Act(the Act).Mark Demars appeals from the circuit court's grant of summary judgment to third-party defendantsBosk Corporation-which is Demars' employer-and Auto-Owners Insurance Group d/b/a Home-Owners Insurance Company(collectively, Bosk) and from the court's dismissal of Demars' claims against Fincantieri Marine Group, LLC-which is the borrowing employer-and Marinette Marine Corporation.^[2]Demars was injured while he was working at FMG's premises.Demars applied for and received worker's compensation benefits from Bosk, but he also filed this lawsuit solely against FMG.Pursuant to an indemnification agreement, FMG filed a third-party complaint against Bosk.

¶2 Bosk and FMG filed motions for summary judgment.The circuit court granted Bosk's motion for summary judgment based on its conclusion that Demars was a loaned employee under WIS STAT. § 102.29(7)-which we will refer to as "the loaned employee doctrine"-and therefore, his suit against FMG was barred under the Act.

¶3 On appeal, Demars asserts three reasons the circuit court erred by granting summary judgment to Bosk: (1) Bosk, not FMG, asserted the loaned employee doctrine as an affirmative defense, and, therefore, FMG is barred from asserting it; (2)the court's conclusion that Bosk was required to indemnify FMG was contrary to its conclusion that the loaned employee doctrine applied; and (3) Demars was not a loaned employee under WIS. STAT. § 102.29(7).For the reasons that follow, we reject all of Demars' arguments, and we affirm the court's decision.

BACKGROUND

¶4 In this case, neither the circumstances of Demars' injury nor the details of FMG's alleged errors or omissions are relevant to the issues on appeal.It is sufficient for us to note that Demars suffered an industrial workplace injury on the premises of FMG in Marinette, Wisconsin, on June 19, 2018.At the time, Demars was employed by Bosk^[3] as a painter, and Bosk had contracted with FMG to provide paint laborers to work on a littoral combat ship (hereinafter, LCS project) in furtherance of FMG's shipbuilding contract with the federal government.As a result of his injury, Demars filed a worker's compensation claim with Bosk, and "[i]ndemnity and medical payments were issued."

¶5 Demars also initiated this tort action against FMG, claiming FMG had violated Wisconsin's Safe Place statute under WIS. STAT. § 101.11, the "common law duty to provide a safe workplace and safe place of employment," and was otherwise variously negligent.^[4] Upon receipt of Demars' complaint, FMG attempted to tender a defense to Bosk based on the terms and conditions of a purchase order agreement (the agreement) between FMG and Bosk.Within the agreement, Bosk had "agreed to provide labor and services to FMG ... in connection with the painting of a certain vessel described as LCS-19."FMG alleged that Bosk had also agreed to defend and indemnify FMG against Demars' claims.Bosk failed to respond to FMG's tender of defense.

¶6 As a result, FMG filed a third-party complaint against Bosk, alleging contractual indemnity and breach of contract.Bosk, in its answer, denied all allegations regarding its duty to defend and indemnify FMG for Demars' injuries.

¶7 Bosk subsequently filed a motion for summary judgment, seeking dismissal of Demars' action on the basis of the loaned employee doctrine.On the same day, FMG also moved for summary judgment on two separate bases.FMG's first motion sought the dismissal of Demars' WIS. STAT. § 101.11 claim because Demars' "act of operation," rather than the acts of FMG, was "the efficient proximate cause of [his] injuries."In its second motion, FMG sought a declaration as to the validity of the indemnification agreement between it and Bosk, argued that Bosk had breached the terms of the indemnification agreement, and claimed that Bosk "must reimburse FMG ... for any defense costs incurred and to be incurred in defending FMG against [Demars'] claims."

¶8 By written decision, the circuit court first granted Bosk's motion for summary judgment.Relying on the test first established in Seaman Body Corp. v. Industrial Commission of Wisconsin,204 Wis. 157, 235 N.W. 433(1931), the court determined that Demars was a loaned employee because Demars consented to work for FMG; Demars was performing FMG's work; FMG had the right to, and did, control Demars' work; and FMG was the primary beneficiary of Demars' work.As a result, the court concluded that Demars' claims against FMG were barred under WIS. STAT. § 102.29(7).

¶9 Bosk then filed a proposed order in accordance with the circuit court's decision.The proposed order granted Bosk's motion for summary judgment; dismissed all of Demars' claims and causes of action "on the merits, with prejudice, and with statutory costs [and] attorneys fees"; and stated that "[b]ecause this [o]rder disposes of the entire matter in litigation as to ... Demars, it is a final [o]rder for purposes of appeal as it relates to" Demars.

¶10 Demars objected to the proposed order and moved for clarification and/or reconsideration.According to Demars, FMG could not "avail itself of the [circuit c]ourt's [o]rder granting summary judgment to Bosk ... because [FMG] never asserted the loaned employee doctrine as a defense to [Demars'] claims"; therefore, FMG had "waived" this defense and "any judgment granted to Bosk has no impact on [Demars'] claims against [FMG]."Demars also, for the first time, argued that the indemnification agreement between Bosk and FMG "waived [Bosk's] worker's compensation immunity" and that Demars' claims should survive, regardless of his status as a loaned employee.

¶11The circuit court later entered a written decision on FMG's motion for summary judgment seeking a declaration as to the validity of the indemnification agreement.The court granted the motion in part and denied it in part.^[5] As relevant here, the court determined that a valid indemnification agreement existed between Bosk and FMG and that "Bosk was in breach of the purchase order's binding indemnification provision when it failed to" accept FMG's tender of defense.However, the court denied FMG's motion for a judgment for attorney's fees "because there ha[d] been no apportionment of liability."^[6]

¶12 The same day the circuit court issued its decision on FMG's motion for summary judgment, it also held a status conference.At that hearing, the court informed the parties that it would issue a written decision clarifying its prior decision on the loaned employee doctrine.That written decision confirmed that "dismissal of Demars' claims is the correct result."Demars appeals.

DISCUSSION

¶13This case involves the operation of the loaned employee doctrine under Wis. STAT. § 102.29(7).Section 102.29(7) provides: "No employee who is loaned by his or her employer to another employer and who has the right to make a claim for compensation under this chapter may make a claim or maintain an action in tort against the employer who accepted the loaned employee's services.""The rationale of the loaned employee doctrine as it relates to worker's compensation is that an employee who is on loan to a borrowing employer becomes a loaned employee of the borrowing employer and should, for worker's compensation purposes, be treated as an employee of the borrowing employer."^[7]Borneman v. Corwyn Tramp., Ltd.,219 Wis.2d 346, 353, 580 N.W.2d 253(1998)."The loaned employee doctrine is one way of promoting the compromises and policies underlying the Worker's Compensation Act."Id.

¶14 As noted, the circuit court granted summary judgment to Bosk.We review a circuit court's grant of summary judgment de novo by applying the same methodology as the circuit court.1325 N. Van Bur en, LLC v. T-3 Grp., Ltd.,2006 WI 94, ¶22, 293 Wis.2d 410, 716 N.W.2d 822.Under that methodology, summary judgment is granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."WIS. STAT. § 802.08(2).

¶15We acknowledge that there are facts in dispute, but none of the facts are material to the legal issue in this case.Where the material facts are undisputed, we determine whether an employee is a loaned employee de novo but benefiting from the circuit court's analysis.SeeBauernfeind v. Zell,190 Wis.2d 702, 714, 528 N.W.2d 1(1995)(citingGansch v. Nekoosa Papers, Inc.,158 Wis.2d 743, 753, 463 N.W.2d 682(1990));Phelps v. Physicians Ins. Co. of Wis.,2009 WI 74, ¶35, 319 Wis.2d 1, 768 N.W.2d 615.

¶16 On appeal, Demars asserts three reasons the circuit court erred by granting summary judgment to Bosk.First, he claims that the court erred by expanding...