DiNicola v. George Hyman Const. Co.

• Decision Date: 19 October 1979
• Docket Number: No. 12560.,12560.
• Citation: 407 A.2d 670
• Parties: Russell DiNICOLA et al., Appellants, v. GEORGE HYMAN CONSTRUCTION CO. et al., Appellees.
• Court: D.C. Court of Appeals

407 A.2d 670

Russell DiNICOLA et al., Appellants, v. GEORGE HYMAN CONSTRUCTION CO. et al., Appellees.

No. 12560.

District of Columbia Court of Appeals.

Argued October 17, 1978.

Decided October 19, 1979.

James A. Mannino, Washington, D. C., and Joseph H. Koonz, Jr., Washington, D. C., with whom Carolyn McKenney Endress,

Washington, D. C., was on the brief, for appellants.

Alan R. Siciliano, Arlington, Va., for appellee George Hyman Construction Co. Thomas A. Farrington, Upper Marlboro, Md., was on the brief, for appellee.

William J. Donnelly, Jr., Washington, D. C., with whom Richard W. Galiher, William H. Clarke and Frank J. Martell, Washington, D. C., were on the brief, for appellee Boatman & Magnani, Inc.

Before KELLY, GALLAGHER and HARRIS, Associate Judges.

GALLAGHER, Associate Judge:

This appeal from summary judgment entered in favor of appellees George Hyman Construction Co. (Hyman) and Boatman & Magnani, Inc. (Boatman) raises an important current question locally in workmen's compensation law: whether an injured employee of a subcontractor may sue the general contractor in negligence where the employee has received compensation benefits from the subcontractor. Hyman (general contractor) was under contract to do construction for an underpass tunnel at L'Enfant Plaza in Washington, D.C. It subcontracted the tile work for this project to Boatman (subcontractor), which in turn employed appellant Russell DiNicola as a tile setter. On August 2, 1972, employees of Hyman partially dismantled the scaffold which Boatman's employees had been using for setting tiles.¹ An open space was left in the scaffold where Hyman's employees had removed a plywood sheet, and appellant fell through this open space and was injured. Boatman carried workmen's compensation insurance, and appellant collected benefits from Boatman. His wife joining him in the action, appellant then sued Hyman, the general contractor, for the alleged negligence of its employees in causing the injuries. Hyman in turn filed a third party action against Boatman for indemnity based on the indemnity clause of their subcontract agreement.² Both companies moved for summary judgment, and the trial court ruled that under the Longshoremen's and Harbor Workers' Compensation Act³ (Longshoremen's Act) a general contractor is immune from tort suit brought by an employee of one of its subcontractors where the injured employee has received compensation benefits from the subcontractor. It granted summary judgment in favor of Hyman, and ruled that this rendered the motions for summary judgment on the indemnity clause moot. Appellant contends the trial court's interpretation of the Longshoremen's Act was in error. We agree and reverse.

The federal Longshoremen's Act, including its amendments by Congress, is the workmen's compensation statute for the District of Columbia. D.C.Code 1973, §§ 36-501, -502. Under the Act, compensation is payable to employees for "accidental injury or death arising out of and in the course of employment," 33 U.S.C. §§ 902(2), 903(a), "irrespective of fault as a cause for the injury." Id., § 904(b). The duty to secure compensation insurance is imposed on "every employer." Id., § 904(a). In return for this no-fault remedy, the workman gives up traditional tort remedies against his employer. Section 905(a) provides that "[t]he liability of an employer [under the Act] shall be exclusive and in place of all other liability of such employer . . . on account of such injury." If the employer fails to secure compensation insurance as required by the Act, the injured employee has the election of either claiming compensation under the Act or maintaining a damage suit at law against the employer. If he elects to sue at law, the employer may not plead as a defense the fellow servant doctrine, assumption of risk, or contributory negligence. Id., § 905(a). Section 933 provides that although compensation is the exclusive remedy for the injured employee, "this provision shall not affect the liability of a person other than an officer or employee of the employer." Id., § 933(i) (emphasis supplied). Furthermore, an injured employee may recover both compensation from his employer and "damages against such third person." Id., § 933(a).⁴ Finally, Section 904(a) provides that where the employer is a subcontractor, "the contractor shall be liable for and shall secure the payment of such compensation to employees of the subcontractor unless the subcontractor has secured such payment" (emphasis supplied).

The question here is whether a general contractor is the "employer" of the subcontractor's injured employee and thus immune from tort liability under § 905(a), or a "third person" subject to damage suit under § 933, where the subcontractor has secured insurance and paid compensation to the employee, thus relieving the general contractor from his compensation obligation under § 904(a). The trial court reasoned that regardless of who has the duty under the Act to secure compensation insurance for the subcontractor's employees, the general contractor ultimately bears the cost of it since the subcontractor adds such cost into his bid, and the general contractor should consequently be accorded tort immunity; that since general contractors and subcontractors ordinarily perform construction work in close cooperation, they should bear the same risk of tort liability with respect to injured employees; that imposing tort liability on the general contractor defeats the liability limiting purpose of the Act, since as a result of his duty to indemnify the general contractor under the indemnity clause for damages recovered from the general contractor by the subcontractor's employees, the subcontractor ultimately ends up paying both tort damages and compensation;⁵ and finally, that providing immunity for the general contractor will bring the District of Columbia in line with the neighboring jurisdictions of Maryland and Virginia.

Appellees urge us to adopt the trial court's reasoning. Hyman also contends that since the Act places upon the general contractor the burden of obtaining compensation for the employee or seeing to it that the subcontractor does, it must have been contemplated by Congress that the general contractor has the benefit of tort immunity. Hyman further argues that imposition of tort liability on the general contractor when the subcontractor is insured, but not when the subcontractor is uninsured, will frustrate the Act's purpose of encouraging the general contractor to hire insured, reputable subcontractors. We disagree with the trial court's reasoning and with appellees' contentions.

Cases interpreting the Act prior to the 1972 amendments include Thomas v. George Hyman Construction Co., 173 F.Supp. 381, 383 (D.D.C.1959), in which both the general contractor and the subcontractor carried compensation insurance for the subcontractor's employees. The court stated:

The law does not accord to the general contractor the choice of either carrying workmen's compensation insurance, or subjecting himself to liability for negligence. The law requires him to carry insurance only if the subcontractor fails to do so. In such a contingency, the general contractor may well be free of all other liability if he in fact carried such insurance. He may not, however, voluntarily take out insurance that the law does not require and thereby secure freedom from liability for negligence. In this instance the subcontractor carried compensation insurance and hence the defendant was not obligated to do so. Release from common law liability is a benefit accruing from carrying compensation insurance only in case the law imposes a duty to do so. One may not escape from such liability by taking out insurance that the law does not require. [Emphasis supplied.]

Similarly, in Probst v. Southern Stevedoring Co., 379 F.2d 763, 766-67 (5th Cir. 1967), the court reasoned:

[T]he provision imposing on the general contractor compensation liability to an employee of a subcontractor is a secondary, protective one. The subcontractor not only is compelled, as we have just shown, to qualify under the Act, but his failure to do so does not reduce his liability to his injured employee. To the contrary, the employee under § 905 has a fielder's choice. He has the right to a . . . suit for damages [against the subcontractor] with no risk from defenses of fellow servant, assumed risk or contributory negligence. Or, if he wishes to eliminate all risks, he can demand payment of compensation under the terms of the Act. About the only time then that the injured worker has to pursue the general contractor under § 904 is when the subcontractor has failed to secure payment of compensation with an approved insurance carrier, § 932, and the subcontractor is financially unable to respond for compensation benefits. The purpose of § 904 is to effectually assure payment of benefits. The general contractor has a secondary, guaranty-like liability. The Act does not make the general contractor the "employer." It is only the "employer" who can get under the immunity umbrella of § 905.

See Liberty Mutual Insurance Co. v. Goode Construction Co., 97 F.Supp. 316, 317 (E.D. Va.1951).

In 1972 Congress amended § 905 as it applied to maritime injuries. Prior to these amendments, under the doctrine of seaworthiness, a vessel was held liable to the employees of stevedoring companies for injuries regardless of the vessel's fault. The 1972 amendments abolished this strict liability doctrine but left the vessel liable as a third party for its negligence with respect to stevedoring companies' employees.⁶ As stated in the House Report for these amendments, the intent was

to place an employee injured aboard a vessel in the same position he would be if he were injured in non-maritime employment ashore, insofar as bringing a third party damage action is concerned, and not to endow him with any special maritime theory of...