Fallone v. Misericordia Hospital

Decision Date18 May 1965
Citation23 A.D.2d 222,259 N.Y.S.2d 947
PartiesRalph FALLONE, Plaintiff-Respondent, v. MISERICORDIA HOSPITAL, Defendant, and Industrial Engineering Co., Defendant-Appellant.
CourtNew York Supreme Court — Appellate Division

Joseph M. Callahan, New York City, of counsel (Dale A. Welke, New York City, with him on the brief, George J. Conway, New York City, attorney), for appellant.

Benjamin H. Siff, New York City, of counsel (Saminsky, Olin & Stern, New York City, attorneys), for respondent.

Before BOTEIN, P. J., and VALENTE, McNALLY, STEVENS and STEUER, JJ.

VALENTE, Justice.

Defendant Industrial Engineering Co. (Industrial) appeals from a judgment in plaintiff's favor entered upon a verdict of a jury. The question presented on this appeal is whether workmen's compensation was plaintiff's exclusive remedy which precluded recovery in this action.

Plaintiff was injured on May 2, 1957 when in the course of the construction of certain hospital buildings in Bronx County, a scaffold, on which plaintiff was working, collapsed.

On May 22, 1956 Vermilya-Brown Construction Co. (Vermilya) entered into a contract with the owners to construct the hospital. On May 24, 1956, Vermilya and Industrial entered into a contract in which they agreed to perform the construction contract as joint venturers. That agreement was consented to by the owner of the property.

In summary, the testimony of plaintiff and his witnesses on the liability phase of his case was that plaintiff was a specialist in concrete work and was an employee of Vermilya; and that at the time of the accident, and for several days prior thereto, plaintiff was working under the direction of Industrial's foreman. This proof presented an issue of negligence as to the supplying of an inadequate scaffold.

Appellant offered no testimony as to the accident but called the cost accountant of Vermilya as a witness. That witness testified that Vermilya and Industrial were jointly engaged in the construction of the buildings, and that there was no segregation in payrolls of Vermilya and Industrial. Tax withholding and social security records showed that plaintiff was receiving his salary from the joint venture.

The crux of the defense, as pleaded in appellant's answer, was that Vermilya and appellant were both acting as general contractors on the construction job and that plaintiff was employed by the joint venture; that the joint venture had complied with the Workmen's Compensation Law by providing a policy of workmen's compensation insurance with an approved surety company; and that consequently workmen's compensation benefits under that policy provided plaintiff's sole remedy. (Sections 10, 11, 29 and 50, Workmen's Compensation Law.)

At the conclusion of the testimony, the Trial Judge dismissed the defense based on workmen's compensation, holding that defendant had not sustained the burden of proving that plaintiff was an employee either of Industrial or of the joint venture.

We have concluded that the Trial Judge erred in dismissing the defense and that the judgment in plaintiff's favor should be reversed and the complaint dismissed on the ground that workmen's compensation was plaintiff's exclusive remedy precluding recovery in this action.

Section 10 of the Workmen's Compensation Law requires that every employer secure compensation for his employees to cover benefits for the disability or death of employees from injuries arising out of and in the course of their employment without regard to fault. Where an employer has obtained compensation insurance, section 11 of the same Act provides that workmen's compensation shall be the exclusive remedy of injured employees.

An 'Employer' is defined in Section 2, subd. 3 of the Workmen's Compensation Law as follows:

"Employer,' except when otherwise expressly stated, means a person, partnership, association, corporation, * * *.'

This definition does not specifically refer to a 'joint venture'. Plaintiff argues that the omission of the category of 'joint venture' from the definition in Section 2, subd. 3, was deliberate since a joint venture is not an entity. There is no basis to support a claim of deliberate omission. The contention that only 'entities' are described in the definition is untenable. An association is not an entity. In Williams v. Hartshorn, 296 N.Y. 49, 51, 69 N.E.2d 557, 559, it was held in a workmen's compensation case that 'a partnership is not to be regarded as a separate entity distinct from the persons who compose it.'

A joint venture was defined in Forman v. Lumm, 214 App.Div. 579, 583, 212 N.Y.S. 487, 490, as 'an association of two or more persons to carry out a single business enterprise for profit, for which purpose they combine their property, money, effects, skill, and knowledge.' (For similar definitions and discussions of the nature of a joint venture, see 32 N.Y.Jur., Joint Adventures, §§ 1-5; Anno. 63 A.L.R. 909; 41 Cornell L. Q. 640; 18 Fordham L. Rev. 114.)

An examination of the agreement between Vermilya and Industrial discloses that the parties are referred to as 'Joint Venturers' and that the agreement is limited to the project for the construction of the hospital. The respective interests of the parties in the net proceeds and in their obligations and liabilities are fixed at 75% for Vermilya and 25% for Industrial. Provision is made for the selection of specific designees of the joint venturers to make decisions in connection with the performance of the construction work. Costs of insurance and taxes on labor, among other things, are made part of the cost of construction.

Defendant offered to show that workmen's compensation insurance was provided and procured by the joint venture pursuant to the agreement, but the Trial Court excluded such proof on the ground that the agreement spoke for itself. That was an erroneous ruling since the proffer was as to performance and not interpretation of the agreement. There is evidently no dispute that the parties to the agreement did procure workmen's compensation insurance. The appeal has been argued on that basis.

The conclusion that the agreement between Industrial and Vermilya is unquestionably one of a joint venture to construct the hospital buildings is irrefutable. It meets all the tests for such a relationship, i.e. an association of two or more persons to carry out a single enterprise for profit. (See Shove v. Siegbert, 239 App.Div. 334, 267 N.Y.S. 306.) Being parties to a joint venture, the liability as to the parties to the agreement for torts is governed by the law applicable to partnerships. (Prosser--Torts, 3rd Ed. § 71, p. 489.) In Haxton & Son v. Rich, 267 App.Div. 492, 495, 47 N.Y.S.2d 501, 503, the Court said:

'Rules of law governing partnerships, if relevant, apply to a 'joint adventure' which in this state has been termed a 'limited copartnership' (citing cases).'

(See also 2 Rowley on Partnership (2nd Ed.) § 52.55; 30 Am.Jur., Joint Adventures, § 58.)

There is no authoritative decision in this State dealing with the precise question posed in the instant case; but holdings in other jurisdictions point to the proper determination. Whether the joint venture herein be treated as a separate...

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27 cases
  • Claudio v. US
    • United States
    • U.S. District Court — Eastern District of New York
    • November 16, 1995
    ...in interpreting the Workers' Compensation Law have explicitly held that it applies to joint ventures. See Fallone v. Misericordia Hosp., 23 A.D.2d 222, 259 N.Y.S.2d 947, 952 (1965), aff'd, 17 N.Y.2d 648, 269 N.Y.S.2d 431, 216 N.E.2d 594 (1966). The reasoning used in these cases may be appli......
  • Fung v. Japan Airlines Co., Ltd.
    • United States
    • New York Court of Appeals Court of Appeals
    • December 13, 2007
    ...affd. 39 N.Y.2d 855, 386 N.Y.S.2d 214, 352 N.E.2d 131 [1976] [employer in joint venture context]; Fallone v. Misericordia Hosp., 23 A.D.2d 222; 259 N.Y.S.2d 947 [1st Dept. 1965], affd. 17 N.Y.2d 648, 269 N.Y.S.2d 431, 216 N.E.2d 594 [1966] [same]) or coemployee (see e.g. Hanford v. Plaza Pa......
  • Haas v. 653 Leasing Co.
    • United States
    • U.S. District Court — Eastern District of Pennsylvania
    • January 25, 1977
    ...over the enterprise.15 A joint venture, on the other hand, is, in a sense, a separate entity. See Fallone v. Misericordia Hospital, 23 A.D.2d 222, 259 N.Y.S.2d 947, 950 (1st Dep't 1965). The joint venture may employ its own workers, pay their social security taxes and withhold taxes from th......
  • INTERN. TEL. PROD. v. Twentieth Century-Fox Tel.
    • United States
    • U.S. District Court — Southern District of New York
    • December 5, 1985
    ...v. Cities Services Co., 374 F.2d 643, 647 (2d Cir.1967); 16 N.Y.Jur.2d § 1594 at 274 (1981). Fallone v. Misericordia Hospital, 23 A.D.2d 222, 226, 259 N.Y.S.2d 947 (1st Dep't 1965), aff'd, 17 N.Y.2d 648, 269 N.Y.S.2d 431, 216 N.E.2d 594 (1966). A partner who seeks to recover a debt due the ......
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