Fund v. Tyson Farms, Inc.

• Decision Date: 22 November 2019
• Docket Number: No. 1057, Sept. Term, 2018,1057, Sept. Term, 2018
• Citation: Fund v. Tyson Farms, Inc., 243 Md.App. 406, 220 A.3d 429 (Md. App. 2019)
• Parties: UNINSURED EMPLOYERS' FUND v. TYSON FARMS, INC., et al.
• Court: Court of Special Appeals of Maryland

243 Md.App. 406

220 A.3d 429

UNINSURED EMPLOYERS' FUND

v.TYSON FARMS, INC., et al.

No. 1057, Sept. Term, 2018

Court of Special Appeals of Maryland.

November 22, 2019

Argued by: David K. Stesch (Brian E. Frosh, Atty. Gen. on the brief), Towson, MD, for Appellant.

Argued by: Joel E. Ogden (Semmes, Bowen, Semmes on the brief), Baltimore, MD, for Appellee.

Panel:^* Wright, Gould, Glenn T. Harrell, Jr. (Senior Judge, Specially Assigned) JJ.

Wright, J. On April 15, 2014, Mauro Jimenez Garcia suffered an "occupational disease disablement" to his lungs, arising out of his work raising chickens on a farm owned by Dai K. Nguyen. The chickens on Mr. Nguyen's farm were raised for, and owned by, Tyson Farms, Inc. ("Tyson"), appellee. Mr. Garcia filed a claim against Mr. Nguyen under the Workers' Compensation Act¹ on June 27, 2014. The Uninsured Employers' Fund ("UEF"),² appellant, was made a party to the claim when it became clear that Mr. Nguyen did not possess workers' compensation insurance. Mr. Garcia and UEF then impleaded Tyson into the claim.

After a hearing on March 3, 2016, the Workers' Compensation Commission ("Commission") declared that Mr. Garcia's injuries arose out of the course of his employment, and that both Mr. Nguyen and Tyson were co-employers of Mr. Garcia at the time of his injuries. Tyson appealed the Commission's decision to the Circuit Court for Worcester County.

A two-day jury trial took place on June 19 and 20, 2018; the sole issue for the jury was whether Tyson was a co-employer of Mr. Garcia. After the presentation of evidence, UEF and Tyson made motions for judgment. The circuit court denied both motions. The jury, after being instructed in the applicable law (without objection), returned a verdict finding that Tyson was not a co-employer at the time of Mr. Garcia's injuries. UEF challenged the circuit court's ruling on its motion for judgment and presents a single question for our review, which we have reworded as follows:³

1. Did the circuit court err in denying UEF's motion for judgment?

For the reasons presented below, we answer this question in the affirmative and reverse the circuit court's judgment.

BACKGROUND

The Farm & Mr. Garcia's Hiring

Tyson, the largest chicken producer in the country, does not own a single chicken farm. Rather, the company contracts with individual farmers to raise its chickens; the farmers own and operate the farms, while chickens are raised by the farmer according to Tyson's guidelines and best practices.

In 2009, Mr. Garcia was hired to work at a chicken farm where Tyson's chickens were being raised. The farm was owned by Terry Ung at the time. When Mr. Garcia was first hired, he performed routine maintenance, such as removing dead chickens, cutting the grass, and changing the lights. When Mr. Ung became ill toward the end of 2009, Mr. Garcia began managing the farm. Upon Mr. Ung's death at the end of 2009, his wife, Lee Ung, became the owner of the farm.

Because Mrs. Ung was unfamiliar with raising chickens, Tyson representatives taught Mr. Garcia how to operate the farm. During this period, Tyson employees came to the farm between two and four times a week "to teach Mr. Garcia how to maintain the farm and raise the chickens." According to Mr. Garcia, "[the Tyson's employees] taught [him] everything. They showed [him] how the system worked, how to check the water levels, the feeding, temperature, fans, how [all of the systems] would work properly, [and] how to turn them on and off automatically." In addition to assuming day-to-day responsibility for the chickens, Mr. Garcia also began residing at the farm after Mr. Ung passed away, as Tyson required someone to be present 24 hours a day, 7 days a week, to ensure proper operation of the farm.

Mrs. Ung sold the farm to Dai K. Nguyen in 2013. Mr. Nguyen, who lived and worked in northern Virginia, did not know how to operate a chicken farm either and purchased the farm as an investment. Thus, Mr. Nguyen contracted with Tyson to raise its chickens on the farm in June of 2013 as an "absentee owner." Tyson will generally contract with an absentee owner if someone is on the farm 24 hours a day, 7 days a week, to respond to any emergencies that may arise with the chickens. Based on Mr. Nguyen's status, "Tyson and Mr. Nguyen agreed that the contract would only be approved if [Mr. Nguyen] agreed to keep Mr. Garcia on as the resident manager of the farm."

Broiler Production Contract

Mr. Nguyen and Tyson entered into a "Broiler Production Contract"⁴ ("the Contract"). Under the Contract, Tyson was required to:

(1) "[R]etain title and ownership to chickens, feed, and medication[,] ... [and] determine the amount, type, frequency, and time of delivery to and pick-up from [Mr. Nguyen] of chickens, feed, and medication[;]"⁵

(2) "[P]rovide veterinary services and technical advice" to assist in raising the chickens; and

(3) "[C]omply with all applicable federal, state, and local statutes, rules, regulations, and ordinances in performance of [the] Contract."

In return, Mr. Nguyen was obligated to:

(1) "[F]urnish labor, materials, and utilities necessary for" raising the chickens and, when necessary, "seek [Tyson's] technical advice[;]"

(2) "[M]aintain biosecure housing for [Tyson's] chickens, feed, and medication[;]" (3) "[I]mplement [Tyson's] recommended best animal management practices, including recommendations regarding lighting, brooding, watering, ventilation, and bedding[;]" and

(4) "[C]omply with all applicable federal, state, and local statutes, rules, regulations, and ordinances in performance of [the] Contract[.]"

The Contract also gave Tyson the unilateral right to terminate the relationship upon default by Mr. Nguyen. Under the termination clause, a "default" occurs upon:

Failure to comply with any provision of [the] Contract, including but not limited to compliance with all applicable environmental and litter management laws, rules, regulations, and ordinances, and all requirements and programs contained in the attached Schedules.⁶

In the event of a default, Tyson had the right to "take immediate possession of [their] chickens, feed, and medication without further notice[.]" Tyson was further permitted to "utilize [Mr. Nguyen's facilities] ... to complete the production of [the chickens] at [Mr. Nguyen's] expense."

The Contract also included various addenda that set out how chickens were to be raised on the farm. As an example, one 18-page document titled "Broiler Growing Guide," gave detailed instructions for raising a flock of chickens. These instructions began at the stage of preparing the facilities for a new flock through the chickens' seven-week life cycle, giving specific instructions on how to manage the flock's temperature, ventilation, water, food, and light exposure for each week. The guide also included requirements for the operation of various equipment and procedures involved in raising the chickens. According to Ronald Watkins, a Senior Manager of Live Production at Tyson, if failure to comply with "programs [such as those in the Broiler Growing Guide] leads to animal welfare issues or poor performance," such a failure could result in the termination of the Contract.

Tyson's Oversight of the Farm

Tyson engaged in a continual oversight process to verify that the farm was being operated in compliance with the Contract. To ensure that conditions were adequate for chickens to be placed on the farm, Tyson employees completed a 25-item "Broiler Placement Checklist" before each flock of chickens was placed. The checklist was reviewed with Mr. Garcia, as he was the "resident manager of the farm."

Tyson also had the right to visit the farm during the lifecycle of each flock of chickens to "evaluate animal [health] and welfare, and [to] provide any technical advice based on the current conditions of the farm[.]" Tyson employees visited the farm one to three times a week to assess the chickens' well-being. During these visits, Tyson employees completed a series of forms and checklists to evaluate the flock's quality of life. The "Flock Visitation Summary," for example, was completed at least weekly throughout the flock's life cycle and included various metrics to evaluate the chickens' feed, water, temperature, ventilation, and lighting. As Mr. Garcia lived and worked on the farm 24 hours a day, 7 days a week, Tyson would speak directly to him if anything needed to be adjusted. Mr. Garcia then carried out any necessary adjustments throughout the flock's lifecycle.

Mr. Garcia's Injury and Subsequent Litigation

Mr. Garcia was found to be occupationally disabled on April 15, 2014; he suffered from hypersensitivity pneumonitis and interstitial disease. On June 27, 2014, Mr. Garcia filed a claim against Mr. Nguyen under the Workers' Compensation Act. After it became clear that Mr. Nguyen did not have Workers' Compensation insurance, UEF was added as a party. Mr. Garcia and UEF then impleaded Tyson into the claim.

A hearing before the Commission took place on March 3, 2016. As Mr. Garcia states in his brief, "[t]here [was] no dispute that Mr. Nguyen was an employer of Mr. Garcia at the time of [Mr. Garcia's] date of disablement for his occupational disease." Rather, the key issue was whether Tyson was also an employer of Mr. Garcia at the time he became disabled. After the hearing, the Commission declared: (1) that Mr. Garcia's occupational disease "[arose] out of and in the course of employment;" (2) that "[Mr.] Nguyen ... and Tyson ... were co-employers at the time of the aforesaid occupational disease[;]" and (3) that Mr. Nguyen and Tyson were liable to Mr. Garcia for his injuries.

Tyson appealed the Commission's findings to the circuit court on March 26, 2016, and challenged the Commission's determination that it was a co-employer of Mr. Garcia. After all the evidence was presented in the two-day jury trial that followed, both the UEF and Tyson made motions for judgment on the issue of Tyson's status as a co-employer. The circuit...