Holder v. Fraser Shipyards, Inc., 16–cv–343–wmc

Citation288 F.Supp.3d 911
Decision Date17 January 2018
Docket Number16–cv–343–wmc
Parties James HOLDER, Plaintiff, v. FRASER SHIPYARDS, INC., The Interlake Steamship Co., and Capstan Corp., Defendants.
CourtUnited States District Courts. 7th Circuit. Western District of Wisconsin

288 F.Supp.3d 911

James HOLDER, Plaintiff,
v.
FRASER SHIPYARDS, INC., The Interlake Steamship Co., and Capstan Corp., Defendants.

16–cv–343–wmc

United States District Court, W.D. Wisconsin.

Signed January 17, 2018


288 F.Supp.3d 921

David E. Rapoport, Matthew S. Sims, Melanie VanOverloop, Rapoport Law Offices, P.C., Chicago, IL, Keith R. Clifford, Teague D. Devitt, Clifford & Raihala, Madison, WI, for Plaintiff.

Richard John Leighton, Johnson Killen & Seiler PA, Duluth, MN, Joseph Manno, Thomas Baker, Tucker Ellis LLP, Cleveland, OH, Sherry A. Knutson, Tucker Ellis LLP, Chicago, IL, Frederick J. Strampe, April Katheryn Toy, Barbara A. O'Brien, Borgelt, Powell, Peterson & Frauen, S.C., Milwaukee, WI, for Defendants.

OPINION AND ORDER

WILLIAM M. CONLEY, District Judge

Plaintiff James Holder alleges that he suffered from lead poisoning while working on a project to convert the Herbert C. Jackson 's propulsion system from steam- to diesel-powered. He sued the ship's owner, The Interlake Steamship Company, alleging negligence under the Longshore and Harbor Workers' Compensation Act (the "Act" or "LHWCA"), 33 U.S.C. § 905(b), as well as Fraser Shipyards, Inc., where the Jackson was dry-docked for the upgrade, and Capstan Corporation, Fraser's parent corporation, for negligence under § 933 of the Act.1 These three defendants highlight different provisions of the Act: § 905(b), the exclusive remedy against vessels;2 §§ 904, 905(a), the exclusive remedy against employers; and § 933, the remedy against third parties. Before the court are defendants' motions for summary judgment (dkt. ## 50, 72, 78), along with plaintiff's related request to disregard new evidence and argument in Fraser's reply (dkt. # 124).3

288 F.Supp.3d 922

UNDISPUTED FACTS4

A. Background

Defendant Interlake, the owner of the Jackson , is a Delaware corporation that maintains its principal place of business in Ohio. Beginning in 2006, Interlake started a ten-year project to upgrade five ships in its fleet, including converting four to diesel-powered. The last ship due for an upgrade was the Jackson . To facilitate this, Interlake entered into a contract on September 30, 2015, with defendant Fraser.

Fraser is a Wisconsin corporation with its principal place of business in Superior, Wisconsin, which provides shipyard services, such as construction, repairs and inspections. Fraser's work on the Jackson was its "first major repowering [project] ... since the mid–1980s." (Press Release (dkt. # 101–2) 5.) The majority of the work Fraser performs occurs at its property in Superior, Wisconsin. Defendant Capstan is Fraser's sole shareholder and parent corporation and it is a Wisconsin corporation, but with an office in Duluth, Minnesota.5 Defendants Capstan and Fraser are separate corporate entities, with separate workspaces, email domains, corporate logos and websites. They do, however, share a CEO and chairman (Todd Johnson), as well as a treasurer and CFO (Scott Brantly).6 According to Nicholas Minardi, who is allegedly familiar with Capstan's corporate structure between 2014 and 2016, Capstan and Fraser shifted their approach in 2014 to safety management, so that Capstan would manage safety for Fraser.7

288 F.Supp.3d 923

Since February 18, 2011, Fraser had a Client Services Agreement with Tradesmen International, under which Tradesmen would assign workers to Fraser. By its terms, this agreement specified that Fraser would be "solely responsible for directing, supervising and controlling Tradesmen employees as well as their work." (Client Services Agreement (dkt. # 15–1) ¶ 3(a).) This agreement also detailed that Fraser had the right "in its sole discretion, [to] release a Tradesmen employee back to Tradesmen at any time." (Id. )

On December 14, 2015, Holder applied for a job as a "ship fitter" with Tradesmen, believing that the job consisted of working for Tradesmen in Superior, Wisconsin. As part of the application process, Holder acknowledged that he would be subject to a background check, including signing off on execution of a background check release form, which referred to Tradesmen as the employer. Holder also received a Tradesmen Employment Orientation Recap, which involved reviewing OSHA training and the Tradesmen Employee Safety Handbook, watching a safety video, and discussing fringe benefits. In addition, he was instructed to report injuries and accidents to Tradesmen for investigation and to direct questions about the Field Employee Policy Manual to his manager. Finally, Holder understood that Tradesmen would manage his employee withholdings.

Beginning in January 2016, Tradesmen assigned workers to Fraser Shipyards for the Jackson upgrade, including Holder. Holder disputes that: (1) the Fraser–Tradesmen Client Services Agreement was followed in practice; (2) he acknowledged Fraser's responsibility and authority for his direction and supervision; and (3) he acknowledged being a Fraser employee. Fraser paid Tradesmen for the work done by Holder based on a bill-out rate, multiplied by the number of hours Holder worked.

B. Holder's Work on the Jackson

Holder worked aboard the ship at Fraser's dry dock for 37 days, from January 5 until February 29, 2016. On the 5th, Holder signed a notice agreeing to abide by Tradesmen's policies, as well as acknowledging that Tradesmen or he could terminate his employment "with or without cause, and with or without notice, at any time." (Holder Personnel File (dkt. # 102–1) 10.)

Holder's work involved "removing and replacing the bottom and side shell on the vessel and also framework," which required him "to burn out the old steel with a torch," make "final cuts, take whatever framework had to be taken out, and go ahead and replac[e] everything with new steel." (Holder Dep. (dkt. # 85) 98:4–15.) He only worked on the turn-of-the-bilge/ballast area of the ship. Holder avers that his supervisors were Chris Duncan and Joe Kutzler (apparently misspelled as Cunsler) and that they directed his work, although Fraser and Capstan dispute this. The parties also dispute whether Duncan and Kutzler were employees of Reuben

288 F.Supp.3d 924

Johnson & Sons ("RJS") or Chris Jensen & Sons, and whether they were working for Fraser on the Jackson project. Fraser avers that no RJS employees were on the Jackson .

Regardless, Holder believed that he was working for Tradesmen, not Fraser. Moreover, the parties agree that Holder was paid by Tradesmen during the course of his work at the Fraser Shipyards, although they dispute whether Fraser provided Holder with tools or whether Holder brought his own, with the exception of heavy equipment which they agree was available at the job site. The parties also dispute whether Fraser made available safety and protective equipment. Holder contends that when he checked out equipment, he identified himself as a Tradesmen employee.

Fraser asserts that Holder worked on a different project unrelated to the repowering project—specifically, one replacing shell plates, which was covered by a different Interlake purchase order—while Holder maintains that he worked on the repowering project. In either case, Holder maintains that he was exposed to lead during his work on the project. He also avers that: (1) a Fraser representative informed him respirators were optional; (2) no one told him about designated changing areas, to vacuum his clothing, or other preventive hygiene; (3) the respirator he used at work was not fit tested; and (4) on January 29, 2016, Farkas informed him that "there is no lead paint" (Holder Dep. (dkt. # 85) 164:6–165:5). Holder does not recall speaking with anyone from Interlake while working on the Jackson .

C. Work Performed on the Jackson

The goal of the contract between Interlake and Fraser Shipyards was to convert the Jackson from steam- to diesel-powered. For the price of $9,784,295, plus costs for equipment, the Jackson repowering project included the installation of new diesel engines, operating and main decks, propeller and blades, control room and console, and a tailshaft, plus related piping, electrical components and equipment. During the work, the propeller blades, rudder, hub, unloading diesel generators, and stack were removed; the propeller shaft cut; the main propulsion turbine, propulsion boilers, propulsion controls, and reduction gear were demolished; and the outer hull below the waterline had a 7–foot by 4–foot hole in it. The ship was unable to propel itself and was no longer watertight and or capable of floating while in dry dock. Holder himself testified about "holes all over the shell of the boat," such that it looked like "Swiss cheese," and there was "no way in the world that boat was going to float if you flooded the dry dock at that point." (Holder Dep. (dkt. # 85) 151:3–15.)

As a result, the Jackson was in dry dock from December 15, 2015 until May 31, 2016, and could not have been used for transport during this time. The Jackson entered a Fraser "graving" dry dock, such that it was out of water and did not have a captain in service onboard. Although this repowering project was supposed to take...

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