Honaker v. W. C. & A. N. Miller Development Co.

• Decision Date: 04 November 1976
• Docket Number: No. 55,55
• Citation: 365 A.2d 287,278 Md. 453
• Parties: Dallas A. HONAKER et ux. v. W. C. AND A. N. MILLER DEVELOPMENT COMPANY.
• Court: Maryland Court of Appeals

Page 453

278 Md. 453

365 A.2d 287

Dallas A. HONAKER et ux. v. W. C. AND A. N. MILLER DEVELOPMENT COMPANY.

No. 55.

Court of Appeals of Maryland.

Nov. 4, 1976.

Ferdinand J. Mack, Rockville (Shadoan & Mack, Rockville, on the brief), for appellants.

William H. Clarke, Rockville (W. Barry Wraga, Richard W. Galiher, Jr., and Galiher, Clarke, Martell & Donnelly, Rockville on the brief), for appellee.

Argued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES, LEVINE, ELDRIDGE and ORTH, JJ.

ORTH, Judge.

Over half a century ago the General Assembly enacted the Workmen's Compensation Act, withdrawing from private controversy all phases of extra-hazardous employments. The Act provided sure and certain relief for workmen injured in such employments and for their families and dependents, regardless of questions of fault and to the exclusion of every other remedy. Preamble, Acts 1914, ch. 800. Two years later, coverage under the Act was broadened by providing a new remedy for an employee who would otherwise be faced with the burden of the sometimes complex question of who was his employer. Acts 1916, ch. 597, § 60A, now codified as Maryland Code (1957, 1964 Repl.Vol.), Art. 101, § 62 in pertinent part provided:

'When any person as a principal contractor undertakes to execute any work which is part of his trade, business or occupation which he has contracted to perform and contracts with any other person as subcontractor, for the execution by or under the subcontractor, of the whole or any part of the work undertaken by the principal contractor, the principal contractor shall be liable to pay to any workman employed in the execution of the work any compensation under this article which he would have been liable to pay if that workman had been immediately employed by him; . . ..'

The purpose of § 62 was discussed at length in State v. Bennett Building Co., 154 Md. 159, 161-162, 140 A. 52, 53 (1928):

'It is common practice in certain trades for one party to agree for a reward to complete a certain work or undertaking, and then to enter into subcontracts with various parties providing for the execution by them respectively of specified parts of the whole work or undertaking, so that the whole or part thereof would be done by such subcontractors and their assistants. In this manner the principal contractor would avoid in part the responsibility for accidents happening in the carrying out of the work or undertaking. If this responsibility were so shifted upon parties too weak financially to meet it, and who had not secured compensation to their employees in one of the ways required by the statute, an injured workman, proceeding at common law or under the Workmen's Compensation Act, would obtain neither compensation nor damages. Furthermore, difficult questions arose with reference to whether the workman was the servant of the principal contractor rather than of his immediate employer, depending largely upon who had power to hire and discharge, to direct and control the workmen, and a variety of other circumstances. In order to obviate these contingencies, and more certainly to assure the workman his contemplated compensation, the statute has imposed, under a certain state of circumstances, a liability to pay upon the principal contractor, although he might not have been held at common law the employer of the injured workman.'

The Court spelled out the impact of the statute:

'The effect of (§ 62), when brought into operation through the designated state of circumstances, is to impose the absolute liability of an employer upon the principal contractor, when he was not in law the employer of the injured workman. The result then is that where the prescribed conditions exist, the principal contractor becomes by the act the statutory employer of any workman employed in the execution of the work.' Id. at 162, 140 A. at 53.

The relation established by the statute was described in terms of two employers of the same employee: 'One was (the employee's) immediate employer, the subcontractor, whose relation was founded in contract; and the second was his more remote statutory employer, the principal contractor, whose status, with the rights and liabilities growing thereout, was created and determined by law.' Id. at 165, 140 A. at 54. It has become quite common to speak of the principal contractor's liability as that of the 'statutory employer' to a 'statutory employee.' 1A A. Larson, The Law of Workmen's Compensation § 49.11. This appeal requires us to ascertain whether the relation of statutory employer-statutory employee existed between W. C. and A. N. Miller Development Company (Miller), appellee, and Dallas A. Honaker, an appellant.

The facts are not complicated. Miller was erecting a house on property it owned in Montgomery County, Maryland. It entered into a contract with Orndorff and Spaid, Inc. (Orndorff) whereby Orndorff agreed to furnish all labor and materials to install a roof on the house, gutters and downspouts, and a fireproof garage door, for a specified sum. Honaker was an employee of Orndorff. While working on the installation of the roof, Honaker sustained an accidental personal injury, alleged to be due to the negligence of Miller. Orndorff was covered by workmen's compensation insurance on the date of the accident under a policy issued by the State Accident Fund of Maryland. Honaker received workmen's compensation benefits from Orndorff through the Fund as a result of his injury.

Honaker and his wife filed a tort action in the Cicuit Court for Montgomery County against Miller. In Count One of the declaration, Honaker, to his own use and to the use of the State Accident Fund, claimed damages for injury suffered and expenses incurred due to the negligence of Miller. In Count Two, Honaker and his wife claimed damages for loss of consortium. Miller pleaded the general issue and filed a motion for summary judgment, alleging that there was no dispute as to the facts and claiming that Honaker was the statutory employee of Miller so that the exclusive remedy was workmen's compensation. Honaker opposed the motion, contending that Miller was 'not a person or entity entitled to the benefit of the Workmen's Compensation defense asserted . . ..' ¹ Upon hearing, the court below concluded that Miller and Honaker stood in a statutory employer-statutory employee relation, and, therefore, Miller was immune from suit. It granted motion for summary judgment and dismissed the claim 'with prejudice.' Judgment for costs was entered in favor of Miller. The Honakers appealed to the Court of Special Appeals. ² Code (1974), Courts and Judicial Proceedings Article, § 12-301. We required by writ of certiorari that the case be certified to us for review and determination before decision by the Court of Special Appeals. Code (1974), Courts Art. § 12-203.

The precise issue for decision is whether the trial court was correct in granting summary judgment. Maryland Rule 610, § d 1 spells out two requirements for the grant of the judgment. It provides that the judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show (1) that there is no genuine dispute as to any material fact, and (2) that the moving party is entitled to a judgment as a matter of law. ³

The first requirement for rendering summary judgment was met. As we have indicated, the question raised by this appeal is whether the relation of statutory employer-statutory employee existed between Miller and Honaker in the contemplation of Art. 101, § 62. The facts we hereinbefore recounted were shown by the pleadings, depositions, admissions and affidavits on file. The trial court found, and we agree, that, with respect to the question raised, there is no genuine dispute as to any material fact. This leaves the issue of the propriety of the rendering of summary judgment dependent upon the second requirement, namely, that the moving party, Miller, was entitled to a judgment as a matter of law. He would be so entitled if he were the statutory employer of Honaker for then Honaker's exclusive remedy would be under the Act, and Miller would be immune from a tort action for alleged negligence under the common law. 'If an employer is within the (Workmen's Compensation) act to bear its liabilities, he must remain to be accorded its immunities, in the absence of clearly expressed legislative intention to the countrary.' State v. Bennett Building Co., supra, 154 Md. at 168, 140 A. at 55. Under Art. 101, § 15, liability prescribed by the Act is exclusive. Roland v. Lloyd E. Mitchell, Inc., 221 Md. 11, 13, 155 A.2d 691, 693 (1959). On the other hand, if Miller were not the statutory employer of Honaker, Miller would be a third party in the contemplation of Art. 101, § 58, and under that statute Honaker could maintain his tort action at law. Gray v. State Rds. Comm'n, 253 Md. 421, 252 A.2d 810 (1969). In cases involving a principal contractor-subcontractor relation, for authority that a plaintiff's exclusive remedy is under the Act if the defendant is the statutory employer of the plaintiff, see Roland v. Lloyd E. Mitchell, Inc., supra; State v. City of Baltimore, 199 Md. 289, 86 A.2d 618 (1952); State v. Bennett Building Co., supra. For authority that a plaintiff may maintain a tort action at law if the defendant is not the statutory employer of the plaintiff, see Long Co. v. State Accident Fund, 156 Md. 639, 144 A. 775 (1929); Ryan v. Bethlehem Sparrows Point Shipyard, Inc., 209 F.2d 53 (4th Cir. 1953). This brings us to the point of determining whether, on the undisputed facts, Miller and Honaker stood in the position of statutory employer-statutory employee.

It is manifest on the face of § 62 of Art. 101, that in order to invoke its provisions there must be:

(1) a principal contractor ⁴

(2) who has contracted to perform work

(3) which is a part of his trade, business or occupation; and

(4) who has...