Howe v. Diversified Builders, Inc.

• Decision Date: 05 June 1968
• Citation: Howe v. Diversified Builders, Inc., 262 Cal.App.2d 741, 69 Cal.Rptr. 56 (Cal. App. 1968)
• Parties: Donald E. HOWE, Plaintiff and Appellant, v. DIVERSIFIED BUILDERS, INC., a corporation, and K. G. Bitter & Sons, Inc., a corporation, a joint venture, Defendants and Respondents. Div. 31607.
• Court: California Court of Appeals

Page 56

69 Cal.Rptr. 56

262 Cal.App.2d 741

Donald E. HOWE, Plaintiff and Appellant, v.DIVERSIFIED BUILDERS, INC., a corporation, and K. G. Bitter & Sons, Inc., a corporation, a joint venture, Defendants and Respondents.

Div. 31607.

Court of Appeal, Second District, Division 2, California.

June 5, 1968.

Belli, Ashe, Gerry & Ellison, Los Angeles, Irmas & Rutter and Lillian Finan, by William A. Rutter, Beverly Hills, for plaintiff and appellant.

Waters, McCluskey & Corcoran and Henry F. Walker, Los Angeles, for defendants and respondents.

HERNDON, Acting Presiding Justice.

Appellant, a resident of Nevada, brought this action seeking to recover damages for personal injuries sustained by him in the course of performing his work as a welder on a construction project in the State of Nevada.Defendants and respondents are California corporations and were the general contractors on this project.The work in which appellant was engaged at the time of his injury was being performed pursuant to a contract between him and respondents, the terms of which were such as to classify him as a subcontractor under the pertinent provisions of Nevada's workmen's compensation law.

The trial court granted respondents' motion for a summary judgment upon the basis of its holding as a matter of law that Nevada's Industrial Insurance Act governed in determining the rights and duties of the parties and provided the exclusive remedy available to appellant.The trial court accordingly decided that appellant had no right to maintain this civil action for damages.We have concluded that the controlling law was correctly applied by the court below and that its judgment should be affirmed.

Appellant states his contentions as follows: (1)The trial court should have applied California law, rather than Nevada law, to the issues raised in this litigation.(2) Applying the lex fori, an independent contractor is not subject to workmen's compensation law, and hence is free to maintain a common law negligence action against defendant general contractors.(3) Even assuming the lex loci applies, the Nevada law does not bar plaintiff's action since he has rejected benefits thereunder.(4) Nevada's law, purporting to establish an 'exclusive' remedy, cannot oust the California court of jurisdiction.

Appellant concedes that the determinative facts are not in dispute.Appellant is, and for at least five years prior to the accident giving rise to the present litigation was, a resident of the State of Nevada.During this period appellant has been engaged in the occupation of a welder operating under the name 'Howe's Welding Service' in Las Vegas, Nevada.Pursuant to an oral contract with respondents, appellant was performing welding services on the construction site of the Stardust Hotel in Las Vegas on December 10, 1963, when he was injured by a falling scaffold plank.As has been stated, respondents are California corporations and were the general contractors of this construction project.For purposes of the present motion the parties stipulated that appellant might be deemed an independent subcontractor.

The Nevada Industrial Insurance Act(N.R.S. Ch. 616) constitutes Nevada's workmens compensation law.It provides for a state controlled and operated fund and it establishes the exclusive remedy for all industrial injuries coming within its terms.Pertinent sections thereof provide as follows:

Section 616.085: 'Subcontractors and their employees shall be deemed to be employees of the principal contractor.'

Section 616.105: "Independent contractor' means any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.'

Section 616.115: "Subcontractors' shall include independent contractors.'

Section 616.285: 'Where an employer has in his service two or more employees under a contract of hire, except as otherwise expressly provided in this chapter, the terms, conditions and provisions of this chapter for the payment of premiums to the state insurance fund and, except as further otherwise provided, to the accident benefit fund, for the payment of compensation and the amount thereof for such injury sustained by an employee of such employer, shall be conclusive, compulsory and obligatory upon both employer and employee.'

Section 616.270: '1.Every employer within the provisions of this chapter, and those employers who shall accept the terms of this chapter and be governed by its provisions, as in this chapter provided, shall provide and secure compensation according to the terms, conditions and provisions of this chapter for any and all personal injuries by accident sustained by an employee arising out of and in the course of the employment.

'2.In such cases the employer shall be relieved from other liability for recovery of damages or other compensation for such personal injury, unless by the terms of this chapter otherwise provided.'

Section 616.370: '1.The rights and remedies provided in this chapter for an employee on account of an injury by accident sustained arising out of and in the course of the employment shall be exclusive, except as otherwise provided in this chapter, of all other rights and remedies of the employee, his personal or legal representatives, dependents or next of kin, at common law or otherwise, on account of such injury.

'2.The terms, conditions and provisions of this chapter for the payment of compensation and the amount thereof for injuries sustained or death resulting from such injuries shall be conclusive, compulsory and obligatory upon both employers and employees coming within the provisions of this chapter.'

It is immediately apparent that respondents, as employers of more than two employees, and appellant, as a subcontractor rendering services to respondents, come within the terms of the act and, so far as the State of Nevada is concerned, it provides the exclusive measure of their respective rights and liabilities in the premises.Respondents had complied with the terms of the act and appellant received an award thereunder.(Titanium Metals Corp. of Amer. v. Eighth Jud. Dist. Co., 76 Nev. 72, 349 P.2d 444;Simon Service Incorporated v. Mitchell, 73 Nev. 9, 307 P.2d 110.)

Appellant, however, contends that since respondents are California corporations, he should be permitted to recover from them in this common-law negligence action because California's workmen's compensation law does not classify independent contractors as employees.We reject this contention as unmeritorious.

Appellant, of course, in correct in urging that 'the law of the place of the wrong is not necessarily the applicable law for all tort actions brought in the courts of this state.'(Reich v. Purcell, 67 A.C. 560, 564, 63 Cal.Rptr. 31, 34.)Further, as pointed out by the court in Reich, page 562, 63 Cal.Rptr. page 33: 'In a complex situation involving multi-state contacts * * * no single state alone can be deemed to create exclusively governing rights.(Citations.)The forum must search to find the proper law to apply based upon the interests of the litigants and the involved states.Such complex cases elucidate what the simpler cases obscured, namely, that the forum can only apply its own law.(Citations.)When it purports to do otherwise, it is not enforcing foreign rights but choosing a foreign rule of decision as the appropriate one to apply to the case before it.'

However, these considerations are of no benefit to appellant herein.This is not a complex situation involving multistate contacts and California has no interest in extending to Nevada residents greater rights than are afforded them by the state of their domicile.At all relevant times appellant was, and now is, domiciled in Nevada; the contract under which he engaged to render services was entered into in Nevada; the services were performed exclusively in Nevada; the injury occurred in Nevada; and if appellant or his family were to become economic burdens by reason of his incapacity, such burden would fall upon the State of Nevada.(Cf.Travelers Ins. Co. v. Workmen's Comp. App. Bd., 68 A.C. 1, 6, 64 Cal.Rptr. 440, 434 P.2d 992 et seq.)

California's sole 'contact' with the subject matter of the instant proceeding is the happenstance that respondents are California corporations.However, as previously indicated, no California 'interest' would be promoted by impairing the ability of California corporations to compete for business in other states by imposing upon them obligations to the residents of such states which those states do not impose upon foreign corporations or their own domestic corporations.Therefore, although 'California has rejected the traditional mechanical solutions to choice-of-law problems,' it is clear that the trial court correctly 'adopted foreign law' in granting respondents' motion for summary judgment because 'it is appropriate in light of the significant interests in the particular case.'(Travelers Ins. Co., supra, p. 5, 64 Cal.Rptr. p. 442, 434 P.2d p. 994.)

In an effort to avoid the compelling logic of this conclusion, appellant,...