Inmon v. Crane Rental Services, Inc., No. 1 CA-CV 02-0261

• Decision Date: 06 May 2003
• Docket Number: No. 1 CA-CV 02-0261, No. 1 CA-CV 02-0597.
• Citation: 67 P.3d 726,205 Ariz. 130
• Parties: Charles N. INMON and Diana L. Inmon, husband and wife, and Mark S. Cummings, an unmarried man, Plaintiffs-Appellants, v. CRANE RENTAL SERVICES, INC., an Arizona corporation; Eddie De La Torre and Jane Doe De La Torre, husband and wife, Defendants-Appellees. Charles N. Inmon and Mark Cummings, Plaintiffs-Appellants, v. Crane Rental Services, Inc., an Arizona corporation; Eddie De La Torre and Jane Doe De La Torre, husband and wife, Defendants-Appellees.
• Court: Arizona Court of Appeals

67 P.3d 726

205 Ariz. 130

Charles N. INMON and Diana L. Inmon, husband and wife, and Mark S. Cummings, an unmarried man, Plaintiffs-Appellants, v. CRANE RENTAL SERVICES, INC., an Arizona corporation; Eddie De La Torre and Jane Doe De La Torre, husband and wife, Defendants-Appellees.

Charles N. Inmon and Mark Cummings, Plaintiffs-Appellants, v. Crane Rental Services, Inc., an Arizona corporation; Eddie De La Torre and Jane Doe De La Torre, husband and wife, Defendants-Appellees.

Nos. -0261, -0597.

Court of Appeals of Arizona, Division 1, Department E.

May 6, 2003.

Jackson, White, Gardner, Weech & Walker, P.C. By Wm. J. Monahan, Bobbie J. Rasmusson, Kelly G. Black, Mesa, Attorneys for Plaintiffs-Appellants.

Koeller, Nebeker, Carlson & Haluck LLP By Wade Causey, D. John Djordjevich, Phoenix, Attorneys for Defendants-Appellees.

OPINION

SNOW, Judge.

¶ 1 Appellants Charles N. Inmon, Diana L. Inmon, and Mark S. Cummings (collectively "Plaintiffs") appeal from the Maricopa County Superior Court's summary judgment dismissing their claims against Eddie De La Torre and Crane Rental Services, Inc. ("CRSI"). We affirm in part, reverse in part, and remand.

FACTS AND PROCEDURAL HISTORY

¶ 2 Charles Inmon and Mark Cummings were iron workers employed by DeRusha Steel who were severely injured on the job when a crane owned by CRSI and operated by Eddie De La Torre, a CRSI employee, tipped over under load. DeRusha had contracted with CRSI for CRSI to provide a crane and an operator to lift roof joists to the top of a supermarket DeRusha was building.

¶ 3 Plaintiffs sued De La Torre and CRSI (together "Defendants"), contending that the accident had been caused by De La Torre's negligence and that CRSI was vicariously liable for that negligence.¹ Plaintiffs also contended that CRSI was independently negligent in its training and supervision of De La Torre.

¶ 4 Defendants filed a motion for summary judgment, alleging that CRSI was not independently negligent and that both CRSI and De La Torre were entitled to immunity from Plaintiffs' suit under Arizona Revised Statutes ("A.R.S.") section 23-1022(A), part of Arizona's Workers' Compensation Act ("the Act"). The superior court initially denied Defendants' motion. However, following additional discovery, the court granted the renewed motion.

¶ 5 In its summary judgment, the superior court determined that Plaintiffs' objections to granting statutory immunity to Defendants in this context were without merit and that the "actions of the parties, their relationship, and the conduct of the work site is not in dispute." It characterized as dispositive the question whether trained or skilled workers could be "loaned servants." Finding, pursuant to our opinion in Ruelas v. Staff Builders Personnel Services, Inc., 199 Ariz. 344, 18 P.3d 138 (App.2001), that skilled workers could be loaned servants, the superior court entered summary judgment in Defendants' favor. We disagree that summary judgment is appropriate. Accordingly, we reverse and remand.

ANALYSIS

¶ 6 In their motion, and on appeal, Defendants have argued, as precedent, authority that pertains both to the "lent employee" doctrine in the workers' compensation context, and a related doctrine sometimes identified by the same name in the vicarious liability context.² However, neither Defendants, nor the trial court in its summary judgment, sufficiently distinguish these two related concepts. Our own opinions have not always clearly distinguished them. To be sure, both apply in instances when an employer has loaned a temporary worker to another employer. However, there are important differences between the doctrines illustrated, in part, by the facts of this case. Because the superior court did not specify the legal principle or principles upon which it granted Defendants' motion, we address both doctrines.

A. The Workers' Compensation "Lent Employee" Doctrine Cannot Be Used To Interpret The Term "Co-employee" Under A.R.S. § 23-1022(A).

¶ 7 The Act prevents employees who are provided with coverage under the Act from suing their employer or co-employees for accidents arising from their employment. A.R.S. § 23-1022(A) ("The right to recover compensation pursuant to this chapter for injuries sustained by an employee... is the exclusive remedy against the employer or any co-employee acting in the scope of his employment."). At the same time, the Act permits an employee who is injured in the workplace "by another not in the same employ" to pursue his common law remedy against the person or persons who injured him. A.R.S. § 23-1023(A) ("If an employee entitled to compensation under this chapter is injured or killed by the negligence or wrong of another not in the same employ, such injured employee ... may pursue his remedy against such other person."). Defendants assert that both CRSI and De La Torre are immune from Plaintiffs' suit because, pursuant to the lent employee doctrine, DeRusha became De La Torre's special employer for purposes of obtaining immunity pursuant to A.R.S. § 23-1022(A).

¶ 8 The lent employee doctrine, however, only applies to provide the lent employee (De La Torre) with workers' compensation coverage from the putative special employer (DeRusha). Labor Force v. Indus. Comm'n, 184 Ariz. 547, 553-54 911 P.2d 553, 559-60 (App.1995). Once the special employer is obligated to provide workers' compensation coverage to the lent employee under the doctrine, the doctrine also extends immunity to the special employer from suit brought by the lent employee. Araiza v. U.S. West Bus. Res., Inc., 183 Ariz. 448, 453, 904 P.2d 1272, 1277 (App.1995). In this case, however, De La Torre neither seeks coverage from, nor brings a claim against, DeRusha. Thus, the lent employee doctrine does not apply.

¶ 9 Defendants argue for an extension of the doctrine, noting that if, pursuant to the doctrine, DeRusha becomes De La Torre's "special employer," then De La Torre must also become the "co-employee" of Plaintiffs for purposes of granting De La Torre statutory immunity from Plaintiffs' suit as set forth in A.R.S. § 23-1022(A). Building on this speculative premise, Defendants argue that if Plaintiffs cannot bring suit against De La Torre because De La Torre is their co-employee, CRSI cannot be held vicariously liable for De La Torre's negligence.

¶ 10 However, Defendants' argument fails for several reasons. First, Defendants misunderstand the scope and purpose of the lent employee doctrine. The lent employee doctrine's basic purpose is to protect injured workers by expanding the application of workers' compensation coverage. The doctrine is used to determine when a business or employer that borrows a worker from another becomes liable to provide workers' compensation coverage to that worker. Labor Force, 184 Ariz. at 554, 911 P.2d at 560; 3 A. Larson, Workers' Compensation Law § 67.1 (2002). Our supreme court has laid out the "factors to be considered" in determining when the temporary or "special employer" is obliged to provide worker's compensation benefits, which include:

(a) the employee has made a contract of hire, express or implied, with the special employer;

(b) the work being done is essentially that of the special employer; and

(c) the special employer has the right to control the details of the work.

Word v. Motorola, Inc., 135 Ariz. 517, 520, 662 P.2d 1024, 1027 (1983) (quoting 1C A. Larson, Workmen's Compensation Law, § 48.00 (1982)).

¶ 11 Once an employer becomes liable to provide workers' compensation coverage to the employee, the special employer is deemed an "employer" pursuant to A.R.S. § 23-1022(A). The special employer then receives the benefits of the exclusive remedy statute and is immune from suit by the employee. Word, 135 Ariz. at 520, 662 P.2d at 1027 ("[L]ike other employers liable for workmen's compensation, [the special employer] may be entitled to the benefit of the statutory immunity [from lawsuits] given complying employers."); Avila v. Northrup King Co., 179 Ariz. 497, 505-06, 880 P.2d 717, 725-26 (App.1994) (grower, who was deemed employer pursuant to lent employee doctrine, also deemed immune from suit brought by temporary agricultural worker); Lindsey v. Bucyrus-Erie, 161 Ariz. 457, 458, 778 P.2d 1353, 1354 (App.1989) (temporary employer that was required to provide workers' compensation coverage deemed immune from suit brought by employee it would have been obliged to cover); Nation v. Weiner, 145 Ariz. 414, 419-20, 701 P.2d 1222, 1227-28 (App.1985) (hospital, deemed an employer, is immune from suit by nurse).

¶ 12 Defendants do not argue that pursuant to the "lent employee doctrine" either CRSI or De La Torre would be obliged to provide Plaintiffs with workers' compensation coverage. They merely argue that they should receive a windfall by being immune from Plaintiffs' suit without having a corresponding obligation to provide Plaintiffs with coverage. This is contrary to the purpose behind both the lent employee doctrine and the Workers' Compensation Act. See also Brumbaugh v. Pet Inc., 129 Ariz. 12, 13, 628 P.2d 49, 50 (App.1981) (agent's immunity does not prevent vicarious liability for the agent's acts from attaching to the principal).

¶ 13 Further, the first element of the "lent employee" test is not satisfied unless the party losing its right to bring suit at least impliedly consented to the control over him by the employer who receives the immunity. As the Arizona Supreme Court noted, if implied consent was not a requirement of the lent employee doctrine, it would permit "the two employers themselves ... by their private arrangements to affect the common law rights of the employee without his knowledge and consent." Young v. Envtl. Air Prods., Inc., 136 Ariz. 158, 163, 665 P.2d 40, 45 (1983) (citation omitted).³ That is precisely the result the statutory interpretation urged by Defendants would cause here. It would deprive Plaintiffs of their right to bring suit against Defenda...