Inner Harbor Warehouse, Inc. v. Myers

• Decision Date: 24 December 1990
• Docket Number: No. 117,117
• Citation: 582 A.2d 1244,321 Md. 363
• Parties: INNER HARBOR WAREHOUSE, INC. et al. v. Gordon L. MYERS Sept. Term 1989.
• Court: Maryland Court of Appeals

Page 363

321 Md. 363

582 A.2d 1244

INNER HARBOR WAREHOUSE, INC. et al. v. Gordon L. MYERS

No. 117 Sept. Term 1989.

Court of Appeals of Maryland.

Dec. 24, 1990.

Alan M. Carlo (Montedonico & Mason, Chartered, both on brief), Baltimore, for petitioners.

Laurence A. Marder (Suzanne K. Farace, Israelson, Salsbury, Clements & Bekman, all on brief), Baltimore, for respondent.

Argued before MURPHY, C.J., and ELDRIDGE, COLE, RODOWSKY, McAULIFFE, ADKINS, ^* and CHASANOW, JJ.

COLE, Judge.

In this case we are asked to decide four issues that relate to Maryland's workers' compensation law as embodied in Md.Code (1957, 1985 Repl.Vol., 1989 Cum.Supp.), Article 101: ¹ (1) whether the president, who is also the sole stockholder and chief executive officer of a close corporation, is an individual intended to benefit from the protection of Article 101, § 62 as an employee of an uninsured subcontractor; (2) whether that individual who had not purchased workers' compensation insurance had thereby elected not to avail his company of the protections of the workers' compensation article; (3) whether a principal contractor is obligated to file an employer's first report of injury for any injuries sustained by its subcontractors' employees; and (4) whether the Respondent's claim was barred by the applicable statute of limitations.

The facts of the case are not disputed. At the time of the accident, Inner Harbor Warehouse & Distribution, Inc. (Inner Harbor), was under retainer by Eluma International, U.S.A. (Eluma) to transport Brazilian engine blocks from their point of arrival at the Port of Baltimore to Inner Harbor's warehouse for future distribution on an ongoing basis. Inner Harbor did not own trucks capable of handling the job, so it retained truck owners and their drivers to haul the engine blocks.

G.K. Myers, & Son, Inc. (G.K. Myers), a close corporation whose president, sole stockholder ² and chief executive officer was Gordon Myers, was in the business of retaining truck drivers for companies such as Inner Harbor. The drivers of G.K. Myers, in fact, drove almost exclusively for Inner Harbor. Respondent was a truck driver by trade who, along with other drivers, performed truck driving services for Inner Harbor under G.K. Myers' retainer agreement.

On October 18, 1984, Myers was hauling the Brazilian engine blocks from the Port of Baltimore to Inner Harbor's warehouse. While travelling along a ramp in downtown Baltimore, the load shifted in the truck. As a result thereof, the container and the tractor trailer fell over the side of the ramp and landed on the railroad tracks below. Myers suffered serious injuries including the amputation of one leg below the knee and the partial amputation of several of his fingers.

At the time of the accident G.K. Myers was not covered by workers' compensation insurance. The parties do not dispute the fact that sometime in April of 1984 Myers had communicated with Reese Bean, the president and chief executive officer of Inner Harbor, about having the latter company provide workers' compensation insurance to the employees of G.K. Myers. The parties disagree on Bean's ultimate response to the request. It is clear, however, that as of the time of the accident, G.K. Myers & Sons was not covered by workers' compensation insurance. The extent of Inner Harbor's cognizance of that fact is unknown, but Inner Harbor has made no allegation of fraud or misrepresentation on the part of G.K. Myers about its uninsured status.

Shortly after the accident, Myers notified representatives of Inner Harbor of his injuries. He then filed a claim with the Workers' Compensation Commission (WCC) on December 22, 1986 naming Inner Harbor as his employer. He argued he was entitled to compensation because he was Inner Harbor's employee, or, in the alternative, that Inner Harbor was his statutory employer. The WCC found Myers to be an independent contractor rather than an employee and therefore denied the claim. Myers moved for a rehearing which motion was denied.

On appeal to the Circuit Court for Baltimore City, Myers filed a Motion for Partial Summary Judgment alleging he was entitled to insurance coverage under Inner Harbor's policy by virtue of Article 101, § 62 of the Code. The motion was granted by the court, and Inner Harbor appealed.

The judgment of the circuit court was affirmed by the Court of Special Appeals which held that: (1) Myers did not elect to exempt himself from workers' compensation insurance coverage merely because he did not procure that insurance for his company; (2) Myers was a "statutory employee" of Inner Harbor within the meaning of § 62; and (3), an employer's duty to file a report of injury upon receiving notice of an employee's injury, and the consequence of failing to so file, apply to a § 62 "statutory employer" when an accidental injury befalls a "statutory employee;" since Inner Harbor failed to file the report with regard to Myers, the statute of limitations period applicable to Myers' claim was tolled pursuant to Article 101, § 38(c). Inner Harbor v. Myers, 80 Md.App. 1, 559 A.2d 376 (1989). We granted certiorari to conduct our own examination of the issues presented.

I

We first note that this case requires us to review the trial court's entry of summary judgment for Respondent Myers. In this regard, our task is to determine whether the entry of summary judgment was appropriate under the circumstances of the case. Md.Rule 2-501(e) provides that summary judgment is warranted "if the pleadings, depositions, answers to interrogatories, admissions, and affidavits show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law." In determining whether any factual issues exist, the trial court must resolve all inferences against the party moving for summary judgment. See Brady v. Ralph Parsons Co., 308 Md. 486, 495, 520 A.2d 717 (1987); Honaker v. W.C. & A.N. Miller Development Co., 285 Md. 216, 231, 401 A.2d 1013 (1979) (Honaker II ). Upon our review we must also determine whether there is a genuine dispute as to any material fact and whether the moving party is entitled to judgment as a matter of law, which task requires resolving all inferences against the moving party. Brady v. Ralph Parsons Co., 308 Md. at 496, 520 A.2d 717; Liscombe v. Potomac Edison Co., 303 Md. 619, 621, 495 A.2d 838 (1985).

II

Petitioner first alleges that Myers cannot meet the requirements of worker status in order to fall under the protection of § 62. Inner Harbor argues that Myers, as the president, sole stockholder and chief executive officer of G.K. Myers, exhibits none of the indicia of an employee for purposes of § 62.

Petitioner likens the instant case to Palumbo v. Nello L. Teer Company, 240 F.Supp. 226 (D.C.Md.1965). While noting that that case is not binding precedent on this Court, Petitioner nevertheless asks us to recognize its factual similarities. In Palumbo, the plaintiff was a truck driver for and a partner in the partnership that had subcontracted to haul loads for the general contractor, Teer. He was injured in the course of that employment. The court found that Palumbo was not an employee of his own partnership and that because he was not a worker within the meaning of § 62, Palumbo was not a statutory employee of Teer. By analogy to the facts of Palumbo, Inner Harbor avers that Myers, as president, sole stockholder and chief executive officer of G.K. Myers, is not its statutory employee.

Myers counters by stating he is in fact a statutory employee of Inner Harbor as defined by § 62. He argues that Article 101, § 21(b) specifically confers employee status upon officers of close corporations who perform services for the corporation for monetary payment. Myers also distinguishes Palumbo from his case by pointing out that the Palumbo court recognized that by definition, a partner is not an employee under § 21.

The primary issue we must resolve is whether Myers is an individual meant to benefit from the protections of § 62. The cardinal rule of statutory construction is to ascertain and effectuate the actual intent of the legislature. Kaczorowski v. City of Baltimore, 309 Md. 505, 514, 525 A.2d 628 (1987); Lovellette v. City of Baltimore, 297 Md. 271, 282, 465 A.2d 1141 (1983); Howard Co. Ass'n, Retarded Cit. v. Walls, 288 Md. 526, 530, 418 A.2d 1210 (1980); Honaker v. W.C. & A.N. Miller Development Co., 285 Md. at 229, 401 A.2d 1013.

In order to fall under the protection of § 62, the injured person must be a worker. To qualify as a worker one must also be an employee because independent contractors ³ are not covered by Article 101. See Criminal Injuries Compensation Board v. Gould, 273 Md. 486, 517, 331 A.2d 55 (1975). The first question we must resolve is whether Myers, as president, sole stockholder and chief executive officer of G.K. Myers, may be considered an employee of that corporation. Second, we must decide whether he is a "statutory employee" of Inner Harbor by virtue of § 62.

Petitioner, relying on Palumbo, maintains that Myers cannot be an employee of his own corporation. As we see it, Palumbo does not support Petitioner's argument. The plaintiff in Palumbo was a partner in the firm that had been retained as the subcontractor. Defendant Teer was the general contractor. Plaintiff argued that as a partner of his own company he could not be an employee of himself. The court agreed. The court also held that § 62 did not apply to Palumbo because he was not the "employee of another." Palumbo v. Nello L. Teer Co., 240 F.Supp. at 230. While those facts do seem very similar to the facts of the case at bar, the crucial difference becomes obvious when we analyze Article 101, §§ 21 and 67 together. Section 21 sets forth those people who are considered employers and employees under Article 101. That section states in pertinent part:

(b) Coverage of employees.--The following...