Martin v. Phillips Petroleum Co.

• Decision Date: 04 November 1974
• Citation: 42 Cal.App.3d 916,117 Cal.Rptr. 269
• Court: California Court of Appeals Court of Appeals
• Parties: William J. MARTIN, Plaintiff and Appellant, v. PHILLIPS PETROLEUM CO., etc., Defendant and Respondent, Hartford Accident & Indemnity Co., etc., Intervenor and Appellant. Civ. 33087.

Page 269

117 Cal.Rptr. 269

42 Cal.App.3d 916

William J. MARTIN, Plaintiff and Appellant, v. PHILLIPS PETROLEUM CO., etc., Defendant and Respondent Hartford Accident & Indemnity Co., etc., Intervenor and Appellant.

Civ. 33087.

Court of Appeal, First District, Division 3, California.

Nov. 4, 1974.

As Amended on Denial of Rehearing Dec. 4, 1974.

Hearing Denied Jan. 2, 1975.

Dolgin, Kully & Jameson, David A. Dolgin, Martinez, Bruce Cornblum, San Jose, for plaintiff-appellant.

Gordon, Waltz & DeFraga, Martinez, for defendant-respondent.

Leonard & Thomas, Orinda, for intervenor-appellant.

DEVINE, ^* Associate Justice.

Plaintiff, William J. Martin, and intervenor, Hartford Accident and Indemnity Company, appealed from a judgment rendered by the court in the first part of what was scheduled to be a bifurcated trial. The judgment, in favor of Phillips Petroleum Company, defendant, is based on the conclusion that Martin was a special employee of the defendant at the time he allegedly sustained injuries referred to in his complaint. The Hartford Company, as workmen's compensation insurance carrier for Plant Maintenance Inc., has paid all of the benefits required by the Labor Code. Plant Maintenance surely was the general employer of Martin, and it is contended by appellants that it was his sole employer. If the court's finding and conclusion that Phillips was Martin's special employer at the time of the asserted injury be correct, it follows that plaintiff may not have damages by means of this personal injury action against Phillips. (Lab.Code, § 3601; Sehrt v. Howard, 187 Cal.App.2d 739, 10 Cal.Rptr. 128; Oxford v. Signal Oil & Gas Co., 12 Cal.App.3d 403, 90 Cal.Rptr. 700; McFarland v. Voorheis-Trindle Co., 52 Cal.2d 698, 702, 343 P.2d 923.) On the other hand, he would be entitled to workmen's compensation from either or both employers. (McFarland v. Voorheis-Trindle Co., supra, at p. 702, 343 P.2d 923; Oxford v. Signal Oil & Gas Co., supra, at p. 411, 90 Cal.Rptr. 700; National Auto. Insurance Co. v. Industrial Accident Comm., 23 Cal.2d 215, 219, 143 P.2d 481; Dept. of Water & Power v. Industrial Accident Comm., 220 Cal. 638, 32 P.2d 354.)

The Contract Between Plant Maintenance and Phillips Petroleum

Although the contract names Tidewater Oil Company as one of the parties, it was stipulated that Phillips Petroleum is the successor of Tidewater and that the contract is binding on Phillips. We shall refer to Phillips as a party without further reference to Tidewater. Plant Maintenance is in the business of supplying manpower to oil refineries and other industries. Plaintiff had been an employee of Plant Maintenance for several years before the accident, but he had worked at the Avon refinery of Phillips for about a year, or perhaps as much as two years, according to his testimony. The terms of the contract are such as obviously to be designed to designate workmen as employees of Plant Maintenance only and to prevent Phillips from being considered a special employer. Thus, the contract provides that Plant Maintenance is not the agent of Phillips but is an independent contractor; that Plant Maintenance maintains complete control over its employees; that this is so even 'as an aid to Contractor (Plant Maintenance),' some of the employees may work solely or partially under the direction or supervision of Phillips; such direction or supervision shall be for contractor's benefit and account; that contractor shall constantly superintend said work by its own superintendent and instructions given superintendent shall be deemed to have been given to the contractor; and that all the employees shall be deemed to be employees of contractor for all purposes, notwithstanding any finding that their work is wholly or partially under the direction or supervision of Phillips.

Even before considering the factual situation which the trial judge impliedly found to be incompatible with the written contract, we note that the labored effort to maintain independence of the two potential employers in itself gives evidence that the independence is fictitious. For example, how can it be believed that work done by laborers shall be for Plant Maintenance's benefit, except of course for the fact that Plant Maintenance expects to be paid by Phillips? What other benefit does Plant Maintenance gain from work done at an oil refinery? And by brief reference to the facts as described below, what does an employee whose work calls for using a jack hammer have to do with the interest of a general supplier of labor? Further, the provision in the contract that the employees shall be deemed to be those of Plant Maintenance, Notwithstanding any finding that the work is performed under the direction or supervision of Phillips, appears to be an attempt to control the status of the various parties despite a finding by a court or by the Workmen's Compensation Appeals Board. The contract cannot affect the true relationship of the parties to it. Nor can it place an employee in a different position from that which he actually held. (Mark Hopkins, Inc. v. California Employment Stabilization Comm., 86 Cal.App.2d 15, 193 P.2d 792; Stewart & Nuss v. Industrial Accident Comm., 55 Cal.App.2d 501, 506, 130 P.2d 985.)

We find nothing in the nature of estoppel to prevent Phillips from asserting the true situation. It does not seem that the case was tried on the theory of estoppel. The record contains no request for a finding on the subject of any intention on the part of respondent that its conduct should be acted upon or that appellant Martin himself relied upon any deceptive representation or concealment under a duty to speak or to the injury to appellant Martin. Appellants relied on the written contract and on such facts, as set forth below, which would favor their position, contending at all times, as they do on appeal, that Plant Maintenance was the sole employer of Martin. The essential elements of estoppel are lacking. (Crestline Mobile Homes Mfg. Co. v. Pacific Finance Corp., 54 Cal.2d 773, 8 Cal.Rptr. 448, 356 P.2d 192.)

Although a conclusion that Martin was a special employee of Phillips cannot be squared with the terms of the written contract, it does, as we view the totality of the circumstances, comport with the law and the decisions. The workman is assured of recovery for an industrial injury from both employers, and although in this particular case the general employer's carrier has paid the benefits, the special employer was likewise liable. The true relationship between the parties, rather than the professed one, should be held to establish the rights and duties of the parties. Although the Legislature has recognized, as a practical matter, the respective liabilities of insurance carriers in a general-special employer situation, by providing in Insurance Code section 11663 that the insurer of the general employer is liable for the entire cost of compensation unless the special employer had the employee on his payroll at the time of injury, the section does not purport to abrogate the rule of liability of full employers. (Argonaut Insurance Exch. v. Industrial Accident Comm., 154 Cal.App.2d 703, 316 P.2d 759; McFarland v. Voorheis-Trindle Co., 52 Cal.2d 698, 343 P.2d 923.) Thus the employee has the benefit of having the special employer as an additional party responsible for any industrial injury which he suffers on that employer's job. If there be serious and willful misconduct on the part of the special employer (which creates a liability which cannot be insured against), no doubt he has the right to an increased award against the special employer under Labor Code section 4553.

The Accident

The injury took place during plaintiff's lunch hour. He had gone to a locker room which, although it was on Avon's premises, was provided by Plant Maintenance. It is allged that the defendant negligently maintained the lockers within the room, so that they fell on plaintiff. We do not find merit in the suggestion by appellant that because he had retired to the locker room for luncheon, he was not under the direction of the special employer. The ordinary rule as to breaks for luncheon, etc., applicable to workmen's compensation cases, obtains. (See Herlick, California Workmen's Compensation Law Handbook, § 10.12, p. 259.)

The Contract of Hire

Although Phillips did not expressly make a contract of employment with Martin, Martin's consent may be inferred from his acceptance of the special employer's control and direction. (1A Larson's Workmen's Compensation Law, § 48.10.) The long term during which Martin did the work of Phillips confirms this inference. Martin did not know of the contract between Plant Maintenance and Phillips, and knew that he was on the payroll of the former, but it is evident that he knew the general situation becuase he testified, 'when I was hired out I was hired out to work at Shell and then I came to Phillips and I stayed.'

Special Employment

An analysis of the various elements which, taken as a whole, determine the relationship of Martin to Phillips convinces us that Martin was a special employee.

1. Payroll. Martin was on the payroll of Plant Maintenance. Withholding of taxes and social security contributions was handled by Plant Maintenance. This is relatively unimportant. No doubt the service rendered was of value to Phillips, but it has nothing to do with the duties performed by the employee.

2. Duration. Martin worked for Phillips without interruption for a least a year, and possibly two, a factor tending to show special employment. (Oxford v. Signal Oil & Gas Co., supra, 12 Cal.App.3d at p. 408, 90 Cal.Rptr. 700.)

3. Nature of the work. Martin had two categories of employment: laborer and brick mason. Just before the accident, he had been using a jack hammer, which he was permitted to do by union rules in his capacity as brick mason. The relatively unskilled nature of the services which would make them readily subject...