Following oral arguments on March 6, 2012, this matter is now before the Court on Defendant American Heavy Industries' (AHI) Plea in Bar asserting that the Plaintiff's sole remedy for his alleged injuries is worker's compensation. As seen below, the ultimate question to be answered in addressing this Plea in Bar is whether Plaintiff Masterson and the involved Defendant AHI employees should be deemed statutory co-employees of Norfolk Southern at the time of Masterson's accident.
The relationships among the parties in this type of case vary but fall into three general categories. First is the situation where an employee of a sub-contractor sues the owner. This commonly is referred to as an ascending case. Next is the situation where an employee of the owner sues the sub-contractor or an employee of a sub-contractor. This commonly is referred to as a descending case. Finally there is the situation where the employee of one sub-contractor sues another sub-contractor or his employee. This commonly is referred to as a pyramid case.
The case presently before the Court is a pyramid situation. Succinctly summarized, Plaintiff Masterson was an employee of Aetna. Masterson worked as part of an Aetna crew under contract to repaint the upper portion of a Norfolk Southern owned coal loader. Of note is that this part of the coal loader was last painted some twenty years prior. Aetna's paint job was expected to last another twenty years. Aetna's task was to sandblast away the existing lead based paint and repaint with a three-tier system: zinc primer, epoxy intermediate and urethane topcoat. AHI was under contract with Norfolk Southern to maintain the elevator within the over 200-foot tall coal loader. Masterson claims he was injured when riding in that elevator.
In a 2005 opinion involving a pyramid situation, the Supreme Court referenced prior cases involving all three scenarios and summarized the analysis to be applied as follows:
An employee subject to the provisions of the Workers' Compensation Act cannot file an independent tort action against his employer or any fellow employee for injuries received in the course of employment. Code § 65.2-307; Pfeifer v. Krauss Const. Co., 262 Va. 262, 266, 546 S.E.2d 717, 719 (2001). Under certain circumstances, Code § 65.2-302 extends this immunity from tort liability arising from workplace accidents to qualifying employers, even though no direct common law contract of employment exists between such employers and employees. An employer qualifies for this immunity if the employer, acting as a general contractor, contracts with another to perform all or part of the employer's trade, business or occupation. Under these circumstances, the employer is deemed the statutory employer of the employees of such other subcontractor and the remedies under the Act are the statutory employees' exclusive remedy against the statutory employer. See id.; Evans v. Hook, 239 Va. 127, 131, 387 S.E.2d 777, 779, 6 Va. Law Rep. 1081 (1990); Smith v. Horn, 232 Va. 302, 306, 351 S.E.2d 14, 16, 3 Va. Law Rep. 1265 (1986). Similarly, employees of different subcontractors who are working on the same project and are also engaged in the general contractor's trade, business, or occupation are considered statutory fellow employees and are entitled to protection from an independent tort action for injuries allegedly caused by either of them. Pfeifer, 262 Va. at 266-67, 546 S.E.2d at 719; Evans, 239 Va. at 131, 387 S.E.2d at 779.
Applying these principles to this case, if at the time of Hudson's injury, Hudson and Jarrett were working on the same project and were also engaged in the trade, business, or occupation of VIT, Hudson and Jarrett would be statutory fellow employees and Hudson's third party tort action against Jarrett and Cooper could not proceed. Whether a person is a statutory employer presents a mixed question of law and fact and must be decided on the facts and circumstances of each case. See Bosley v. Shepherd, 262 Va. 641, 648, 554 S.E.2d 77, 81 (2001); Fowler v. International Cleaning Serv, 260 Va. 421, 425, 537 S.E.2d 312, 314 (2000).
Hudson v. Jarrett, 269 Va. 24, 29-30, 606 S.E.2d 827, 829 (2005).
Earlier this year, the Supreme Court revisited this area of law (albeit in a public utility situation), summarizing the analysis as follows:
The sole issue before this Court is whether the circuit court erred in determining that Britt and CP&O were statutory employees of the VPA. "The rights and remedies provided in the Virginia Workers' Compensation Act (the Act) are exclusive of all other rights and remedies for employees who fall within the scope of the Act." Burch v. Hechinger Co., 264 Va. 165, 168, 563 S.E.2d 745, 747 (2002). Thus, "[t]he issue whether a particular person or entity is the statutory employer of an injured employee is a jurisdictional matter presenting a mixed question of law and fact that must be determined under the facts of each case." Bosley v. Shepherd, 262 Va. 641, 648, 554 S.E.2d 77, 81 (2001).
The definition of a statutory employer is found in Code § 65.2-302(A), which states: When any person (referred to in this section as "owner") undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (referred to in this section as "subcontractor") for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any worker employed in the work any compensation under this title which he would have been liable to pay if the worker had been immediately employed by him.
Recognizing that not every statutory employer/employee relationship fits neatly within the parameters of the Code, this Court has developed a number of tests as guides to aid with the proper application of Code § 65.2-302(A). See, e.g., Cinnamon v. IBM Corp., 238 Va. 471, 478, 384 S.E.2d 618, 621, 6 Va. Law Rep. 628 (1989) (recognizing that the normal work test "is only a corollary guide, sometimes useful but not indispensable, in applying the literal language of the statutes to the facts in a particular case"). Two of these tests, the normal work test1and the governmental entity test2 are discussed at great length by the parties in this case. Moore, however, contends that neither the normal work test nor the governmental entity test is dispositive as there was no contract between Britt or CP&O and the VPA. We agree.
What they are supposed to do is also a determinant. Whereas a private business entity is essentially self-defining in terms of its trade, business, or occupation, a public utility has duties, obligations, and responsibilities imposed upon it by statute, regulation, or other means. Id. at 383, 355 S.E.2d at 599-600.
The plain language of Code § 65.2-302(A), establishes that two discrete elements must be present for a statutory employer/employee relationship to exist: (1) the work must be part of the owner/contractor's trade, business or occupation, and (2) the owner/contractor must have contracted with another to have work performed.
As we explained in Henderson v. Central Telephone Company of Virginia, 233 Va. 377, 383, 355 S.E.2d 596, 599, 3 Va. Law Rep. 2494 (1987) "[t]he [normal work] test is merely an approach that is useful in determining an entity's trade, business, or occupation." It is axiomatic then that the governmental entity test, as a counterpart to the normal work test, is a similarly useful approach for determining a governmental entities' trade, business, or occupation.
Moore v. Va. Int'l Terminals, Inc., 283 Va. 232, 235-237, 720 S.E.2d 117, 118-19 (2012).
In Clean Sweep v. Talley, 267 Va. 210, 591 S.E.2d 79 (2004), (a pyramid case) the Court discussed the test in this fashion:
...The only exception to this exclusivity provision is provided in Code § 65.2-309(A) permitting an action to be maintained against an "other party" "To be an 'other party' a defendant must have been a stranger to the trade, occupation, or business in which the employee was engaged when he was injured." 262 Va. at 525, 551 S.E.2d at 329. Additionally, we have held:
Because he is not a "stranger to the employment," an allegedly negligent employee of one contractor, engaged in the same business or project of an owner as an injured employee of another contractor, is not an "other party" amenable to suit...
Evans v. Hook, 239 Va. 127, 131 S.E.2d 777, 779, 6 Va. Law Rep. 1081 (1990). See also Pfeifer v. Krauss Construction Co., 262 Va. 262, 266-267, 546 S.E.2d 717, 719 (2001).
The initial question then is whether Masterson was a statutory employee of Norfolk Southern when working on the Aetna paint crew; for if Masterson was a stranger to the work of Norfolk Southern, he necessarily also was a stranger to the work of AHI.
AHI describes this painting project as maintenance of the coal loader. AHI points to the Stewart case (a descending case) for the proposition that all repairs and maintenance always are considered a part of the trade, occupation, or business of a company and employees performing such work are never a stranger to the work of the owner. Stewart v. Bass Construction Company, Inc., 223 Va. 363, 288 S.E.2d 489 (1982). Plaintiff Stewart worked for Federal, a company that manufactured pulp and paper products. As a part of its business, Federal purified water using 2000 pound aerators installed in lagoons. Defendant Bass was primarily engaged in construction work, but it also provided cranes and operators to...
