McCarthy v. Dan Lepore & Sons Co., Inc.

• Decision Date: 22 December 1998
• Citation: 724 A.2d 938
• Parties: Gerald McCARTHY and Nancy McCarthy, Husband and Wife, Appellants, v. DAN LEPORE & SONS CO., INC., Henderson Construction, Waco International, Cutler Construction, & Butler Manufacturing, Appellees.
• Court: Pennsylvania Superior Court

724 A.2d 938

Gerald McCARTHY and Nancy McCarthy, Husband and Wife, Appellants, v. DAN LEPORE & SONS CO., INC., Henderson Construction, Waco International, Cutler Construction, & Butler Manufacturing, Appellees.

Superior Court of Pennsylvania.

Submitted June 3, 1998.

Filed December 22, 1998.

Reargument Denied March 4, 1999.

Eric G. Marttila, Philadelphia, for appellants.

James K. Brengle, Wayne, for appellees.

Before KELLY, J., and CERCONE, President Judge Emeritus, and MONTEMURO, J.¹

KELLY, J.:

Appellant, Gerald McCarthy ("McCarthy"), asks us to determine whether Appellee, Dan Lepore & Sons Co., Inc. ("Lepore"), qualifies as a statutory employer. Specifically, we must address Lepore's "statutory employer" status with respect to Appellant, who was an employee of Lepore's subcontractor on the construction site where the injuries occurred. Under the law as it exists in this jurisdiction, we hold that Lepore is a "statutory employer" of its subcontractor's employee. Accordingly, we affirm the trial court's grant of summary judgment in favor of Lepore on that basis.

The relevant facts and procedural history of this appeal are as follows. In May, 1986, the Trustees of the University of Pennsylvania ("TUP") entered into a written contract with Henderson Construction Company, Inc. ("Henco"). Pursuant to the contract, Henco was to serve as the "construction manager" (general contractor) of a new clinical research building to be built on the University's premises. Henco hired more than fifty subcontractors to perform separate parts of the elaborate construction project. Lepore was one of the subcontractors hired by Henco. Lepore was hired to perform exterior masonry work on the building. Lepore signed a contract with Henco but not with TUP. Lepore then engaged Hamada as its subcontractor to waterproof the brickface of the building. Hamada was working under a verbal agreement with Lepore on a time and materials basis and had no contract with either Henco or TUP. Hamada employed McCarthy, a roofer, at the construction site.

As required by its contract with Henco, Lepore erected scaffolding to perform the exterior masonry work, including the waterproofing to be performed by Hamada. On July 7, 1988, McCarthy was up on the scaffolding inspecting a portion of the job when he leaned back against the crossbraces of the scaffolding. The scaffolding gave way and McCarthy fell seven stories to the ground. McCarthy sustained severe injuries and collected workers' compensation from his immediate employer, Hamada. McCarthy then brought suit against other contractors on the site, including Lepore and Henco. McCarthy also sued the scaffolding manufacturer, Waco International Corporation.

As a result of the claim, Lepore joined other subcontractors, Cutler Construction Company and Butler Manufacturing Company, as additional defendants. Each of the additional defendants filed a motion for summary judgment. Following oral argument, all counsel agreed to the dismissal of the additional defendants and of the original defendants, except Lepore. The trial court granted the dismissed parties' motions for summary judgment in separate orders entered on July 24, 1997. Following further oral argument, the trial court also granted Lepore's motion for summary judgment based on the statutory employer defense. McCarthy timely filed this appeal.

On appeal, McCarthy raises the following issue for our review:

SHOULD [LEPORE] BE DEEMED [MCCARTHY]'S "STATUTORY EMPLOYER," AND, THEREFORE, IMMUNE FROM COMMON LAW LIABILITY, WHERE [LEPORE] WAS NOT UNDER CONTRACT WITH THE OWNER (OR ONE IN THE POSITION OF THE OWNER), WAS NOT OCCUPYING OR CONTROLLING ANY PORTION OF THE OWNER'S PREMISES, AND WAS NOT RESPONSIBLE FOR PAYMENT OF [MCCARTHY]'S WORKERS' COMPENSATION BENEFITS?

(McCarthy's Brief at 3).

Pennsylvania Rules of Civil Procedure, Rule 1035.2 governs summary judgment as follows:

RULE 1035.2 MOTION

After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law

(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or

(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.

Pa.R.C.P. 1035.2. A proper grant of summary judgment depends upon an evidentiary record that either (1) shows the material facts are undisputed or (2) contains insufficient evidence of facts to make out a prima facie cause of action or defense and, therefore, there is no issue to be submitted to the jury. Pa.R.C.P. 1035.2 Note. Where a motion for summary judgment is based upon insufficient evidence of facts, the adverse party must come forward with evidence essential to preserve the cause of action. Id. If the non-moving party fails to come forward with sufficient evidence to establish or contest a material issue to the case, the moving party is entitled to judgment as a matter of law. Ertel v. Patriot-News Co., 544 Pa. 93, 674 A.2d 1038 (1996), cert. denied, ___ U.S. ___, 117 S.Ct. 512, 136 L.Ed.2d 401 (1996). The non-moving party must adduce sufficient evidence on an issue essential to its case and on which it bears the burden of proof such that a jury could return a verdict favorable to the non-moving party. Id. As with all summary judgment cases, the court must examine the record in the light most favorable to the non-moving party and resolve all doubts against the moving party as to the existence of a triable issue. Id.

Upon appellate review, we are not bound by the trial court's conclusions of law, but may reach our own conclusions. Long v. Yingling, 700 A.2d 508 (Pa.Super.1997), appeal dismissed, 1998 Pa. LEXIS 695 (1998) (citing Butterfield v. Giuntoli, 448 Pa.Super. 1, 670 A.2d 646 (1995),appeal denied, 546 Pa. 635, 683 A.2d 875 (1996)). In reviewing a grant of summary judgment, the appellate Court may disturb the trial court's order only upon an error of law or an abuse of discretion. Id. The scope of review is plenary and the appellate Court applies the same standard for summary judgment as the trial court. Albright v. Abington Memorial Hospital, 548 Pa. 268, 696 A.2d 1159 (1997).

On appeal, McCarthy argues that Lepore may not assert the "statutory employer" defense to his negligence cause of action because Lepore is not a "statutory employer" as defined by the Workers' Compensation Act. Specifically, McCarthy claims that Lepore is not a "statutory employer" under the Act because Lepore (1) was not under contract with the owner of the premises or a contractor in the position of the owner; (2) was not occupying or controlling any portion of the owner's premises; and (3) was not responsible for payment of McCarthy's workers' compensation benefits. We disagree.

Section 52 of the Workers' Compensation Act defines the employers' liability to an employee of an employee or contractor permitted to enter upon the premises as follows:

An employer who permits the entry upon premises occupied by him or under his control of a laborer or an assistant hired by an employe or contractor, for the performance upon such premises of a part of the employer's regular business entrusted to such employe or contractor, shall be liable to such laborer or assistant in the same manner and to the same extent as his own employe.

77 P.S. § 52; Lascio v. Belcher Roofing Corp., 704 A.2d 642, 643 (Pa.Super.1997). Employees may have more than one "employer" under the Act and all such employers are entitled to immunity under the Act provided that they meet the required conditions. See Pastore v. Anjo Const. Co., Inc., 396 Pa.Super. 58, 578 A.2d 21 (1990)

.

Under the Pennsylvania Workers' Compensation Act, a contractor² need not be the general contractor on a construction project to qualify as a statutory employer. Grant v. Riverside Corp., 364 Pa.Super. 593, 528 A.2d 962, 966 (1987), appeal denied, 518 Pa. 632, 541 A.2d 1391 (1988). This Court has stated that a general contractor's subcontractor on a construction project may also qualify as a "statutory employer" with respect to its own subcontractor's employees. Id. See generally Travaglia v. C.H. Schwertner & Son, Inc., 391 Pa.Super. 61, 570 A.2d 513 (1989),

appeal denied, 527 Pa. 618, 590 A.2d 758 (1990). For a contractor who is not the general contractor to qualify as a "statutory employer" of its own subcontractor's employees, the contractor must satisfy three conditions. See Grant, supra at 966 (citing Kieffer v. Walsh Construction Co., 140 F.Supp. 318 (E.D.Pa.1956)).

First, the contractor must be under contract with the owner of the premises or with a contractor who is in the position of the owner. Id. Second, the contractor must be in sole or common control of the job premises with a general contractor. Id. Third, the contractor must subcontract a part of its regular business to the subcontractor whose employee suffers an injury. Id. In this context, the key element of statutory employer status is the vertical relationship between the general contractor, the subcontractor, and the sub-subcontractor, whose employee was injured. See generally Grant, supra; Travaglia, supra; Kieffer, supra. The vertical relationship is essential to the test for statutory immunity because, by virtue of the vertical relationship, all of the contractors up the ladder remain potentially liable under the Act for payment of the injured employee's workers' compensation benefits. See Menginie v. Savine, 170 Pa.Super. 582, 88 A.2d 106 (1952)

(where general contractor and subcontractor have workers' compensation insurance, subcontractor may be liable for...