Murphy v. Chickasha Mobile Homes, Inc.

• Decision Date: 06 May 1980
• Docket Number: No. 51630,51630
• Citation: 611 P.2d 243,1980 OK 75
• Parties: Debra Kaye MURPHY, Administratrix of the Estate of Jesse Houston Murphy, Deceased; and Debra Kaye Murphy, Individually and as Next Friend and Mother of Tina Michelle Murphy, and Bobby James Murphy, Minors, Appellants, v. CHICKASHA MOBILE HOMES, INC., a Corporation, Appellee.
• Court: Oklahoma Supreme Court

Page 243

611 P.2d 243

1980 OK 75

Debra Kaye MURPHY, Administratrix of the Estate of Jesse

Houston Murphy, Deceased; and Debra Kaye Murphy,

Individually and as Next Friend and Mother of Tina Michelle

Murphy, and Bobby James Murphy, Minors, Appellants, v. CHICKASHA MOBILE HOMES, INC., a Corporation, Appellee.

No. 51630.

Supreme Court of Oklahoma.

May 6, 1980.

Certiorari to the Court of Appeals, Division 2.

Employee of independent building contractor suffered fatal injuries while working on a construction project at owner's manufacturing plant. Administratrix of deceased worker brought negligent-tort action against the owner. District Court, Oklahoma County, Hon. Charles L. Owens, trial judge, viewed the wrongful death action as abrogated by the Workers' Compensation Act and sustained owner's motion to dismiss. The Court of Appeals affirmed and administratrix seeks review by certiorari.

CERTIORARI GRANTED, OPINION OF COURT OF APPEALS VACATED, TRIAL COURT'S JUDGMENT REVERSED AND CAUSE REMANDED WITH DIRECTIONS.

Kent F. Frates, Ellis, Frates & Shotts, Victor G. Hill, Jr., Oklahoma City, for appellants.

James M. Robinson, James S. Drennan, Monnet, Hayes, Bullis, Thompson & Edwards, Oklahoma City, for appellee.

OPALA, Justice:

The issue on certiorari is whether the "hirer" of an independent building contractor was the "principal employer" within the meaning of 85 O.S.1971 § 11 which casts secondary liability for payment of compensation benefits upon indirect or remote employers. We hold that under the Atkinson ¹ "necessary-and-integral" test, the record before us is insufficient for a meaningful determination of hirer's § 11 status as the statutory employer.

A principal employer, within the meaning of the compensation law, must be defined in terms of the task for the performance of which he hired the independent contractor. Proper application of the test requires a two-step consideration: (1) the task being performed by the worker, when injured, must be necessary and integral part of hirer's day-to-day business operations or (2) one that is within the range of activities customarily carried out by one in the hirer's line of business. If the contractor, however independent he may be, is merely a medium through whom the hirer is pursuing the day-to-day activity of his own business, § 11 status is created by operation of law and compensation liability attaches.

The administratrix of the estate of Jesse Murphy (worker) brought a wrongful death action against Chickasha Mobile Homes, Inc. (owner). The worker was killed at the owner's facility a manufacturing plant. He was then in the employ of Apollo Building Systems, Inc., an independent building contractor (contractor), who was in the process of erecting, pursuant to a contract with the owner, a metal addition to an existing plant building at owner's premises. While plugging an electric screwdriver into an extension cord furnished by owner, worker became exposed to electrical current and suffered extensive injuries. He died a short time after the accident.

The administratrix alleges that owner was negligent in supplying for worker's use a plug and cord which had been dangerously altered. The trial court sustained owner's "motion to dismiss," ruling that the cause of action sought to be litigated was abrogated by the Workmen's Compensation Law. ² Owner's secondary liability as statutory employer within the purview of § 11, reasoned the court, made it immune from the common-law tort action. The Court of Appeals affirmed. Administratrix seeks certiorari.

At the heart of the dispute is the contractor's status vis-a-vis the defendant-owner. If the latter fits the description of a principal (statutory) employer, within the meaning of § 11, he is secondarily answerable in compensation for injury or death occurring in activities that are a necessary and integral part of the owner's business. If this be true, the instant action does not lie. But if owner is not a principal employer, then he is subject to tort liability preserved by § 44.

This area of law has been marked by several decades of rather discordant decisions. Our most recent effort to articulate the correct test for ascertaining who is principal employer under § 11 was in Atkinson. ³ There we abandoned the remaining vestiges of the "pecuniary gain" analysis to lay down the so-called "necessary and integral" test by which to measure the hirer's secondary liability for the activities of his independent contractor.

Under the pre-Atkinson application of the "necessary and integral" test extant case law accorded a hirer the statutory employer's status under § 11 in those cases where hirer's contractor was engaged in (1) the repair and maintenance of hirer's business premises, ⁴ (2) the moving of hirer's equipment or manufactured goods from one location to another, ⁵ and (3) the performance of tasks representing temporarily expanded activity beyond hirer's day-to-day business operations. ⁶

In some of these cases the work performed by the contractor was deemed necessary and integral part of the hirer's business because, in some way, it tended to facilitate the continued operations of his business. The work so done by the contractor, though oftentimes totally unrelated to the line of business carried on by the hirer, was nonetheless held necessary and integral part of it where the tasks performed could be somehow interconnected, however remotely, with the uninterrupted functioning of the hirer's business.

For the most part the cases which represent our past expressions are neither readily reconcilable nor capable of being arranged according to some definable categories. Any effort to classify them would likely fail. We shall not attempt the task. The conflict that is apparent from these pronouncements may be attributed to (1) the long period during which two different and not always consistent tests were being applied pecuniary gain ⁷ and the necessary-and-integral-part analyses, ⁸ (2) our subconsciously persistent pursuit (even after the 1955 amendment of § 11 redefined statutory employer) ⁹ of notions associated with the 1923 version of § 11, which, while in effect, appeared to extend the hirer's secondary liability, in a most sweeping phrase, to "any contract with an independent contractor" ¹⁰ and, lastly, (3) the fact that some of our cases were decided before the existence of contingent secondary liability for payment of compensation came to be recognized as a ground for tort immunity. ¹¹ The decisional law may also have been influenced by excessive judicial fear of leaving an independent contractor's employee completely without any benefit of coverage under the compensation law. Before the 1977 amendments became enacted, the "laundry-list" of covered "hazardous" employment included only a trickle of the total industrial and business life in the state. ¹² The rest of the workers were left unprotected. As late as 1940 the "necessary and integral" test of Atkinson had not yet been fully evolved and the court seemed still impressed with the seemingly open-ended language of the 1923 version of § 11. While some cases reflected an attempt at limiting § 11's application by resort to variously verbalized standards, ¹³ it was not until Atkinson that we were able to give an articulate recognition to the long-existing statutory verity that § 11 does not operate to make every hirer of an independent contractor liable for compensation to the latter's employees. Atkinson, a significant link in the chain of case-law development, first brought to our jurisprudence much needed conceptual consistency. ¹⁴ Its teaching is of even greater significance now since compensation law's coverage has been extended by the 1977 amendments to a near-universal sweep. ¹⁵ What remains for us to do here is to point the way to a meaningful implementation of Atkinson by a proper application of its essence which is free from the encrusted complexities left behind by the pecuniary-gain test's distortions of yesteryears.

For a distortion-free determination of hirer's status as statutory § 11 employer under the "necessary-and-integral" test, we fashion here a helpful two-part task-related standard. Tasks performed by an independent contractor are "necessary and integral" part of the hirer's operations within the meaning of the test when they (1) are directly associated with the day-to-day activity carried on by the hirer's line of trade, industry or business or (2) would customarily be done in that line of business. The activities encompassed by the contractual relationship of the statutory employer and the skills needed for their performance must necessarily be germane to, and considered part and parcel of, that employer's day-to-day business operations.

What constitutes a necessary and integral part of the employer's business may often constitute a disputed issue of law or fact because of (1) the different factual characteristics that may arise in every case, (2) the diverse categorical and individual characteristics of management practices and customs in effect within a given industry, trade or business and (3) incidental legal factors such as those that may be present when public utility operations are under consideration. ¹⁶

This case appears to have been decided on the basis of an overbroad construction of § 11. The trial court's ruling on motion to dismiss had not been preceded by a proper, test-related examination of undisputed facts relevant and material to the issue of whether in the owner's business (manufacturing mobile homes) the construction of a metal addition to its plant may be viewed as (a) work associated with the day-to-day operations or customarily performed in that line of business or (b) one that represents an unrelated activity to be procured through an independent contractor with different, specialized skills in another line of business endeavor. The opinion of the Court of Appeals is hence vacated, the trial...