Nation v. Weiner

• Citation: 145 Ariz. 414,701 P.2d 1222
• Decision Date: 16 May 1985
• Docket Number: No. 1,CA-CIV,1
• Parties: Elizabeth Rae NATION and Roland Nation, wife and husband, Plaintiffs-Appellants, v. Dave WEINER and Phoenix General Hospital, Inc., an Arizona corporation, Defendants-Appellees. 6691.
• Court: Arizona Court of Appeals

Page 1222

701 P.2d 1222

145 Ariz. 414

Elizabeth Rae NATION and Roland Nation, wife and husband, Plaintiffs-Appellants, v. Dave WEINER and Phoenix General Hospital, Inc., an Arizona corporation, Defendants-Appellees.

No. 1 CA-CIV 6691.

Court of Appeals of Arizona,

Division 1, Department A.

May 16, 1985.

Ely, Bettini & Ulman by Herbert L. Ely and R. Todd Lundmark, Phoenix, for plaintiffs-appellants

Fennemore, Craig, Von Ammon, Udall & Powers, P.C. by Reed C. Tolman and Scot Butler III, Phoenix, for defendants-appellees.

OPINION

HAIRE, Presiding Judge.

The question presented is whether the appellant Elizabeth Nation (Nation) may recover damages against Phoenix General Hospital and one of its employees for injuries allegedly caused by the hospital's negligence.

Nation, a registered nurse, was admittedly an employee of Medox, Inc. Medox was in the business of supplying Phoenix area health care facilities with medical personnel on a temporary basis. Medox had assigned Nation to work at Phoenix General for nearly two years. Nation slipped and fell while rendering nursing services at Phoenix General. Her fall caused a serious injury to her right knee and resulted in her absence from work for several months.

Following her accident, Nation filed a workers' compensation claim and received compensation benefits from Medox's workers' compensation insurer. She also filed this action against Phoenix General alleging negligence and praying for damages not covered by the workers' compensation benefits received from Medox's workers' compensation insurer. Following substantial discovery, Phoenix General filed a motion for summary judgment and Nation filed a cross-motion for partial summary judgment. The trial court granted summary judgment for Phoenix General. Nation has appealed from that decision.

There are three major issues before this court. First, whether the facts contained in the record support the trial court's summary judgment determination that Phoenix General was also Nation's employer. Second, assuming that Phoenix General was Nation's employer, is the hospital nevertheless civilly liable because it failed to comply with the statutory prerequisites for immunity from such liability? Finally, again assuming the existence of an employment relationship, should Phoenix General enjoy immunity from civil prosecution where Nation's direct employer, Medox, and not Phoenix General, has provided workers' compensation benefits to Nation.

In analyzing the employment relationship between Nation and the hospital we are guided by the Arizona Supreme Court's recent decision in Word v. Motorola, Inc., 135 Ariz. 517, 662 P.2d 1024 (1983). Word is factually similar to this case.

"Plaintiff was assigned by his employer, Paramount Designs Systems, Inc. (Paramount) to work at Motorola, Inc. (defendant). During the course of this employment, plaintiff was injured on defendant's premises. He then filed a negligence action against defendant. Defendant claimed it was plaintiff's employer and that workmen's compensation was plaintiff's exclusive remedy. The trial court granted defendant's motion for summary judgment on this issue and the court of appeals affirmed." Word, 135 Ariz. at 517, 662 P.2d at 1024.

The trial court in Word determined that as a matter of law Motorola was Word's statutory employer and therefore was immune from Word's civil action pursuant to A.R.S. § 23-906. This decision was affirmed by the court of appeals. The supreme court reversed and remanded finding that the trial and appellate court decisions were "based upon a doctrine [statutory employer, § 23-901(B) ] legally inapplicable to the facts...." Word, 135 Ariz. at 519, 662 P.2d at 1026. The supreme court concluded:

"The statutory employer doctrine governs only situations in which an 'employer [owner or general contractor, for example] procures work to be done for him by a contractor....' A.R.S. § 23-902(B). Here, Motorola did not procure work to be done by Paramount. It undertook to perform the work itself, through its employees, and procured plaintiff and additional temporary employees from Paramount and other labor contractors. Paramount did not 'do work' for Motorola, it merely supplied ('lent') its employees to Motorola. The issue in this case, therefore, was not whether Motorola was a statutory employer under § 23-902(B), but whether Motorola was actually plaintiff's employer under the lent employee doctrine. See Carnes v. Industrial Commission, 73 Ariz. 264, 240 P.2d 536 (1952)." Word, 135 Ariz. at 519, 662 P.2d at 1026. (Emphasis added).

Similarly, in this case, the statutory employer doctrine has no application. ¹ As in Word, Medox did not "do work" for the hospital, but rather supplied ("lent") Nation to the hospital. Word establishes that the proper legal question is whether Phoenix General was Nation's employer by virtue of a lent employee-employer relationship.

In defining the elements of the lent employee relationship, the court in Word relied heavily upon A. Larson, Workmen's Compensation Law (1982). The court, quoting Larson with approval, stated:

"When a general employer lends an employee to a special employer, the special employer becomes liable for workmen's compensation only if

(a) the employee has made a contract of hire, express or implied, with the special employer;

(b) the work being done is essentially that of the special employer; and

(c) the special employer has the right to control the details of the work.

* * *

* * *

"When these factors are met, the 'special employer' becomes an 'employer' and, like other employers liable for workmen's compensation, may be entitled to the benefit of the statutory immunity given complying employers." Word, 135 Ariz. at 520, 662 P.2d at 1027. (Emphasis added; footnote omitted).

Although the parties agree that Medox was an employer of Nation, this does not prevent Phoenix General from also being Nation's employer. ² Arizona courts have acknowledged that an employee engaged in a particular activity may have two separate employers. See Hamrick v. Industrial Commission, 15 Ariz.App. 277, 488 P.2d 482 (1971); Butler v. Industrial Commission, 50 Ariz. 516, 73 P.2d 703 (1937).

We now consider whether the record in this case establishes as a matter of law that Phoenix General was Nation's employer by virtue of a lent employee relationship. It is clear that Nation worked regularly at Phoenix General, and that she performed a service of a type regularly provided by the hospital. Thus the second requirement specified in Word is clearly satisfied. This leaves the contract for hire and control and supervision elements for consideration.

The control issue must be considered by evaluating the totality of the employment circumstances. ³ Reed v. Industrial Commission, 23 Ariz. 591, 534 P.2d 1090 (1975). This evidence should include:

"The duration of the employment; the method of payment; who furnishes necessary equipment; the right to hire and fire; who bears responsibility for workmen's compensation insurance; the extent to which the employer may exercise control over the details of the work...." Home Insurance Co. v. Industrial Commission, 123 Ariz. 348, 350, 599 P.2d 801, 803 (1979).

Extensive discovery by the parties revealed the following facts. Medox hired and had the authority to fire Nation. Medox reviewed Phoenix General's performance evaluation of Nation and was in weekly contact with Nation concerning any problems she might be having with her assignment. Medox could assign and reassign Nation at will. Medox paid Nation's salary, and provided malpractice and workers' compensation insurance for her. Phoenix General provided workers' compensation for its employees and required proof that such coverage was supplied by Medox before Nation was permitted to work at the hospital.

Nation worked at Phoenix General for over two years. During this time Nation would notify her hospital supervisor of her availability to be scheduled on a monthly basis. This schedule would then be turned over to Medox for formal assignment. While working at Phoenix General, Nation had to comply with the policies, rules and regulations of the hospital.

Nation was subject to the same supervision by Phoenix General's supervisors or staff physicians as were the hospital's regularly employed nurses. Phoenix General could terminate Nation's services at the hospital by requesting that Medox not reassign her, but this would not terminate her employment with Medox. Both Medox and Phoenix General exhibit several of the traditional indicia of supervision and control over Nation.

In considering whether the hospital had the requisite supervision and control over Nation to establish an employment relationship, it is important to note that the decisive factor is the right to supervise and control, not the exercise of that right. Hughes v. Industrial Commission, 113 Ariz. 517, 558 P.2d 11 (1976); Scott v. Rhyan, 78 Ariz. 80, 275 P.2d 891 (1954).

In our opinion the facts conclusively demonstrate that Phoenix General had sufficient right to supervise and control Nation to satisfy this element of an employer-employee relationship. This conclusion is primarily due to the extended time (two years) that Nation worked at Phoenix General as well as the established fact that Nation was admittedly subject to the same direction and supervision by Phoenix General as were the staff nurses of Phoenix General with whom she worked on a daily basis. ⁴

Finally, we consider whether there was a contract for hire between Nation and Phoenix General. As indicated in Word, the evidence establishing the existence of a "contract of hire" between the special employer and the employee need not be expressed. It "may be implied from the employee's acceptance of the special employer's control and direction." Larson, supra, § 48.10 at 8-331-332. Word specifically notes that although there is authority to the contrary, in cases involving labor...