Searcy v. Paul

• Decision Date: 31 May 1985
• Parties: , 69 A.L.R.4th 187 Harold SEARCY v. David L. PAUL et al. 1
• Court: Appeals Court of Massachusetts

Page 1275

478 N.E.2d 1275

20 Mass.App.Ct. 134, 69 A.L.R.4th 187

Harold SEARCY v. David L. PAUL et al. ¹

Appeals Court of Massachusetts Plymouth.

Argued Feb. 5, 1985.

Decided May 31, 1985.

Edward J. Shagory, Boston (Beth H. Saltzman, Peabody, with him), for David L. Paul et al.

Edmund M. Pitts, Boston, for plaintiff.

Mary Holland Harvey, for Homeowners Federal Sav. and Loan Ass'n.

Before GREANEY, C.J., and CUTTER and FINE, JJ.

CUTTER, Justice.

On April 8, 1975, Searcy was injured when he fell from a ladder while cleaning windows at an apartment complex (the complex), known as Brandywine Village, in Brockton. The action was originally brought on April 5, 1976, against Paul, individually and as doing business as Paul Properties. By amendments and substitute complaints, D.L.P., Inc. (DLP), a New York corporation; Vortex Construction Company (Vortex), a Massachusetts corporation; and Homeowners Federal Savings and Loan Association (Homeowners) were added as defendants. The complaints asserted negligence on the part of certain defendants in furnishing to Searcy an unsafe ladder.

On March 31, 1976, Searcy had filed a claim with the Industrial Accident Board (the board), under G.L. c. 152 (workers' compensation), asserting that he was an employee of Vortex. This claim was settled, with the board's approval, by Vortex's compensation insurer for a lump sum of $5,300 (G.L. c. 152, § 48). This sum was paid to Searcy, his attorney (who also represents him in this action), and medical providers. ²

Among other defenses to the substitute complaints, the defendants asserted that Searcy was barred from proceeding at common law against them, respectively, by the lump sum settlement under G.L. c. 152. A pretrial motion for summary judgment (on the ground that the lump sum settlement barred relief in this action) was denied by one Superior Court judge, and later on February 8, 1983, was allowed by another judge as a defense protecting Vortex, but not other defendants. The action was dismissed as against Vortex.

At trial, the case was submitted to the jury on special questions against Paul and DLP under which Searcy was awarded $112,500. ³ The defendants' motions for judgment n.o.v. and for a new trial were denied. Paul and DLP have appealed. The judge directed a verdict for Homeowners. From the resulting judgment for Homeowners, Searcy has appealed. We state the principal facts underlying the claims asserted.

In 1974, Homeowners had acquired the complex by foreclosure when it was about sixty percent completed. By a duly recorded deed, Homeowners, on November 20, 1974, conveyed ⁴ the complex to Paul, a real estate developer, who operated real estate projects in several States as Paul Properties. Paul owned all the shares of Vortex, a corporation engaged in construction, and was its president. Paul was also president, and owned a majority of the shares, of DLP. Paul hired Vortex as general contractor to complete the complex. It could be found that Paul hired DLP as managing agent for the complex and that he selected one Joseph Roif (upon the recommendation of Homeowners or of persons connected with Homeowners) to oversee the construction work for Vortex and as manager-operator of DLP. ⁵ Roif was the supervisor of Richard Record, also an employee of Vortex.

Searcy operated his own cleaning business. He was engaged ⁶ by Vortex to clean units in the complex (after their completion) at a price of twenty dollars per unit and started work a week or more before April 8, 1975, when the accident happened. Searcy was told by Record that he was also to clean some outside windows about twelve feet above the ground. Searcy protested that he "never did any ... outside windows before and ... [that he] wasn't equipped to do outside windows." Searcy also told Record that he "didn't have a ladder ... [to use] to clean the windows." Record said the outside windows "had to be done before ... [Searcy] could get paid," and that he would get Searcy a ladder.

Later David Fagone, an employee of DLP (who lived in one of the apartment buildings and did miscellaneous work in the complex) brought an aluminum ladder to Searcy and said that Record had sent it. This was the bottom section of a sixteen to thirty-two foot extension ladder. It could be found or inferred that friction feet for the bottom of the ladder were not attached at the time of the accident and that Searcy had not "alter[ed] the ladder at all that ... Fagone gave" him.

Searcy used the ladder in cleaning windows for four or five days. Record testified that he warned Searcy "a couple of times," when he saw him, that the base of the ladder was too far away from the side of the building, near which he then was working, to be safe. On April 8, 1975, Searcy placed the base of the ladder on a blacktop walkway about eight feet away from a building on which he was about to work. He was washing a window with his left hand, and holding onto the building with his right hand. His bucket was between his feet, which were on the fourth rung from the top. The ladder suddenly shifted and Searcy fell to the ground, with the bucket. He noticed that the rung on which he had been standing was bent and the ladder was twisted. He was seriously injured, sustained head and back injuries, and had broken bones in or near his feet and ankles. He was hospitalized for a substantial time and some of his injuries are permanent.

1. Paul and DLP contend that Searcy is barred from bringing this action because of the approved lump sum settlement with Vortex by him as an employee of that corporation. Vortex was named as an insured, together with DLP and Paul Properties (and other entities), by endorsement on Vortex's workers' compensation policy. The contention, in effect, is that Searcy (having made a lump sum settlement under G.L. c. 152, cannot sue Paul and DLP as third parties under c. 152, § 15, as amended by St.1971, cc. 888 and 941) ⁷ because the relationships among Paul, DLP, and Vortex were such as to create "one [insured] multi-faceted construction company" and, consequently, one aggregate employer of Searcy.

Examination of the legislative history of St.1971, c. 941 (see note 7, supra ), discloses no interpretation of the chapter's purpose beyond the language of the section itself. Contemporary comment, however, shows that the statute was taken by text and periodical writers as broadly abolishing the so-called "common employment" doctrine and permitting third party actions by, or in behalf of, an injured employee against all but his immediate insured employer. See Locke, Workmen's Compensation Law, 18 Ann.Survey Mass.Law 50, §§ 4.1-4.3 (1972); Locke, Workmen's Compensation, §§ 661-665, 668-674 (2d ed. 1981 & Supp.1984); 2A Larson, Workmen's Compensation, §§ 72.31(b)-72.40 (1983 & Supp.1984). See also the concurring opinion of Braucher, J., in Poirier v. Plymouth, 374 Mass. 206, 229-230, 372 N.E.2d 212 (1978), and Correia v. Firestone Tire & Rubber Co., 388 Mass. 342, 350-352, & n. 9, 446 N.E.2d 1033 (1983).

We apply the 1971 amendment as meaning just what it says, and as allowing a corporation's employee to bring actions for negligence against third parties, either individuals or corporations, even if in some degree affiliated with the insured employer corporation (at least where no joint venture with another defendant is established). This seems to be the trend of the cases elsewhere where legislation, generally comparable to the 1971 amendments of c. 152, § 15, has been enacted. ⁸

We perceive no basis, in the present circumstances, for extending the Massachusetts decisions with respect to "disregarding the corporate fiction" so as to provide to a third party corporation immunity from an action by an employee of a somewhat affiliated corporation which has made a workers' compensation settlement with that employee. Here there has been shown (a) no flagrant or relevant disregard of corporate barriers by Paul and the several corporations of which he was an officer and shareholder and (b) no fraud. See My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614, 618[20 Mass.App.Ct. 140] -619, 233 N.E.2d 748 (1968); Gordon Chemical Co. v. Aetna Cas. & Surety Co., 358 Mass. 632, 637-639, 266 N.E.2d 653 (1971). ⁹

We do not view Vertentes v. Barletta Co., 392 Mass. 165, 167-170, 466 N.E.2d 500 (1984), and see concurring opinion at 176-177, as precluding a third party action by Searcy against either Paul or DLP. Searcy, in seeking recovery against Paul, was trying to recover from Paul as principal for the negligence of DLP alleged to be Paul's agent. Searcy has not been shown to have been working for DLP either as employee or independent contractor. Nothing in G.L. c. 152 (after the 1971 amendments) extends any immunity to Paul, if DLP was his agent, because Vortex (insured under c. 152) had made a lump sum settlement with Searcy. Whether Searcy was an employee or independent contractor of Vortex, the 1971 amendments specifically permitted Searcy to bring a third party action for negligence against DLP or against Paul as principal if DLP was his agent.

2. It could be found that Paul, as owner of the complex, and DLP, as Paul's agent, at the time of the accident on April 8, 1975, had sufficient control over the complex, to make it the duty of each of them to take "reasonable and appropriate" steps to prevent injury to persons lawfully on the premises of the complex regardless of the status entitling such persons to be there. See Mounsey v. Ellard, 363 Mass. 693, 707-709, 297 N.E.2d 43 (1973); Poirier v. Plymouth, 374 Mass. 206, 228, 372 N.E.2d 212 (1978), and the cases reviewed in the concurring opinion in Vertentes v. Barletta Co., 392 Mass. supra at 171-176, 466 N.E.2d 500. We think that Searcy, whether an employee of Vortex or an independent contractor of Vortex, was lawfully on the premises owned by Paul and managed by DLP which could be found to be Paul's agent. ¹⁰

Paul and DLP were not...