Taylor v. YRC, Inc.
| Decision Date | 02 February 2023 |
| Docket Number | 358037 |
| Parties | ANTHONY TAYLOR, Plaintiff-Appellant, v. YRC, INC., doing business as FREIGHT, and KEVEN KING, Defendants-Appellees. |
| Court | Court of Appeal of Michigan — District of US |
UNPUBLISHED
Oakland Circuit Court LC No. 2019-175506-NO
Before: HOOD, P.J., and SWARTZLE and REDFORD, JJ.
In this negligence action, plaintiff, Anthony Taylor (Taylor) appeals as of right an order granting summary disposition to defendants, YRC, Inc., doing business as Freight (YRC), and Keven King. We affirm.
This case originated with workplace injuries Taylor suffered while working at YRC's shipping terminal in Pontiac, Michigan on December 3, 2018. YRC is a freight shipping and trucking company. Taylor was employed by a company called FAMCO, Inc. (FAMCO). For several years, FAMCO had assigned Taylor to perform light maintenance and janitorial work at YRC's Pontiac facility. Although the contract between YRC and FAMCO is not part of the record, Taylor and YRC acknowledge that at a minimum there was an implied contract between YRC and FAMCO. In early December 2018, while Taylor was walking in YRC's terminal, a forklift operated by King, a direct employee of YRC, backed up and struck Taylor, injuring him. Taylor suffered a significant injury to his left leg.
Taylor's employer, FAMCO, did not carry worker's compensation insurance, and its owner disappeared shortly after Taylor's injury. Taylor claims that his medical insurer paid his medical bills arising from the injury. He has not claimed or received worker's compensation benefits.
In late July 2019, Taylor filed a complaint alleging negligence against both YRC and King, and vicarious liability and agency claims against YRC. Defendants filed a motion for summary disposition pursuant to MCR 2.116(C)(10), arguing that YRC was Taylor's statutory employer under MCL 418.171, so his claims were barred under MCL 418.131(1), the exclusive-remedy provision of the Worker's Disability Compensation Act (the WDCA), MCL 418.101 et seq. Following a hearing, the trial court granted defendants' motion for summary disposition, finding that YRC was Taylor's statutory employer.[1] Taylor filed motions for reconsideration and for relief from judgment, which the trial court denied. This appeal followed.
We review de novo a trial court's decision on a motion for summary disposition. El-Khalil v Oakwood Healthcare, Inc, 504 Mich. 152, 159; 934 N.W.2d 665 (2019).
A motion under MCR 2.116(C)(10) . . . tests the factual sufficiency of a claim. When considering such a motion, a trial court must consider all evidence submitted by the parties in the light most favorable to the party opposing the motion. A motion under MCR 2.116(C)(10) may only be granted when there is no genuine issue of material fact. A genuine issue of material fact exists when the record leaves open an issue upon which reasonable minds might differ. [El-Khalil, 504 Mich. at 160 (quotation marks and citations omitted).]
Taylor argues that the trial court erred by concluding that YRC was his statutory employer, therefore, it erred in applying the exclusive-remedy provision to bar his claim. We disagree.
The WDCA is Michigan's worker's compensation statute. Ideally, the dual purpose of the WDCA is to streamline the payment and receipt of benefits for workers who are injured on the job and to limit employers' exposure to individual lawsuits by injured workers. See Reed v Yackell, 473 Mich. 520, 529-530; 703 N.W.2d 1 (2005) (opinion by TAYLOR, C.J.). An employee, who falls within the WDCA's framework, is subject to the exclusive-remedy provision of the act, MCL 418.131(1). See id. This means, with the exception of certain intentional torts, an employee subject to the exclusive-remedy provision cannot sue their employer for a workplace injury except to recover WDCA benefits. See id.; MCL 418.131(1). The protection of the exclusive-remedy provision extends not only to the employer but also to a coworker who allegedly injured the plaintiff on the job. Harris v Vernier, 242 Mich.App. 306, 310, 312; 617 N.W.2d 764 (2000); Whaley v McClain, 158 Mich.App. 533, 535-536, 538; 405 N.W.2d 187 (1987). As with many worker's compensation cases, the threshold question is whether Taylor was an "employee" under the definitions in the WDCA, and in this case whether YRC was an employer.
The trial court correctly concluded that YRC was Taylor's statutory employer, bringing Taylor within the exclusive-remedy provision of the WDCA. Although Taylor's direct employer was FAMCO rather than YRC, the exclusive-remedy provision is nonetheless applicable in this case if YRC qualifies as Taylor's statutory employer under MCL 418.171(1). See Burger v Midland Cogeneration Venture, 202 Mich.App. 310, 314; 507 N.W.2d 827 (1993) ("If an employer is a statutory employer under [MCL 418.171], the exclusive remedy provision of [MCL 418.131] applies.") (Citations omitted).
A "statutory employer" or "shoot-through employer" is an employer that becomes, through function of the statute, responsible for paying the WDCA benefits of workers that are not its direct employees. See MCL 418.171.[2] This happens when the employer hires a contractor that is either not subject to the WDCA or uninsured, and the contractor's employee is injured. See id.; see also McQueer v Perfect Fence Co 502 Mich. 276, 286-290; 917 N.W.2d 584 (2018). Effectively, MCL 418.171 is a safety net for employees of a contractor who does not have adequate WDCA coverage. McQueer, 502 Mich. at 289-290.
Our Supreme Court has explained:
[MCL 418.171(1)] sets forth a statutorily imposed employment relationship, under which an employer assumes the role of a "principal" by contracting with an independent contractor, referred to as the "contractor," for the performance of any work. The principal becomes liable for the payment of workers' compensation benefits to "any person employed" by the contractor for injuries sustained while performing any work on behalf of the principal, provided that the contractor is either not subject to the WDCA or has failed to obtain adequate insurance as required by the WDCA. Subsection (1) thus creates a tripartite employment relationship among the principal, the contractor, and the contractor's employees. [McQueer, 502 Mich. at 288.]
"For an employee to recover from a principal under [MCL 418.171(1)], there must be, among other things, a contract between the principal who is covered by the WDCA and a contractor employer who is not covered." McQueer, 502 Mich. at 288 n 20 (quotation marks, brackets, and citation omitted). In short, MCL 418.171(1) "statutorily imposes an employment relationship between the principal and the contractor's uninsured employees for purposes of providing workers' compensation benefits." McQueer, 502 Mich. at 289.
Here, the trial court correctly concluded that YRC qualifies as Taylor's statutory employer under MCR 418.171(1) as a matter of law. Using the language of that statutory provision, YRC was the principal, and FAMCO was the contractor. YRC and FAMCO had a contractual arrangement whereby FAMCO provided maintenance and janitorial services for YRC's Pontiac terminal. Taylor, who worked for FAMCO, had been performing maintenance and janitorial services at YRC's Pontiac terminal for many years. He was injured while working at YRC's Pontiac terminal. It is undisputed that FAMCO did not have workers' compensation insurance. In light of these facts, YRC was Taylor's statutory employer under MCL 418.171(1). Therefore, the exclusive-remedy provision applies to bar Taylor's tort claim against YRC. Burger, 202 Mich.App. at 314. And Taylor's tort claim against his coworker, King, is also barred by the exclusiveremedy provision. Harris, 242 Mich.App. at 310, 312; Whaley, 158 Mich.App. at 535-536, 538.
Taylor argues in his principal brief on appeal that YRC was not his statutory employer because there was no contract for hire between YRC and FAMCO. We disagree.
The language of MCL 418.171(1) does not require a contract for hire; it merely requires a contract. See MCL 418.171(1) ("If any employer subject to the provisions of this act, in this section referred to as the principal, contracts with any other person, in this section referred to as the contractor ....") (emphasis added). Taylor suggests that there was no contract between YRC and FAMCO. He relies on deposition testimony indicating that no written contract between YRC and FAMCO has been found or produced. But there is no language in MCL 418.171(1) requiring a written contract. It is recognized elsewhere in the WDCA that contracts may be "express or implied, oral or written ...." MCL 418.151(b). An implied-in-fact contract "arises when services are performed by one who at the time expects compensation from another who expects at the time to pay therefor." Drob v SEK 15, Inc, 334 Mich.App. 607, 619; 965 N.W.2d 683 (2020) (quotation marks and citation omitted). It is beyond reasonable dispute that, at minimum, an implied contract existed between YRC and FAMCO, a point which Taylor's counsel appeared to concede at oral argument. YRC engaged FAMCO to provide maintenance and janitorial services at YRC's Pontiac terminal. Taylor worked for FAMCO at YRC's Pontiac terminal for about 11 years before he was injured. There is no evidence disputing the existence of this implied contract.
The trial court did not err in concluding that YRC was Taylor's statutory employer under MCL 418.171. It therefore, correctly granted summary disposition because Taylor's negligence claims were barred by the exclusive-remedy provision. Because we affirm on this ground, we decline to address the...
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