Vanterpool v. Hess Oil Virgin Islands Corp., Civ. No. 1983/341.

• Decision Date: 07 June 1984
• Docket Number: Civ. No. 1983/341.
• Citation: 589 F. Supp. 334
• Parties: George N. VANTERPOOL, and Marjorie Vanterpool, his wife, Plaintiffs, v. HESS OIL VIRGIN ISLANDS CORP., Defendant.
• Court: U.S. District Court — Virgin Islands

589 F. Supp. 334

George N. VANTERPOOL, and Marjorie Vanterpool, his wife, Plaintiffs, v. HESS OIL VIRGIN ISLANDS CORP., Defendant.

Civ. No. 1983/341.

District Court, Virgin Islands, D. St. Croix.

June 7, 1984.

COPYRIGHT MATERIAL OMITTED

John K. Dema and John R. Coon, Christiansted, St. Croix, V.I., for plaintiffs.

Britain H. Bryant, Christiansted, St. Croix, V.I., for defendant.

MEMORANDUM OPINION

DAVID V. O'BRIEN, District Judge.

We must decide in this case whether the borrowed employee doctrine applies in the Virgin Islands. In a workmen's compensation setting, it involves the situation where a worker who is employed by one employer is borrowed by another employer to provide temporary services. When applied, the doctrine bars that employee from filing any common law action for damages, if he is injured, against the borrowing employer in the same manner as he is barred from an action against his regular employer.

We find that the doctrine does apply in this jurisdiction, but we will deny summary judgment to the defendant because a material fact is in dispute.

I. FACTS

The plaintiff George N. Vanterpool, ("Vanterpool"), was employed by Litwin Panamerican Corporation, ("Litwin"), at the refinery of Hess Oil Virgin Islands Corp., ("HOVIC"). Litwin was essentially a labor broker supplying workers for temporary assignment at HOVIC. Vanterpool was accustomed to such assignments. Prior to each particular assignment, he was required to execute a certain form called a "Rehire Form", prepared by Litwin. He signed his first "Rehire Form" on July 1, 1976 with nine others to follow. The last occasion he signed such a form was on September 11, 1979.

The form, as pertinent to this case, stated:

This is to inform you of the conditions under which you will be working while a "HESS Turnaround Loanee".

You should be aware that while working as a Loanee:

1. HOVIC personnel will control, direct and supervise all aspects of your work.

2. At no time should you receive or act under instructions from Litwin supervision.

3. HOVIC will provide you with safety equipment and will ensure that all safety conditions surrounding your work are met.

Vanterpool put his initials to this part of the form, and placed his signature at the appropriate location at the bottom. He then went to work until November 17, 1981, when he was injured.

On the date of his injuries, Vanterpool was working with a large mobile welding machine, attempting to link it to a trailer hitch connected to a truck. All the above equipment was owned by HOVIC. His complaint alleges that he was doing his work "according to the instructions of HOVIC personnel," while his later affidavit claims "the details of my work were directed by a pipefitter who was employed by Litwin." There is no question Vanterpool was working on HOVIC property, doing HOVIC's work. He could have been fired by HOVIC without decisional involvement by Litwin.

Vanterpool, at the time, remained on the Litwin payroll. As part of the contract between Litwin and HOVIC under which he was working, Litwin was specifically responsible for making the insurance premium payments to the Government Insurance Fund whereby Vanterpool would be eligible for workmen's compensation benefits if injured. Litwin then charged the expense back to HOVIC. Vanterpool received workmen's compensation benefits under this arrangement after his injury.

He also filed an action against HOVIC, claiming the negligence of HOVIC was responsible for his injuries. HOVIC filed this motion for summary judgment, invoking the borrowed employee doctrine. The matter is a case of first impression in this jurisdiction. The factual situation is presented herein in the light most favorable to Vanterpool, the non-moving party.

II. HISTORY OF BORROWED EMPLOYEE DOCTRINE

The genesis of the borrowed employee doctrine is found in Standard Oil Co. v. Anderson, 212 U.S. 215, 220-221, 29 S.Ct. 252, 253-254, 53 L.Ed. 480 (1908) whereby the Supreme court defined the matter as follows:

One may be in the general service of another, and, nevertheless, with respect to particular work, may be transferred, with his own consent and acquiescence, to the service of a third person, so that he becomes the servant of that person with all the legal consequences of the new relation.

Id. at 220, 29 S.Ct. at 253.

Likewise, the Court added:

It sometimes happens that one wishes a certain work to be done for his benefit and neither has persons in his employ who can do it nor is willing to take such persons into his general service. He may then enter an agreement with another. If that other furnishes him with men to do the work and places them under his exclusive control in the performance of it, those men become pro hac vice the servants of him to whom they are furnished.

Id. at 221, 29 S.Ct. at 254.

This doctrine is contained in the Restatement (Second) of Agency §§ 220, 227 (1958).

The essential factors to be considered in whether the borrowed employee doctrine applies have remained constant since Standard Oil, supra. They are, in the main:

(1) Who has control over the employee and the work he is performing?

(2) Whose work is being performed?

(3) Was there an agreement between the original and the borrowing employer?

(4) Did the employee consent and acquiesce in the new situation?

Other courts have added additional factors which should also be considered, such as: who paid the employee's wages; who had the power to terminate his employment; and who furnished the tools with which the work was performed and the place for performing the work? Tarboro v. Reading Co., 396 F.2d 941, 943 (3d Cir. 1968).

Which factors are to be given greater weight depends in part upon whether the case involves (1) invocation of the concept of respondeat superior, where one is attempting to hold the proper employer responsible for the torts of his employee, or (2) if the case involves an attempt to use the borrowed employee doctrine to bar an employee from a common law damage action and restrict him to the exclusive coverage provided by workmen's compensation. Gaudet v. Exxon Corp., 562 F.2d 351, 356 (5th Cir.1977).

The case at bar fits the pattern of the second type of case described above, in that HOVIC, claiming to be the special employer of Vanterpool, asks the Court to dismiss his common law tort claim for damages, asserting that his sole remedy is workmen's compensation benefits.

The suggestion that some factors are given greater weight in certain types of cases than in others can be explained in this way: if the intent is to hold an employer under the theory of respondeat superior for the acts of an employee, the elements of control and a clear understanding that the employee has been shifted from the general employer to perform services for the special employer will be important. Byrne v. Pennsylvania R.R. Co., 262 F.2d 906, 911 (3d Cir.1959).

But if the case involves a worker filing a common law claim for damages by reason of negligence of the special employer, and it is sought to bar that claim and leave the worker solely to his workmen's compensation benefits, then the question of whether the worker acquiesced in the employment situation and made a knowing waiver of such right becomes important. At 1C A. Larsen, Workmen's Compensation Law § 48.10 at 8-319 (1982), the following point is forcefully made:

In compensation law, the spotlight must now be turned upon the employee, for the first question of all is: Did he make a contract of hire with the special employer? If this question cannot be answered "yes," the investigation is closed, and there is no need to go into tests of relative control and the like.

This must necessarily be so, since the employee loses certain rights along with those he gains when he strikes up a new employment relation. Most important of all, he loses the right to sue the special employer at common law for negligence; and when this question has been presented in this form, the courts have usually been vigilant in insisting upon a showing of a deliberate and informed consent by the employee before employment relation will be held a bar to common-law suit.

In deciding whether the borrowed employee doctrine can be used as a defense to common law liability in a workmen's compensation context, two other factors must be considered. These are aimed at determining the answer to the issue of informed consent. They are: (1) was the second employer itself responsible for the working conditions experienced by the employee and the risks inherent thereto, and (2) was the employment with the new employer of such duration that the employee could be reasonably presumed to have evaluated the risks of the work situation and acquiesced? Gaudet, supra, at 357.

All of that having been said, we now confront the claim by Vanterpool that the Workmen's Compensation Act of the Virgin Islands, 24 V.I.C. § 251 et seq., (the "Act"), does not leave room for the borrowed employee doctrine.

III. APPLICABILITY TO THE VIRGIN ISLANDS

Section 251 of the Act contains several definitions important to our consideration:

"Employee" means any person, including a minor, employed under any appointment or contract, express or implied, oral or written, or in the service of any employer.

"Employer" means ... any person or body of persons whether incorporated or not, any partnership or association, contractors or subcontractors.

Section 272(a) provides:

Every employer shall secure the payment of compensation under this chapter by insuring with the Government Insurance Fund created by this chapter.

Section 284 provides:

When an employer is insured under this chapter, the right herein established to obtain compensation shall be the only remedy against the employer...

Third party actions against those responsible for an injury are permitted against non-employers under Section 263 of the Act. It is asserted by Vanterpool that HOVIC was a third party and not his employer, since HOVIC did...