Vigil v. Digital Equipment Corp.

• Decision Date: 23 July 1996
• Docket Number: No. 16803,16803
• Citation: 925 P.2d 883,122 N.M. 417,1996 NMCA 100
• Parties: Bobby VIGIL, Plaintiff-Appellant, v. DIGITAL EQUIPMENT CORPORATION, Defendant-Appellee.
• Court: Court of Appeals of New Mexico

Page 883

925 P.2d 883

122 N.M. 417

Bobby VIGIL, Plaintiff-Appellant, v. DIGITAL EQUIPMENT CORPORATION, Defendant-Appellee.

No. 16803.

Court of Appeals of New Mexico.

July 23, 1996.

Certiorari Denied Oct. 10, 1996.

[122 N.M. 418] Narciso Garcia, Jr., Garcia Law Offices, Albuquerque, for Plaintiff-Appellant.

Neils L. Thompson, Shannon A. Parden, and Madison, Harbour & Mroz, P.A., Albuquerque, for Defendant-Appellee.

OPINION

PICKARD, Judge.

1. In this case we discuss at what point a temporary employer is entitled to immunity from common law tort claims according to NMSA 1978, Sections 52-1-6(E), and -9 (Repl.Pamp.1991) of the Workers' Compensation Act (the Act). We hold that the temporary employer is immune here because it meets the three-part test of special employer set forth in our cases; it has contractually assured that the general employer will provide workers' compensation coverage, even though there is no specific evidence concerning how the special employer pays for that coverage; and the worker at issue has signed a contract agreeing to look to the general employer for his remedy for on-the-job injuries.

FACTS

2. Bobby Vigil (Vigil) was employed by Manpower Temporary Services (Manpower). Manpower is a personnel agency that provides temporary workers by contract to employers that need short-term labor. The workers are hired, assigned, promoted, managed, and terminated by Manpower. The contract employer pays a fee to Manpower for each worker. This fee includes money to cover the worker's hourly wages and Manpower's administrative costs.

3. Digital Equipment Corporation (Digital) contracted with Manpower for temporary workers to work at Digital dismantling conveyers. The contract between Digital and Manpower required Manpower to carry workers' compensation insurance for its employees. Digital was to approve the insurance carrier. Manpower was required to show proof of coverage to Digital. The contract also provided that Manpower would not terminate the coverage for its employees without ten days advance notice to Digital.

4. Manpower assigned Vigil to work at Digital. Vigil signed a waiver-of-claim agreement prior to beginning work in which he acknowledged that he was not a Digital employee. As part of the agreement, Vigil agreed that his sole remedy in the event of an injury while on the job at Digital would be in the form of workers' compensation benefits paid by Manpower. Vigil was severely injured while working for Digital. He received workers' compensation benefits from Manpower, then sued Digital and the manufacturer of the conveyer equipment, alleging negligence and products liability.

5. Digital moved for summary judgment on the ground that the Act provided Vigil's exclusive remedy. Subsequently, Digital filed an amended motion for summary judgment, citing Vigil's contract not to sue Digital. The district court granted both motions for summary judgment. Vigil appeals the district court's order. We affirm.

DISCUSSION

Standard of Review

6. Summary judgment is appropriately granted if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. NMRA 1996, 1-056(C); Koenig v. Perez, 104 N.M. 664, 665, 726 P.2d 341, 342 (1986). The moving party must make a prima facie showing that it is entitled to summary judgment. Roth v. Thompson, 113 N.M. 331, 334-35, 825 P.2d 1241, 1244-45 (1992). The burden then shifts to the opposing party to demonstrate the existence of disputed facts which require resolution by a fact-finder. Dow v. Chilili Coop. Ass'n, 105 N.M. 52, 54, 728 P.2d 462, 464 (1986). If only the legal effect of undisputed facts remains to be determined, summary judgment is proper. Gardner-Zemke Co. v. State, 109 N.M. 729, 732, 790 P.2d 1010, 1013 (1990).

The Exclusivity Provision

7. The Act provides the exclusive remedy against employers for employees injured on the job. See generally Harger v. Structural Servs., Inc., 121 N.M. 657, 664-65 916 P.2d 1324, 1331-33 (1996) (discussing exclusivity provisions of the Act). However, an employee or the employee's estate may seek redress from a third party even after the employee has received workers' compensation benefits from the employer. Matkins v. Zero Refrigerated Lines, 93 N.M. 511, 513, 602 P.2d 195, 197 (Ct.App.1979). The Act provides that an employer who complies with the provisions of the Act and provides workers' compensation benefits to an injured employee is immune from a tort action by the employee or the employee's estate. See NMSA 1978, §§ 52-1-8, -9 (Repl.Pamp.1991). This statutory scheme ensures that injured workers are adequately compensated and that employers may avoid excessive tort liability. See Garcia v. Smith Pipe & Steel Co., 107 N.M. 808, 810, 765 P.2d 1176, 1178 (Ct.App.) (purpose of the Act is served where insurance is purchased and the injured worker is compensated), cert. denied,107 N.M. 673, 763 P.2d 689 (1988).

Payment of Workers' Compensation Insurance

8. Vigil argues that Digital did not pay for workers' compensation insurance and is not entitled to immunity under the Act. If a contract employer pays for workers' compensation insurance as part of a fee to an intermediate, temporary labor agency, this indirect payment of the cost of workers' compensation insurance entitles the contract employer to immunity from common law and statutory tort liability claims according to the Act. See Garcia, 107 N.M. at 809, 765 P.2d at 1177.

9. In Rivera v. Sagebrush Sales, 118 N.M. 676, 678, 884 P.2d 832, 834 (Ct.App.), cert. denied, 118 N.M. 585, 883 P.2d 1282 (1994), this Court observed that specific provisions in the contract between a temporary agency and an employer of workers assigned through the agency meant that the employer had paid workers' compensation for assigned employees as part of the contract fee. Therefore, once the three-part test for special employer was met, the employer had availed itself of the benefit of immunity from suit under the Act. Id. at 678-80, 884 P.2d at 834-36. Likewise, in Garcia, this Court held that the defendant indirectly secured coverage for the plaintiff by reimbursing the plaintiff's employer for its insurance costs. 107 N.M. at 809, 765 P.2d at 1177. These indirect payments were sufficient to invoke the protection of the exclusive remedy provision of the Act. Id.

10. Vigil attempts to distinguish the indirect payments for workers' compensation insurance in Garcia and Rivera from the case at bar. He points to the terms of the contract between Manpower and Digital in support of his argument that Digital did not pay for workers' compensation insurance. Vigil contends that Digital relinquished the right to invoke the exclusivity provision of the Act when it disclaimed any liability as an employer and required Manpower to carry workers' compensation insurance. Vigil argues that no express condition in the contract between Digital and Manpower provided that Digital's payments to Manpower included payments for the purchase of workers' compensation insurance.

11. Vigil submits that this case is similar to Matkins, 93 N.M. 511, 602 P.2d 195. In Matkins, a carrier company leased a truck and the services of two drivers from the drivers' immediate employer, who owned the truck. The terms of the lease expressly required the owner to maintain workers' compensation insurance to cover the drivers. Id. at 513, 602 P.2d at 197. One of the drivers was killed in an accident while driving for the carrier. Id. His estate was permitted to maintain a wrongful death action against the carrier. This Court reasoned that by declining to provide workers' compensation coverage for the drivers, the carrier relinquished the right to claim immunity under the exclusivity provisions of the Act. Id. at 515, 602 P.2d at 199.

12. Similarly, Vigil claims that the contract between Digital and Manpower specifically required Manpower to purchase and maintain workers' compensation insurance for its employees. Vigil claims that Digital, having relieved itself of the burden of meeting the statutory obligation to provide workers' compensation coverage, may not rely on the Act's exclusivity provisions to prevent a tort action. See id 13. We are not persuaded. A reading of the Matkins opinion shows that the Court was equally persuaded by two factors in arriving at its decision that Zero was not an employer and thus could be liable for tort damages. Only one of those factors was the contractual provision declining to provide workers' compensation coverage. Equally important was the other factor, which was that the worker was not an employee under the tests used to determine that status. Thus, as in Rivera, 118 N.M. at 678, 884 P.2d at 834, we limit Matkins to its facts.

14. The fee scheme between temporary labor agencies and contracting employers permits items such as workers' compensation insurance to be procured through the agency, with the costs passed on to the contracting employer in the full price paid for the workers' wages on any given day. See Garcia, 107 N.M. at 810, 765 P.2d at 1178. If the contract employer arranged compliance with the Act relating to the insurance of its workers and ultimately paid for the insurance, the fact that the parties' agreement did not spell out their obligations regarding actual procurement of the insurance is immaterial. See id. at 809, 765 P.2d at 1177; Quintana v. University of Cal., 111 N.M. 679, 683, 808 P.2d 964, 968 (Ct.App.), cert. denied, 111 N.M. 678, 808 P.2d 963 (1991), overruled on other grounds by Harger, 121 N.M. at 666 n. 3, 916 P.2d at 1333 n. 3. Digital required Manpower to purchase workers' compensation insurance from a carrier approved by Digital. Manpower was required to show certificates of insurance showing the amount of coverage. The terms of the agreement specified that the policy could not be terminated without a minimum ten-day notice to Digital. These contractual terms between Digital and...