JOSE DASILVA v. BAYONNE INDUSTRIAL SERVICES CORP

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3744-07T33744-07T3

JOSE DASILVA,

Plaintiff-Appellant,

v.

BAYONNE INDUSTRIAL SERVICES CORP.,

Defendant,

and

BAYONNE DRY DOCK & REPAIR, INC.,

BAYONNE DRY DOCK & REPAIR, and

BAYONNE DRY DOCK,

Defendants-Respondents.

______________________________________

 

Argued December 2, 2008 - Decided

Before Judges Fuentes, Gilroy and Chambers.

On appeal from Superior Court of New Jersey,

Law Division, Essex County, Docket No.

L-813-06.

A. John Blake argued the cause for appellant

(Marciano & Topazio, attorneys; Mr. Blake,

on the brief).

John F. Gaffney argued the cause for respondents

(Chase Kurshan Herzfeld & Rubin and Joseph E.

Donat of the New York bar, admitted pro hac

vice, attorneys; Mr. Gaffney and Mr. Donat,

on the brief).

PER CURIAM

Plaintiff Jose DaSilva appeals from the order of the Law Division dismissing his personal injury cause of action against defendant Bayonne Dry Dock & Repair, Inc ("Dry Dock"). In granting Dry Dock's motion for summary judgment, the trial court found that plaintiff's claims were barred under the Workers' Compensation Act because, at the time of the accident, plaintiff was a special employee of Dry Dock by virtue of an implied employment relationship.

Plaintiff now appeals arguing that the motion judge misapplied our holding in Antheunisse v. Tiffany & Co., Inc., 229 N.J. Super. 399 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989), because the record does not support that plaintiff was, as a matter of law, a special employee of Dry Dock during the relevant time period. We agree and reverse.

I

In September 2003, Carl Gomez, the owner of Bayonne Industrial Services Corporation, ("Industrial"), hired plaintiff as a "helper" to assist welders stationed at Dry Dock. Although Dry Dock and Industrial are separate corporate entities, they shared office space. At the time he accepted employment from Gomez, plaintiff was unaware who Gomez worked for, and there were no signs at the office identifying a company name or other indicia of ownership. After working approximately six months as a helper, plaintiff was promoted to welder.

Dry Dock contracted with another company "to dry dock, survey and make repairs to [a] Weeks 533 barge." On January 4, 2004, Dry Dock entered into a contract with Gomez, on behalf of Industrial, to obtain employees for work on the barge. Under this contract, Industrial remained an independent contractor "maintaining complete and exclusive control over all its personnel (including, without limitation, its employees and subcontractors)." Under Paragraph 6, Industrial is required to provide:

[o]ne supervisor who shall be responsible for all work to be performed on board the vessel. Prior to commencement of the work the supervisor shall provide [Dry Dock] with a schedule for completion of work. At the beginning of each day, the supervisor shall provide [Dry Dock] with a list of the men who will be working on the vessel that day.

Industrial was also charged with "ensur[ing] that its employees, representatives, and subcontractors" complied with the relevant safety procedures; welding was to be done "using only certified welders," subject to inspection by Dry Dock. Any materials furnished by Dry Dock were to "be received and cared for by [Industrial]".

Despite these contractual limitations, the president of Dry Dock, Michael Cranston, testified at his deposition that he retained the authority to hire and fire the workers provided by Industrial. When asked directly to identify the source of such authority, Cranston responded: "At the end of the day, it is Bayonne Dry Dock & Repair Corporation's facility and as such, we are responsible for all of the personnel who work in the yard."

According to Cranston, although not formally stated in the contract, Dry Dock compensated Industrial for the employees it assigned to Dry Dock's facilities by utilizing the workers' timesheets. The procedure worked as follows. After receiving a statement from Industrial regarding the hours its employees worked in the preceding week, Dry Dock would pay Industrial that amount in salaries, plus nineteen percent (19%) over the gross amount "[f]or overhead." Industrial would then pay its employees directly. In his capacity as supervisor, Gomez was among the Industrial employees for whom Dry Dock paid compensation. Finally, Cranston clarified that the "gross overhead amount" referred to in describing the method of compensation, did not include what Cranston termed "the employer's matching taxes," such as Social Security, Medicare, and Workers' Compensation Insurance.

II

Plaintiff worked only at Dry Dock throughout his entire employment history. In this capacity, he saw Gomez on a daily basis. According to plaintiff, Gomez was the only on-site supervisor for the welders. The only exception to this rule occurred just two days before the accident, when Dry Dock employee Edward Feuchsak supervised the night shift. On that night, Feuchsak told plaintiff that, beginning the following evening, he would be working on the Weeks 533 barge.

At that time, although aware that Feuchsak worked at the site daily, plaintiff did not know what position Feuchsak held with Dry Dock. Feuchsak showed plaintiff where to begin work, and told him that he would be "remov[ing] the floor from the bottom of the barge" in the evenings; other employees would continue his work during the day. Feuchsak also advised plaintiff not to "punch in" on the time clock because he would be paid by Gomez for completing the job within the 15 days allotted. At the end of this encounter, plaintiff returned to his day job at Dry Dock cutting iron.

On September 7, 2004, plaintiff reported to work in the evening to begin cutting the floor of the barge. Two other employees were working with him that night; Feuchsak was not at the barge. In order to cut and weld the new floor into the barge, plaintiff utilized a two and a half foot torch. Although plaintiff believed that the torch he used on that particular night belonged to Feuchsak, the record shows that Dry Dock supplied all of the equipment on the barge. On that evening, the torch functioned properly.

Plaintiff worked until the early morning hours of September 8, 2004. Other employees were also assigned to cut the floor. Plaintiff returned to the barge a second night to resume cutting the floor. Both on the previous night and that night, plaintiff wore protective clothing consisting of a leather jacket and gloves that he owned. He used the same torch that he had used the previous evening. Because other welders had worked with the torch during the day, it was connected and ready for use. Plaintiff then worked for approximately 40 minutes without incident. After returning from a 10 or 15 minute break, plaintiff "pressed the button to cut, [the torch] exploded." He suffered severe burns to his body. At the time of the accident, Feuchsak was "the person responsible as the supervisor for the group of people who were working on the barge."

When he was transported by ambulance to receive medical care, plaintiff identified Gomez as his on-site "boss." Once at the hospital, plaintiff informed the hospital staff that he worked for "Bayonne Dry Dock." He was then transferred to a different hospital and admitted for about 8 days.

Plaintiff filed a workers' compensation claim with Travelers Insurance ("Travelers"), Dry Dock's insurance carrier, under the Longshore and Harbor Workers' Compensation Act ("LHWCA"), 33 U.S.C.A. 901 to -50. On October 24, 2004, Travelers sent plaintiff a notice of controversion of right for compensation, alleging that plaintiff was employed by Industrial, not Dry Dock. Plaintiff thus filed a workers compensation claim against Industrial and its carrier Liberty Mutual Insurance Company.

On August 16, 2006, the parties reached a settlement agreement on the Workers Compensation claim. On August 29, 2006, the settlement was approved by an administrative law judge of the U.S. Department of Labor, Office of Workers' Compensation Programs. On January 27, 2006, plaintiff filed the present action in the Superior Court against Dry Dock. The complaint was dismissed on Dry Dock's summary judgment motion. The court held that plaintiff's tort action was barred because, at the time of the accident, plaintiff was a special employee of Dry Dock. The court denied plaintiff's subsequent motion for reconsideration.

III

The question before us is whether the record supports the trial court's legal conclusion that plaintiff was a special employee of Dry Dock, and thus barred from prosecuting this tort action under the Workers' Compensation Act. To answer this question, we must first lay out the relevant legal principles that will govern our discussion.

When the employer/employee relationship is clear and undisputed, an employee's exclusive remedy against the employer for job-related injuries is to file a claim under the Workers Compensation Act. Walrond v. County of Somerset, 382 N.J. Super. 227, 234 (App. Div. 2006). However, "an employee, for the purposes of workmen's compensation, may have two employers, both of whom may be liable to him in compensation, and a recovery against one bars the employee from maintaining a common law tort action against either for the same injury." Blessing v. T. Shriver & Co., 94 N.J. Super. 426, 429-30 (App. Div. 1967).

Whether a plaintiff's tort action is precluded "is dependent upon a determination that the borrower of an employee is, in fact, a special employer." Id. at 430. The three-prong test for determining whether a party is a special employer was articulated by Professor Larson in 1A Arthur Larson, Workmen's Compensation, 48.00, p. 710 (1966), and has been adopted by the New Jersey Supreme Court. Volb v. Gen. Elec. Capital Corp., 139 N.J. 110, 116 (1995).

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.

[Blessing, supra, 94 N.J. Super. at 430 (quoting Larson, Workmen's Compensation, 48.00, at 710).]

A reviewing court should also consider "two more co-equal factors, namely, whether the special employer (1) pays the lent employee's wages, and (2) has the power to hire, discharge or recall the employee." Ibid.

Accordingly, in balancing these five factors, "[n]o single factor is necessarily dispositive, and not all five must be satisfied in order for a special employment relationship to exist." Walrond, supra, 382 N.J. Super. at 236 (internal quotations and citations omitted). Yet, the control factor has been held to be the "most significant". Ibid.; see also Santos v. Std. Havens, Inc., 225 N.J. Super. 16, 22 (App. Div. 1988). Because these factors are not exclusive, each case is fact-sensitive. Blessing, supra, 94 N.J. Super. at 434. Thus, in applying this test, we should consider the "totality of the circumstances". Santos, supra, 225 N.J. Super. at 22.

Here, the trial court relied heavily on Antheunisse, 229 N.J. Super. at 399, where we affirmed the trial court's holding of Tiffany & Co. as a special employer. Id. at 401. In Antheunisse, a personnel agency contracted with Tiffany to provide it with temporary employees. Ibid. After Tiffany screened and hired the applicants, the agency's "role was restricted to processing their paychecks." Ibid. However, Tiffany "retained the power to supervise, discharge or recall a temporary employee until the end of the employment period." Ibid. After beginning work at Tiffany, an employee was injured by a falling object. Ibid. To compensate for her injury, plaintiff sought recovery from the agency under workers' compensation, and from Tiffany in the form of a tort claim. Ibid.

In finding a special employment relationship between the parties, we explained that the employee "impliedly contracted with [Tiffany] when she reported voluntarily to work, complied with store policies and accepted the training and guidance provided by defendant." Id. at 404. Further, by contracting with the agency, the employee accepted that she would be hired out to other employers. Ibid. Likewise, she "was apprised of the name of her potential employer, the nature of the work and had the opportunity to refuse the job without fearing any reprisal from the agency." Ibid.

With regard to the compensation prong, we noted that the agency paid the employee directly after being reimbursed by Tiffany for the hours the employee worked. Id. at 404-05. Thus, because the amounts paid to the agency were greater than that owed for the amount of hours the employee worked, the extra cost "undoubtedly helped cover, besides the agency's profit margin, such expenses as payment of [the employee's] workers' compensation insurance." Id. at 405. Accordingly, we held that the money used by the agency to pay the employee's workers' compensation benefits "came directly from the fee paid by [Tiffany] and was one of the expenses included in calculating that fee." Ibid.

On appeal, plaintiff argues that Dry Dock failed to meet these factors because: (1) there was no implied contract of hire between plaintiff and Dry Dock; (2) the work done by plaintiff was performed in continued obedience to Industrial's commands; (3) Dry Dock did not control the details of plaintiff's work; (4) the only contact plaintiff had with any Dry Dock employee occurred a year after he was hired, and two days before the accident; and (5) Dry Dock did not have the power to fire plaintiff from his job with Industrial.

We review these issues under the totality of the circumstances. Each of the five factors must be balanced against the others. Dry Dock's inability to prevail on every factor does not necessarily require the reversal of the trial court's grant of summary judgment. Walrond, supra, 382 N.J. Super. at 236.

As to the first prong, plaintiff argues that "there [was] no contract between plaintiff and . . . Dry Dock, either express or implied." As far as he was concerned, he was employed by Industrial. It is not plaintiff's subjective belief, however, that governs this review. "[T]he test of whether an express or implied contract of hire existed is satisfied if the employee consents to the special employment relationship." Anthuenisse, supra, 229 N.J. Super. at 403 (citing Whitehead v. Safway Steel Products, Inc., 304 Md. 67 (Md. 1985) (emphasis added)).

Specifically, the factual question is "whether it is understood between him and his employer[] that he is to remain in the allegiance of the first as to a specific act, or is to be employed in the business and subject to the direction of the temporary employer as to details of such act." Murin v. Frapaul Construction Co., 240 N.J. Super. 600, 608 (App. Div. 1990).

In this respect, Dry Dock must demonstrate that plaintiff "voluntarily submitted to [Dry Dock's] direction and control." Anthuenisse, supra, 229 N.J. Super. at 403. Generally, this requires a "showing of deliberate and informed consent by the employee before an employment relationship will be held to bar a common law suit." Murin, supra, 240 N.J. Super. at 608. Black's Law Dictionary 323 (Deluxe 8th ed. 2004), define "informed consent" as "[a] person's agreement to allow something to happen, made with full knowledge of the risks involved and the alternatives." Informed consent can also be inferred "when the servant, continuing in the service, takes his orders from [someone] other than the hirer or the hirer's representative." Blessing, supra, 94 N.J. Super. at 437 (citation omitted).

Here, it is undisputed that no formal contract of hire exists between plaintiff and Dry Dock. Further, contrary to the trial court's findings, the record does not support the inference that plaintiff made an informed and deliberate decision to consent to Dry Dock's supervision and control. There is nothing in the record to indicate that plaintiff knew of the "employee lending" relationship between Industrial and Dry Dock, a separate corporate entity from Industrial. In this regard, the facts are sufficiently different than the facts in Antheunisse, where the employee "knew she was working for a temporary agency, knew she would be hired out to various employers, and accepted such employers." Anthuenisse, supra, 229 N.J. Super. at 403. Finally, even if plaintiff abided by Feuchsak's directions, there is no indication that he knew that Feuchsak was a Dry Dock supervisor and not an agent of Industrial.

To further distinguish this case from Antheunisse, there is a material issue of fact as to whether plaintiff was aware that he worked for Dry Dock, not just at facilities operated by Dry Dock. He was hired by Gomez, an employee of Industrial; the office where the hiring took place was generic and nondescript; although plaintiff punched in and out on a time clock, the record does not reflect who owned the time clock. Cf Murin, supra, 240 N.J. Super. at 610 (where the general employer "retained control over plaintiff because he reported to and signed in each morning at [the general employer] and again each evening").

The second prong requires Dry Dock to show that "the work being done is essentially that of the special employer". Larson, Workmen's Compensation, 48.00, at 317. The burden is upon Dry Dock to come forward with affirmative proofs because "absent evidence to the contrary, there is an inference that the employee remains in his general employment so long as, by the service rendered another, he is performing the business entrusted to him by the general employer." Murin, supra, 240 N.J. Super. at 608.

To overcome this presumption a party must clearly demonstrate that a new temporary employer has been substituted for the old employer. This demonstration must include a showing that a contract was made between the special employer and the employee. Although consent to a new contract with a special employer may be implied from the employee's acceptance of the special employer's control and direction, such acceptance may actually be a continuance of obedience to the general employer's commands.

[Id. at 609 (internal citations omitted).]

Here, there is no formal contract between plaintiff and Dry Dock. Plaintiff was under Dry Dock's direct control and supervision only two days before the accident, when Feuchsak told him what hours to work, where he would be welding, how he would be welding, and provided him with equipment to use. There is nothing in the record that definitively establishes that plaintiff was aware of Feuchsak's status as a Dry Dock representative. Generally, the most significant factor in the five-prong test is "whether the special employer had the right to control the special employee." Walrond, supra, 382 N.J. Super. at 236. The record here is far from settled as to the degree of control Dry Dock exercised over plaintiff. Although Dry Dock's employee directed plaintiff's work two days before the accident, there is no clear proof that such control remained for an extended period of time, sufficient to put an objectively reasonable person on notice as to the identity of his employer.

With the exception of Feuchsak's instructions, it can be argued that plaintiff's supervision was in accordance with Paragraph 6 of the Contract, placing him under Industrial's supervision and control while he worked at Dry Dock. The record is also devoid of evidence regarding the general supervision and control of plaintiff by Dry Dock over the course of his one-year employment. We are thus satisfied that the issue of control and supervision remains to be settled by the trier of fact.

The fourth prong concerns the payment of wages. Blessing, supra, 94 N.J. Super. at 430. As we noted in Walrond, supra, 382 N.J. Super. at 237-38, "[i]n every case we have been able to identify, where our courts have found a special employment relationship, the special employer paid the special employee directly or indirectly through fees to the general employer." This is because "indirect or direct financial consideration flows to the special employee from the special employer."

Here, Gomez paid plaintiff's salary; Dry Dock paid Industrial based on the amount of hours its employees worked at Dry Dock plus nineteen percent (19%) over the gross amount "[f]or overhead." As in Antheunisse, except for workers' compensation cost, "[t]his extra cost undoubtedly helped cover, besides [Industrial's] profit margin, such expenses as payment of plaintiff's workers' compensation insurance." Supra, 229 N.J. Super. at 405. Thus, "[t]he money . . . used to pay plaintiff's compensation benefits came directly from the fee paid by [Dry Dock] and was one of the expenses included in calculating that fee." Ibid. As a result of this indirect payment from Dry Dock, it can be argued that Dry Dock met this part of the special employer test. Contra Walrond, supra, 382 N.J. Super. at 497-98.

The last prong of the special employment relationship requires the special employer to show it "has the power to hire, discharge or recall the employee." Blessing, supra, 94 N.J. Super. at 430. Toward that end, Dry Dock argues, and plaintiff concedes, that it had the power to fire plaintiff from his position welding at Dry Dock.

Against this backdrop, we must determine whether the case is ripe for summary judgment. That is, was the trial court correct in concluding that Dry Dock established its special employment relationship with plaintiff as a matter of law.

Summary judgment must be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2. To determine whether there exists a "genuine issue as to any material fact" the court must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Coyne v. State Dep't of Transp., 182 N.J. 481, 490 (2005) (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)). We review a trial court's grant of summary judgment by applying the same standards used by the trial court. EMC Mortgage Corp. v. Chaudhri, 400 N.J. Super. 126, 136 (App. Div. 2008) (citing Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007)).

Here, we are satisfied that plaintiff has presented sufficient evidence to survive summary judgment. When viewed in the light most favorable to plaintiff, the record shows Dry Dock has met some, but not all, of the five prongs. The record is not clear with respect to factors one and three; that is, that an implied contract of hire existed between plaintiff and Dry Dock, and that Dry Dock had the right to control plaintiff.

In the special employment analysis, factors one and three have been considered predominant. Blessing, supra, 94 N.J. Super. at 430-31. As such, a genuine issue of material fact existed. Summary judgment was thus improvidently granted because Dry Dock was not entitled to judgment as a matter of law. Brill, supra, 142 N.J. at 523.

Reversed and remanded.

 

(continued)

(continued)

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A-3744-07T3

June 26, 2009