Suits v City of New York

[*1] Suits v City of New York 2006 NY Slip Op 50933(U) [12 Misc 3d 1156(A)] Decided on March 29, 2006 Supreme Court, New York County Stallman, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 29, 2006
Supreme Court, New York County

Daniel Suits and Mary Pat Suits, Plaintiffs,

against

The City of New York and Julie A. Squires, Defendants.



107028/04



For Plaintiffs

Robert E. Godosky, Esq.

Godosky & Gentile, P.C.

61 Broadway, 20th Floor

New York, New York 10006

(212) 742-9700

For Defendant Julie A. Squires

Patrick J. McConnell, Esq.

Law Offices of Michael F.X. Manning,Esqs.

One Whitehall Street, 12th Floor

New York, New York 10004

(212) 530-7777

For Defendant City of New York

Michael A. Cardozo, Esq.

Corporation Counsel of the City of New York

100 Church Street, 4th Floor

New York, New York 10007

(212) 788-0303

For 3rd Defendants Hearth Management and Mark Burritt

Charles J. Siegel, Esq.

Law Offices of Charles J. Siegel, Esqs. 40 Wall Street, 7th Floor

New York, New York 10005

(212) 440-2350

Michael D. Stallman, J.

In this personal injury action, third-party defendants Hearth Management and Mark E. Burrit move, pursuant to CPLR 3212, for summary judgment dismissing the third-party complaint against them. This motion requires the Court to consider the circumstances when an officer of one corporation may be considered the special employee of another corporation, for the purpose of the exclusive remedy provisions of the Workers' Compensation Law.

Background

Plaintiff Daniel Suits and his wife, Mary Pat Suits, derivatively, commenced this action against defendants The City of New York and Julie A. Squires seeking to recover damages for personal injuries arising out of an automobile accident on November 30, 2003. The Complaint essentially alleges that Daniel Suits sustained serious personal injuries when the automobile in which he was riding as a passenger collided with an automobile driven by Squires at the intersection of West 56th Street and 12th Avenue, New York, New York, a public roadway owned and maintained by the City. The first cause of action alleges that the accident was caused by the negligent operation of the automobile driven by Julie A. Squires and the defective condition of the accident site. In the second cause of action, Mary Pat Suits seeks to recover damages for loss of consortium. [*2]

Daniel Suits is employed by Fahs Rolston Paving Company, which is engaged in the business of highway, bridge and road construction. In addition, Daniel Suits, Burrit and nonparty Maynard Fahs are shareholders and officers of Hearth Management, which maintains and operates assisted living facilities for patients with Alzheimer's disease, and of Fahs Rolston. At the time of the accident, Daniel Suits, Burrit and Maynard Fahs were driving in Manhattan, in an automobile owned by Hearth Management and driven by Burrit, allegedly to attend meetings on behalf of Hearth Management.

Squires commenced a third-party action against Hearth Management and Burrit seeking contribution or indemnification.

Hearth Management and Burrit now seek summary judgment dismissing the Third-party Complaint on the ground that Daniel Suits is in the special employ of Hearth Management and, as such, the third-party action is barred by Workers Compensation Law §§ 11 and 29 (6).

I.

It is well settled that the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]); Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Once this showing has been made, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action (Zuckerman v City of New York, supra). Mere conclusions, expressions of hope, or unsubstantiated allegations or assertions are insufficient to defeat summary judgment (id.).

Workers' Compensation Law §11, as amended by the Omnibus Workers' Compensation Reform Act of 1996 (L 1996, ch 635, § 2), prohibits third-party claims for contribution or indemnification against an employer for injuries sustained by an employee acting within the scope of employment, except when the employee has sustained a "grave injury" or when there exists a written contract entered into prior to the accident or occurrence by which the employer had expressly agreed to contribution or indemnification of the claimant. Section 11 defines "grave injury" as:

[D]eath, permanent and total loss or use or amputation of an arm, leg, hand or foot, loss of multiple fingers, loss of multiple toes, paraplegia or quadriplegia, total and permanent blindness, total and permanent deafness, loss of nose, loss of ear, permanent and severe facial disfigurement, loss of an index finger or an acquired injury to the brain caused by an external physical force resulting in a permanent total disability.

Section 29(6) similarly limits the liability of employers for injury or death of employees while acting within the scope of their employment to compensation or benefits under the Workers' Compensation statute.

II.

In seeking summary judgment, third-party defendants assert that Squires is prohibited from [*3]prosecuting the third-party action because, at the time of the accident, plaintiff was acting in the scope of his role as a special employee for Hearth Management and neither of the two exceptions apply. In particular, third-party defendants argue that Daniel Suits's injury claims do not satisfy the "grave injury" standard contained in Workers' Compensation Law § 11.

To support their position, third-party defendants submit, inter alia, a copy of the transcript of the examination of Daniel Suits, pursuant to § 50-h of the General Municipal Law, held on April 27, 2004, a copy of the transcript of the examination before trial of Daniel Suits, held on April 21, 2005, and the affidavit of Burrit.

At his 50-h hearing, Daniel Suits testified that he is a vice president of Fahs Rolston; that at the time of the accident, he, Burrit and Maynard Fahs were driving in Manhattan to attend meetings with banks and investors on behalf of Hearth Management; and that he was a passenger in the back right seat of a 2004 Volvo S80, which was being driven by Burrit with Maynard Fahs in the front passenger seat (50-h hearing of Daniel Suits, Not of Mot, Exh D, pp 5, 6). Suits further testified that the automobile in which he was riding was registered to Hearth Management, a sister company of Fahs Rolston, and a company of which he is a partner (id. at 8).[FN1]

At his EBT, plaintiff testified that he worked for Fahs Rolston in the full-time position of vice president (EBT of Suits, Not of Mot, Exh E, p 6, 7). He also testified that the office to which he goes every day is owned by Hearth Management, and that Fahs Rolston and Hearth Management have "[s]imilar owners" (id. at p 8). He explained that he, Burrit and Maynard Fahs are the main principals of both Fahs Rolston and Hearth Management (id. at 9). He further stated that as a chief operating officer of Hearth Management, he is in charge of all day-to-day operations of all of the assisted living and Alzheimer's facilities, as well as the oversight of new property and development, but that he does not receive a salary from Hearth Management (id. at 9, 12). In addition, he stated that on a given day, 99% of his time is spent doing Hearth Management business (id. at 14). He also stated that he received workers' compensation benefits from Fahs Rolston (id. at 97).

In his affidavit, Burrit confirmed that he, Daniel Suits and Maynard Fahs are co-owners of Hearth Management, and that at the time of the accident, the three of them were driving in Manhattan in an automobile owned by Hearth Management to attend meetings related to Hearth Management (Affid of Burrit, Not of Mot, Exh F). Burrit also noted that both Fahs Rolston and Hearth Management maintain their businesses in the same office building, and that although Fahs Rolston and Hearth Management are technically separate entities, they have similar owners (id.). Burrit further stated that Daniel Suits is a vice president of Fahs Rolston and the chief operating officer of Hearth Management, and that he spends most of his work time doing Hearth Management business (id.). In addition, Burrit asserts that although he, Maynard Fahs and Daniel Suits are all on the Fahs Rolston payroll, Hearth Management reimburses Fahs Rolston for a percentage of their respective salaries that are attributable to work done for Hearth Management (id.) Burrit also stated, upon information and belief, that at the time of the accident, Hearth Management reimbursed Fahs Rolston for approximately 90% of the salary it paid to Daniel Suits (id.). He further stated that Hearth Management reimbursed Fahs Rolston for all of Daniel Suits benefits, including workers compensation, health insurance, disability and unemployment (id.). [*4]

In opposition to the summary judgment motion, Squires disagrees that Daniel Squires is in the special employee of Hearth Management, arguing instead, that the submissions make clear that Daniel Suits is employed by Fahs Rolston, and that Fahs Rolston and Hearth Management are separate, distinct companies engaged in different endeavors. In addition, while taking no position on Daniel Suits's status with respect to Hearth Management, the City disputes the assertion that Daniel Suits did not sustain "grave injury" within the meaning of Workers' Compensation Law §11. "[A] general employee of one employer may also be in the special employ of another, notwithstanding the general employer's responsibility for payment of wages and for maintaining workers' compensation and other employee benefits. A special employee is described as one who is transferred for a limited time of whatever duration to the service of another. General employment is presumed to continue, but this presumption is overcome upon clear demonstration of surrender of control by the general employer and assumption of control by the special employer.

* * * Many factors are weighed in deciding whether a special employment relationship exists, and generally no one is decisive. While not determinative, a significant and weighty feature has emerged that focuses on who controls and directs the manner, details and ultimate results of the employee's work"

(Thompson v Grumman Aerospace Corp., 78 NY2d 553, 557-588 [1991][internal citations omitted]).

Here, third-party defendants did not meet their burden of establishing that Suits is a special employee of Hearth Management. The evidence is lacking that Fahs Rolston surrendered control to Hearth Management and that Hearth Management assumed control. "Only where the undisputed facts establish surrender of complete control by the general employer and assumption of control by the special employer can the determination of special employment status be made as a matter of law" (Ozzimo v H.E.S., Inc., 249 AD2d 912, 913 [4th Dept 1998]). Third-party defendants emphasize only that Suits spent much of his time on Hearth Management matters, and that Daniel Suits was riding in a Hearth Management-owned vehicle and acting in furtherance of his role as shareholder and principal of Hearth Management at the time of the accident. At most, Hearth Management reimbursed Fahs Rolston for 90% of the salary and all of the benefits it paid to Daniel Suits. Nothing in the record establishes that Hearth Management controlled the details of Suits's work as its chief operating officer. This showing falls short of the evidence needed to rebut the presumption of general employment.

III.

The Workers' Compensation Law narrowly defines "grave injury." See Workers' Compensation Law § 11, quoted supra § I.

In amending Workers' Compensation Law § 11 to provide that an "employer shall not be liable for contribution or indemnity to any third person based upon liability for injuries sustained by an employee" unless the employee's injuries are shown to be grave, the Legislature sought to limit employer's liability that existed under Dole v Dow Chem. Co. (30 NY2d 143 [1972]).

(Castro v United Container Machinery Group, Inc., 96 NY2d 398, 401 [2001]). [*5]

The hospital records maintained for Daniel Suits following the accident, as well as the Bill of Particulars in this action, reveal that he sustained a fracture of the fourth and fifth cervical vertebrae, a surgical posterior fusion of the fourth through sixth cervical vertebrae and an occluded left vertebral artery (Verified Bill of Particulars, Not of Mot, Exh C; St. Luke's-Roosevelt Hospital Records, Affirm in Partial Opp, Exh A). None of these injuries correspond to any of the injuries specified as "grave" in Workers' Compensation Law § 11.

The conclusory assertion by the City that an occluded left vertebral artery amounts to "an acquired injury to the brain caused by an external physical force resulting in a permanent total disability" is insufficient as a matter of law. For a brain injury to constitutes a permanent total disability under Workers' Compensation Law § 11, the evidence must establish that the injured worker is no longer employable in any capacity (see Rubeis v The Aqua Club, Inc., 3 NY2d 408, 413 [2004]). At his deposition, however, Daniel Suits testified that he returned to work full time in April or May 2004 (EBT of Daniel Suits, Not of Mot, Exh E, p 50). Thus, as a matter of law, Daniel Suits did not suffer a brain injury resulting in permanent injury within the meaning of Workers' Compensation Law § 11.

CONCLUSION

Burrit and Hearth Management have not met their burden of establishing, as a matter of law, that Suits was a special employee of Hearth Management, and that Workers' Compensation Law §§ 11 and 29 (6) consequently prohibit the third-party action against them for contribution or indemnification.

Accordingly, it is

ORDERED that the motion for summary judgment is denied.

Dated: March 29, 2006ENTER:

New York, New York S/

_________________________

J. S. C. Footnotes

Footnote 1:It appears that Hearth Management is not a partnership. At his deposition, Suits testified that Fahs Rolston Company and Hearth Management are both corporations.