Case Title: Hudson v. Jarrett

Citation: 

Docket Number: 040433

State: virginia

Court: Virginia Supreme Court

Date: 2005-01-14T00:00:00Z

Document:
Present:  All the Justices 
 
JAMES HUDSON 
 
v.  Record No. 040433     OPINION BY JUSTICE ELIZABETH B. LACY 
 
 
 
January 14, 2005 
OTHA JARRETT, ET AL. 
 
FROM THE CIRCUIT COURT OF THE CITY OF PORTSMOUTH 
Dean W. Sword, Jr., Judge 
 
 
James Hudson, Jr. filed a tort action against Otha 
Jarrett for injuries Hudson received while he was unloading 
cargo from a barge docked at a terminal operated by Virginia 
International Terminals, Inc. (VIT).  At the time of the 
accident Jarrett was unloading cargo from another vessel.  The 
trial court dismissed Hudson's motion for judgment holding 
that VIT was the statutory employer of both Hudson and Jarrett 
and therefore the exclusivity provision of the Virginia 
Workers' Compensation Act, Code § 65.2-307, barred Hudson's 
tort action.  Because VIT was not a party to any contract that 
required Hudson or his employer to load or unload the barge, 
VIT cannot be Hudson's statutory employer and we will reverse 
the judgment of the trial court and remand the case for 
further proceedings.  
FACTS  
 
 
On July 5, 2001, Hudson was engaged in the loading and 
unloading of cargo from a barge owned by Columbia Coastal 
Transport LLC (Columbia).  Hudson was an employee of Universal 
 
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Maritime Services Corporation (Universal), a stevedoring 
company.  The work was being performed pursuant to a contract 
between Universal and Columbia.  At the same time, Otha 
Jarrett was unloading a cargo container from another vessel, 
the M/V Ingrid Oldendorf, pursuant to a contract between 
Jarrett's employer, Cooper/T. Smith Stevedoring Company, Inc. 
(Cooper) and the owner of the vessel.  Hudson was injured when 
the vehicle he was driving collided with a similar vehicle 
driven by Jarrett. 
The accident occurred at Norfolk International Terminal, 
a terminal managed and operated by Virginia International 
Terminals, Inc. pursuant to a contract with the terminal's 
owner, Virginia Port Authority (VPA).  Hudson collected 
workers' compensation benefits from his employer under the 
Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 
§§ 901–950 (2000) (the Longshore Act).  He subsequently filed 
a motion for judgment against Jarrett and his employer, 
Cooper, alleging that Jarrett's negligence was the proximate 
cause of the injuries Hudson sustained. 
Prior to trial, Universal and its workers' compensation 
insurance carrier, Signal Mutual Indemnity Association, Ltd. 
(Signal), filed a motion to intervene, which the trial court 
granted over Hudson's objections.  Cooper and Jarrett filed a 
plea in bar asserting that Hudson's tort action was barred by 
 
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the exclusivity provision of the Virginia Workers' 
Compensation Act, Code § 65.2-307, because under Code § 65.2-
302, VIT was the statutory employer of both Hudson and Jarrett 
and, therefore, the two workers were "fellow employees."  The 
trial court agreed with Cooper and Jarrett, finding that 
"Cooper and Universal perform work pursuant to an agreement 
with VIT that is a part of the trade, business or occupation 
of VIT."  Hudson's motion for judgment was dismissed with 
prejudice.  We awarded Hudson an appeal. 
I. 
An employee subject to the provisions of the Workers' 
Compensation Act cannot file an independent tort action 
against his employer or any fellow employee for injuries 
received in the course of employment.  Code § 65.2-307; 
Pfeifer v. Krauss Const. Co., 262 Va. 262, 266, 546 S.E.2d 
717, 719 (2001).  Under certain circumstances, Code § 65.2-302 
extends this immunity from tort liability arising from 
workplace accidents to qualifying employers, even though no 
direct common law contract of employment exists between such 
employers and employees.  An employer qualifies for this 
immunity if the employer, acting as a general contractor, 
contracts with another to perform all or part of the 
employer's trade, business or occupation.  Under these 
circumstances, the employer is deemed the statutory employer 
 
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of the employees of such other subcontractor and the remedies 
under the Act are the statutory employees' exclusive remedy 
against the statutory employer.  See id.; Evans v. Hook, 239 
Va. 127, 131, 387 S.E.2d 777, 779 (1990); Smith v. Horn, 232 
Va. 302, 306, 351 S.E.2d 14, 16 (1986).  Similarly, employees 
of different subcontractors who are working on the same 
project and are also engaged in the general contractor's 
trade, business, or occupation are considered statutory fellow 
employees and are entitled to protection from an independent 
tort action for injuries allegedly caused by either of them.  
Pfeiffer, 262 Va. at 266-67, 546 S.E.2d at 719; Evans, 239 Va. 
at 131, 387 S.E.2d at 779. 
Applying these principles to this case, if at the time of 
Hudson's injury, Hudson and Jarrett were working on the same 
project and were also engaged in the trade, business, or 
occupation of VIT, Hudson and Jarrett would be statutory 
fellow employees and Hudson's third party tort action against 
Jarrett and Cooper could not proceed.  Whether a person is a 
statutory employer presents a mixed question of law and fact 
and must be decided on the facts and circumstances of each 
case.  See Bosley v. Shepherd, 262 Va. 641, 648, 554 S.E.2d 
77, 81 (2001); Fowler v. International Cleaning Serv., 260 Va. 
421, 425, 537 S.E.2d 312, 314 (2000). 
 
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At the time of the accident, Hudson was working on 
loading and unloading cargo from Columbia's barge.  The 
decision to load or unload cargo at the terminal was the 
decision of Columbia, the vessel owner.1  Columbia contracted 
with Universal to perform the stevedoring services necessary 
to implement this transfer of cargo.  VIT was not a party to 
the contract between Universal and the barge owner for the 
transfer of the cargo.  Furthermore, there is no contract in 
this record between VIT and Columbia involving the loading or 
unloading of this specific barge and cargo.  In the absence of 
such a contract between Columbia and VIT, to qualify as 
Hudson's statutory employer, VIT had to have subcontracted 
with Universal for the loading and unloading of Columbia's 
barge. 
 
The trial court concluded that Universal was VIT's 
subcontractor because Universal was engaged in the execution 
or performance of the trade or business of VIT.  The trial 
court found that a "principal function (trade or business) of 
VIT is to move cargo from shore to ship or ship to shore."  
The trial court found that Universal performed this function 
                     
1 Not all vessels berthed at the terminal discharged or 
took on cargo.  See Virginia International Terminals, Inc., 
Schedule of Rates No. 1, Section 200 (current version 
available at http://www.vit.org/downloads.doc/tarrif.doc) 
(hereinafter, "Schedule of Rates"). 
 
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for VIT as a subcontractor, or in other words, pursuant to 
agreements with VIT. 
The contracts identified by the trial court that required 
Universal and Cooper to move cargo from ship to shore or shore 
to ship, were (1) "arrangements" with Universal and Cooper 
governed by VIT's Schedule of Rates; (2) VIT license 
agreements with both Cooper and Universal "to provide labor at 
NIT pursuant to the Schedule of Rate2;" and (3) contracts 
between VIT and the stevedoring companies "to provide labor 
pursuant to agreements" with the International Longshoremen's 
Association (ILA).  The trial court also relied on the fact 
that VIT directly employed ILA members to perform work similar 
to that done by the stevedoring companies and that the loading 
and unloading of vessels "generally" involves persons employed 
by VIT and a stevedoring company, including the operation of 
cranes by VIT personnel.  None of these contracts or 
agreements, or Schedule of Rates, however, required Universal 
to load or unload cargo for Columbia's barge or any other 
vessel. 
 
The Schedule of Rates prescribes certain conditions that 
must be met by those doing business at any VIT facility.  By 
using the facility, Cooper and Universal agreed to those 
conditions.  However, the Schedule of Rates is not a contract 
 
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to perform the actual loading and unloading of any particular 
vessel.  The contracts to perform those services are the 
contracts between the ship owners and the stevedore companies. 
According to this record, the license agreements between 
VIT, Cooper, and Universal cited by the trial court are 
agreements negotiated between VIT and the stevedore companies 
for the use of designated space in the facility for such 
things as gear and equipment storage and compliance with 
environmental regulations and regulations promulgated by VIT 
and VPA.  These agreements are negotiated between VIT and each 
stevedore company "for a rate agreed to by the parties."  Thus 
stevedore companies pay VIT for the right to operate using VIT 
piers and wharves.  These licensing agreements do not require 
Universal or Cooper to move cargo from ship to shore or shore 
to ship for VIT. 
Finally, although this record delineating the collective 
bargaining agreement with the ILA is very slight, VIT and the 
stevedore companies are parties to such a contract.  The 
contract appears to require that VIT and the stevedores use 
ILA members when they are operating at the terminal.  This 
agreement, like the Schedule of Rates and license agreements, 
provides general conditions of operation when the stevedore 
                                                                
2 See footnote 1. 
 
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companies operate; they do not require the stevedores to 
actually load and unload any cargo. 
In the absence of any contractual relationship between 
VIT and Columbia for the loading and unloading of Columbia's 
barge, or between VIT and Universal under which Universal 
agreed to load or unload cargo from the barge or from any 
vessel, VIT cannot qualify as Hudson's statutory employer.  
Accordingly, Hudson and Jarrett are not statutory fellow 
employees and the exclusivity provision of the Workers' 
Compensation Act does not bar Hudson's tort action against 
Jarrett and Jarrett's employer, Cooper.  
II. 
 
Because our conclusion requires that the case be remanded 
for further proceedings, we must address Hudson's second 
assignment of error in which he claims that the trial court 
erred in granting Signal's and Universal's motion to 
intervene. 
 
Universal and Signal filed a motion to intervene pursuant 
to Rule 3:19.  Rule 3:19 provides:  "A new party may by leave 
of court file a pleading to intervene as a plaintiff or 
defendant to assert any claim or defense germane to the 
subject matter of the proceeding."  Prior to 2000, there was 
no rule regarding intervention in a law action, but, on the 
chancery side, a court could allow a "new party" to file a 
 
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petition asserting "any claim or defense germane to the 
subject matter" of the litigation.  Former Rule 2:15.  In 
2000, identical rules were adopted for intervention in both 
law and chancery proceedings.  Significantly, the new rules 
required that an intervenor intervene specifically as a 
plaintiff or as a defendant.  This addition reinforced the 
interpretation of former Rule 2:15 that an intervenor must be 
asserting an interest that is part of the subject matter of 
the litigation. 
Even though leave to amend should be granted 
liberally by the trial court in furtherance of the 
ends of justice, Rule 1:8, a new party may not 
intervene and assert a claim in a pending suit 
unless the claim is 'germane to the subject matter 
of the suit.'  Rule 2:15.  In order for a stranger 
to become a party by intervention, he must 'assert 
some right involved in the suit.'  Lile's Equity 
Pleading and Practice at 91 (3rd ed. 1952). 
 
Layton v. Seawall Enterprises, Inc., 231 Va. 402, 406, 344 
S.E.2d 896, 899 (1986). 
The claim of the intervenors in this case is limited to 
the protection of their right to reimbursement from the 
employee's third-party recovery for the amounts paid in 
compensation benefits.  33 U.S.C. § 933(f)(2000); Bloomer v. 
Liberty Mutual Ins. Co., 445 U.S. 74, 79-88(1980); Peters v. 
North River Ins. Co., 764 F.2d 306, 313 (5th Cir. 1985); 
Nacirema Operating Co. v. Oosting, 456 F.2d 956, 958 n.3 (4th 
Cir. 1972); The Etna, 138 F.2d 37, 40 (3rd Cir. 1943).  In 
 
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other words, Signal and Universal have a lien on any proceeds 
Hudson may recover in his action against Jarrett and Cooper, 
but Signal and Universal do not have a cause of action against 
Jarrett and Cooper based on Hudson's injuries.  33 U.S.C. 
§ 933(b) (2000); Peters, 764 F.2d at 317. 
Under federal law, the intervenors' lien attached 
automatically to amounts Hudson might recover by judgment or 
settlement as a result of his action against Jarrett and 
Cooper.  The intervenors can recover without independently 
proving Jarrett's liability to Hudson.  Id. at 320.  No issue 
to be resolved in Hudson's action is affected by the 
intervenors' lien claim, and no issue resolved in the action 
will affect the lien claim. 
In their motion to intervene and motion for judgment in 
this case, Signal and Universal did not raise a claim against 
Hudson, Jarrett, or Cooper.  The only relief sought was entry 
of a judgment against any proceeds awarded to Hudson for the 
amount of the workers' compensation paid Hudson.  Furthermore, 
on brief and at oral argument, the intervenors stated that 
they "do not want to participate in the trial."  They seek 
only to "follow" the trial and "be assured" their lien is 
protected. 
While intervention under Rule 3:19 is within the 
discretion of the trial court, the intervention must meet the 
 
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requirements of the Rule.3  The allegations of the intervenors 
here fall far short of showing any claim that they could 
assert as a plaintiff or defendant that is germane to the 
issues in the tort case. 
We also reject the intervenors' suggestion that because 
the General Assembly has provided a specific mechanism for the 
courts to protect the compensation liens of employers and 
workers' compensation insurance carriers who have paid 
benefits under the Virginia Workers' Compensation Act, Code 
§ 65.2-309 and -310, it is "reasonable to assume" that the 
General Assembly "envisioned liens under the Longshore Act as 
being 'claims' under Rule 3:19."  Rule 3:19 is a specific Rule 
enacted by this Court to govern the orderliness of 
proceedings.  As discussed, the Rule's history includes a 
strong adherence to limiting intervention to those parties who 
are legitimately plaintiffs or defendants in litigation 
because the nature of their claim includes some right that is 
involved in the litigation.  The claims of the intervenors 
                     
3 Some federal courts have allowed intervention to protect 
the compensation lien under Federal Rules of Civil Procedure 
24 and some have denied such intervention.  See Lewis v. 
United States, 812 F. Supp. 629, 631 (E.D.Va. 1993)(allowing 
intervention under Fed.R.Civ.P. 24(a)(2); The Etna, 138 F.2d 
at 41 (allowing intervention under Admiralty Rule 34).  Cf. 
Harris v. Westfal-Larsen & Co., 1964 A.M.C. 21 (N.D. Cal. 
1963) (disallowing intervention against third party while 
recognizing an insurer's right to intervene against 
longshoreman). 
 
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here fail to meet these conditions, and the trial court erred 
in granting the motions of Signal and Universal to intervene 
under Rule 3:19. 
III. 
In conclusion, for the stated reasons, we hold that the 
trial court erred in finding that the exclusivity provision of 
the Virginia Workers' Compensation Act barred Hudson's action 
against Cooper and Jarrett and in granting the motion of 
Signal and Universal to intervene under Rule 3:19.  
Accordingly, the judgment of the trial court is reversed and 
the case remanded for further proceedings consistent with this 
opinion. 
Reversed and remanded.