Opinion ID: 1502235
Heading Depth: 1
Heading Rank: 3

Heading: Derby

Text: Derby interposed a plea based upon Art. 101, § 62. It provides: When any person as a principal contractor, undertakes to execute any work which is a part of his trade, business or occupation which he has contracted to perform and contracts with any other person as subcontractor, for the execution by or under the subcontractor, of the whole or any part of the work undertaken by the principal contractor, the principal contractor shall be liable to pay to any workman employed in the execution of the work any compensation under this article which he would have been liable to pay if that workman had been immediately employed by him; and where compensation is claimed from or proceedings are taken against the principal contractor, then, in the application of this article, reference to the principal contractor shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the workman under the employer by whom he is immediately employed. Where the principal contractor is liable to pay compensation under this section, he shall be entitled to indemnity from any employer, who would have been liable to pay compensation to the employee independently of this section, and shall have a cause of action therefor against such employer. Nothing in this section shall be construed as preventing a workman from recovering compensation under this article from the subcontractor instead of from the contractor. Whenever an employee of a subcontractor files a claim under this article against the principal contractor, the principal contractor shall have the right to join the subcontractor or any intermediate contractors as defendant or codefendant in the case. The Workmen's Compensation Act as enacted by Chapter 800 of the Acts of 1914 was found to contain a major loophole in that an employer, by entering into a subcontract for the performance of parts of an entire project, could escape liability under the act. Accordingly, the numerous revisions embodied in Chapter 597 of the Acts of 1916 included a new section which became the present § 62. If Derby in this case is a principal contractor who has undertake[n] to execute any work which is part of his trade, business or occupation, a part of which he has contracted with some other person as subcontractor to perform, then under §§ 62 and 15 of the Workmen's Compensation Act the exclusive remedy of Coffey would be under that Act. Roland v. Lloyd E. Mitchell, Inc., 221 Md. 11, 13, 155 A.2d 691 (1959), and cases there cited. On the other hand, if Derby is not a statutory employer of Coffey, then Coffey may maintain the tort action here for alleged negligence in accordance with § 58 of the Workmen's Compensation Act. In Honaker II we examined the background of this statute. 285 Md. at 222-25. We pointed out that in Honaker v. W.C. & A.N. Miller Dev. Co., 278 Md. 453, 365 A.2d 287 (1976) ( Honaker I ), Judge Orth discussed for the Court a number of our prior cases including State v. Bennett Bldg. Co., 154 Md. 159, 140 A. 52 (1928). The Court said in Honaker I: It is manifest on the face of § 62 of Art. 101, that in order to invoke its provisions there must be: (1) a principal contractor (2) who has contracted to perform work (3) which is a part of his trade, business or occupation; and (4) who has contracted with any other party as a subcontractor for the execution by or under the subcontractor of the whole or any part of such work. [ Id. 278 Md. at 459-60.] The Court quoted this in Honaker II. 285 Md. at 225. We pointed out in Honaker I and Honaker II that the term principal contractor is not synonomous with general contractor. Honaker I, 278 Md. at 460 n. 4, and Honaker II, 285 Md. at 225. The parties are in agreement in this case that Derby meets criteria (1), (2), and (4). The dispute is whether the work for which Derby contracted is part of its trade, business or occupation.... At trial Derby's evidence consisted solely of placing before the court certain drawings and the like. It presented no live testimony. Because the evidence adduced by Coffey at trial differed from that which was before the Court in Honaker II on the motion for summary judgment, we shall first examine that which was before the Court then. On summary judgment the affidavit and deposition of Frederick B. Maples were considered. By the time of trial he had retired, but for the preceding thirty years he was employed by Derby, the last fifteen years of which (including the time of the incident) he was Derby's executive vice-president. His deposition and his affidavit indicated that the men who did the actual steel erection were employed by Prosser, the erection company. He said it was usual practice to buy steel from the fabricator erected, although he claimed his men had the capability of erecting it and said that he had subcontracted the erection here to Prosser. He did state in his affidavit, [I]t is a common practice for steel fabricators in the Baltimore area to enter into contracts for both the supply and erection of steel. Such practice is customary in the industry, and contracting for both supply and erection of structural steel is an essential part of Derby's business. Coffey countered with an affidavit from the president of the general contractor, The Lacchi Construction Company. It was to the effect that Derby at the time of the incident was engaged in steel fabrication, that it held itself out as a steel fabricator; that as far as local steel fabricators are concerned, it is the experience of The Lacchi Construction Company that it is highly unusual for steel fabricators to erect steel with their own manpower but rather they subcontract the erection. The pages from the classified section of the Baltimore City telephone directory for the years 1971 to 1976, inclusive, reflecting that Derby advertised itself as a steel contractor and not as an erector, were also before the trial judge. The aforegoing is all that was before him. It supplied the basis for our saying, The sum total of that which was before the trial judge on the motion for summary judgment is susceptible of an inference that Derby is no longer engaged in `the trade, business or occupation' of steel erection. 285 Md. at 232. With that reference we now turn to an examination of the evidence adduced by Coffey at this trial. It will be seen that not only was it in a different posture, but there was more to support Derby's position than when the matter was before the court on summary judgment. The testimony of Mr. Maples is of critical importance here. He said that although at one time Derby had done erection work with its own employees, it no longer did so. It continued, however, to bid structural steel furnished and erected. In response to a question as to what the majority of ... the work of Derby Steel was back in 1972 he replied, We furnished and fabricated, delivered, and generally erected structural steel for the industry. He said that this included entering into contracts to both furnish and erect the steel. In this instance Derby prepared drawings for Prosser, the steel erector, to tell it where to put each piece. Maples indicated that in this transaction Derby made a profit on the work it subcontracted to Prosser. He said that Derby was responsible to the general contractor to see that the job progressed in accordance with Derby's subcontract from the general contractor. The testimony relative to the drawings and the profit made was not before the court on summary judgment. Moreover, the Maples testimony adduced by Coffey was more explicit as to Derby's bidding structural steel furnished and erected and generally erecting structural steel for the industry than on the motion for summary judgment. Paul J. Prosser, Jr., of Prosser was another witness called by Coffey. He testified that at the relevant time Derby habitually entered into contracts with general contractors both to furnish and erect steel. Franklin H. Smith, superintendent for Lacchi, the general contractor for the building, was yet another witness produced by Coffey. Although he said that he had never known of Derby's ever doing any erection by means of its own employees, he also said that at the time of the incident in question Derby was generally in the business of entering into contracts with general contractors and others both to fabricate and erect steel on jobs. He further testified, It is general knowledge around that most fabricators when they write a contract, not all but most, at that time would take a contract with a general contractor, fabricate and erect it, letting a sub-contract for the actual erection. By way of summary, the testimony of Maples was not precisely that which was before the trial court on the motion for summary judgment. Nothing from either Prosser or Smith was before the Court on summary judgment. It will be noted that their testimony served to reinforce the contention that erection of steel was a part of Derby's business although such was not done by Derby's erecting steel with its own employees. Also, a statement was extracted from Maples to the effect that Derby did not advertise in the classified section of the telephone book as a steel erector. Such is in no way inconsistent with Derby's contention that its business includes the erecting of steel through subcontractors. No one has contradicted the testimony of Messrs. Maples, Prosser, and Smith. Thus, it was uncontradicted that the work in question was a part of Derby's trade, business or occupation.... A general contractor who bids a job and then subcontracts each of the various components of that job to others is in the business of being a general contractor for that type of construction notwithstanding the fact that no part of the actual work is performed by his own direct employees. It simply is not necessary that work be done by one's employees for one to be in a given business. Coffey seems to be of the view that for one to be a principal contractor it is necessary for one to be a general contractor. That simply does not follow. That is like the argument we rejected in Honaker II that because Miller did not have employees who put roofs on houses that the placing of such a roof could not be part of its trade, business or occupation of building and selling homes. We said there was no question but that Miller was in the business of building and selling homes, that from time immemorial shelter from the elements has been regarded as one of the necessities of life, and that any structure with four walls must have a roof on it before it may be considered a house; thus a contention that the installation of a roof is not a part of the trade, business or occupation of building homes was without merit. 285 Md. at 229. This case was before us in Honaker II on a motion for summary judgment with our then considering whether the pleadings, depositions, and admissions on file, together with the affidavits, if any, showed that there was no genuine dispute as to any material fact and that the moving party was entitled to a judgment as a matter of law. As we have pointed out, the function of a summary judgment proceeding is not to try the case nor to attempt to resolve factual issues, but to determine whether there is a dispute as to a material fact sufficient to provide an issue to be tried. Dietz v. Moore, 277 Md. 1, 4-5, 351 A.2d 428 (1976), and cases there cited. On the motion for summary judgment, all of the depositions, pleadings, affidavits, admissions, and the like are considered together without reference to their origin and are examined to determine whether or not there is a potential triable issue of fact for submission to the jury. The case has now been tried. At trial, more evidence was adduced in support of Derby's position which was not before the Court on the motion for summary judgment, as we have already pointed out. Moreover, the matter came before the Court in a somewhat different posture. Coffey was not bound in Honaker II by what he elicited from others by way of deposition nor was he bound by any affidavits submitted on behalf of his opponent. Coffey is bound by the testimony adduced by him at trial, which clearly establishes that the work here was a part of the trade, business or occupation of Derby, such testimony having been neither rebutted, contradicted, nor discredited. In Proctor Electric, 217 Md. 22 at 33, Judge Prescott referred for the Court to the fact that [t]he testimony of a witness may be contradicted or discredited by circumstances as well as by statements of other witnesses, and a jury is not bound to accept a witness' testimony as true if it contains improbabilities, or if there are reasonable grounds for concluding that it is erroneous. This language was quoted with approval in Williams, 252 Md. at 80, and in Wood v. Johnson, 242 Md. 446, 453, 219 A.2d 231 (1966). None of these factual situations are present here. The situation before us in the present case would be different if the testimony in regard to Derby's business were produced as a part of Derby's case. There was, however, no evidence from Derby on that issue. When Coffey produced witnesses to testify in regard to Derby's business, we must view the collection of evidence in a different light inasmuch as it can go no further in Coffey's favor than that properly inferable from the evidence Coffey produced. In the present case, it is Coffey's evidence, not Derby's, which is before us in regard to Derby's business so that the only permissible factual finding under such evidence is that Derby is engaged, among other things, in the trade, business or occupation of steel erection. No evidence was produced which would justify an inference to the contrary. Hence, the trial judge properly entered judgment n.o.v. in favor of Derby against Coffey.