Opinion ID: 2101530
Heading Depth: 1
Heading Rank: 2

Heading: PECO's Appeal

Text: PECO does not deny its negligence but instead contends that it is immune from suit under the Pennsylvania Workmen's Compensation Act. Pa.Stat.Ann. tit. 77, §§ 1-1601 (Purdon 1952 & Supp. 1988). The Act grants employees the right to a fixed level of compensation for work-related injuries and, in return, exempts their employers from common law liability for negligence. See generally McGinn v. Valloti, 363 Pa.Super. 88, 525 A.2d 732 (1987). The central question on appeal is whether PECO qualifies as the employer of John Mathis under the statute. Viewing the facts in the light most favorable to the verdict winners, we find that PECO was not John Mathis' employer and was therefore subject to suit. Mathis was hired as a laborer by Henkels and McCoy, Inc. (Henkels). Henkels had entered into a contract with PECO in which it agreed to furnish laborers to perform maintenance work at the Eddystone Plant. Henkels paid the laborers, and provided supervisors to oversee the performance of their duties. Henkels also retained ultimate authority to discharge laborers. PECO informed the Henkels supervisors of what work needed to be done, reimbursed Henkels for the cost of wages, benefits, taxes, and insurance, and supplied the laborers with tools. John Mathis reported for work every day at the Eddystone Plant. The work consisted of general maintenance, such as removing debris and sweeping floors, as well as more complex tasks, such as dismantling scaffolds. Mathis testified that he received all instructions concerning which tasks to do and how to do them from Samuel Mench and Joshua Whitaker, two Henkels foremen. Mench and Whitaker received general directions from Leon Yacyshyn, a PECO manager who did not ordinarily communicate directly with individual laborers. On May 5, 1981, Whitaker assigned Mathis to a crew of Henkels laborers and ordered the crew to tear down scaffolding which had been erected above the UE & C catwalk. At the time that Mathis fell through the catwalk, Yacyshyn was not present at the plant. PECO first argues that even assuming that Henkels actually employed Mathis, PECO was the statutory employer of Mathis under section 52 of the Workmen's Compensation Act. [3] Under section 52, the employees of a subcontractor are sometimes deemed to be employees of a principal contractor for workmen's compensation purposes. PECO, however, is not a principal contractor but is instead the owner and operator of the Eddystone Plant. As such, PECO is not eligible for statutory employer status. In McDonald v. Levinson Steel Co., 302 Pa. 287, 153 A. 424 (1930), the Pennsylvania Supreme Court held that the statutory employer doctrine does not apply unless five elements are present. These are: (1) An employer who is under contract with an owner or one in the position of an owner. (2) Premises occupied by or under the control of such employer. (3) A subcontract made by such employer. (4) Part of the employer's regular business entrusted to such subcontractor. (5) An employee of such subcontractor. 302 Pa. at 294-95, 153 A. at 426 (1930). These requirements have been strictly construed by the appellate courts of Pennsylvania. See, e.g., Cox v. Turner Construction Co., 373 Pa.Super. 214, 540 A.2d 944 (1988); Grant v. Riverside Corp., 364 Pa.Super. 593, 528 A.2d 962 (1987); Zizza v. Dresher Mechanical Contractors, 358 Pa.Super. 600, 518 A.2d 302 (1986) (en banc); Stipanovich v. Westinghouse Electric Corp., 210 Pa.Super. 98, 231 A.2d 894 (1967). PECO does not meet the first requirement since PECO is an owner  not an employer under contract with a separate entity that is an owner or one in the position of an owner. PECO emphasizes that the job which Mathis performed was an essential part of the day to day operations of its electric power plant. We recognize that PECO controlled the premises of the plant and that PECO entrusted part of its regular business operations at the plant to Henkels, Mathis' direct employer. This information is relevant to the second and fourth of the McDonald requirements but is not sufficient to create the relationship of statutory employer between PECO and Mathis. In the McDonald case, the Levinson Steel Company hired Uhl, another steel company, to construct a steel crane shed for Levinson on property which Levinson had leased. Levinson asserted that it was the statutory employer of an injured worker that Uhl had hired. In rejecting this claim, the Supreme Court specifically noted: We may concede that the regular business of Levinson was constructing similar work for others, and he was an employer to his own employees. Further the work was done on premises leased by him. However, the work under which the accident took place was that let to a independent contractor by Levinson as lessee-owner. Merely because the work is on his own property and is done in the course of his regular business does not bring him within the act. There must be a relation of principal contractor and subcontractor under him, and Levinson must be such principal contractor. 302 Pa. at 295, 153 A. at 426-27 (citations omitted) (emphasis added). In this case, PECO stands in the shoes of Levinson and Henkels stands in the shoes of Uhl. We therefore find that PECO cannot qualify under section 52 of the Workmen's Compensation Act as Mathis' statutory employer. PECO also argues that it should be recognized as Mathis' employer for workmen's compensation purposes by virtue of the borrowed employee doctrine. This doctrine is an outgrowth of the common law rule that a servant who is loaned by his master to a third party is regarded as the servant of that third party while under that third party's direction and control. See Ashman v. Sharon Steel Corp., 302 Pa.Super. 305, 313-14, 448 A.2d 1054, 1058 (1982). In order to come within the scope of the doctrine, the borrowing employer must control or have the right to control the borrowed employee with regard to both the work to be done and the manner of performing it. Martin v. Recker, 380 Pa.Super. 527, 535, 552 A.2d 668, 672 (1988); English v. Lehigh County Authority, 286 Pa.Super. 312, 428 A.2d 1343 (1981). At trial, PECO alleged that Henkels loaned Mathis to its maintenance department and that Mathis was wholly subject to the authority of its maintenance department. [4] The court referred the question of PECO's authority to the trial jury. In response to a special interrogatory, the jury found that that the maintenance department did not control or have a right to control Mathis. PECO maintains that under Venezia v. Philadelphia Electric Co., 317 Pa. 557, 177 A. 25 (1935), the borrowed employee issue should have been resolved in its favor as a matter of law. We disagree. In Venezia, the plaintiff was injured while digging ditches for PECO pursuant to a contract between PECO and his direct employer, Anthony Tinaglia. Plaintiff testified that he worked under two supervisors: a foreman provided by Tinaglia who told him which job to go to and checked his attendance, and a foreman provided by PECO who actually directed his work. The Supreme Court found that PECO was the plaintiff's true employer since it was clear from the plaintiff's own testimony that PECO controlled the manner in which he performed his work. On the other hand, Mathis testified that he received work instructions from the foremen provided by Henkels, and not from PECO supervisors. Accordingly, the jury was free to conclude that Henkels actually controlled Mathis, and that PECO was therefore not immune from suit as a borrowing employer. PECO also asserts that the testimony of the two Henkels foremen, Whitaker and Mench, clearly established that PECO had reserved the right to control Mathis' work. We find that this testimony was ambiguous. Whitaker testified that he had disagreements with Leon Yacyshyn, the PECO supervisor, about how the work should be done, and that sometimes he would prevail and sometimes Yacyshyn would prevail. When asked on cross-examination if Yacyshyn was the boss, he replied I guess he was. R.R. at 657a. Mench said that Yacyshyn rarely ventured forth from his office, but he conceded on cross-examination that Yacyshyn would have had authority to tell the Henkels laborers Don't sweep there; sweep there . . . or that sort of thing. R.R. at 857a. Neither Whitaker nor Mench ever stated that Yacyshyn had authority to direct the precise manner in which laborers carried out more complex tasks  such as dismantling a scaffold. When the evidence could reasonably give rise to contrary inferences as to the scope and extent of an employer's control, the question is for the jury. See Mature v. Angelo, 373 Pa. 593, 598, 97 A.2d 59, 61-62 (1953). Since the jury found that PECO did not have the right to control the manner in which Mathis did his work, the trial court properly concluded that PECO could not claim immunity as an employer under the Workmen's Compensation Act. PECO next alleges that the trial court erred by refusing to submit to the jury the question of whether UE & C must indemnify PECO. Since we determined in section I of this opinion that UE & C is entitled to judgment n.o.v., this claim is clearly without merit. PECO next alleges that the trial court improperly admitted expert testimony on damages for loss of future earning capacity. Before the catwalk accident, Mathis' duties included lifting heavy objects and performing other strenuous manual labor. After the accident, he resumed work for the Henkels Company at the Eddystone Plant, and he continued to receive the union wage of $13.60 per hour. However, his physician stated in a deposition that was introduced into evidence that Mathis could only perform light janitorial work because of his back injury. At trial, plaintiffs called Dr. Robert Wolf, a specialist in vocational rehabilitation, who testified that as a result of the injury, the value of Mathis' services in the job market had declined from $13.60 per hour to $5.00 per hour. PECO objected to this testimony as misleading and unduly speculative, especially in light of the fact that Mathis had kept his old job and had not suffered any actual reduction in his wages. In DiCiacchio v. Rockcraft Stone Products Company, the Pennsylvania Supreme Court explained that when assessing loss of earning capacity: The test is not exclusively a comparison of before-and-after figures, but a determination as to whether, because of the injuries, the injured man's economic horizon has been shortened. . . . A tortfeasor is not entitled to a reduction in his financial responsibility because, through fortuitous circumstances or unusual application on the part of the injured person, the wages of the injured person following the accident are as high or even higher than they were prior to the accident. Parity of wages may show lack of impairment of earning power if it confirms other physical data that the injured person has completely recovered. Standing alone, however, parity of wages is inconclusive. 424 Pa. 77, 82, 225 A.2d 913, 915 (1967) (lead opinion). See also Christides v. Little, 274 Pa.Super. 343, 418 A.2d 438 (1980); Wright v. Engle, 256 Pa.Super. 321, 389 A.2d 1144 (1978). The case sub judice is analogous to Gary v. Mankamyer, 485 Pa. 525, 403 A.2d 87 (1979). The plaintiff in Gary was a nurse whose injury prevented her from continuing to lift and move patients. Although she was allowed to return to her former position, she established that she was permanently disabled and that she would not have been able to secure a job as a nurse at another hospital. The Court held that [s]uch evidence, on the basis of which a reasonable jury could reasonably infer appellant's physical inability to continue work as a practical nurse, also forms an adequate predicate for the challenged testimony of the actuarial expert who calculated appellant's projected future loss of earnings based on an assumption of total loss of earning capacity. 485 Pa. at 529-30, 403 A.2d at 89-90. In the instant case, the jury could have concluded that Mathis was no longer capable of working as an all purpose laborer and that he would not be able to secure another position at union wage if he lost his job with Henkels. We find that the testimony of Dr. Wolf was admissible, and we further note that PECO had ample opportunity to cross-examine Dr. Wolf as to any aspect of his testimony that was arguably misleading. Finally, PECO asserts that the trial court erred by awarding delay damages pursuant to Pennsylvania Rule of Civil Procedure 238. [5] On November 7, 1988, while this case was pending on appeal, the Pennsylvania Supreme Court rescinded the original Rule 238 and promulgated a new Rule 238 effective immediately. In Ceresini v. Valley View Trailer Park, 380 Pa.Super. 416, 552 A.2d 258 (1988), an en banc panel of this court found that new Rule 238 applied to an action in which a properly preserved challenge to the assessment of delay damages was pending in the Superior Court as of the date of the promulgation of the new rule. In light of Ceresini, we remand for a recalculation of delay damages under new Rule 238. We grant judgment n.o.v. to United Engineers and Constructors, Inc., and we remand for proceedings consistent with this opinion. Jurisdiction is relinquished.