Opinion ID: 169318
Heading Depth: 3
Heading Rank: 1

Heading: New M exico’s Special Employee D efense

Text: Philco’s principal trial defense was that Frintz was under the control of IM C at the time of the accident. Under New M exico employment law, an employer may be sued only for employee torts committed within the scope of employment. M onett v. Dona Ana County Sheriff’s Posse, 840 P.2d 599, 603 (N.M . Ct. App. 1992); Restatement (Second) of Agency § 219(1) (1957) (“A master is subject to liability for the torts of his servants committed while acting in the scope of their employment.”). But, “[a]s a general rule, an employer is not liable under respondeat superior for an injury negligently caused by a[n employee] if the [employee] is not acting at the time as the [employee] of that employer, and the evidence shows that the employee has been loaned to the service of another who controls the manner and details of the employee’s work.” Los Ranchitos v. Tierra Grande, 861 P.2d 263, 267 (N .M . Ct. App.1993). This is known as the special employee defense. -7- Under this defense, the employee’s primary employer is not liable for negligent conduct where the employee was temporarily in the employ of another employer at the time of the accident. To establish a special employee relationship, New M exico cases require tw o findings of fact: One, for which employer is work being performed at the time of the tortious conduct, and two, which employer had the power to control the w ork performed and the conduct of the employee. Dunham v. Walker, 288 P.2d 684, 689 (N .M . 1955); see also Wuertz v. Howard, 421 P.2d 441 (N.M . 1966). The district court tendered this two-part test to the jury. The Bains argue, however, that the test applies only when workers compensation claims are involved. Outside the workers compensation context, as is the case here, they contend New M exico case law requires a tripartite finding to establish the special employee defense. They argue an additional element of relinquishment by the primary employer is necessary— not only was the employee under the control of another employer and performing work for that employer, but also that the primary employer relinquished control of its employee, relying on our decision in Jones v. George F. Getty O il, 92 F.2d 255 (10th Cir. 1937). W e disagree that the New M exico courts have adopted a relinquishment requirement as part of the special employee defense. In Jones, we addressed the question of whether employees temporarily borrowed by another employer under -8- the tenets of agency law, so-called “special” employees, were covered by New M exico’s workers compensation statute. W e answered in the affirmative, concluding that the special employer’s “sole liability to [the injured worker] is under the New M exico Compensation Act; no common-law liability having application” because of the preemption of common-law suits provided by workers compensation. Id. at 258. Our decision in Jones was notable because it was the first reported case that addressed the special employee defense under New M exico law. The Bains argue that Jones embodies a relinquishment element for cases outside the workers compensation context that New M exico courts would adopt if presented the opportunity. 4 In the seventy years since Jones, a substantial body of case law on the special employee defense has been developed by the New M exico courts. The New M exico courts first adopted the two-part test laid out above, with its focus on for whom the work is done and who controls the work, in Dunham v. Walker, 288 P.2d 684, 689 (N.M . 1955) (citing Jones, 92 F.2d at 258). M any subsequent cases have reaffirmed this rule. See, e.g., Shipman v. M acco Corp., 392 P.2d 9 (N .M . 4 By demonstrating relinquishment, the employer would sever the agency relationship necessary to respondeat superior liability by showing the employee was not working within the scope of his employment at the time of the negligence. Under this theory, without a showing of relinquishment both the special employer and the defendant employer could be directing the employee— leaving both susceptible to respondeat superior liability. -9- 1964); Wuertz v. Howard, 421 P.2d 441 (N.M . 1966); Barger v. Ford Sales Co., 546 P.2d 873 (N.M . Ct. App. 1976); Fresquez v. Sw. Indus. Contractors & Riggers, 554 P.2d 986 (N .M . Ct. App. 1976). W e must ask whether New M exico law then left the door open for an additional relinquishment requirement in cases where workers compensation preemption does not apply as the Bains contend. The answ er to that question is no. In our view , the N ew M exico Supreme Court rejected the relinquishment requirement outside the workers compensation context in Weese v. Stoddard, 312 P.2d 545 (N .M . 1956). There, a local American Legion post helped construct a refreshment stand for use at a rodeo. The stand was to be operated by a separate and distinct sister organization, the W omen’s Auxiliary. The American Legion loaned one of its members, M r. Stoddard, to the Auxiliary to help with heavy labor chores. An Auxiliary member asked Stoddard to move a truck that was supporting a beam attached to a tarpaulin sheltering the refreshment stand from the wind and sun. As Stoddard moved the truck, the beam fell upon plaintiff Bertha W eese of the Auxiliary and injured her. W eese sued both Stoddard and the American Legion. In assessing the scope of the special employee defense, the court used the two-part test adopted in D unham to determine whether the W omen’s Auxiliary or -10- the American Legion controlled and directed Stoddard’s work. After finding Stoddard a special agent of the W omen’s Auxiliary, the court decided special agency alone (without relinquishment) was sufficient to sever the American Legion’s respondeat superior liability for W eese’s injury. W hile the case involved a special agent rather than a special employee, the court made clear the analysis was the same by using the two-part test established in Dunham for special employees. 5 The Bains seek to distinguish Weese by arguing it is really a w orkers compensation case and should not be applied outside that specific context. Unfortunately for the Bains, there is nothing in Weese to narrow its holding in that fashion. First of all, the New M exico Supreme Court plainly found respondeat superior inapplicable because the agency relationship between the defendant employer and tortfeasor had been severed by the special employee doctrine. The court no where relied on workers compensation preemption to support this rationale. In fact, citing to an agency treatise and the nature of the agency relationship, the court explained its holding to the contrary: [I]n determining whether, in respect of a particular act, a servant, in the general employment of one person, who has been loaned for the time being to another is the servant of the original employer or of the person whom he has been loaned, the test is whether in the particular service which he is engaged to perform, the servant continues liable to the direction and 5 The court even cited to our Jones decision as an illustration of the application of the test. Weese, 312 P.2d at 547–48. -11- control of his general employer or becomes subject to that of the person to whom he is lent. Id. at 547 (citation omitted) (emphasis added). Secondly, while Weese cites to some workers compensation cases for its agency proposition, it also cites to numerous non-workers compensation cases and an agency treatise that places no reliance whatsoever upon workers compensation for its analysis. Id. at 547–48 (citing to Finegan v. H.C. & A.I. Piercy Contracting Co., 189 A.D. 699 (1919); Issacs v. Prince & Wilds, 133 M iss. 195 (1923); Denton v. Yazoo & M.V.R. Co., 284 U.S. 305 (1931); 35 Am. Jur. (M aster and Servant) § 541). The special employee defense in Weese is solely premised on severing respondeat superior liability for the primary employer rather than in establishing workers compensation preemption. Although occurring in the workers compensation context, Wuertz, 421 P.2d 441, also undermines the notion that New M exico courts w ould adopt a relinquishment requirement if given the chance. In Wuertz, the New M exico Supreme Court had an opportunity to make it more difficult for an employer to use the special employee defense by adding a consent exception to the defense. Instead of doing so, the court cited to the Weese decision for the proposition that even though the general employer consented to his employee helping a special employer, the special employee defense still applied. Id. at 443. -12- In sum, we cannot ignore the clarity of logic and reasoning with which the New M exico Supreme Court ignored the relinquishment requirement outside the workers compensation context in Weese and opted against reducing the availability of the special employee defense in Wuertz. W ithout a relinquishment requirement, the two-part test for establishing the special employee defense that the district court used in the jury instructions correctly stated New M exico law. Accordingly, the district court did not abuse its discretion in withholding the Bains’ requested instruction on relinquishment.