Opinion ID: 454564
Heading Depth: 1
Heading Rank: 7

Heading: I.Code Ann. tit. 24, Sec. 261(b)(1) provides:

Text: (b)(1) The insured employee of an uninsured employer, or the employee's beneficiaries, instead of receiving compensation under this chapter may elect, at any time prior to the rendering of a decision by the Commission, to bring suit for damages against the employer, just as if this chapter were not applicable. 7 That an employer's immunity is lifted as a punitive measure is made clear by V.I.Code Ann. tit. 24, Sec. 261(b)(3) which prohibits an uninsured employer from asserting the common law defenses of contributory negligence, assumption of risk, or fellow servant in a resultant tort action 8 Restatement (Second) of Agency Sec. 220 provides: Sec. 220. Definition of Servant (1) A servant is a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control. (2) In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered: (a) the extent of control which, by the agreement, the master may exercise over the details of the work; (b) whether or not the one employed is engaged in a distinct occupation or business; (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; (d) the skill required in the particular occupation; (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; (f) the length of time for which the person is employed; (g) the method of payment, whether by the time or by the job; (h) whether or not the work is a part of the regular business of the employer; (i) whether or not the parties believe they are creating the relation of master and servant; and (j) whether the principal is or is not in business. Restatement (Second) of Agency Sec. 227 provides: Sec. 227. Servant Lent to Another Master A servant directed or permitted by his master to perform services for another may become the servant of such other in performing the services. He may become the other's servant as to some acts and not as to others. 9 As previously noted, see supra at note 1, we here deal only with the unrevised statute which applied at the time the events giving rise to this litigation transpired 10 Colon Nunez was based upon Puerto Rico's workers' compensation statute from which the Virgin Islands Act was adopted in 1954. Only those extraterritorial decisions which interpret adopted legislation prior to the date of its enactment by the Virgin Islands constitute binding precedent in the courts of the Virgin Islands. See Berkeley v. West Indies Enterprises, Inc., 480 F.2d 1088, 1089, 1095 (3d Cir.1973). Colon Nunez is thus persuasive, but not binding authority in the Virgin Islands 11 In discussing Colon Nunez, Larson states that the decision contradicts not only the court's own prior decision in Musick, but also the majority rule and the overall trend of the case law from other jurisdictions. See 2A A. Larson, supra Sec. 72.31(b) at 14-126. Noting that the Colon Nunez court expressed particular concern that a foreign shipowner not be allowed to shift the burden of an injured worker's loss back onto the Puerto Rican economy by means of the exclusive government compensation fund, see 423 F.2d at 956, Larson characterizes the decision as a morsel of xenophobia. 2A A. Larson, supra Sec. 72.31(b) at 14-126 More significantly, the Colon Nunez court argues that because Puerto Rico's compensation law is mandatory and comprehensive, no incentive is needed to induce contractors to insist that their subcontractors carry insurance. As Larson comments, however, the mandatory nature of the statute is not alone sufficient to guarantee universal compliance. See 2A A. Larson, supra Sec. 72.31(b) at 14-126. Under neither the Puerto Rican nor the Virgin Islands scheme should a principal, who requires that his contractor comply with the applicable compensation law, be effectively penalized by thereby being precluded from ever being considered a statutory employer for purposes of workers' compensation. 12 11 L.P.R.A. Sec. 21 provides in pertinent part: When an employer insures his workmen or employees in accordance with this chapter, the right herein established to obtain compensation shall be the only remedy against the employer.. The facts in Lugo Sanchez, which called 11 L.P.R.A. Sec. 21 into play, may be briefly summarized. The plaintiff was an employee of an independent contractor who had contracted with the defendant Authority to construct and maintain several thermoelectric plants. Steam valves in the plants required periodic repairs and prior to each repair, defendant Authority would be notified to remove all steam from the line. When the plaintiff began to disassemble a particular valve, he was injured by an escaping steam jet. Plaintiff's original employer was insured in accordance with the Puerto Rican Act and the plaintiff received compensation benefits. He thereafter sued the Authority as a third-party whose negligence caused his personal injury. The Supreme Court of Puerto Rico held that under the circumstances, the Authority was not a third party but rather was plaintiff's statutory employer and hence immune from suit. 13 The precise statutory provision upon which the Lugo Sanchez court and subsequent courts relied in interpreting the Puerto Rican Act was 11 L.P.R.A. Sec. 20 which states: Sec. 20. Employer to report all wages Every insured employer shall, on reporting his annual payrolls, include in said payrolls the wages paid to all the workmen and employees working for or employed by him, whether by the job or under some person with whom the employer contracted for the job, or under a contractor or independent subcontractor employed or contracted by said employer; and all accounts or taxes collected by the State shall be based on the employer's current payroll in which shall be included the above-mentioned laborers; Provided. That this provision shall not be applicable to employers for whom work is done by an independent contractor who is insured as an employer under the provisions of this chapter. The Virgin Islands Act contains no equivalent provision. Resort to section 20, however, was necessary because the Puerto Rican statute does not directly define employer or employee. This difference should not be allowed to obscure the fundamental policy behind Musick--that immunity is required to guarantee that an employer who insists that its contractors carry insurance is not in fact penalized for enforcing compliance with the law. Indeed, to accept Vanterpool's argument, that omission of a similar reporting provision in the Virgin Islands statute bars HOVIC from being deemed a statutory employer, leads to the anomalous result that HOVIC should prefer not to have its contractors purchase insurance, since the consequence of their purchase would be that HOVIC would inevitably have the status of a third-party. 14 In concluding that an employee's knowing waiver of his right to maintain a common law action for negligence against his borrowing employer was an essential element of the borrowed employee doctrine, the district court reiterated Larson's admonition that special attention must be paid to the employee's consent to his new employment. See 589 F.Supp. at 338. The relevant passage in Larson states: In compensation law, the spotlight must now be turned upon the employee, for the first question of all is: Did he make a contract of hire with the special employer? If this question cannot be answered yes. the investigation is closed, and there is no need to go into tests of relative control and the like. This must necessarily be so, since the employee loses certain rights along with those he gains when he strikes up a new employment relation. Most important of all, he loses the right to sue the special employer at common law for negligence; and when this question has been presented in this form, the courts have usually been vigilant in insisting upon a showing of a deliberate and informed consent by the employee before employment relation will be held a bar to common-law suit. 1C A. Larson, supra Sec. 48.10 at 8-319. Even in this formulation offered by Larson, the emphasis upon the deliberate and informed consent of the employee relates to the contract of hire rather than to some secondary and subsequent waiver of an employee's right to sue at common law. Indeed, as Larson makes clear, consent to special employment necessarily entails loss of a borrowed employee's common law remedies, when a workers' compensation statute obtains.