Court Opinion

ID: 9483874
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:33:50.667437+00
Date Added: 2024-06-11T17:49:53.114954
License: Public Domain

KEITH, Circuit Judge.
Miles and Theresa Mathis, plaintiffs-appellants appeal from the district court’s October 4, 1991 order in favor of defendant-appellee, Bowater Incorporated. The court granted Bo water’s motion for summary judgment. For the reasons set forth below, we AFFIRM.
*278I.
Bowater, which owns and operates a paper mill in Calhoun, Tennessee, undertook the “Kraft Mill Project” (“the Project”), to renovate the facilities at the mill. As part of this process, Bowater contracted with several companies for construction, renovation and design services. In order to coordinate the services provided by these various companies, Bowater instructed a group of its employees to oversee the work.
On April 5,1988, after work began at the preliminary site, Bowater entered into a contract with Bechtel Construction Company to provide various construction services for the Project. Pursuant to this contract, Bowater retained control of the work schedule as well as other aspects of the construction and renovation process. For example, Bowater retained the right to specify and reject subcontractors hired by Bechtel to complete portions of the Project. In turn, Bechtel retained the right to enter into separate agreements with various unions for the supply of skilled workers for the Project.
On July 26, 1989, the appellant, an employee of Bechtel, was struck by a log ejected from a conveyor while he was working on the • Project. Appellant suffered permanent injury to his back. He was laid off in January, 1990 after being placed on a restricted work status for several months. Bechtel provided appellant medical treatment pursuant to Tennessee’s Workers’ Compensation Law. On May 31, 1990, appellant settled his worker’s compensation claims with Bechtel’s insurance carrier.
On June 5, 1990, appellants, Miles and Theresa Mathis, filed suit in the United States District Court for the Eastern District of Tennessee against Bowater to recover for injuries suffered by Mr. Mathis (“Mathis”). Mathis was struck by a log while working for his employer, Bechtel Construction Company, on Bowater’s premises. Bowater raised a number of defenses in its answer to the complaint, including contributory negligence, assumption of the risk, intervening cause, and exclusive remedy as a bar to appellant’s action.
Subsequently, various interrogatories were exchanged by the parties. The case was scheduled for trial on September 3, 1991. On August 5, 1991, Bowater filed a motion for summary judgment, arguing they were in fact the principal contractor of the Project, and therefore a statutory employer. Under Tennessee Workers’ Compensation Law, a statutory employer is responsible for providing worker’s compensation insurance but immune to tort liability. On September 3, 1991, the district court granted Bowater’s motion for summary judgment. From that order, plaintiffs filed two separate notices of appeal, which have been consolidated by this Court.
II.
To grant summary judgment, a court must determine that “there is no issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. This Court reviews the district court’s grant of summary judgment for Bowater de novo. White v. Turfway Park Racing Ass’n, Inc., 909 F.2d 941, 943 (6th Cir.1990). This Court must view all facts and inferences in the light most favorable to the nonmoving party, and the moving party shoulders the burden of showing no genuine issue of material fact exists. The nonmoving party, however, may not rest on its pleadings, but must come forward with probative evidence which would make it necessary to resolve the factual dispute at trial. Id. at 943-44. See also Celotex Corp. v. Catrett, 471 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Jurisdiction in this case is based upon diversity, therefore the district court’s application of Tennessee Workers’ Compensation Law was proper. See Tennessee River Pulp and Paper Co., v. Eichleay Corporation, 708 F.2d 1055, 1057-58 (6th Cir.1983). The district court found, and the appellant does not dispute, that the Tennessee Workers’ Compensation Law, T.C.A. § 50-6-108 (Supp.1990) requires an employer to compensate an employee for injuries he sustains, even if those injuries are not a result of the employer’s negli*279gence. In turn, the employee is barred from recovering damages from his employer for injuries resulting from his employer’s negligence making worker’s compensation benefits the employee’s exclusive remedy. Posey v. Union Carbide Cory. 705 F.2d 833, 834 (6th Cir.1983).
The responsibility for workers’ compensation benefits and immunity to tort liability is expanded beyond the direct employer, under T.C.A. § 50-6-113. Specifically, the statute states:
Liability of principal, intermediate contractor or subcontractor. — (a) A principal, or intermediate contractor, or subcontractor shall be liable for compensation to any employee injured while in the employ of any of his subcontractors and engaged upon the subject matter of the contract to the same extent as the immediate employer.
(c) Every claim for compensation under this section shall be in the first instance presented to and instituted against the immediate employer, but such proceedings shall not constitute a waiver of the employee’s rights to recover compensation under this chapter from the principle or intermediate contractor, provided that the collection of full compensation from one (1) employer shall bar recovery by the employee against any others, nor shall he collect from all a total compensation in excess of the amount for which any of said contractors is liable.
(d) This section shall apply only in cases where the injury occurred on, in, or about the premises on which the principal contractor has undertaken to execute work or which are otherwise under his control and management.
Under T.C.A. § 50-6-113, if a subcontractor’s employee is injured on premises under the principal contractor’s control, the principal contractor is liable to that employee to the same extent as the subcontractor. That principal contractor, however, is immune, to tort actions of that injured employee, to the same extent as the subcontractor.
To determine whether an owner is acting as its own principal contractor, in Stratton v. United Inter-Mountain Telephone, 695 S.W.2d 947 (Tenn.1985), the Tennessee Supreme Court listed the following factors for consideration:
(1) right to control the conduct of work; (2) right of termination, (3) method of payment; (4) whether alleged employee furnishes his own helpers (5) whether alleged employee furnishes his own tools; and (6) whether one is doing ‘work for another’.
Stratton, 695 S.W.2d at 950. The Stratton court further explained that, while no single issue is dispositive, the “right to control the work has been repeatedly emphasized”. Id. In evaluating whether an owner has the right to control, the court stated “the test is not whether the right to control was exercised but merely whether this right to control existed”. Id.
In addition to the right to control, the Tennessee Supreme Court in Acklie v. Carrier, 785 S.W.2d 355 (Tenn.1990), cited other aspects of being a principal contractor. In that case, the court found an owner to be its own principal contractor because:
[The Company] selected the subcontractors, coordinated the work, made changes periodically in the plans and had work redone, and its own employees performed [many of the necessary] tasks.
Acklie, 785 S.W.2d at 358.
Furthermore, this Court also used the above listed factors in Ronald Lyness v. Bowater, Inc. 941 F.2d 1210 (6th Cir.1991) (unpublished per curiam). The Lyness panel was faced with similar facts and held that Bowater was its own principal contractor, where Mr. Lyness’ direct employer was a “resident contractor” for Bowater.
In the case at bar, the district court found that a principal contractor/subcontractor relationship existed between Bowater and Bechtel, respectively. The district court based its finding primarily on: the contract between Bechtel and Bowater, and the affidavit and deposition of Edwin N. Scott, the manager of the Project. The appellant does not dispute the veracity of the information in any of these documents. *280Instead, appellant maintains that in spite of the contract and testimony of Mr. Scott, Bowater was simply the owner and not the principal contractor. Review of the contract, as well as other evidence submitted, reveals that under the Tennessee Workers’ Compensation Law, Bowater was the principal contractor. As noted above, the court in Stratton emphasized that an owner’s retention of the right to control the work to be done is a strong indication that the owner was acting as its own principal contractor. Stratton at 950. Provisions within the “Contract for Procurement and Construction Services” 1 between Bowater and Bechtel indicate that Bowater retained a great deal of control over the Project.
In addition to Bowater’s high level of control over the Project, Article XI of the contract further indicates that Bowater was acting as the principal contractor. For example, by requiring Bechtel to maintain workers’ compensation insurance, Bowater was protecting itself against a claim by an injured Bechtel employee, like Mathis. The only way that Bowater would be liable to the Bechtel employee’s workers’ compensation claim is if Bowater were the principal contractor, and Bechtel were a subcontractor.
As noted above, Edwin N. Scott was the manager for the Project. Mr. Scott’s testimony, which is uncontested by the appellant, indicates that Bowater was acting as its own principal contractor. Specifically, Mr. Scott testified that:
1. Preliminary work was done by other contractors before Bowater contracted with Bechtel, including site preparation, removal of a parking lot and relocation of water and electrical lines.
2. Bowater assisted Bechtel in the selection of its subcontractors, approving some and rejecting others.
3. Bowater was integral in the coordination and planning of the Project, before, during and after Bechtel was involved.
4. Bowater was involved in the purchasing of tools and equipment.
5. After Bechtel ceased working on the Project, Bowater directly hired other contractors to complete the remaining work; also, Bowater’s own employees eventually assisted in the completion of the Project.
This is in direct accord with the criteria listed in Acklie.
III.
Under the Tennessee Workers’ Compensation Law, Bowater is immune from tort liability, as a principal contractor. A de novo review of the evidence reveals that Bowater was acting as its own principal contractor and Bechtel was one of its subcontractors. In light of the strict correlation between the facts of this case and the standards set forth for determining whether an owner is its own principal contractor, the district court did not err by granting summary judgment to Bowater. Bowater was acting as a principal contractor, and is *281therefore immune to tort liability, under the Tennessee Worker's Compensation Law. For the forgoing reasons, we AFFIRM the summary judgment dismissal of the Honorable James H. Jarvis, United States District Judge for the Eastern District of Tennessee.

. For example, according to appellee’s brief: Article II, Section B: Bechtel acted as Bowa-ter’s agent for procuring materials, equipment, supplies and related services for construction of the project, not specified to be furnished by or on behalf of others; Bowa-ter's approval was required regarding general terms and conditions, including warranties to be incorporated in all bid packages, subcontracts, contracts and purchase orders entered into by Bechtel.
Article II, Section C: Bechtel was required to furnish construction equipment and tools but had to consult Bowater, whose agreement was required with regard to the source of the equipment and tools and whether they should be acquired by purchase, lease or rental. Article II, Section D: Bowater furnished field office space, field clerical employees, utilities, communications, reproduction services, supplies, and related materials and services as necessary for the proper performance and start up of testing services.
Article II. Section G: Bechtel was required to prepare for Bowater’s approval a schedule for the performance of the work.
Article IV: Bowater appointed three of its employees to sit on a review board with three Bechtel employees for the purpose of determining what, if any, incentive pay Bechtel should receive under the parties’ contract. Article VI: Bowater had the right to require or approve changes within the general scope of the project of the work.
Article XI: Bechtel was required to maintain in full force and effect worker’s compensation insurance covering Bechtel employees as required by law and employer’s liability insurance.