Court Opinion

ID: 9698110
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:42:19.962987+00
Date Added: 2024-06-11T18:20:38.464257
License: Public Domain

*133POLLOCK, J.,
dissenting.
In an unreported opinion, the Appellate Division affirmed the judgment of the Law Division granting summary judgment dismissing the individual and representative claims of plaintiff Linda Volb against defendant T.D.E. Services, Inc. (T.D.E.) and Ronald Lee. I would affirm.
I
The case arises out of a fatal accident at a construction site on the New Jersey Turnpike. On the date of the accident, J.H. Reid General Contractors, Inc. (Reid) was the general employer of Charles Volb and the special employer of Ronald Lee. Both Lee and Volb were under the exclusive control of Frank Perelko, a Reid supervisor, who had the right to direct their work and to fire them.
The most important factor in determining a special employer’s status is whether the borrowing employer had the right to control the special employee’s work. Indeed, the majority acknowledges that “the trial court plainly was correct in concluding that Lee was a special employee of [Reid]____” Ante at 116, 651 A.2d at 1005. It further acknowledges that “Lee’s status as a special employee of [Reid] compels the conclusion that Volb’s estate cannot sue Lee.” Ante at 117, 651 A.2d at 1005. I agree that plaintiff may not sue Lee. Unlike the majority, however, I believe that neither may plaintiff sue T.D.E.
To facilitate the hiring of union workers, Reid created T.D.E. and a second subsidiary that is not a party to this action. Reid owned all the stock of both subsidiaries. The four principals of Reid also were the principals of each of the subsidiaries. Apparently, the two subsidiaries hire workers from different unions to work on Reid’s construction jobs. Each subsidiary issues paychecks, and Reid delivers them to the workers. In effect, T.D.E. provides a payroll service for Reid.
*134According to Lee, Reid had hired him from the union hall of Teamsters Local 676 to work on the construction site at Exit 7 of the New Jersey Turnpike. The accident occurred when Perelko directed Lee to unload a dump truck that G.E. Capital Corporation had leased to Reid. While Lee was bácking up the truck, it struck and killed Volb.
Plaintiff Linda Volb, as Volb’s widow, recovered workers’ compensation benefits from Reid. As administratrix of her husband’s estate, she then sued various defendants, including Lee and his general employer, T.D.E. The Law Division granted motions for summary judgment by Lee and T.D.E. The Appellate Division affirmed. Before us for review is the judgment in favor of T.D.E.
The issue is whether plaintiff may maintain this wrongful-death action against T.D.E. Traditionally, an employer’s liability for the negligent acts of a borrowed employee has depended on whether the employer had retained the right to control the employee’s activities that injured another. Murin v. Frapaul Constr. Co., 240 N.J.Super. 600, 607-10, 573 A.2d 989 (App.Div.1990).
The lower courts correctly concluded that Reid, Lee’s special employer, had exclusive control over Lee when he backed the truck over the decedent. Lee’s general employer, T.D.E., had neither provided the truck nor retained any control over Lee. The lower courts ruled, therefore, that T.D.E. was not hable for Lee’s alleged negligence.
On the facts of this case, that straightforward result comports with both the purpose of tort law and common sense. If the underlying purpose of tort law is to make the workplace safe, the responsibility for worker safety belongs to Reid, which provided the truck and exclusively controlled it, the driver, and the site. Plaintiff has already recovered workers’ compensation benefits against her decedent’s employer, Reid. To impose tort liability on T.D.E. distorts reality. T.D.E. exists so Reid can bid for union work. Realistically, T.D.E. never could have controlled Lee and did not control him at the time of the accident.
*135Several principles counsel against permitting plaintiff to maintain a wrongful-death action against T.D.E. First, suits against employers for injuries caused by the negligent acts of loaned employees should depend on the retention of the right to control the activity that caused the injuries. Without the right to control,’ the employer cannot control the risk of injury. Also, to impose liability on an employer who cannot avoid the risk that caused the injuries is unfair. Second, not every injured worker may recover both workers’ compensation benefits and tort damages. As Professor Larson states: “The concept underlying third party actions is the moral idea that the ultimate loss from wrongdoing should fall upon the wrongdoer.” 2A Arthur Larson, Workmen’s Compensation Law § 71.00, at 14-1 (1989). Implicit in the concept is the assumption that the wrongdoer played an actionable role through the commission or omission of an act in the events that caused the worker’s injury. Although T.D.E. and Reid were separate but related corporations, they were engaged in an integrated-economic activity, construction work on the Turnpike. Because T.D.E. is only a payroll service, it never exercises control over any of its employees. In brief, T.D.E. is not sufficiently involved in Reid’s construction work to justify the imposition of an actionable role. Permitting plaintiff to recover workers’ compensation against Reid and tort damages against T.D.E. would impose an additional cost on Reid because it chose to do business through a subsidiary. I would leave the imposition of any such cost or “tax” to the Legislature.
In her petition for certification, plaintiff cited four cases. She relied primarily on Lyon v. Barrett, 89 N.J. 294, 445 A.2d 1153 (1982), not discussed by the majority, and Vernon v. Supermarket Services Corp., 250 N.J.Super. 8, 593 A.2d 345 (App.Div.1991), discussed by the majority, ante at 125, 651 A.2d at 1010. On the unique facts of this case, I would find that Lyon does not prevent T.D.E. from enjoying the same protection as its parent corporation, Reid. In Lyon, Barrett, a lawyer, established a professional corporation for the practice of law in a building that he owned. This Court found that the Workers’ Compensation Act did not *136prevent a legal secretary employed by the professional corporation from suing Barrett in his capacity as owner and landlord. The critical distinction between Lyon and the instant case is that Barrett, in his dual capacities as landlord and employer, operated as two entities with separate business purposes. As a landlord, Barrett owed the same duty to the plaintiff that he owed to other tenants and their employees. Id. at 305, 445 A.2d 1153. As an attorney, however, Barrett was plaintiffs employer and could avail himself of the workers’ compensation bar. In the present case, T.D.E. and Reid, although separate corporations, shared the singular purpose of performing construction work for Reid. Thus, Lyon involved a single person acting in dual capacities. By contrast, the present case involves two corporations acting in a single capacity. If Reid had “borrowed” Lee from a completely unrelated general employer, that employer, as long as it did not retain any control over Lee, would not be liable for Lee’s negligence. T.D.E. should enjoy the same protection as any other general employer.
' Vernon, supra, 250 N.J.Super. 8, 593 A.2d 345, is not illuminating. In Vernon, an employee of one wholly-owned corporate subsidiary who had recovered workers’ compensation against the parent was allowed to sue another wholly-owned subsidiary for the acts of that subsidiary’s negligent employee who had injured the plaintiff. The ease did not involve a “borrowed” employee and therefore does not raise the question of the liability of a general employer, such as T.D.E., for the acts of a “borrowed” employee over whom the general employer has not retained any control. Furthermore, the opinion does not discuss the activities or interrelationships of the various corporate entities. It assumes that those entities were engaged in separate activities such that the workers’ compensation bar against suing the parent and one subsidiary did not bar suit against the other subsidiary.
In this Court, the majority has instilled the petition with a second life. For me, the majority’s intricate analysis of statutory *137immunity under the Workers’ Compensation Act, ante at 116-27, 651. A.2d at 1004-11, whatever merit it might hold for another case, is irrelevant. I would not reach for the issue to import so significant a change into the law. The majority acknowledges that “fflntuition might suggest that a broader immunity would be consistent with the underlying objectives of workers’ compensation legislation, and the Legislature is at liberty to enact a more comprehensive, enterprise-based immunity.” Ante at 126, 651 A.2d at 1010. Given the paramount role of the Legislature in workers’ compensation law, I believe the more judicious approach simply would be to flag the issue for the Legislature.
Nor would I reach for the majority’s novel theory that would impose liability on a general employer for the acts of a loaned employee who somehow was furthering the interest of the general employer while acting under the exclusive control of a special employer. Rather, I would rely, as have the parties and the lower courts, on the traditional respondeat superior principle that liability turns on control.
As the entity that supplied the truck and exclusively controlled Lee’s operation of it, Reid, and Reid alone, should bear the cost of the risk of decedent’s death. Reid created T.D.E. to obtain construction employees for union jobs. To hint that T.D.E. may have been furthering its interest in “lending” Volb to work for Reid is to create a tautology. The only reason for T.D.E.’s existence was to hire union workers for Reid. In this context, to suggest that T.D.E. might be hable because Lee was furthering its interest while under the control of Reid does not serve the purpose of tort law. The majority can sustain its suggestion only by viewing the sole purpose of tort law as the expansion of third-party liability without regard to the allocation of the risk of loss to the party best able to control it.
Cases arising from workplace accidents involving the workers’ compensation immunity and third-party tort liability are fact sensitive. A case with a different set of facts might be more conducive for introducing so significant a proposal as that pro*138posed by the majority. Perhaps because the facts do not readily lend themselves to the notion that T.D.E. might be liable in tort because Lee was furthering T.D.E.’s interest, neither the parties nor the lower courts considered it.
The opinions cited by the majority do not support the imposition of tort liability on a general employer in- the present case. Although Judge (later Justice) Schettino’s concurrence in Devone v. Newark Tidewater Terminal, Inc., 14 N.J.Super. 401, 82 A.2d 425 (App.Div.1951), advocated a furtherance-of-the-general-employer’s-interest test, the majority in Devone relied on the traditional control test. For the majority, the critical consideration was that “control” meant “ordering not only what shall be done but how it shall be done.” Id. at 405, 82 A.2d 425. In Devone, moreover, the general employer had provided both the dinky engine and the operator that caused the plaintiffs injury. Here, Reid provided only the driver, but not the truck.
I cannot find a single case — and the majority cites none— holding a general employer liable for the negligence of an employee who is loaned to a special employer and who, while operating a vehicle under the exclusive control of the special employer, injures a fellow employee. The general employer in Viggiano v. William C. Reppenhagen, Inc., 55 N.J.Super. 114, 119, 150 A.2d 40 (App. Div.1959), discussed by the majority, ante at 130-31, 651 A.2d at 1013, was “engaged in the business of renting out motor vehicles or some other apparatus and [furnished] a driver or operator as part of the hiring____” Because the special employer exercised no control over the driver, the court found sufficient evidence to withstand summary judgment for the general employer under both the furtherance-of-interest and control tests. Id. at 120, 150 A.2d 40. Likewise, in Larocca v. American Chain & Cable Co., 13 N.J. 1, 97 A.2d 680 (1953), discussed by the majority, ante at 130-31, 651 A.2d at 1012-13, the general employer provided both the crane that injured the plaintiff and the crane operator. We recognized that the general employer’s liability for the acts of a negligent employee turned on whether the employer had retained *139the right of control. Finding sufficient evidence that the general employer had retained control, we approved the reversal of summary judgment for the employer. Like the defendants in the other cases, the employer in Cross v. Robert E. Lamb, Inc., 60 N.J.Super. 53, 158 A.2d 359 (App.Div.), certif. denied, 32 N.J. 350, 160 A.2d 847 (1960), owned the equipment, a hoist, and employed the hoist operator. Based on those facts, the Appellate Division rejected a plain-error challenge to the jury charge and sustained the judgment of liability against the general contractor for injuries caused by the negligent operation of the hoist.
The facts of J.L. Querner Truck Lines, Inc. v. Safeway Truck Lines, Inc., 65 N.J.Super. 554, 561, 168 A.2d 216 (App.Div.), aff'd, 35 N.J. 564, 174 A.2d 201 (1961), discussed by the majority, ante at 131, 651 A.2d at 1013, are so inapposite as to render irrelevant the statement in the opinion that “[t]he crucial issue is whether the employee was furthering the interests of his general employer.” Quemer was a suit for property damage to a trailer that struck an overpass. The driver was a general employee of the owner of the trailer. At the time of the accident, an employee of the defendant truck terminal, Safeway Truck Lines, Inc., was directing the driver on the route to the terminal. The quoted language appears in a discussion leading to the conclusion that the lease of the tractor-trailer to Safeway did not constitute a bailment for hire. The trial court dismissed the owner’s complaint at the conclusion of the entire case. In reversing, the Appellate Division found the evidence sufficient to justify submitting to the jury the question whether Safeway, through its employee, had exercised control over the trailer sufficient to hold it liable. Quemer hardly supports the imposition of liability on a general employer for the acts of a “loaned” employee who was acting under the exclusive control of a special employer.
The opinions cited by the majority, ante at 129-32, 651 A.2d at 1012-14, in support of the furtherance-of-interest test also demonstrate continued support for the control test. See e.g., Larocca, *140supra, 13 N.J. at 6, 97 A.2d 680 (holding that liability turns on right to exercise control over servant); Quemer, supra, 65 N.J.Super. at 566, 168 A.2d 216 (stating that “[i]t remains to be considered whether defendant could be found liable because it negligently exercised some measure of control over trailer through its employer”); see also Murin, supra, 240 N.J.Super. at 610, 573 A.2d 989 (finding special employer not liable because general employer retained control over plaintiff); State v. Joule Technical Corp., 126 N.J.Super. 496, 501, 315 A.2d 697 (App.Div.1974) (holding control test is logically determinative test to demonstrate that defendant was not electrical contractor for purposes of licensing); Blessing v. T. Shriver & Co., 94 N.J.Super. 426, 439, 228 A.2d 711 (App.Div.1967) (finding liability based on retention of effective control over work).
Moreover I do not share the majority’s uncertainty “whether or to what extent the trial court considered principles of respondeat superior liability in granting summary judgment in favor of T.D.E.” Ante at 127, 651 A.2d at 1011. My reading of the record leads me to conclude (1) that the parties and the lower courts understood the relationship between control and the doctrine of respondeat superior and (2) that by deciding that Lee was under the exclusive control of Reid, the courts correctly concluded that T.D.E. was not responsible for Lee’s negligence under the doctrine.
Without belaboring the point, I see no need for a remand to the Law Division to reconsider an issue that it already has decided. The briefs, supplemental submissions, transcripts, and lower court opinions persuade me that those courts fully understood that they were deciding that T.D.E. was not liable under respondeat superi- or. They reached their decisions under the only theory of respondeat superior that makes sense in this case, whether Reid exclusively controlled Lee at the time of the accident. The majority’s belated attempt to introduce an alternative theory should not change the outcome. The last thing this ease needs is another court event.
I would affirm the judgment of the Appellate Division.
*141GARIBALDI, J., joins in this dissent.
For reversal and remandment — Chief Justice WILENTZ, and Justices HANDLER and STEIN — 3.
For affirmance — Justices POLLOCK and GARIBALDI — 2.