Opinion
Civil No. JFM-00-2991
July 31, 2001
MEMORANDUM OPINION
On April 20, 1999, a fire badly damaged a condominium project that the plaintiff, NVR, Inc., was developing and building. NVR blames the fire on negligence by an unskilled temporary worker supplied by the defendant, Just Temps, Inc., under a contract between the parties. NVR brings claims of negligence through direct and vicarious liability (count 1), breach of contract (count 2), and breach of warranty (count 3) against Just Temps. Just Temps moves for summary judgment on all counts.
For simplicity, I will use the acronym "NVR" exclusively in referring to the plaintiff, despite the other names under which it does business.
I. Background
The contract between the parties is a standard agreement used by NVR for all its sub-contractors. It provides that Just Temps and its employees "will perform the Work as independent contractors and not as employees or agents of NVR." Mot. Ex. 6 at § 5. It further provides that Just Temps "shall keep a competent Foreman present at the site and in charge of the Work at all times, and such person shall be authorized to act for [Just Temps] and be responsible for all Work performed by [Just Temps]. [Just Temps or its] agent shall be responsible for the scheduling and quality of the rough and finish Work." Mot. Ex. 6 at § 2(d). Just Temps "shall not employ any unfit person or anyone not skilled in the Work assigned to him," Mot. Ex. 6 at § 2(c), and "agrees that the Work will be performed in a neat and workmanlike manner." Mot. Ex. 6 at § 2.
Finally, the contract includes an indemnification provision under which Just Temps "agrees to indemnify NVR and its affiliates and the agents and employees of each [of] them for . . . any and all liabilities, losses, and costs (together with reasonable attorney fees), regardless of cause, arising from or connected with. . . (ii) any alleged personal injury, death, or property damage arising from or connected with the Work," with the qualification that "no provision of this Agreement shall obligate Subcontractor to indemnify NVR and its affiliates for any liability attributable solely to the negligence of NVR or its affiliates." Mot. Ex. 6 at § 8(c). The contract was signed for Just Temps on May 31, 1996.
NVR generally asked its Just Temps workers to undertake "small maintenance, cleanup, and other minor tasks involving the moving and relocation of various items including propane tanks from one location to another." Mot. Ex. 1 at 7. Sometimes NVR asked that Just Temps workers bring their own gloves or hard hats, but otherwise NVR supplied all equipment needed for their work. Mot. Ex. 2 at 25-27. Just Temps ordinarily receives general requests for manual laborers, perhaps specifying a weight to be lifted, but not specifically requesting workers to move propane tanks. Mot. Ex. 4 at 72.
Just Temps does not train the workers it supplies at all. Mot. Ex. 4 at 55. The temporary agency tells its workers that if they are asked to do something dangerous, they should either have the customer's supervisor on the site call the Just Temps office or they should call the office personally. Mot. Ex. 4 at 55. Just Temps provides hard hats to its workers. Mot. Ex. 4 at 56.
In April 1999, Kenneth Dudley, then an NVR employee, was the production supervisor and the person in charge on the construction site. Mot. Ex. 2 at 11; Mot. Ex. 3 at 132. On April 19, 1999, Dudley placed an order with Just Temps requesting two temporary workers for the following day, without specifying that they would be asked to lift propane tanks. Mot. Ex. 2 at 99. He had often requested temporary workers from Just Temps to perform clean-up duties, and knew that he was requesting unskilled laborers. Mot. Ex. 2 at 25-26. No specification sheets applied to the work done by the temporary workers.
Dudley did not request that a supervisor foreman accompany the workers. He had never requested a supervisor foreman from Just Temps, and did not believe that his budget provided for one. Mot. Ex. 2 at 142-43. NVR's sub-contractors and the other temporary agency the company used did not send supervisor foremen with their employees either, in his experience. Mot. Ex. 2 at 29-30, 144. Dudley's supervisor never asked whether Just Temps was providing supervisors on the project, nor ever looked into whether supervisors were provided to any job site. Mot. Ex. 3 at 140-41. For its part, Just Temps is only rarely asked to send a supervisor to any job; if such a request is made, the company simply selects the best of the group of workers being sent out for that day. Mot. Ex. 4 at 65-66.
Since the fire, as well, Dudley's supervisor has never requested supervisors from temporary agencies, nor instructed his subordinates, other production supervisors like Dudley, to request them. Mot. Ex. 3 at 143; see also Mot. Ex. 7 at 34-35.
Neither Dudley nor any other production supervisor working for NVR was familiar with the contracts between NVR and the temporary agencies; the contracts were not kept at construction sites. Mot. Ex. 2 at 48-50; Mot. Ex. 3 at 134. Dudley had never seen the contract between NVR and Just Temps before his deposition in this case. Mot. Ex. 2 at 48-50.
In general, Just Temps workers reported to Dudley for each assignment on completing the one they had previously been assigned, and also went to him if a problem arose. Mot. Ex. 2 at 37-39, 46. Dudley was the only person on the site who was authorized to instruct the Just Temps workers on their daily duties, Mot. Ex. 2 at 234-35, and no one at Just Temps had any knowledge of what specific tasks they would be given. Mot. Ex. 4 at 53. At the end of the day Dudley signed a pay slip for each Just Temps worker, who took it back to Just Temps to be paid; Just Temps passed on the full cost, plus overhead, to NVR. If Dudley thought a worker had done particularly well, he might note on the slip that he would like that worker to be sent again. He found that asking not to get a specific worker again was ineffective.
On April 20, 1999, Dudley set up two propane tanks inside one of the buildings under construction, and connected each tank to a heater inside the building, used to dry out some of the construction materials. Mot. Ex. 2 at 90, 102, 122. Later in the morning, Willie Everett and one other temporary worker for Just Temps reported to Dudley, who had never met them before. After the two workers completed their first task of the day, several hours of moving bricks, Dudley instructed them to move six propane tanks from the rear of the same building to the front. Mot. Ex. 2 at 102. He did not tell them whether the tanks still contained any propane, nor did he specify an exact route they should take. Mot. Ex. 2 at 130-31. No one at Just Temps had any role in instructing the workers to move the tanks. Mot. Ex. 4 at 53.
Dudley left the site shortly after assigning the second task to the workers. According to NVR, while Dudley was off the site, Everett moved a tank through the building. Everett opened the tank to release some of the gas it contained, to make it lighter and thus easier to move. A nearby heater ignited the propane Everett had released, and eventually the cylinder he had been moving exploded, causing a fire. For present purposes, Just Temps does not dispute that Everett caused the fire. Except for a deductible, the plaintiff has been reimbursed for its losses under an insurance policy issued by St. Paul Fire Marine Insurance Company.
II. Negligence
NVR's negligence claims against Just Temps are based on vicarious liability for Everett's negligence and direct liability for negligent training and supervision of Everett. The viability of the vicarious-liability claims depends on the legal relationship between Everett and Just Temps. The contract between Just Temps and NVR provides that Everett was an independent contractor during his work at the site, but Just Temps argues that he was an NVR employee despite the contract, under Maryland's "borrowed servant" doctrine.
NVR argues that the relationships between Everett and NVR and between Everett and Just Temps are questions of fact to be determined by the jury, and that genuine disputes of material fact bar summary judgment in favor of Just Temps. Opp'n at 6-7. NVR does not point to a single fact in dispute that is relevant to the legal relationship between Everett and NVR or to the legal relationship between Everett and Just Temps. Certainly, where there is a genuine dispute of material fact, whether a worker was an employee or an independent contractor may turn on a question of fact. Sea Land Indus. Inc. v. Gen. Ship Repair Corp. 530 F. Supp. 550, 563 (D.Md. 1982). However, where the relevant material facts are undisputed for purposes of summary judgment, as here, the question is one of law. Whitehead v. Safway Steel Prods., 304 Md. 67, 70, 497 A.2d 803, 804 (1985).
Despite NVR's contention to the contrary, the contractual provision that Just Temps workers "will perform the Work as independent contractors and not as employees or agents of NVR" is not dispositive of their status. Mot. Ex. at ¶ 5. The Fourth Circuit recently addressed a similar contractual relationship. White v. Bethlehem Steel Corp., 222 F.3d 146, 148, 150 (4th Cir. 2000) (citing Gaudet v. Exxon Corp., 562 F.2d 351, 357-59 (5th Cir. 1977)). Although the contract in White v. Bethlehem Steel Corporation had expired, 222 F.3d at 148, 150, the Fourth Circuit noted that it "continued to govern the parties' relationship at the time of the incident in question." 222 F.3d at 148. The court found employee status despite the contractual provision to the contrary. See also Gaudet, 562 F.2d at 358 (finding a worker to be an employee despite the "independent contractor" provision of a non-expired contract); Krzywicki v. Tidewater Equipment Co., 600 F. Supp. 629, 638 (D.Md. 1985) (noting that "any understanding or meeting of the minds between the original and the borrowing employer as to the status of the employee in question during the period of the employment" is only "one of the factors to be examined").
NVR argues that the many years of employment at issue in White v. Bethlehem Steel Corporation distinguishes that case from the case at bar, in which the negligence occurred on the first day of employment. Duration of employment is not a part of the test. Indeed, the Maryland Court of Appeals has found that a temporary worker on his second day of employment was an employee of the customer of the temporary agency. Whitehead, 304 Md. 67, 497 A.2d 803. See also Huff v. Marine Tank Testing Corp., 631 F.2d 1140 (4th Cir. 1980) ("[T]he duration of the temporary employment does not affect the employment relationship.")
Under Maryland law, in addition to the contract, "at least five criteria . . . may be considered in determining" whether a worker is a borrowed servant: "(1) . . . selection and engagement. . ., (2) the payment of wages, (3) the power to discharge, (4) the power to control the [worker's] conduct, (5) and whether the work is a part of the regular business of the employer." Keitz v. Nat'l Paving Contracting Co., 214 Md. 479, 491, 134 A.2d 296, 301 (1957). Of these, the fourth factor is "[t]he decisive test": "whether the employer has the right to control and direct the [worker] in the performance of his work and in the manner in which the work is to be done." 214 Md. at 481, 134 A.2d at 301; see also 222 F.3d at 149. "[I]t is not the manner in which the alleged [employer] actually exercised his authority to control and direct the action of the [worker] which controls, but it is his right to do so that is important." 214 Md. at 481, 134 A.2d at 301.
Just Temps had more power over selection of the temporary workers than NVR did, and the contract weighs against a finding that NVR employed the temporary workers. However, all the other factors, including the most important one, degree of control over the work, support a finding that NVR employed Everett. NVR had the power to request particular workers and to discharge them. The work done by the temporary workers was within the regular course of NVR's business. NVR paid all of the worker's wages, via Just Temps. See 222 F.3d at 150 (noting that the customer paid the temporary worker's "wages and insurance premiums in pass-through form"). Most importantly, Dudley had complete authority and control over the work assigned to Everett, while Just Temps had no specific knowledge of the jobs he would be asked to do. See Vito v. Sargis Jones, Ltd., 108 Md. App.408, 434, 672 A.2d 129, 142 (1996) (noting the relevance of instruction as to "how to perform [the] task" and "evidence showing . . . power to alter the method or speed" by which the task is completed). In addition to this application of the balancing test, the Maryland Court of Appeals, like many other courts, has held that the business using temporary workers, not the temporary agency that supplies them, is their primary employer. Whitehead, 304 Md. at 79-84, 497 A.2d at 809-12; see also, e.g., Huff, 631 F.2d at 1144. NVR was Everett's employer, and thus Just Temps is entitled to summary judgment on NVR's claim that Just Temps is vicariously liable for Everett's negligence.
NVR argues that Just Temps's purchase of workers' compensation insurance for its employees somehow differentiates this case from other cases finding employee status. However, even in Whitehead itself, the temporary agency had secured such insurance. 304 Md. at 70, 423 A.2d at 805. The presence of the indemnification clause in the contract also supports a finding of an employer-employee relationship between NVR and Everett. See Kryzwicki, 600 F. Supp. at 639 n. 15.
Because of this ruling, I need not reach Just Temps's arguments as to assumption of the risk, contributory negligence, and Everett's purported status as an independent contractor with respect to Just Temps itself.
NVR separately claims that Just Temps was negligent in its training and supervision of Everett. However, Dudley knew that Just Temps was supplying unskilled laborers, and he did not request that a supervisor accompany the workers. Mot. Ex. 2 at 25-26; Mot. Ex. 3 at 131. Even after the fire, production supervisors working for NVR do not request supervisors from temporary agencies. Furthermore, no one at Just Temps knew what jobs any given workers would be asked to perform at NVR construction sites. Outside the contract, which I address in Part III, NVR has failed to show that Just Temps had any duty either to train the temporary workers it supplied in how to handle propane tanks or to supervise them. Accordingly, Just Temps is entitled to summary judgment on NVR's negligence claim based on direct liability.
III. Breach of Contract
NVR claims that Just Temps breached the contract in three ways: through failure to employ competent and skilled workers, failure to supervise the workers, and failure to perform in a "neat and workmanlike manner" as promised in the contract. NVR further claims that Just Temps undertook in the contract to indemnify NVR against damage caused by its workers. Just Temps argues that NVR has failed to state a claim for breach of contract.
NVR's claim for breach of contract (count 2) also says that Just Temps breached the contract by breaching "express and implied warranties that the defendant's performance would be done in a safe, proper and workmanlike manner." Compl. at ¶ 15(d). Because this claim appears to be identical to count 3, I will address it in Part IV.
NVR waived Just Temps's first contractual commitment, to supply a supervisor for the workers it sent, by regularly requesting, accepting, and paying only workers, without a supervisor. "Waiver is the intentional relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right, and may result from an express agreement or be inferred from circumstances. And acts relied upon as constituting a waiver of the provisions of a contract must be inconsistent with an intention to insist upon enforcing such provisions." Food Fair Stores, Inc. v. Blumberg, 234 Md. 521, 531, 200 A.2d 166, 172 (1964). Dudley, on behalf of NVR, chose to pay only for workers, not for a supervisor as well, a pattern of requests that continued even after the fire in question. This consistent pattern indicates a relinquishment of NVR's right to insist that a supervisor accompany the temporary workers who were assigned. Accordingly, the motion for summary judgment will be granted as to NVR's contract claim based on failure to provide a supervisor.
NVR has produced nothing to show that Just Temps breached its second contractual commitment as to the competence of the workers it supplied. The contract says that Just Temps "shall not employ any unfit person or anyone not skilled in the Work assigned" to him or her. Mot. Ex. 6 at § 2(c). Dudley was well aware that he was hiring unskilled workers, and it was NVR's pattern to hire unskilled workers from Just Temps. NVR has not alleged that Everett was unable to lift and carry the materials he was instructed to move. In addition, NVR has waived any claim based on the contractual provision for fitness and skill of the workers Just Temps supplied. NVR was aware that the workers Just Temps supplied were untrained, and that no one at Just Temps knew what jobs the temporary workers would be asked to perform. It was NVR that chose to assign Everett to work with propane tanks. For both these reasons, Just Temps is entitled to summary judgment on NVR's contract claim based on the competence of the workers supplied.
NVR's third contractual argument is based on the promise of workers who would perform in a "neat and workmanlike manner." To handle propane in a "workmanlike" manner a person must understand what substance he or she is handling. NVR had no reason to think that Just Temps would supply a worker who could identify a propane tank and know the qualities of propane. Accordingly, the motion for summary judgment will be granted as to the breach of contract claim based on the "neat and workmanlike manner" clause.
In the fourth disputed contractual provision, the indemnification clause of the contract, Just Temps accepted liability for "any and all liabilities, losses, and costs . . . arising from or connected with . . . any . . . property damage arising from or connected with the Work." Opp'n Ex. B at § 8c. However, the indemnification clause also provides that "no provision of this Agreement shall obligate [Just Temps] to indemnify NVR and its affiliates for any liability attributable solely to the negligence of NVR or its affiliates." Mot. Ex. 6 at § 8c. Because Everett was an employee of NVR at the time of the accident, the accident is attributable solely to the negligence of NVR. Just Temps is thus entitled to summary judgment on NVR's claim based on the indemnification clause.
IV. Breach of Warranty
NVR argues that Just Temps has breached an express or implied warranty that the personal services provided under its contract would "be performed in a good and/or workmanlike manner." Compl. at 6. The contract contains no express warranty, and Maryland does not recognize a tort of breach of implied warranty for the performance of personal services. Sea Land, 530 F. Supp. at 557-58. Accordingly, plaintiff's warranty claims have no basis, and the defendant is entitled to summary judgment on count 3.
In accordance with the attached Memorandum, it is this ___ day of July 2001, by the United States District Court for the District of Maryland, ORDERED:
1. That Defendant's Motion for Summary Judgment is GRANTED;
2. That final judgment be entered in favor of the defendant;
3. That copies of this Memorandum and Order be mailed to counsel for the parties; and
4. That this case be closed upon the records of the Court.