Opinion
C.A. No. N12C-10-042 EMD
07-13-2015
DISCOVER PROPERTY AND CASUALTY INSURANCE COMPANY, Individually and a/s/o ACCESS LABOR SERVICE, INC., and FRANK LAYNE, JR., Plaintiff, v. GAVILON GRAIN, LLC, d/b/a PEAVY COMPANY, LLC Defendant.
Louis J. Rizzo, Jr., Esquire, Reger Rizzo Darnall LLP, Wilmington, Delaware, Attorney for Plaintiff Discover Property and Casualty Insurance Company. Robert G. Devine, Esquire, Michael W. Horner, Esquire, Rochelle L. Gumapac, Esquire, White and Williams LLP, Wilmington, Delaware, Attorneys for Defendants Gavilon Grain, LLC and Hector Cabrera.
Upon Consideration of the Motion for Partial Summary Judgment of Defendant, Gavilon Grain LLC
GRANTED
Louis J. Rizzo, Jr., Esquire, Reger Rizzo Darnall LLP, Wilmington, Delaware, Attorney for Plaintiff Discover Property and Casualty Insurance Company. Robert G. Devine, Esquire, Michael W. Horner, Esquire, Rochelle L. Gumapac, Esquire, White and Williams LLP, Wilmington, Delaware, Attorneys for Defendants Gavilon Grain, LLC and Hector Cabrera. DAVIS, J.
I. INTRODUCTION AND PROCEDURAL HISTORY
This is a subrogation matter arising from a November 10, 2011, work place accident that happened on the premises of Gavilon Grain LLC ("Gavilon"). In that accident, Frank Layne, Jr., suffered injuries. Several lawsuits arose from that accident, including the instant action. Here, Plaintiff Discover Property and Casualty Insurance Company ("Discover"), as the subrogee of Access Labor Service, Inc. ("Access") and Mr. Layne, is suing Gavilon. Discover paid workers compensation benefits to Mr. Layne from a policy issued by Discover to Access.
Discover asserts two causes of action against Gavilon - one for breach of contract and one for negligence. On September 19, 2014, Gavilon filed the Motion for Partial Summary Judgment of Defendant, Gavilon Grain LLC (the "Motion"). Gavilon seeks summary judgment as to the negligence claim only, contending that Discover's negligence claim is barred by the exclusive remedy provision of the Workers' Compensation Act (the "Act") because Mr. Layne was Gavilon's borrowed servant.
On October 9, 2014, Discover filed its Opposition to Defendant Gavilon Group LLC's Motion for Partial Summary Judgment (the "Opposition"). On October 31, 2014, Gavilon filed the Reply Brief of Defendant Gavilon Grain LLC to the Opposition of Plaintiff Discover Property Casualty Insurance Company to its Motion for Summary Judgment (the "Reply"). The Court held a hearing on the motions in this case, and the companion cases on March 16, 2015. After the hearing, the Court reserved its decision. Subsequently, additional discovery, and supplemental briefing was submitted to the Court in the companion case, Shawana Layne (f/k/a Shawana Singleton) as Guardian Ad Litem and Next Friend to Frank Layne, Jr. v. Gavilon Grain LLC et al., C.A. No. N12C-12-057. The Court refrained from issuing any formal ruling on the pending dispositive motions so that the parties could supplement the record, as discovery in each case is virtually identical and relevant to the motions heard on March 16, 2015.
July 10, 2015, the Court issued its Memorandum Opinion (the "July 10 Memorandum Opinion") on the motions filed in Shawana Layne (f/k/a Shawana Singleton) as Guardian Ad Litem and Next Friend to Frank Layne, Jr. v. Gavilon Grain LLC et al., C.A. No. N12C-12-057.
The Court has reviewed all the pleadings in this matter, as well as the deposition transcripts of Mr. Layne, Access employee Dennis Yetman, and the two depositions of Gavilon facility manager James C. Engler. For the reasons set forth below, the Motion for Partial Summary Judgment of Defendant, Gavilon Grain LLC is GRANTED.
II. FACTUAL BACKGROUND
For the purposes of this opinion, the facts are taken from the facts in the July 10 Memorandum Opinion.
On August 31, 2009, Mr. Layne completed a Pre-Applicant Job Questionnaire and an Employment Application with Access. As part of the Employment Application, Mr. Layne also completed a W4 form and executed the Substance Abuse Policy. Access has the power to terminate an employee if it finds a violation of the Substance Abuse Policy. All Access employees must complete and execute Access' Policies and Procedures checklist. Paragraph 6 of that checklist provides: "I understand that I am an employee of this staffing company and only this staffing company..." An Access employee is required to report any absence or late arrivals at work to Access.
Exhibit 2, Dennis Yetman Deposition, March 25, 2014 ("Yetman Dep.").
Id.
Yetman Dep. 18:5-21.
Exhibit 2, Yetman Dep.
Yetman Dep. 23:7-18.
Mr. Layne was interviewed by Access, hired, and subsequently placed as a general laborer with Gavilon. Access did not expect general laborers to ride on boom lifts, and expected Gavilon and Mr. Layne to contact Access before it directed a general laborer onto a boom lift. This is supported by the Client Safety Partnership Letter executed between Gavilon and Access which stated "Our employees will only work on jobs for which they have been assigned and trained. Any variance must be reported to our office before work begins."
Id. 120:2-15.
Exhibit 3, Yetman Dep.
The Contract between Access and Gavilon has the following clauses:
ACCESS LABOR SERVICES takes care of our worker's Federal, Delaware State & Delaware Local taxes, as well as FICA,
Unemployment, Worker's Comp. and General Liability Insurance. We bill you weekly and payment is due net ten days from the date of the invoice.
...
Terms and Conditions
2 ... Client also agrees not to authorize employee to operate or drive a motorized vehicle or operate any machinery without prior written approval from ACCESS LABOR SERVICE. ACCESS LABOR SERVICE will not be responsible for any loss arising from those practices.
3. ... Any employee placed with your company by ACCESS LABOR SERVICE is an employee of ACCESS LABOR SERVICE and may not be hired by client within one year of the last day worked for ACCESS LABOR ...
Id.
In conformity with the contract, Access maintains worker's compensation insurance for its employees, as well as unemployment insurance, FICA, and general liability insurance. Access deducts taxes from the compensation it pays to its employees.
Yetman Dep. 16:22-17:12.
Id. 17:6-8.
Access charged Gavilon $17 per hour for general laborers. Mr. Layne was a general laborer. Gavilon paid for his services, and Access would pay Mr. Layne directly. Access would appear at the Gavilon facility approximately once per month to observe Mr. Layne and other Access workers assigned to the facility.
Id. 31:8.
Id. 31:17-18.
Id. 48:6-13.
Frank Layne Jr. Deposition 37:2-8 ("Layne Dep.").
After being hired by Access, Access provided Mr. Layne with some training in the form of a basic safety course consisting of a safety video and test. Question number 8 on the safety test asks "If your supervisor asks you to handle chemicals or equipment you have not been trained to use, you should ..." Mr. Layne selected option (b) which read "tell your supervisor that you have not been trained to handle the chemicals or operate the equipment." Mr. Yetman, an office manager for Access, testified at his deposition that, for safety reasons, Access did not want its employees to perform something that they were not trained to handle. Mr. Yetman stated that under such a circumstance the client "would call and say, can you send a certified person, and we'd renegotiate a contract or a rate." It was Access' understanding that under the contract documents with Gavilon, Access had the power to prohibit Gavilon from using an employee in an unauthorized way.
Yetman Dep. 22:11-14.
Exhibit 2, Yetman Dep.
Yetman Dep. 26:8-13.
Id. 26:17-27:1.
Id. 27:15-20.
Mr. Engler met and interviewed Mr. Layne on the first day that Mr. Layne was assigned by Access to Gavilon. As noted above, Mr. Engler was Gavilon's facility manager. Mr. Engler conducted an interview and obtained information regarding Mr. Layne's background and skill set to ensure that Mr. Layne could perform the tasks that would be assigned. Mr. Layne's interview was the same interview that Gavilon would have conducted of someone who was considered for full time employment. Mr. Layne also completed an employment application with Gavilon. The purpose of the application was for Gavilon to receive general information regarding Mr. Layne. The application was suitable for Gavilon to eventually consider Mr. Layne for permanent employment with Gavilon. However, Mr. Layne's application did not consist of the same forms that a full-time employee would fill out.
James C. Engler Deposition, June 4, 2014, 137:8-138:3 ("Engler Dep.").
Engler Dep. 31:18-32:4, 137:8-138:3.
Id. 32:5-23.
Id. 28:18-22; Exhibit 4, Engler Dep.
Engler Dep. 28:23-29:2.
Id. 29:3-10.
Id. 29:14-19.
During Mr. Layne's course of employment at the Gavilon facility, Gavilon directed Mr. Layne as to when he would work, when to take lunch, and when to take breaks. Mr. Engler, as well as other senior Gavilon employees, directed Mr. Layne on what work to perform each day, and if need be, instructed Mr. Layne on how to perform the work. Gavilon directly supervised Layne's day-to-day activities at the Gavilon facility. Gavilon had the authority to discipline, fire or discharge Mr. Layne from his work at the Gavilon facility. Gavilon had the authority to direct Mr. Layne to comply with all necessary work procedures and safety requirements for any particular work task Gavilon assigned to Mr. Layne. Gavilon supplied Mr. Layne with all the necessary tools and equipment to perform his daily work activities. Gavilon also provided or otherwise made available all necessary safety equipment and devices for Mr. Layne's assigned work tasks.
Layne Dep. 38:2-39:14, 42:9-14, 85:6-86:3.
Id. 42:18-43:8, 58:12-14; 86:12-87:3; 99:23-100:2.
Engler Dep. 96:14-97:5; 138:4-6; Yetman Dep. 84:2-85:5.
Yetman Dep. 87:7-19; Engler Dep. 161:7-11.
Yetman Dep. 106:16-107:13; Engler Dep. 158:9-160:16.
Engler Dep. 65:2-5; Layne Dep. 60:12-20 70:18-71:12.
Engler Dep. 162:11-163:20.
Gavilon also decided when and if Mr. Layne would work overtime. Mr. Layne had to contact Access when he worked overtime so that Access' records would be updated for that day, as Access charged more for employee overtime. However, Gavilon was the entity that decided whether Mr. Layne would work overtime.
Layne Dep. 38:2-39:14, 42:9-14, 85:6-86:3.
Gavilon provided both written and on-the-job training to Mr. Layne at the time of his hire. Mr. Layne completed the following Gavilon-designed and presented training programs: (i) General Awareness level 1; (ii) General Awareness level 2; (iii) restricted access; (iv) hot work; (v) bin entry and (vi) lockout/tagout training. Mr. Layne's training with Gavilon consisted of classroom instruction, written materials, and a video presentation which was followed by written question and answer tests.
Engler Dep. 86:4-87:7 142:8-152:22.
Id. 87:11-23; 142:8-152:22
Mr. Layne had been working at the Gavilon facility for approximately three months before the accident occurred. At the time of the accident, Mr. Engler directed Mr. Layne to assist Mr. Cabrera with a welding and maintenance task. Gavilon supplied all the tools, safety devices, the articulating boom lift (occupied by Mr. Layne and Mr. Cabrera), the welding equipment and the safety lanyards.
Id. 83:10-16
Id. 127:11-128:8, 161:24-163:20, 167:14-168:19.
On the day of the accident, Mr. Engler had the authority to direct how Mr. Layne did his job, what tools to use, and whether or not Mr. Layne should be on a boom lift. This was the same authority that Mr. Engler exercised over Mr. Layne since Mr. Layne began his work at the Gavilon facility. Mr. Engler's authority over Mr. Layne was so complete that Mr. Engler could direct Mr. Layne on which side of the silos to work, and whether to use a wrench or a socket wrench to remove bolts during the work. Mr. Engler could also tell Mr. Layne and Mr. Cabrera exactly how to pass the materials from the basket of the lift onto the catwalk.
James C. Engler Deposition Vol. 2, May 29, 2015, 522:14-23 ("Engler Dep. 2").
Id. 526:3-11, 527:20-24
Id. 528:5-9.
Mr. Engler had the same authority over Mr. Cabrera, an employee of Gavilon. The morning of the accident, Mr. Engler specifically told Mr. Layne and Mr. Cabrera at the toolbox meeting that Mr. Layne would be Mr. Cabrera's helper, and that Mr. Layne would be subject to Mr. Cabrera's direction. Mr. Cabrera could direct Mr. Layne's activities within the scope of the project.
Id. 523:12-17.
Id. 524:3-24.
Id.
The accident occurred when a Genie S-85 articulating boom lift occupied by Mr. Layne and Mr. Cabrera tipped over causing injuries to both Mr. Layne and Mr. Cabrera. Due to the accident, Mr. Layne sustained severe physical injuries, which have left him permanently cognitively and physically disabled.
After the accident, Access personnel completed and filed the First Report of Occupational Injury. Mr. Layne applied for and received worker's compensation benefits from Plaintiff through the worker's compensation insurance placed by Access. Gavilon contends that, in part, it funded this worker's compensation insurance.
Yetman Dep. 6:7-16.
III. PARTIES' CONTENTIONS
Gavilon contends that Mr. Layne is a special employee of Gavilon, such that the negligence claim asserted by Discover against Gavilon is barred by the Act. Gavilon also argues that this decision is a matter of law for the Court to resolve.
Discover contends that a jury could determine that Access was Mr. Layne's sole employer, and that this issue is a question of fact left to the jury. In addition, Discover claims that genuine issues of material fact exist as to whether Mr. Layne is a special employee of Gavilon.
IV. STANDARD OF REVIEW
The standard of review on a motion for summary judgment is well-settled. The Court's principal function when considering a motion for summary judgment is to examine the record to determine whether genuine issues of material fact exist, "but not to decide such issues." Summary judgment will be granted if, after viewing the record in a light most favorable to a non-moving party, no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. If, however, the record reveals that material facts are in dispute, or if the factual record has not been developed thoroughly enough to allow the Court to apply the law to the factual record, then summary judgment will not be granted. The moving party bears the initial burden of demonstrating that the undisputed facts support his claims or defenses. If the motion is properly supported, then the burden shifts to the non-moving party to demonstrate that there are material issues of fact for the resolution by the ultimate fact-finder.
Merrill v. Crothall-American Inc., 606 A.2d 96, 99-100 (Del. 1992) (internal citations omitted); Oliver B. Cannon & Sons, Inc. v. Dorr-Oliver, Inc., 312 A.2d 322, 325 (Del. Super. Ct. 1973).
Id.
Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962). See also Cook v. City of Harrington, 1990 WL 35244 at *3 (Del. Super. Ct. Feb. 22, 1990)(citing Ebersole, 180 A.2d at 467)("Summary judgment will not be granted under any circumstances when the record indicates ... that it is desirable to inquire more thoroughly into the facts in order to clarify the application of law to the circumstances.").
Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1970)(citing Ebersole, 180 A.2d at 470).
See Brzoska v. Olsen, 668 A.2d 1355, 1364 (Del. 1995).
V. DISCUSSION
A. The issue of whether Mr. Layne is a special employee of Gavilon is a matter of law for the Court to decide.
The Delaware Supreme Court held in Porter v. Pathfinder Serv. Inc. that when there is no material fact in dispute, "[t]he existence of an employer-employee relationship is an issue of law." In Porter, the plaintiff was an electrical technician who was placed, by an agency, as a temporary employee with the defendant. The Supreme Court affirmed a Superior Court decision which held that, as a matter of law, the plaintiff was a special employee of the defendant.
Porter v. Pathfinder Service, Inc., 683 A.2d 40, 42 (Del. 1996).
Id.
Id. at 41.
Id.
In Porter the essential facts were not in dispute and the parties agreed that if an employment relationship existed between the plaintiff and the defendant the Act furnished the exclusive remedy for recovery. In Porter, the parties did not dispute the facts, but rather the weight and significance of each fact. This is virtually identical to the current case where both Discover and Gavilon have done an exceptional job of providing the Court with detailed and well documented facts. There is no issue of material fact in this matter, as such, the decision of whether Mr. Layne is a special employee of Gavilon is a matter of law for the Court to decide.
Id.
Id. at 42
Discover relies on Larson v. Mill Creek Fire Co. for the contention that whether or not Mr. Layne is an employee of Gavilon is a matter of fact left to the determination of the jury. In Larson, the Superior Court determined that there were "other factors" which created material issues of fact that precluded a determination of whether or not, a borrowed employee was an employee for the purposes of the Act. But where, as here, there are no genuine issues of material fact, the Supreme Court has spoken on this issue, and made it clear that it is the purview of the Court to make the determination as a matter of law.
Larson v. Mill Creek Fire Co., 1 A.3d 361 (Del Super Ct. 2010).
Id.
B. Mr. Layne was a Special Employee of Gavilon.
The issue before the Court turns on whether or not Mr. Layne was a special employee, or a borrowed servant, of Gavilon. The common law borrowed servant doctrine focuses on the relationship between an employer and an employee. "The general rule is that an employee, with his consent, may be loaned by his general employer to another to perform specific services, and that, in the course of and for the purpose of performing such services, he may become the employee of the specific employer rather than the employee of the general employer. Accordingly, a loaned employee may become the specific employer's employee while at the same time remaining, generally speaking, the employee of the employer who loans his services."
Volair Contractors, Inc. v. AmQuip Corp., 829 A.2d 130, 134 (Del. 2003).
In Lester C. Newtown Trucking Co. v. Neal, the Delaware Supreme Court set out a four part test that the courts should apply when determining whether a worker is an "employee" under the Act: (1) who hired the employee; (2) who may discharge the employee; (3) who pays the employee's wages; and (4) who has the power to control the conduct of the employee when he is performing the particular job in question. In Porter v. Pathfinder Services, Inc., the Delaware Supreme Court subsequently used this test when determining that the Act barred the negligence claims of an employee - hired and paid by a placement agency but working for another temporary employer - against his temporary employer.
Lester C. Newtown Trucking Co. v. Neal, 204 A.2d 393 (Del. 1964).
Id. at 395.
Porter, 683 A.2d at 42.
As to the first element of the test, both Access and Gavilon hired Mr. Layne. Mr. Layne completed a Pre-Application Job Questionnaire, an Employment Application and a W4 for Access. Mr. Layne also completed an employment application with Gavilon. Mr. Layne was interviewed by both Access and Gavilon. Mr. Engler, who interviewed Mr. Layne, testified that Mr. Layne's interview with Gavilon was no different than what a full-time employee would have received.
As to element two, both Access and Gavilon could discharge Mr. Layne. Access reserved the right to terminate Mr. Layne, and, for example, made this fact clear in the Substance Abuse Policy. Gavilon, however, retained the power to discipline, fire or discharge Mr. Layne from his work at the Gavilon facility.
As to the third element, Gavilon paid Mr. Layne through Access. Access charged Gavilon $17 per hour for Mr. Layne's services, and more if Mr. Layne worked overtime. The fact that Gavilon paid Access for Mr. Layne's work, instead of Mr. Layne directly is not dispositive of the four part test.
Porter, mentioned above, is most helpful here. In Porter, the defendant paid the placement agency and not the plaintiff for the plaintiff's services. The defendant paid 1.34 times the plaintiff's hourly rate. These facts did not preclude the Supreme Court from affirming the Superior Court's decision that the plaintiff was a special employee of the defendant. Indeed, the Supreme Court noted that the hourly rate was used to cover the plaintiff's salary and mandatory employment charges such as worker's compensation.
Id.
Id.
Id.
In this case, Gavilon paid Access 1.7 times Mr. Layne's hourly rate. The contract between Access and Gavilon states that Access
...takes care of our worker's Federal, Delaware State & Delaware Local taxes, as well as FICA, Unemployment, Worker's Comp. and General Liability Insurance. We bill you weekly and payment is due net ten days from the date of the invoice.
Exhibit 3, Yetman Dep.
The plain reading of the contract shows that the surcharge goes towards Access' fee and mandatory employment charges including worker's compensation for Mr. Layne.
Finally, as to the fourth element, Gavilon had control over Mr. Layne. In a worker's compensation analysis, "[t]he greatest weight is given to the issue of control." Gavilon directed Mr. Layne when to work, when to take lunch, and when to take breaks. Gavilon controlled how Mr. Layne did his work, as shown by the training that it provided Mr. Layne. Gavilon also decided if Mr. Layne would work overtime. Access was not present at the facility, and only visited the facility approximately once a month. Gavilon determined each day which type of work Mr. Layne would be doing, and provided all the necessary tools and equipment. On the day of the accident, Mr. Engler told Mr. Layne at the toolbox meeting that Mr. Layne would be completing a welding and maintenance task under the supervision of Gavilon employee Mr. Cabrera. Mr. Cabrera then supervised and directed Mr. Layne in the completion of the task at the time of the accident. Clearly, it was Gavilon which had control over Mr. Layne's work at the facility on a day to day basis, including on the day of the accident.
Porter, 683 A.2d at 42.
Discover seems to be arguing that Mr. Layne could not have two employers and that questions of fact exist as to who employed Mr. Layne - e.g., who had the power to hire/fire, supervise and control, etc. Porter is on point and provides that it does not matter whether there are two employers. In Porter, the Delaware Supreme Court held that an employee employed both by the placement agency and the temporary employer was barred by the Act from making claims of negligence against the temporary employer. Like the injured worker in Porter, Mr. Layne was hired by Access, was paid by Access and Access placed Mr. Layne with a temporary employer, Gavilon. Under those similar facts, the Delaware Supreme Court held that the Act barred the negligence claims of an employee - hired and paid by a placement agency but working for another temporary employer - against his temporary employer.
Id. at 42; see also RESTATEMENT (SECOND) OF AGENCY § 227, cmt. d. As Comment d of the Restatement (Second) of Agency provides:
Comment:While this comment is discussing theories relating to principal/agent and respondeat superior and injury to a third party, the point is that there are occasions when Mr. Layne is to be considered an employee of Gavilon - e.g., if Gavilon directed Mr. Layne to do work outside the scope of the agreement between Access and Gavilon, and Mr. Layne did such work then, under the Restatement (Second) of Agency, Mr. Layne would be deemed the employee of Gavilon and not Access.
d. Where servant obeys temporary employer. The servant may depart from the service of the general employer as to a given act either in accordance with the agreement between the general employer and the other, or in spite of it. The fact that he obeys the requests of the temporary employer as to the act does not necessarily cause him to be the servant of such employer. If, however, the temporary employer exercises such control over the conduct of the employee as would make the employee his servant were it not for his general employment, the employee as to such act becomes a servant of the temporary employer. If the employee does the very act directed by the temporary employer, the latter is responsible for having directed it, and the first employer is responsible as a master if the act is within the scope of his general employment.
Id.
C. Mr. Layne's claims against Gavilon are barred by the Exclusive Remedy of the Act.
The Act provides that recovery under the Act is the exclusive remedy available to employees injured when acting in the course and scope of their employment. The Act states that "[e]very employer and employee ... shall be bound by this chapter respectively to pay and to accept compensation for personal injuries or death by accident arising out of and in the course of employment, regardless of the question of negligence and to the exclusion of all other rights and remedies." Therefore, any claims of negligence that Mr. Layne may have against Gavilon are barred by the Act. Discover is the subrogee of Mr. Layne and has only those rights against Gavilon that Mr. Layne does. As Mr. Layne's claims against Gavilon are barred by the Act, Discover's claim of negligence against Gavilon is also barred by the Act.
See, e.g., Bell Atlantic-Delaware, Inc. v. Saporito, 875 A.2d 620, 623 n. 9 (Del. 2005)(quoting from DAN B. DOBBS, LAW OF REMEDIES § 4.3 (2d. ed. 1993), "...subrogation simply means substitution of one person for another."). --------
VI. CONCLUSION
For the foregoing reasons the Motion for Partial Summary Judgment of Defendant, Gavilon Grain LLC is GRANTED.
IT IS SO ORDERED.
/s/ Eric M . Davis
Eric M. Davis
Judge