A trial court’s decision to ask a jury whether an injured carpenter, who was both an employee and the sole owner of his carpentry business, was an independent contractor or an employee of the general contractor was flawed and went against nearly a century of precedent, the state Supreme Court has ruled.
The high court unanimously ruled March 26 in Patton v. Worthington Associates that the prelude jury question should have been decided as a matter of law at the summary judgment phase. The ruling overturns a decision by the state Superior Court allowing the prelude question to go before the jury.
“A century ago, this court established that, per the terms of Section 302(b) [of the Workers' Compensation Act], a conventional relationship between a general contractor maintaining control of a job site and a subcontractor implicates the statutory employer concept relative to employees of the subcontractor working there,” said Justice Thomas G. Saylor, who wrote the majority opinion. “The governing law should have been applied by the trial court at the summary judgment stage, before the case ever reached trial, and certainly our error-correcting court should have recognized and vindicated this law on appeal.”
While Saylor said that any arguments that the state’s statutory employer doctrine reflects poor public policy should be addressed by the General Assembly, Justice Max Baer, who joined the entire majority opinion but wrote a concurring opinion, said the mandatory nature of workers’ compensation rendered obsolete the statutory employer doctrine, which grants tort immunity to general contractors.
Baer called upon the legislature to adopt New Jersey’s version of the doctrine, in which the immunity only comes into play when the subcontractor has violated the act and failed to obtain workers’ compensation insurance.
The statutory employer doctrine “remains undisturbed within Pennsylvania’s statutory scheme as an irrational relic of a bygone era,” Baer said. “Adopting such a paradigm would achieve several of the purposes found in the Pennsylvania Workers’ Compensation Act.”
Worthington’s attorney, John J. Hare of Marshall Dennehey Warner Coleman & Goggin, said in an emailed statement that the ruling restores the statutory employer doctrine.
“We believed from the beginning of the case that the defendant general contractor was clearly entitled to statutory employer immunity,” Hare said. “The statutory employer doctrine has been applied to immunize general contractors under these facts in an unbroken line of cases dating back to McDonald [v. Levinson Steel] in 1930.”
According to court documents, the plaintiff, Earl Patton, who filed suit with his wife, owns and acts as an employee of Patton Construction Inc. Worthington hired Patton Construction to do carpentry work on a church Worthington had been contracted to repair. During the project, Patton was pinned under a scissor lift after he inadvertently drove it into a hole, causing it to tip. He fell 14 feet and sustained serious injuries, including fractured vertebrae. The couple filed suit alleging negligence in failing to provide a safe workplace and for failing to cover the holes.
Worthington filed for summary judgment, arguing that it was immune from suit under the statutory employer doctrine, but the motion was denied. The court instead decided to include a prelude jury question before conducting the McDonald test to determine whether a worker is a “statutory employee” or an “independent contractor.” The jury found Patton was an independent contractor, and awarded the plaintiffs a $1.5 million judgment.
Worthington appealed the award, arguing that it had an ordinary contractor-subcontractor relationship with Patton Construction, and therefore the relationship was a “classic statutory employer situation,” rendering the company immune from suit.
The Superior Court held that no “master-servant relationship” existed between the plaintiff and defendant, and therefore the defendant could not be considered a “statutory employer” immune from suit.
Although some attorneys have said the Superior Court’s decision updated the McDonald test, others said it nullified the statutory employer doctrine completely.
Saylor agreed with Worthington and the 21 contractors and subcontractors that filed amici briefs supporting Worthington.
According to Saylor, the central issue came down to whether the contract between the parties was an independent contract or a dependent one. Noting McDonald, which established the McDonald test, and the 1920 decision Qualp v. James Stewart Co., Saylor said an independent contractor is one that has a distinct and independent contract with the owner.
“Worthington is correct that the trial and intermediate courts inappropriately layered common-law concepts onto a distinctive statutory regime. Per Qualp and McDonald, conventional subcontractors are dependent contractors, not independent ones,” Saylor said. “For these purposes, their employees are not contractors at all, nor, at least in the absence of special circumstances, are they employees of the general contractor.”
However, John F. Cordisco of Stark & Stark, who, along with Carin A. O’Donnell, represented the plaintiffs, said the ruling failed to clarify a third-party plaintiff’s burden to have a successful claim under the McDonald test.
Holdings in the court’s 1997 decision in Lascio v. Belcher Roofing and the 1987 decision in Zimmerman v. Public School Employees’ Retirement muddied the waters regarding the plaintiff’s burden to overcome the statutory employer claim, Cordisco said. The high court, which found that no material facts were disputed in Patton’s case, did not indicate what evidence a plaintiff could introduce to succeed on a similar claim, Cordisco said.
“The decision of the court seems to be very result oriented,” he said. “The decision doesn’t give clarity to the doctrine, which creates a real hardship for the lower courts as well as the attorneys bringing these actions.”
Cordisco said he was pleased by Baer’s opinion and agreed that the legislature should change the law to mirror New Jersey’s doctrine.
“There is one small victory for construction workers in Pennsylvania in that the Supreme Court of Pennsylvania has urged the legislature to reassess this doctrine,” Cordisco said. “It’ll most certainly give clarity once and for all to this doctrine.”
(Copies of the 16-page opinion in Patton v. Worthington Associates, PICS No. 14-0447, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •