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The state Superior Court, ruling that statutory employer immunity can be raised at any time during a litigation, has thrown out a $2 million verdict against a contractor.

In so holding, a three-judge panel earlier this month in Sheard v. J.J.DeLuca reversed the trial court’s decision that the doctrine had been waived because it wasn’t asserted until post-trial motions.

In an opinion written by President Judge Susan Peikes Gantman, the court said that under Pennsylvania law, a defense stating that the lawsuit was barred by statutory employer immunity under the Workers’ Compensation Act could be raised at any time during the litigation. Gantman, calling the contractor’s immunity claim “foundational,” reasoned it could be raised even if the jury had never been presented with it.

“Owing to its foundational nature, plus the fact that the proceedings were still open, we conclude appellant did not waive the issue of immunity,” Gantman said. “Whether the immunity issue was presented to a jury is irrelevant, because statutory employer immunity, interpretation of contractors or vertical privity of the individuals and entities are all questions of law.”

The court additionally held that the trial court was wrong to say Delaware law would have precluded the statutory immunity defense. Gantman said the result of the case would be the same under either state’s law.

Plaintiff Nicholas Sheard, who was injured on a construction site in Wilmington, Del., had argued in post-trial filings that Delaware law applied and that the law precluded a statutory employer immunity defense.

But Gantman said Delaware law would have granted J.J. DeLuca Co. immunity, and therefore applying Pennsylvania law, as opposed to Delaware law, did not lead to a different outcome.

“As a contractor, [J.J. DeLuca] is deemed an employer by operation of the statute. Therefore, [Sheard's] exclusive remedy at Delaware law was workers’ compensation,” Gantman said. “Because [Sheard] was able to obtain workers’ compensation, Section 2304 [of the Delaware Workers' Compensation Act] would bar him from recovering any damages in tort from any statutory employer. Consequently, Delaware law would preclude [Sheard's] common law negligence claim against [J.J. DeLuca].”

Judges Cheryl Lynn Allen and Paula Francisco Ott joined Gantman.

According to Gantman, Sheard was hired as a laborer at Delta Drywall. On the day of the incident, Delta was a subcontractor and J.J. DeLuca was acting as the general contractor, Gantman said. While hurling drywall from a balcony, a screw caught Sheard’s sweatshirt and the momentum propelled him out of the balcony, causing him to fall 22 feet, Gantman said.

Following a jury trial, Sheard was awarded $2 million, with 80 percent liability apportioned against J.J. DeLuca and 20 percent against Sheard.

J.J. DeLuca filed a post-trial motion, asserting that the statutory employer doctrine precluded the action.

In his answer, Sheard said the trial court should “ignore the ‘subcontract between DeLuca and Delta’ attached to [J.J. DeLuca's] motion to amend its post-trial motion because ‘it was never introduced into evidence at trial and was never considered by the jury,’” Gantman said. Sheard also argued that Pennsylvania’s statutory employer immunity did not apply because Delaware law applied, which Sheard contended did not provide for the defense.

Following oral arguments, the trial court denied DeLuca’s post-trial motion, and held that the immunity defense was waived because it had not been previously raised and evidence had not been presented on the issue.

On appeal to the Superior Court, DeLuca contended that the trial court’s ruling improperly added requirements regarding timeliness and whether the defense was “actively pursued.”

Gantman initially noted recent state Supreme Court case law, including the court’s 2014 decision in Patton v. Worthington Associates, which reaffirmed the statutory employer doctrine, and the 1989 case Tulewicz v. Southeastern Pennsylvania Transportation Authority, which allowed the initial assertion of sovereign immunity even at the level of a petition for reargument before the state Supreme Court.

“Once the litigation and all appellate avenues are exhausted, the court is no longer competent to address what was otherwise non-waivable immunity,” Gantman said. “As long as the proceedings continued, however, even throughout the appellate process, the relevant court may consider a claim of statutory employer immunity in the first instance.”

Gantman then examined the Delaware Workers’ Compensation Act to determine whether a “true conflict” existed between Pennsylvania and Delaware law.

According to Gantman, under Delaware law, if the general contractor fails to ensure its subcontractor obtained workers’ compensation coverage for its employees, the general contractor bears workers’ compensation liability for the subcontractor’s injured workers. So long as workers’ compensation coverage is available, Gantman said, Section 2304 of Delaware’s Workers’ Compensation Act applies.

“The trial court erred when it concluded Delaware law does not provide for statutory employer immunity, as the trial court overlooked Delaware’s straightforward statutory scheme,” Gantman said.

Sheard’s attorney, Thomas Sacchetta of Sacchetta & Baldino, and J.J. DeLuca’s attorney, Edward M. Koch of White and Williams, did not return calls for comment.

Max Mitchell can be contacted at 215-557-2354 or mmitchell@alm.com. Follow him on Twitter @MMitchellTLI.

(Copies of the 21-page opinion in Sheard v. J.J.DeLuca, PICS No. 14-0731, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •