This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).






Allen Edward Ostertag, et al.,





Bal-Tech, Inc., et al.,



Dynex Industries, Inc.



Hance Locating, Inc.,

f/k/a Hance Cable Testing

and Locating, Inc.,



Filed October 23, 2001

Affirmed in part, reversed in part, and remanded;

motion denied
Toussaint, Chief Judge


Chisago County District Court

File No. CX991531


Harry A. Sieben, Jr., Jeffrey Michael Montpetit, Sieben, Grose, Von Holtum & Carey, Ltd., 900 Midwest Plaza East, 800 Marquette Avenue, Minneapolis, MN 55402 (for appellants)


Thomas Milton Darden, Zelle, Hofmann, Voelbel, Mason & Getter, 33 South Sixth Street, Suite 4400, Minneapolis, MN 55402 (for respondent Dynex Industries)


Jan Marie Gunderson, Rider, Bennett, Egan & Arundel, 333 South Seventh Street, Suite 2000, Minneapolis, MN 55402 (for respondent Hance Locating)


            Considered and decided by Toussaint, Chief Judge, Schumacher, Judge, and Parker, Judge.*

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

            Allen Ostertag appeals from an order for summary judgment dismissing his third-party negligence action against respondents Dynex Industries and Hance Locating under the election-of-remedies provision of the workers’ compensation law, Minn. Stat. § 176.061, subds. 1, 4 (2000).  Because the district court erroneously found that respondents were engaged in a common enterprise under the act, but correctly concluded that Dynex could have a duty to Ostertag, we affirm in part, reverse in part, and remand.  Appellant’s motion to strike portions of Dynex’s brief is denied.


            Appellant was employed by Premier Electric Corporation, the electrical contractor on the Rush City Prison project.  He was injured on the job and applied for and received workers’ compensation benefits.  Subsequently, he brought negligence actions against respondent third-party employers Dynex Industries, Inc. and Hance Locating, Inc.

            On the day Ostertag was injured, he was working with another Premier employee, Mike Dombeross, “pulling wire” in a wing off of the mechanical room at the prison.  While retrieving a ladder from the mechanical room, Ostertag apparently allowed the ladder to touch wires hanging out of a switchgear box.  He felt an intense pain go down his right side and froze in place until another Premier employee, Kevin Docherty, came over and took the ladder away from him.

That day, Docherty was helping with high-voltage testing at the site.  Premier had hired Lawrence Hance, of Hance Locating, Inc., to perform the testing of high-voltage conductors at the prison.  There was no written contract between Premier and Hance.  The testing, which checks the integrity of the insulation, was a small part of the overall electrical project.  Hance did the prison job by himself and brought his own toolbox and equipment to the site. 

Dynex Industries, Inc. was also involved in the testing.  Dynex employee Curtis Hickman was present as an observer of the testing.  Dynex subcontracted with a third party and did not have a contract with the State, Premier, or Hance.  Hickman provided “over-the-shoulder” testing of cables.  On the testing days, he would watch the test unit and observe as Hance put the items on the test forms to verify that they matched.  Engineers would later evaluate the test results. 

Months before the actual testing days, Hance, Hickman, and other Premier employees initially walked through the facilities involved in the testing.  At the time of the walk-through, Hance determined that the area was prepared for testing, and he and Premier agreed on a method to ensure security and safety on the testing days.  Hickman was responsible for noting any safety violations.  Because there were so many end wires throughout the prison, Premier and Hance decided to post a guard at the end wires on testing days rather than barricade each area to keep people clear of the conductors.  On the day of the accident, Docherty was the guard on duty.

There were two sets of switchgear near the mechanical room where Ostertag and Dombeross were working.  Docherty was going back and forth between them during the testing.  Docherty was not on Ostertag’s crew, and, Ostertag did not know why he was there that day. 

Docherty was in contact with Hance via radio during the testing.  Hance and Hickman were in a central room containing the “point of origin” wiring in another prison building.  A Premier foreman, Mark Waletzko, was also in contact with the testing crew via radio, and was present in the central room during the testing.  During the three testing days, Hance and Hickman conducted the testing and found no problem with the insulation.

            Hance stated that one of his responsibilities was to insure that the testing was safely performed.  He familiarized himself with the site to the point where he felt that he could operate safely.  He depended on the electrical contractor, Premier, who was very familiar with the site to aid him.  Dynex’s presence was another layer of inspection that Hance would not normally have on a project.   Dynex looked over Hance’s shoulder to make sure that he “achieved the correct level of voltage and recorded correctly.”  Dynex provided the forms, but did not set up any of the tests.

            On the last day of testing, a Premier employee told Hance to put the test on hold because someone might have made electrical contact.  Hance and Hickman “shut down” and stood by until they were instructed to continue the tests.  Neither Hance nor Dynex saw any evidence of contact with a conductor.  Both said that they would expect to see a sharp spike in current had there been contact.  Hance’s equipment is designed to shut down if there is a spike of current.  When they heard that the employee had gone back to work, they went over the safety rules with Docherty and resumed testing. 


            This court must review the record to determine if any genuine issues of material fact exist and whether the district court erred in its application of the law. O'Malley v. Ulland Bros., 549 N.W.2d 889, 892 (Minn. 1996).  In its review, this court must take the facts in the light most favorable to the party against whom judgment was entered.  Schleicher v. Lunda Constr. Co., 406 N.W.2d 311, 312 (Minn. 1987). 


            The workers’ compensation act would bar Ostertag’s action against the third-party employers, Dynex and Hance, if the facts established a common enterprise between them and Premier, Ostertag’s employer.  See Minn. Stat §176.061, subds. 1, 4 (2000).  When employers are engaged in such an enterprise, an injured employee must elect to recover damages or workers’ compensation benefits, but cannot pursue both.  Id.  The following three elements are requisites for a common enterprise: 

1)  [t]he employers must be engaged on the same project; 2)  [t]he employees must be working together (common activity); and 3)  [i]n such fashion that they are subject to the same or similar hazards. 


McCourtie v. United States Steel Corp., 253 Minn. 501, 506, 93 N.W.2d 552, 556 (1958) (emphasis in original). 

            Here, the district court found all three elements of a common enterprise and dismissed Ostertag’s claims against Dynex and Hance.  All parties agreed that the facts material to the issue of common enterprise were not disputed.   Accordingly, the district court decided the issue as a matter of law, subject to this court’s de novo review.   O’Malley, 549 N.W.2d at 897-98.  On review, we conclude the employees were not working together in a common activity and were not subjected to the same or similar hazards.    

            Case law on the common enterprise doctrine emphasizes the employee’s activities over the employer’s goals.  See Id. at 894.  The functions and risks of the groups of employees are determinative, not the ultimate goal of the project.  See, e.g., Kaiser v. Northern States Power Co., 353 N.W.2d 899, 906 (Minn. 1984) (firefighters and NSP employees had same ultimate goal but distinct functions at scene of fire).  Ostertag, the injured employee, clearly was not involved in the testing.  He had no knowledge that it was taking place.  He was working closely with other members of his crew on a completely different task.  He was physically close to only one employee involved in the testing, and that was Premier employee Docherty.  He had no contact with Hance or Hickman.  In short, the facts indicate that no overlap existed between Ostertag’s tasks and those of the testing crew.

            Ostertag’s distinct activities also subjected him to distinct hazards.  Ostertag, Hance, and Hickman performed separate tasks, did not use the same equipment, and worked in different areas of the prison.  Ostertag installed de-energized junction boxes, while Hance and Hickman tested energized electrical cables.  Similarly, Ostertag’s activities and equipment were distinct from Docherty’s.

            Despite arguments to the contrary, the record does not indicate that all employees were exposed to the same risk of electrical shock.  There is no evidence that Hance and Hickman could have received an electrical shock from their activities or Hance’s equipment during testing.  Hance and Hickman, unlike Docherty and Ostertag, were nowhere near the live end wires.  See Schleicher, 406 N.W.2d at 313 (different hazards when a injured employee drove concrete to site where third-party employer moved concrete through conveyor).  And, unlike Ostertag, none of the testing crew was performing non-testing tasks exposing them to a greater risk near the end wires.

            All three McCourtie factors are requisites for application of the common-enterprise bar to Ostertag’s action.  Having concluded that the employees were not working together on a common activity and were not subjected to the same hazards, we need not reach the third inquiry—whether the employers were involved in the same project.  Based on the foregoing, we reverse the district court’s summary judgment for Hance and Dynex on the common-enterprise theory.


            Dynex moved for summary judgment on the ground that it owed no duty to Ostertag.  See Rasmussen v. Prudential Ins. Co., 277 Minn. 266, 269, 152 N.W.2d 359, 362 (1967) (in absence of legal duty, there can be no actionable negligence).  The district court denied Dynex’s motion reasoning that issues of fact remained for trial.  We agree.

            A legal duty may be imposed by law or derived from contract.  See Goar v. Village of Stephen, 157 Minn. 228, 236, 196 N.W. 171, 174 (1923) (by contract, Village assumed duty of notifying company of defects).  Here, there is no evidence of a contractual duty between Dynex and Ostertag or Premier.  We have only the testimony of the employees regarding their activities, duties, and responsibilities.

            Hance testified that he expected that part of Dynex’s responsibilities was to insure that the test was done safely; however, he also stated that he really did not know what Dynex’s responsibilities were.  Hickman testified that he was required to be at the prison as a state-mandated inspector/observer, and was present at all stages of the testing with Hance.  He also testified that he was required to ask about preparation of the wires and to “note” safety violations.

            Viewing the facts in the light most favorable to Ostertag, we conclude there are genuine factual issues regarding Hickman’s role and responsibilities, especially to Ostertag, at the prison site.  Therefore, we affirm the court’s denial of Dynex’s motion for summary judgment on the issue of duty.


            Ostertag moves this court to strike the portions of the Dynex brief that argue in favor of the district court’s ruling on the common-enterprise doctrine. Because we conclude that there is no common enterprise, Ostertag’s motion to strike is denied as moot.

            Affirmed in part, reversed in part, and remanded.  Motion denied.

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. Art. VI. § 10.