This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
M.A. Mortenson Companies,
defendant and third party plaintiff,
Central Roofing Company,
Third Party Defendant.
Filed March 23, 2004
Hennepin County District Court
File No. PI 02-008378
Wilbur W. Fluegel, Fluegel Law Office, 701 Fourth Avenue South, Suite 1260, Minneapolis, MN 55415-1815; and
William O. Bongard, Sieben, Grose, Von Holtum & Carey, 900 Midwest Plaza East, 800 Marquette Avenue, Minneapolis, MN 55402 (for appellant)
Timothy J. O’Connor, William L. Davidson, Lind, Jensen, Sullivan, Peterson, 150 South 5th Street, Suite 1700, Minneapolis, MN 55402 (for respondent)
Considered and decided by Toussaint, Chief Judge, Halbrooks, Judge, and Huspeni, Judge.*
Appellant Anthony Wally was injured in a construction-site accident while employed by the Central Roofing Company (Central Roofing), a project subcontractor. After electing to receive workers’ compensation benefits from Central Roofing, appellant brought a negligence action against respondent M.A. Mortenson Companies (Mortenson), the project’s general contractor. The district court granted Mortenson summary judgment and dismissed the matter. Appellant now challenges that grant, arguing that the district court erred in concluding that (1) his claim against Mortenson is barred by the common-enterprise defense and (2) his claim against Mortenson is barred by the loaned-servant defense. We affirm.
In March 2000, Central Roofing and Mortenson entered into a standard subcontract agreement whereby Central Roofing agreed to “[f]urnish and install all new roofs” for a construction project in downtown Minneapolis. The contract provided that Central Roofing would “perform all unloading, hoisting, rigging, and final placement of equipment and materials supplied under [the] subcontract.” The contract stated that although Central Roofing was “responsible for furnishing all hoisting, including the furnishing of a crane, required for execution of this subcontract,” Mortenson would make two tower cranes available to subcontractors for hoisting. The contract provided that should Central Roofing use a crane belonging to Mortenson, Central Roofing “shall assume all liability in connection with the use of [the crane]. [Mortenson] will not be liable for damage or injury resulting from use of [Mortenson]-owned equipment by [Central Roofing] personnel.”
On December 6, 2000, a Central Roofing work crew’s task was to unload roofing materials from two flatbed trailers and to hoist the materials to the project’s roof, using a tower crane belonging to Mortenson and operated by a Mortenson employee. Several Central Roofing employees were on the roof to unload the hoisted materials.
Appellant and Mike Dwyer, another Central Roofing employee, remained on the ground level with Mike Dummer, a Mortenson signalman who used a two-way radio to communicate with the crane operator. Appellant, Dwyer, and Dummer worked together on the trailer bed loading pallets of roofing materials onto the crane forks. Dwyer and Dummer slid the crane forks through the bottom part of each pallet and appellant secured each pallet to the forks with a ratcheting strap. Each time the three men finished loading and securing a pallet, Dummer confirmed that the pallet was secure and that appellant and Dwyer were physically clear of the pallet. Dummer then made eye contact with the other two men and asked them if “everything [was] okay.” If the background noise made it difficult to communicate verbally, Dwyer made eye contact with the other two men and used hand signals to confirm that they knew the load was about to be hoisted. Once appellant and Dwyer responded affirmatively to Dummer’s inquiry, Dummer gave a radio command to the tower-crane operator to begin lifting the load. The crane operator then lifted each pallet slowly off the trailer. The work proceeded in this fashion for several hours.
Appellant was injured while the three men were unloading pallets from the second trailer. Once a pallet was loaded and strapped on the crane forks, Dummer asked appellant and Dwyer if it was safe to begin lifting, made eye contact with the two men, gave a hand signal indicating that lifting was imminent, and used his radio to instruct the crane operator to lift the pallet from the trailer bed and move it toward the back of the trailer before raising it. Appellant, who was standing on the trailer bed, heard Dummer give the radio command to begin hoisting. After Dummer gave the radio command, appellant announced that he was going to the bathroom and began walking toward the back end of the trailer bed. As he crouched down to jump off the back end of the trailer bed, the rising pallet caught on his jacket and lifted him into the air. Dummer and Dwyer simultaneously saw appellant hanging from the pallet; Dummer instructed the crane operator by radio to lower the load. As appellant was being lowered, he fell, breaking his right ankle, two bones in his right leg, and his right hip.
In February 2001, Central Roofing signed an addendum to the March 2000 contract providing that Central Roofing assumed all responsibility for the operation of any Mortenson equipment used to hoist roofing materials and equipment and that, during the period of Central Roofing’s use of Mortenson equipment, Mortenson employees operating the equipment would be deemed loaned servants of Central Roofing.
After the accident, appellant elected to receive workers’ compensation benefits for his injuries, which were paid by Central Roofing’s insurer. Appellant then brought suit against Mortenson, claiming that Mortenson’s negligence caused his injuries. Mortenson filed a motion for summary judgment, arguing that appellant was precluded from bringing a common-law negligence action against Mortenson under the election-of-remedies provision in the Minnesota Workers’ Compensation Act, Minn. Stat. ch. 176 (2002), because at the time of the accident, (1) Mortenson and Central Roofing were engaged in a “common enterprise” and (2) Mortenson’s employees were Central Roofing’s “loaned servants.” The district court granted Mortenson’s motion on both grounds. This appeal follows.
Summary judgment is appropriate when a district court determines that “there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. “On appeal from summary judgment, the role of the reviewing court is to review the record for the purpose of answering two questions: (1) whether there are any genuine issues of material fact to be determined, and (2) whether the district court erred in its application of the law.” O’Malley v. Ulland Bros., 549 N.W.2d 889, 892 (Minn. 1996). “A fact is material if its resolution will affect the outcome of a case.” Id. In reviewing a granted motion for summary judgment, we take the facts in the light most favorable to the party against whom summary judgment was granted. Schleicher v. Lunda Constr. Co., 406 N.W.2d 311, 312 (Minn. 1987). We will only set aside the district court’s factual findings if those findings are clearly erroneous. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999). But this court is not bound by the district court’s decision on a purely legal issue. Frost-Benco Elec. Ass’n v. Minn. Pub. Utils. Comm’n, 358 N.W.2d 639, 642 (Minn. 1984).
Appellant argues that the district court erred by concluding that Mortenson and Central Roofing were engaged in a “common enterprise” at the time of his accident such that he is precluded from bringing a negligence claim against Mortenson after receiving workers’ compensation benefits from Central Roofing’s insurer. Under Minn. Stat. § 176.061, subds. 1, 4 (2002), an injured employee may not bring a third-party action after receiving workers’-compensation benefits if the third party was engaged in a “common enterprise” with the injured person’s employer at the time of the injury. Whether a common enterprise existed is a legal determination. O’Malley, 549 N.W.2d at 897.
For a common enterprise to exist between two employers, “(1) [t]he employers must be engaged on the same project; (2) [t]he employees must be working together (a common activity); and (3) [i]n such a 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)). “The test emphasizes the common activities of the workers rather than the common goals of the employers.” Schleicher, 406 N.W.2d at 313.
Appellant does not dispute that Mortenson employees and Central Roofing employees were “engaged on the same project” – uploading roofing materials – at the time the injury occurred; the first element of the common-enterprise test is therefore met.
As to the second element, the activities of the workers must be related in more than a “vague, general way looking toward the completion of a structure.” McCourtie, 253 Minn. at 510, 93 N.W.2d at 559; see also Schleicher, 406 N.W.2d at 313-14 (holding that the common-enterprise defense is not available where the workers’ duties “overlapped minimally and were not interdependent”). It is true that “[o]ne who merely supplies or delivers a product to an employer is not engaged on the same project with him,” even though the employees of both companies joined in the unloading. Urbanski v. Merchants Motor Freight, Inc., 239 Minn. 63, 70-71, 57 N.W.2d 686, 690 (1953). But here, the record is undisputed that appellant and fellow Central Roofing employee Mike Dwyer were working together with Mortenson employee Mike Dummer to load and hoist the roofing materials and that the three men’s functions were interdependent. After Dwyer and Dummer loaded the pallets onto the crane fork, appellant secured the load with a strap. Dummer did not signal the crane operator to lift the load until appellant and Dwyer communicated to him that the load was ready. See O’Malley, 549 N.W.2d at 896 (holding that employees are engaged in a common activity where they work in the same workspace and necessarily coordinate their activities). Therefore, we conclude that the second element of the common-enterprise test is satisfied.
Appellant argues that Mortenson cannot satisfy the third element of the common-enterprise test because he and the Mortenson crane operator faced distinctly different hazards from the men on the ground. In support, appellant relies primarily upon our decision in Sorenson v. Visser, 558 N.W.2d 773 (Minn. App. 1997). In Sorenson, an electrical-company employee was injured while standing in a trench being excavated with a backhoe operated by an excavator’s employee. Id. at 774. We concluded that the two employees were not engaged in a common enterprise because although the electrical-company employee “standing in the trench . . . was subject to the hazard of trench cave-ins, as well as other possible injuries relating to his physical presence in the trench [the excavator’s employee] was not subject to any of these hazards while operating the backhoe.” Id. at 776.
Appellant’s reliance on Sorenson is misplaced because in Sorenson, each employer’s worker was physically separated from the other’s such that the two men were not exposed to similar hazards. See id. Here, it is undisputed that Dummer, the Mortenson employee, worked alongside appellant and Dwyer loading the pallets for lifting and stood on the flatbed trailer as the pallets were lifted. Dummer was therefore exposed to the same “practical dangers incidental to the work” – such as being caught in a load or struck by a falling load – as appellant. See O’Malley v. Ulland Bros., 529 N.W.2d 735, 739 (Minn. App. 1995), aff’d, 549 N.W.2d 889 (Minn. 1996). The Sorenson court specifically distinguished the facts before it from those in Ritter v. M.A. Mortenson Co., 352 N.W.2d 110, 113 (Minn. App. 1984), where the court held that a steel worker and crane operator were involved in common enterprise where the two work crews were intermingled and crew members were subject to same or similar hazards, including “falling beams, electrical shock, [or] injury from the crane”). Sorenson, 558 N.W.2d at 776; see also O’Malley, 529 N.W.2d at 739 (finding a common enterprise where “[a]ll the employees were working within close proximity to each other and thus were subject to the same on-site hazards”).
Appellant concedes that he and Dummer were exposed to similar risks, but argues that the different risks faced by himself and the crane operator frustrates application of the common-enterprise defense. He cites no authority for the proposition that every employee of each employer must be exposed to similar risks such that Mortenson cannot claim the common-enterprise defense unless it shows that appellant and the crane operator faced identical risks. Indeed, the Ritter court held that a common enterprise exists between one employer’s crane operator and another employer’s steel worker when the two were working, as were appellant and the crane operator here, in a “common pool” of intermingled employees. 352 N.W.2d at 113; see also Higgins v. Northwestern Bell Tel. Co., 400 N.W.2d 192, 195 (Minn. App. 1987) (holding that a finding of common enterprise does not require that “two employee groups [be] subject to identical work hazards”), review denied (Minn. Mar. 25, 1987).
Because the undisputed facts show that Dummer was exposed to the same or similar risks as appellant, the third element of the common enterprise test is satisfied. We therefore conclude that appellant is precluded by the election-of-remedies provision in Minn. Stat. ch. 176 (2002) from bringing a negligence claim against Mortenson. The district court did not err in granting respondent summary judgment on this issue.
Appellant next challenges the district court’s conclusion that at the time of the accident, Mortenson employees Dummer and the crane operator were “special employees” of Central Roofing under the “loaned servant” doctrine such that appellant could not attempt to hold Mortenson liable for any allegedly negligent conduct committed by Dummer and the crane operator.
“The loaned-servant doctrine provides that if an employer loans an employee to another for the performance of some special service, then that employee, with respect to that special service, may become the employee of the party to whom his services have been loaned.” Danek v. Meldrum Mfg. & Eng’g Co., 312 Minn. 404, 407, 252 N.W.2d 255, 258 (1977). “[I]f the employee is a loaned servant, the liability for his negligent acts shifts from the general employer to the borrowing employer.” Ismil v. L. H. Sowles Co., 295 Minn. 120, 123, 203 N.W.2d 354, 357 (1972).
“[C]ourts have relied on two tests in determining when a worker becomes a loaned servant. The first of these is the ‘whose business’ test. It asks: At the time of the negligent act, which employer’s business was being done or furthered?” Nepstad v. Lambert, 235 Minn. 1, 11, 50 N.W.2d 614, 620 (1951). The second test, the “so-called ‘right of control or direction’ test[, places] the responsibility for the servant’s negligence upon the employer having the right to control his actions at the time the negligent act occurs.” Id. at 12, 50 N.W.2d at 620. “The theoretical basis for this test is probably the desire to impose the liability upon the employer who was in the best position to prevent the injury.” Id. “The question is . . . whether, as to the act in question, [the special employee] is acting . . . under the direction of the borrowing employer.” Ismil, 295 Minn. at 124, 203 N.W.2d at 357.
Appellant does not contest that the Nepstad “whose business” test is satisfied by the undisputed facts in the record. The agreement between Mortenson and Central Roofing provided that the latter would “perform all unloading, hoisting, rigging, and final placement of equipment and materials supplied under [the] subcontract.” The accident occurred in the course of unloading, hoisting, and rigging the roofing materials delivered to the work site.
Mortenson argues that the Nepstad “right of control or direction” test is satisfied by the February 2001 supplemental-waiver provision of the contract between itself and Central Roofing (stating that Central Roofing assumed all responsibility for the operation of any Mortenson equipment used to hoist roofing materials and that during the period of Central Roofing’s use of Mortenson equipment, Mortenson employees operating the equipment would be deemed loaned servants of Central Roofing). But this provision was not signed until after appellant’s December 2000 accident, and Mortenson did not submit evidence supporting its argument that the terms of the supplemental provision were contemplated by the parties before the provision was signed. Therefore, taking the facts in the light most favorable to appellant, as we must, we conclude that Mortenson may not rely on this provision.
Appellant argues that the “right of control or direction” test is not satisfied here because “the sole direction for the movement of the crane was by [Dummer] to the Mortenson crane operator.” But the undisputed facts, as established by appellant’s deposition testimony, demonstrate that Mortenson employees did not have “sole” control over the crane’s movements. Dummer did not signal the crane operator to begin lifting a load without receiving specific assent to do so from appellant and Dwyer. The Central Roofing employees therefore retained the “authority to exercise detailed authoritative control over the manner in which the [borrowed employees] perform[ed] the work.” See Ismil, 295 Minn. at 124, 203 N.W.2d at 357.
Appellant further argues that the loaned-servant doctrine is not applicable here because Central Roofing employees did not have exclusive control over the crane’s movements from the moment the hoist began. The supreme court has specifically rejected this argument. See id. (stating that Nepstad must not be read so narrowly as to “require that every movement of the crane from the time it left the ground must be directed by the borrowing employer”). The record also demonstrates that because appellant could instruct Dummer not to signal the crane operator to begin lifting, Central Roofing “was in the best position to prevent the injury” that occurred. See Nepstad, 235 Minn. at 12, 50 N.W.2d at 620.
We conclude that, based upon the undisputed facts in the record, Dummer and the crane operator were Central Roofing’s loaned servants as a matter of law when the accident occurred and that Mortenson is therefore entitled to summary judgment by application of the loaned-servant defense.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.