STATE OF MINNESOTA

IN COURT OF APPEALS

A05-2212

Clarence E. Duffy, et al.,
Respondents,

vs.

American Standard, Inc., et al.,
Defendants,

HiMEC, Inc., et al.,
Appellants.

Filed August 8, 2006

Affirmed

Halbrooks, Judge

Ramsey County District Court

File No. C8-05-050048

Michael R. Strom, Sieben, Polk, LaVerdiere & Dusich, P.A., 999 Westview Drive, Hastings, MN 55033 (for respondents)

Susan M. Hansen, Brownson & Ballou, PLLP, 225 South Sixth Street, Suite 4800, Minneapolis, MN 55402 (for appellants)

Considered and decided by Minge, Presiding Judge; Halbrooks, Judge; and Forsberg, Judge.*

U N P U B L I S H E D O P I N I O N

HALBROOKS, Judge

Appellants challenge the district court’s denial of their motion for summary judgment. Because an order denying summary judgment is immediately appealable if the basis for the claim falls within the scope of the Minnesota Workers’ Compensation Act, Olson v. Lyrek, 582 N.W.2d 582 (Minn. App. 1998), and because we conclude that the district court did not err in finding that appellants were not engaged in a common enterprise with respondent’s employer, we affirm.

FACTS

Respondent Clarence Duffy worked as a welding repairman and foreman at the Hormel plant in Austin from 1948 to 1986. Duffy testified that he was responsible for “any pump or any part of machinery” and worked throughout the entire plant, which included more than 50 buildings. In November 2004, Duffy was diagnosed with mesothelioma. Duffy and his wife brought a personal-injury action against numerous defendants who allegedly manufactured, sold, and/or distributed materials containing asbestos. The Duffys alleged that asbestos fibers were released into the air and then inhaled and ingested by Duffy.

Among the defendants were appellants JWR Plumbing & Heating, Inc., Scheid Plumbing and Heating Company, and Hi-MEC, Inc. (successor in interest to JWR Plumbing & Heating, Inc. and Scheid Plumbing and Heating) (Scheid). Scheid’s business generally included sheet-metal work, plumbing, pipe-fitting, and insulation; Scheid performed work at Hormel as an outside contractor.

Scheid moved for summary judgment on the basis that it was engaged in a common enterprise with Hormel, Duffy’s employer, and, therefore, under Minn. Stat. § 176.061, subds. 1, 4 (2004), the Duffys had to elect between collecting workers’ compensation benefits or suing a third party for damages. In support of its motion, Scheid submitted portions of Duffy’s deposition, as well as depositions and an affidavit from Scheid employees.

The district court denied Scheid’s motion, finding that Scheid failed to establish two of the three elements of a common enterprise. While the district court concluded that Hormel and Scheid employees were exposed to the same risks, the district court determined that the respective employees did not participate in common activities and that the employers were not engaged in the same project. This appeal follows.

D E C I S I O N

Summary judgment is proper when there are no genuine issues of material fact and either party is entitled to judgment as a matter of law. Minn. R. Civ. P. 56.03; Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). On appeal, reviewing courts ask whether there are any genuine issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).

Minnesota Statutes chapter 176, the workers’ compensation statute, provides a no-fault system for an injured employee’s recovery from his employer. But in circumstances when an employee is injured due to the tortious conduct of a third party, the employee may have a cause of action against the third party. Minn. Stat. § 176.061, subd. 1 (2004). In that case, the statute provides that when an employer and a third party are engaged in a common enterprise and an injury occurs for which the third party is liable, the injured employee can bring an action against the third party or recover workers’ compensation benefits, but cannot do both. Minn. Stat. § 176.061, subds. 1, 4 (2004).

The “application of a statute to a set of undisputed facts is a question of law.” O’Malley v. Ulland Bros., 549 N.W.2d 889, 897 (Minn. 1996). And, thus, whether a common enterprise exists is also a legal question, which we review de novo. Id. at 898. Questions of law under chapter 176 are to be determined on an “even-handed basis.” Minn. Stat. § 176.021, subd. 1a (2004). “[T]he common law rule of ‘liberal construction’ based on the supposed ‘remedial’ basis of workers’ compensation legislation” is not applied. Minn. Stat. § 176.001 (2004).

A common enterprise exists if the following three factors are found:

(1) The employers must be engaged on the same project;

(2) The employees must be working together (common activity); and

(3) In such fashion that they are subject to the same or similar hazards.

O’Malley, 549 N.W.2d at 894 (quoting McCourtie v. United States Steel Corp., 253 Minn. 501, 506, 93 N.W.2d 552, 556 (1958)).

Here, the district court found that the third factor—that the Hormel and Scheid employees were subject to the same or similar hazards—was met. While the Duffys now challenge that finding, they did not file a notice of review on this issue. “Even if the judgment below is ultimately in its favor, a party must file a notice of review to challenge the district court’s ruling on a particular issue.” City of Ramsey v. Holmberg, 548 N.W.2d 302, 305 (Minn. App. 1996), review denied (Minn. Aug. 6, 1996). In Olson v. Lyrek, this court refused to permit a respondent to challenge the district court’s finding on one of the requirements for a common enterprise when the respondent failed to file a notice of review. 582 N.W.2d 582, 584 n.1 (Minn. App. 1998). As a result, the Duffys cannot challenge the district court’s finding on the third element of a common enterprise in this appeal.

We, therefore, turn our attention to the first two factors of the common-enterprise test. The first factor is whether the employers are engaged on the same project. In making this determination, the caselaw indicates that we should consider whether the employers share functions and whether there is a long-standing relationship between them. O’Malley, 549 N.W.2d at 895. The existence of a contract between an employer and a third party does not necessarily mean that the two entities are engaged in the same project. Urbanski v. Merchants Motor Freight, Inc., 239 Minn. 63, 71, 57 N.W.2d 686, 690-91 (1953).

It is undisputed that Hormel and Scheid had a long-term business relationship. Duffy, himself, testified that there was an outside insulation contractor at Hormel “most of the time.” And Duffy identified Scheid employees who worked at the Hormel plant, including Emil Scheid and Bud Stanek, specifically noting that Stanek “was there most of the time I was there.” Both Stanek and Ed Felten testified that they had worked for Scheid at the Hormel plant. And Stanek stated that Hormel has been one of Scheid’s steady, ongoing contracts since the late 1940s. But the existence of a longstanding business relationship, alone, is not sufficient to satisfy the first factor. The critical element is that employers must be involved in the same project. Illustrative of this point is the supreme court’s finding in O’Malley that the employers were engaged in the same project because they shared equipment, assisted each other hauling materials related to the repair of a ten-mile section of Interstate 90 near Stewartville, prepared road surfaces for each other, and worked together to extract vehicles stuck in fill material. 549 N.W.2d at 895.

Here, Duffy also testified that outside contractors were generally brought in to work on new construction only and that Hormel employees performed maintenance work on existing systems. When Duffy was asked whether he knew the terms of the contract between Hormel and Scheid, he responded that he did not, but that “it was a good one.” Duffy was also asked, “[I]t sounds like Scheid and Hormel had a pretty hand and glove type relationship, is that right?” Duffy responded, “I would say so.” Duffy testified that Scheid and Hormel employees “worked together, but not too much” and that it would have been unusual for the two groups to work at the same pump at the same time.

The district court found that Hormel and Scheid were not engaged on the same project to such an extent as to satify the first factor of the common-enterprise test. In support of its finding, the district court noted Duffy’s testimony that Scheid’s employees were generally responsible for steam-insulation work in new construction while Hormel employees were responsible for the maintenance work in the plant. Because the record supports the district court’s finding, we conclude that the district court did not err in determining that the first factor had not been established.

The second factor of the common-enterprise test is whether employees work together or are engaged in a common activity. The focus of this factor is on the employees, not the employers. Schleicher v. Lunda Constr. Co., 406 N.W.2d 311, 313 (Minn. 1987). Employees are involved in common activities when their duties overlap more than minimally and are interdependent. Id. at 313-14. “[T]he statute requires a common activity of both sets of employees, and the injured employee must be engaged in that common activity.” McCourtie, 253 Minn. at 508, 93 N.W.2d at 558. Employees who work in the same place at the same time are not necessarily performing a common activity, “[a]bsent some other mutual dependence.” Carstens v. Mayers, Inc., 574 N.W.2d 733, 736 (Minn. App. 1998), review denied (Minn. Mar. 26, 1998). When companies perform different types of work and the tasks are only generally related to each other, there is no common activity. Kaiser v. N. States Power Co., 353 N.W.2d 899, 906 (Minn. 1984). And the mere fact that employees may be working toward a common goal is insufficient. Schleicher, 406 N.W.2d at 313. The district court found that the evidence submitted by appellants was insufficient as a matter of law to establish that the two companies’ employees were engaged in common activity. We agree.

As the district court noted, while Duffy, who is now deceased, made several general statements indicating that Hormel and Scheid employees “worked together,” no testimony was elicited to indicate any specific tasks that the two sets of employees performed together. Duffy testified that it would have been “unusual” for the two sets of employees to change a pump together. Duffy’s testimony that the construction crew sometimes worked with Scheid “on projects” and that any of his own crew “could” have worked with Scheid on a new installation of pumps is not sufficiently specific or certain to support a finding of a common enterprise. These broad statements do not indicate the type of interdependent work described in O’Malley. See id. at 891-92. Further, Scheid did not show that Duffy, himself, participated in any common activities. See McCourtie, 253 Minn. at 508, 93 N.W.2d at 558.

Because appellants have not established that Hormel and Scheid were engaged in a common enterprise, the district court did not err in denying summary judgment to Scheid.

Affirmed.

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