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HomeMy WebLinkAbout90-3357 civil/7 JAMES MATTHEW HOCKER, Plaintiff V, P.C.M. CONSTRUCTION, INC., DAYS INN AIRPORT, HARRISBURG AIRPORT : PARTNERSHIP, HEINZ MATHIS, : and WINFORD-LINDSAY : ASSOCIATES, INC., Defendants · IN THE COURT OF COMMON PLEAS OF · CUMBERLAND COUNTY, PENNSYLVANIA ·NO. 3357 CIVIL 1990 · · CIVIL ACTION- LAW IN RE: DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT BEFORE HOFFER, P.J., HESS, GUIDO, JJ. ORDER OF COURT AND NOW, this~I~'~ day of FEBRUARY, 2000, the Motion for Summary Judgment of P.C.M. Construction, Inc., is GRANTED. The Motion for Summary Judgment of Harrisburg Airport Partnership is DENIED. By the Edward E. Guido, J. Marcus A. McKnight, III, Esquire For the Plaintiff Gregory S. Hirtzel, Esquire For Defendant P.C.M. Construction, Inc. David A. Fitzsimons, Esquire For Defendant Harrisburg Airport Partnership :sld JAMES MATTHEW HOCKER, Plaintiff V, P.C.M. CONSTRUCTION, INC., DAYS INN AIRPORT, HARRISBURG AIRPORT · IN THE COURT OF COMMON PLEAS OF · CUMBERLAND COUNTY, PENNSYLVANIA · ' NO. 3357 CIVIL 1990 · PARTNERSHIP, HEINZ MATHIS, · CIVIL ACTION- LAW and WINFORD-LINDSAY ASSOCIATES, INC., Defendants IN RE: DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT BEFORE HOFFER, P.J., HESS. GUIDO. JJ. OPINION AND ORDER OF COURT The present case arises out of a construction site accident that occurred in 1988. Plaintiff, an employee of a subcontractor, commenced this negligence action against several defendants. He alleges a failure to provide basic safety procedures on the work site. The two remaining defendants,~ Harrisburg Airport Parmership (hereinafter HAP) and P.C.M. Construction, Inc. (hereinafter PCM), have filed separate motions for summary judgment which are currently before us. The parties have briefed and argued their respective positions. This matter is now ready for disposition. ~ The other original defendants are no longer parties to the action, having been dismissed over the years for various reasons. 3357 CIVIL 1990 FACTUAL BACKGROUND What follows is a recitation of the facts viewed in the light most favorable to the plaintiff as the non-moving party. HAP is a Pennsylvania partnership with its principal offices located at 422 Allegheny Street, Hollidaysburg, Pennsylvania. PCM is a Pennsylvania corporation engaged in commercial construction with its principal offices located at 422 Allegheny Street, Hollidaysburg, Pennsylvania. The only partners in HAP were P. Jules Patt (hereinafter "Patt") who owned an 85% interest and Heinz Mathis (hereinafter "Mathis") who owned a 15% interest.2 Patt was the sole shareholder and president of PCM.3 Patt was a real estate developer involved in numerous partnerships.4 He generally traded individually under the fictitious name "The Patt Organization".5 Mathis was a paid employee of Patt individually.6 Pursuant to the HAP partnership agreement, any decision regarding the management and business of the partnership could be made by Patt alone as the "Managing General Partner.''7 HAP was the owner of undeveloped land in Lower Swatara Township, Dauphin County. In early March of 1998, it entered into an agreement which called for PCM to construct a motel on that property. Patt signed the agreement on behalf of both HAP and PCM.8 2 Patt Deposition pp. 10-11. 3 Patt Deposition pp. 25-26. 4 Patt Deposition pp. 4-5. 5 Patt Deposition p. 10. 6 Patt Deposition p. 11. 7 Patt Deposition pp. 16-17 and Exhibit 1. 8 He signed as general managing partner of HAP and as president of PCM. 3357 CIVIL 1990 Mathis was not involved in the construction phase of the motel.9 Patt chose the contractor and the architect.~° As the managing general partner of HAP, Patt was actively engaged at the job site as construction progressed.~ However, during conferences at the job site he "almost always" represented HAP.~2 Plaintiff was employed by R & R Plasterer & Drywall Company (R&R). Pursuant to a written agreement, PCM subcontracted with R & R to perform a portion of the work on the motel.13 Plaintiff was working on the job site as an employee orR & R when he was injured. PCM's motion for summary judgment is based upon its claimed stares as a statutory employer under the Worker's Compensation Act.TM HAP claims that it is entitled to summary judgment because it is not responsible for the actions of the general contractor.~5 We will discuss each motion separately. DISCUSSION Each Defendant's motion for summary judgment is based upon Pa. Rule of Civil Procedure 1035.2 which provides as follows' After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law (1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or (2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear 9 Mathis Deposition p. 34. l0 Mathis Deposition p. 64. ~ Patt Deposition p. 34. 22 Patt Deposition p. 46. 13 Patt Deposition pp. 68-69. ~4 77 P.S. § 52. ~5 See Restatement (Second) Torts § 409 (1965). 3357 CIVIL 1990 the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. In determining whether to grant a motion for summary judgment we must examine the record in the light most favorable to the non-moving party. Ertel v. Patriot-News Co.., 544 Pa. 93,674 A.2d 1038 (1996). All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. /at. Summary judgment may only be granted in cases that are clear and free from doubt. Hoffman v, Brandywine Hosp., 443 Pa. Super. 245, 661 A.2d 397 (1995). PCM As A Statutory Employer. One who is considered to be a statutory employer under Section 203 of the Worker's Compensation Act (77 P.S. § 52) is required to pay worker's compensation benefits to a statutory employee who is injured on the job.~6 As a result of these obligations imposed under the act, the statutory employer is entitled to the benefit of the immunity provisions of the act. McDonald v. Levinson Steel Co., 302 Pa. 287, 153 A 424 (1930).~7 The landmark case of McDonald v. Levins0n Steel Co., supra, enunciated the elements necessary to create the statutory employment relationship. They are as follows: (1) An employer who is under contract with an owner or one in the position of an owner. (2) Premises.occupied by or under the control of such employer. (3) A subcontract made by such employer. 16 77 P.S. § 462. ~7 The immunity provisions are contained in 77 P.S. § 481. 3357 CIVIL 1990 (4) Part of the employer's regular business entrusted to such subcontractor. (5) An employee of such subcontractor. 302 Pa. 287, at 294-295. These elements have been strictly construed over the decades. Dougherty v. Conduit and Foundation Corp., 449 Pa. Super. 405,674 A.2d 262 (1996). In the instant case, plaintiff concedes, as he must, that elements 2 through 5 of the McDonald test have been met. He argues that there is a genuine issue of fact as to whether HAP and PCM can be regarded as a single entity. If they can be, then the first element of McDonald is missing and PCM cannot raise its stares as a statutory employee to shield itself from liability for its negligence.~8 As a general role a corporation will be regarded as an independent entity, even if its stock is owned entirely by one person. College Watercolor Group, Inc. v. William H. Newbauer, Inc., 468 Pa. 103, 117, 360 A.2d 200, 207 (1976). Therefore, we must consider PCM and HAP as separate entities unless, at the very least, there are facts of record which would justify a piercing of PCM's corporate veil. The Pennsylvania Supreme Court summarized the law with regard to piercing the corporate veil in Lumax Industries, Inc. v. Aultman, 543 Pa. 38, 669 A.2d 893 (1995). As the Court stated: We note at the outset that there is a strong presumption in Pennsylvania against piercing the corporate veil. Wedner v. Unemployment Board, 449 Pa. 460, 464, 296 A.2d 792, 794 (1972) ("[A]ny court must start from the general role that the corporate entity should be recognized and upheld, unless specific, unusual circumstances call for an exception .... Care should be taken on all occasions to avoid making the entire theory of corporate entity * * * useless. Zubik v. Zubik, 384 F.2d 267, 273 (3d Cir. 1967))") .... t8 The McDonald case, supra, also stands for the proposition that an "owner" cannot be an "employer" for purposes of the first element. 3357 CIVIL 1990 Commonwealth Court has set out the factors to be considered in disregarding the corporate form as follows: undercapitalization, failure to adhere to corporate formalities, substantial intermingling of corporate and personal affairs and use of the corporate form to perpetrate a fraud. Department of Environmental Resources v. Peggs Run Coal Co, 55 Comwlth. Ct. 312, 423 A.2d 765 (1980). Kaites v. Dept. of Environmental Resources, 108 Pa. Cmwlth. 267, 273, 529 A.2d 1148, 1151 (1987). Lumax, 543 Pa. at 42, 669 A.2d at 895. In refusing to pierce the corporate veil in the case before it, the Lumax Court went on to state. The holding in this case well illustrates the sanctity of the corporate structure in Pennsylvania. The corporate veil will not be pierced in this jurisdiction absent the factors of the sort expressed in Kaites, supra. In the instant case, there are no facts of record which would indicate that PCM was undercapitalized or failed to adhere to corporate formalities.~9 Likewise there is no evidence of a substantial intermixing of PCM's affairs with those of Patt or that Patt used PCM to perpetrate a fraud. Since there are not any facts of record which would justify the piercing of PCM's corporate veil, it must be considered a separate legal entity. Consequently, we are satisfied that all of the McDonald criteria necessary for PCM to qualify as a statutory employer have been met. We are, therefore, compelled to grant its motion for summary judgment. ~9 There are facts of record which might be construed to Show that HAP was undercapitalized or was indistinguishable from Patt. However, those facts are irrelevant as to the issue of piercing PCM's corporate veil. 3357 CIVIL 1990 HAP's Motion. HAP contends that it had no control over the job site. Therefore, it argues that it cannot be held liable for PCM's negligence. As a general rule, one who hires an independent contractor is not liable for injuries caused by the contractor's negligence. Steiner v. Bell 0fPennsylvania, 426 Pa. Super. 84, 626 A.2d 584 (1993), citing Restatement (Second) Torts § 409. The underlying rationale for this principle is set forth in Comment b to Section '409 as follows: [S]ince [the one who hires the independent contractor] has no power of control over the manner in which the work is to be done by the contractor, it is to be regarded as the contractor's own enterprise, and he, rather than the [one who hired him] is the proper party to be charged with the responsibility of preventing the risk, and beating and distributing it. There is, however, an exception to the general rule. Restatement (Second) Torts § 414 provides as follows: One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care. We are satisfied that there are sufficient facts in this case from which the jury could infer that HAP, through its managing partner Patt, maintained sufficient control over the project to subject it to liability for PCM's negligence. This is particularly true in light of the fact that Patt wore the dual hats of managing partner of HAP and president of PCM.2° See Byrd v. Merwin, 456 Pa. 516, 317 A.2d 280, (1974). 20 Even if the jury were to f'md that HAP, through Patt, retained control over part of the work, PCM's status of statutory employer would be unaffected. The second element of the McDonald test i.e. premises occupied or under the control of the contractor, is satisfied if the contractor either occupies the premises or controls the premises. Emerson v. Leave~!y McCollum, 725 A.2d 807 (Pa. Super. 1999). 3357 CIVIL 1990 For the reasons set forth in the foregoing opinion, we will enter the order that follow. ORDER OF COURT AND NOW, this 22m) day of FEBRUARY, 2000, the Motion for Summary Judgment of P.C.M. Construction, Inc., is GRANTED. The Motion for Summary Judgment of Harrisburg Airport Partnership is DENIED. By the Court, /s/Edward E. Guido Edward E. Guido, J. Marcus A. McKnight, Esquire For the Plaintiff Gregory S. Hirtzel, Esquire For Defendant P.C.M. Construction, Inc. David A. Fitzsimons, Esquire For Defendant Harrisburg Airport Partnership :sld