This is a trespass action which appellee, Ghrist, commenced to recover damages he suffered when a concrete wall fell upon him. The accident occurred at a construction site where appellee was employed by a subcontractor. Appellant, Cranshaw Construction, Inc., one of the named defendants in the case below, was the general contractor. Appellant argued in a motion for summary judgment that, as the general contractor, it had the status of "statutory employer" conferred by the Pennsylvania Workmen's Compensation Act.
In Nineteen North, Inc. v. Workmen's Compensation Appeal Board, 48 Pa.Cmwlth. 208, 409 A.2d 503 (1979), the Commonwealth Court explained that,
[Citing McDonald v. Levinson Steel Co., 302 Pa. 287, 295, 153 A. 424, 426 (1930)]. See Pape v. Smith, 227 Pa.Super. 80, 323 A.2d 856 (1974).
Appellant contends that it was appellee's statutory employer. It argues that it is entitled to the immunity of a statutory employer and that therefore its motion for summary judgment should have been granted.
The pleadings, depositions and interrogatories contain the following evidence. A vice-president of National Development Corporation, the owner of the property on which the accident occurred, stated in an affidavit that appellant had entered into a construction contract with the owner for the erection of buildings on that property.
The officer also stated in his affidavit that on the date of the accident the appellant occupied and was in possession of the premises and was in control of the construction project. In a deposition, a former employee of the subcontractor stated that an employee of appellant, the general contractor, was "more or less" the "boss of the job site." The witness said that the employee of the appellant was "completely the general of the whole thing."
A copy of the subcontract agreement between appellant and Mar Ray, Inc., the subcontractor, was attached to the affidavit of the president of Mar Ray, Inc.
In his complaint, appellee alleged that appellant was the general contractor employed to construct a building on the premises where the accident occurred. Appellant later introduced a copy of its contract with the owner of the premises showing it to be the general contractor for the construction of many buildings, including one on the premises in question. The subcontract with Mar Ray, Inc. indicated that Mar Ray was to perform the carpentry work on the property on which the accident occurred.
Appellee's complaint states that he was an employee of Mar Ray, Inc. As we have seen, Mar Ray, Inc. was the subcontractor.
Given the above described evidence and the lack of other evidence favorable to appellee, we find no error in the lower court's finding that there is no genuine issue as to whether appellant was appellee's statutory employer. See Pape v. Smith, supra.
The effect of this section was explained in Barbieri, Pennsylvania Workmen's Compensation & Occupational Disease (1975) as follows:
Barbieri, supra, vol. 1, § 4.09(3) (footnotes deleted) (citing cases). See Capozzoli v. Stone & Webster Engineering Corporation, 352 Pa. 183, 42 A.2d 524 (1945).
Section 203 was last amended in 1939. Section 302
We are concerned in the present case with subsections (a) and (b) of Section 302. Subsection (a) is found at 77 P.S. § 461, "coverage of employees of subcontractor"; subsection (b) is found at 77 P.S. § 462, "coverage of laborer or assistant hired by employe or contractor."
Prior to the 1974 amendments, the statute stated that it was to be conclusively presumed that the employer or contractor had agreed to pay compensation. However, the statute did contain what is termed "elective compensation" language. That is, an employer or contractor could, if he complied with the terms of the statute, opt not to pay compensation as called for in the Act.
The present statute includes no elective compensation language. Instead, it provides that contractors and employers are to pay compensation as mandated by the Act, unless the subcontractor (§ 461) or hiring employer (§ 462), primarily liable has secured its payment. The employer referred to in Section 462 is defined in the same way as in the former statute and as in Section 203 of the Act.
Id. at p. 32 § 409 (citing Menginie v. Savine, 170 Pa.Super. 582, 88 A.2d 106 (1952) where the question was whether the general contractor is liable to pay compensation to the employee of a second subcontractor with whom the general had no contract.)
In Capozzoli, supra, our Supreme Court held that, under the former statute, an agreement by a subcontractor to provide workmen's compensation for its employees does not operate to remove the statutory employer from the scope of Art. II of the Workmen's Compensation Act, even though it may operate to relieve such employer from payment of compensation by placing that responsibility upon the subcontractor.
Since Section 203 was not changed by the amendment, we see no reason to construe the alteration of Section 302 as an indirect amendment of the former section. Our research has disclosed no evidence of legislative intent to alter the result in cases like Capozzoli, in which compensation was paid by a party other than the statutory employer.
Furthermore, rules of statutory construction require that every statute be construed, if possible, to give effect to all of its provisions. See 1 Pa. C.S. § 1921(a); Hospital Association of Pennsylvania v. MacLeod, 487 Pa. 516, 410 A.2d 731 (1980).
Having concluded that appellant was entitled to immunity from liability to the appellee, Ghrist, we come finally to the question of whether he is similarly immune from being joined as an additional defendant by appellee, Wolk.
Section 303 of the Act provides:
Act of December 5, 1974, P.L. 782, No. 263, § 6; 77 P.S. § 481 (Supp. 1980-1981) (emphasis added) (footnotes deleted).
Section 303(b) prohibits the joinder of an employer as an additional defendant. Arnold v. Barbonus, 257 Pa.Super. 110, 390 A.2d 271 (1978). Hefferin v. Stempkowski, 247 Pa.Super. 366, 372 A.2d 869 (1977).
The Hefferin court wrote:
Id., 247 Pa.Super. at 369, 372 A.2d at 871.
Prior to the enactment of the 1974 amendments to Section 303 of the Act, the issue of whether an employer was liable for contribution to a third party was controlled by case law. See Giordano v. Clement Martin, Inc., 347 Pa. 61, 31 A.2d 504 (1943); Hattersley v. Bollt, 512 F.2d 209 (1975) (where the Third Circuit Court of Appeals applied cases limiting the contribution of employers to statutory employers).
Case law limited the contribution recoverable from the employer by a third party to the extent of the employer's statutory liability under the Act. See Tsarnas v. Jones & Laughlin Steel Corporation, 488 Pa. 513, 412 A.2d 1094 (1980). In the event the general contractor had been relieved of the obligation to pay compensation for which it would otherwise have been liable, no right of contribution existed. See Giordano v. Clement Martin, Inc., supra.
The present statute relieves the employer of the obligation to contribute to an award imposed upon a third party. That is, unlike the former approach, the current statute relieves an employer of the obligation to contribute, even if he has paid compensation. The statute broadens the employer's immunity; it does not diminish it. Appellee's argument that appellant's failure to pay compensation should deny it immunity from contribution conflicts with the statute. As this court's opinion in Hefferin makes clear, with the enactment of the 1974 amendments, "the Legislature made the Pennsylvania Workmen's Compensation Act a complete substitute for, not a supplement to, common law tort actions." Id., 247 Pa.Super. at 369, 372 at 871.
We have found appellant to be appellee's statutory employer. To find that it is not the "employer" referred to
We find that summary judgment should have been granted to appellant and therefore reverse the lower court's order.
DiSALLE, J., files a concurring statement.
SHERTZ, J., files a dissenting opinion.
DiSALLE, Judge, concurring:
I concur in the result. If, as the dissenting opinion suggests, it was the intention of our Legislature, in enacting the 1974 amendments to Sections 461 and 462, to "follow those jurisdictions which do not allow general contractors, who have no liability for workmen's compensation, to escape common law liability as well," it could very easily have said so, especially when it was aware that the prior language had been construed as immunizing statutory employers from such liability.
SHERTZ, Judge, dissenting:
The instant record does not establish Appellant as a statutory employer, either as a matter of fact or as a matter of law. Appellant is, therefore, neither immune from common law liability nor insulated against joinder as an additional defendant. Thus, the lower court was correct, albeit for reasons with which I respectfully disagree, in denying Appellant's motion for summary judgment.
A motion for summary judgment may properly be granted only where there is no genuine issue as to any material facts and the moving party is entitled to judgment as a matter of law. Rule 1035, Pa.R.Civ.P. The record must be viewed in the light most favorable to the non-moving party, the moving party has the burden of demonstrating that there exists no genuine issue of fact, Nash v. Chemetron Corp., 246 Pa.Super. 595,
Stipanovich v. Westinghouse Electric Corporation, 210 Pa.Super. 98, 106, 231 A.2d 894, 898 (1967).
Given the aforementioned principles, I do not believe the statutory employer concept is instantly applicable under the strict requirements as enunciated in McDonald v. Levinson, 302 Pa. 287, 153 A. 424 (1930). Furthermore, I believe the statutory employer concept is inapplicable, inasmuch as the 1974 amendments
The statutory employer defense was derived from the following provision in the Act:
Pa.Stat.Ann. tit. 77, § 52 (Purdon 1952).
The Supreme Court, in McDonald, construed this section as requiring five criteria to be satisfied in order to give rise to the status of statutory employer. They are:
McDonald, 302 Pa. at 295, 153 A. at 426.
The court below, and the majority, have concluded that the McDonald requirements have instantly been satisfied. As to the first, second, third and fifth requirements, I agree. However, the record fails to conclusively establish the fourth requirement, to wit, that Appellant entrusted a part of its regular business to the Appellee Ghrist's employer, Mar Ray, Inc.
Where, as here, a party moves for summary judgment on the ground that it is a statutory employer, and relies on a contractual obligation to sustain that status, it has the burden of proving: (a) the contractual obligation in question; (b) that its regular business consists, inter alia, of performing the work required by such contractual obligation; and (c) that part of such work was entrusted to the
Although, the contract between Appellant and the owner of the premises, in Article 2 thereof provides:
the Contract Documents have not been made part of the record. On the other hand, Appellant did make part of the record the affidavit of its Vice-President, which states, in pertinent part:
Moreover, the record contains nothing to indicate that carpentry work was a part of Appellant's regular business or that Appellant regularly employed carpenters. Resolving all doubts against Appellant, the moving party, as we must, I conclude, contrary to the view of the court below and the majority here, that the fourth McDonald requirement presents an issue of fact which must be presented to the trier of facts, at trial. See e.g., Jamison, 375 F.2d at 468.
Assuming, arguendo, that the record warranted a finding that Appellant did entrust a part of its regular business to Mar Ray, Inc. and, therefore, was entitled to statutory employer status under the McDonald criteria, I believe the Legislature, by means of the 1974 amendments to sections 461 and 462, essentially added a sixth requirement to the McDonald formulation which, as thereby enlarged, bars Appellant from asserting a statutory employer defense.
Section 461 as amended,
and Section 462, as amended,
In order to ascertain and to effectuate the legislative intent of these amendments and to give effect to all provisions of the Act as affected thereby, it is necessary to compare the foregoing provisions with the pertinent prior language of the Act.
Section 462, prior to the 1974 amendment, in pertinent part provided as follows:
Act of June 2, 1915, as amended, Pa.Stat.Ann. tit. 77, § 462.
A comparison of former section 462, with sections 461 and 462 as amended in 1974, discloses a significant similarity. Under the former section, a general contractor was conclusively presumed to have agreed to pay compensation to his subcontractor's employees, and was therefore afforded statutory employer status pursuant to section 52 of the Act, unless the general contractor took all the necessary steps to manifest his intention not to pay such compensation. In those instances where the general contractor satisfied the "unless clause," by effectively rejecting elective compensation, he was liable, in an action at law, for negligent injury of a subcontractor's employee notwithstanding that the employee received compensation from his direct employer, the subcontractor. Gallivan v. Wark Co., 288 Pa. 443, 136 A. 223 (1927).
In like manner, sections 461 and 462, as amended in 1974, provide that a general contractor shall be liable for the payment of compensation to employees of subcontractors unless the subcontractor secures the payment thereof. This language, which I consider to be clear and free of ambiguity, may not be disregarded. The legislative intent, as manifestly demonstrated thereby, mandates the conclusion that, where the subcontractor has secured the payment of compensation, the general contractor does not become liable for the payment of compensation to the subcontractor's employees. It therefore follows, logically, equitably and on the basis of well established legal precedent, that where the
Id., 298 Pa. at 553, 148 A.2d at 848 (emphasis added).
In the instant case, the record clearly demonstrates that Appellee Ghrist's employer, Mar Ray, Inc., was the subcontractor primarily liable for the payment of compensation and that it "secured its payment as provided for in this act." The Sub-Contract Agreement between Mar Ray, Inc., as "Subcontractor," and Appellant, as "Contractor," attached as an Exhibit to Appellant's Answer and New Matter, provides:
Furthermore, Appellant's Brief in support of its motion for Summary Judgment (R. 109a) frankly acknowledges that "plaintiff (Ghrist) was paid workmen's compensation by his immediate employer, Mar Ray Construction Company."
Given the foregoing facts, and the statutory language applicable when this cause of action arose, we are compelled to conclude that Appellant was not the statutory employer of Appellee Ghrist.
The majority concedes that "rules of statutory construction require that every statute be construed, if possible, to
Sections 52, 461 and 462 can and ought to be read together. Such a reading, heretofore, of sections 52 and former 462, gave rise to the McDonald requirements. Such a reading, now, requires that a sixth requirement be added to the McDonald formulation:
By thus reading sections 52, 461 and 462,
In reaching the opposite conclusion, the majority has relied on cases decided prior to the 1974 amendments. These cases, as explicated by Judge Barbieri in Pennsylvania Workmen's Compensation and Occupational Disease,
Id., 298 Pa. at 552-53, 148 A. at 848 (emphasis added).
Since 1974, however, the basis for the immunity has been eliminated since the amendments specifically provide that the general contractor is not liable, even in a reserve status, if the subcontractor has secured the requisite payment of compensation. In enacting these amendments, our Legislature has chosen to follow those jurisdictions which do not allow general contractors, who have no liability for workmen's compensation, to escape common law liability as well. E.g., Merritt Chapman & Scott Corporation v. Fredin, 307 F.2d 370 (9th Cir. 1962); Whiting v. Farnsworth & Chambers Co., 293 F.2d 45 (10th Cir. 1961); Kozoidek v. Gearbulk Ltd., 471 F.Supp. 401 (D.Md. 1979); Ryan v. New Bedford Cordage Co., 421 F.Supp. 794 (D.Vt. 1976).
The result effected by the 1974 amendments is sound and eminently fair. As pointed out in Robinson, supra, the pre-1974 immunity granted the general contractor was the benefit accorded to him for assuming the compensation burden, even if only on a reserve basis. Where, however, as under sections 461 and 462 and the instant facts, such a burden is never assumed, neither logic nor equity support a continued grant of immunity. To hold otherwise, as aptly pointed out by the trial court, is tantamount to putting a
Finally, Appellant contends, and the majority agrees, that by virtue of Appellant's status as statutory employer, its joinder as an additional defendant is barred by section 481 of the Act.
As noted above, and for the reasons there set forth, a general contractor, such as Appellant, relieved from liability to pay compensation to his subcontractor's employer due to the securing of same by the subcontractor, is not a statutory employer, is outside the Act and is as susceptible to joinder as any other third party.
Even if, however, the instant facts supported Appellant's claim to statutory employer status, section 481 would not bar joinder. That section provides, in pertinent part:
Pa.Stat.Ann. tit. 77, § 481(b) (Purdon Supp. 1981-82) (emphasis added). The words of the statute are "clear and free from all ambiguity" and they make no reference to a statutory employer. The majority, however, relying upon Hefferin v. Stempkowski, 247 Pa.Super. 366, 372 A.2d 869 (1977) concludes that to find that a statutory employer "is not the
I respectfully suggest that the majority misreads Hefferin and, as a consequence, impermissibly disregards the letter of the statute in order to "pursue its spirit." Pa.Cons.Stat. Ann. tit. 1, § 1921(b) (Purdon Supp. 1981-82). Hefferin involved an attempt by the defendant, a third party, to join the plaintiff's direct employer, as an additional defendant. No statutory employer was involved. It was in that context that the Hefferin court wrote, as noted by the majority herein:
Id., 247 Pa.Super. at 369, 372 A.2d at 871 (emphasis added). To extend section 481 to apply to a statutory employer serves only to compound the inequities thereof.
In order to find refuge with section 481, Appellant must establish that it was Appellee Ghrist's employer, since it obviously cannot come within any other of the therein enumerated categories granted immunity from liability to a third party.
To determine whether Appellant can successfully claim to be Ghrist's employer, we look to the Act in its entirety, since we are constrained to give effect to all its provisions. Pa. Cons.Stat.Ann. tit. 1, § 1921(a) (Purdon Supp. 1981-82). In so doing, we find that the Act defines "employer" as follows:
Pa.Stat.Ann. tit. 77, § 21 (emphasis added). This Court, in considering the foregoing definition, has stated.
Rodgers v. P-G Publishing Co., 194 Pa.Super. 207, 166 A.2d 544, 546 (1961). See also Coleman v. Board of Education, 477 Pa. 414, 421-22, 383 A.2d 1275, 1279 (1975); Frederico Granero Co. v. Workmen's Compensation Appeal Board, 43 Pa.Cmwlth. 308, 402 A.2d 312 (1979).
As the Court of Appeals for the Third Circuit, relying upon Zimmer v. Casey, 296 Pa. 529, 146 A. 130 (1929), has appropriately noted:
Mays v. Liberty Mutual Insurance Company, 323 F.2d 174, 177 (3d Cir. 1963) (citation omitted).
The instant record fails to disclose any factual basis for finding that Appellant was the employer of Appellee Ghrist. There is, therefore, no legal impediment to the joinder of Appellant as an additional defendant.
I would therefore affirm the trial court's denial of Appellant's Motion for Summary Judgment.
Appellant's motion followed its assertion of this claim in its Answer to the New Matter filed by appellee, Paul Wolk. In New Matter, Wolk joined appellant as an additional defendant in order to protect his right to contribution or indemnity. The question of whether appellant can be so joined will be discussed at the conclusion of this opinion.