Opinion
Civil Action No. 98-1268.
February 7, 2001
OPINION
The issue of liability was tried before the Court without a jury on January 23-24, 2001, and the matter was taken under submission. Having considered the evidence and testimony adduced at trial, the record, the memoranda of counsel and the law, the Court has determined that the remaining defendants, AA Barge Cleaning ("AA") and River Barge Cleaning, Inc. ("River Barge"), were borrowed servants of Elmwood Dry Dock Repair, Inc. ("Elmwood"). It had already been determined that the plaintiff, Carlos Arboleda ("Arboleda"), was a borrowed servant of Elmwood, and that he could not sue the remaining defendants if they were also borrowed servants of Elmwood under Perron v. Bell Maintenance Fabricators, Inc., 970 F.2d 1409, 1412 (5th Cir. 1992), cert. denied, 507 U.S. 913 (1993). Therefore, judgment should be entered against the plaintiff and in favor of the remaining defendants and the liability insurer, Odyssey Re (London) Limited (f/k/a Sphere Drake Insurance Company p.l.c.).
The record establishes that the plaintiff was directly employed as a welder by L'Homme, Inc. and was working as the borrowed servant of Elmwood on April 27, 1995, when he allegedly fell from a ladder in the hold of a barge at the Elmwood facility in Algiers, Louisiana. (Rec. Docs. 53, 72). The ladder belonged to Elmwood. Arboleda claims that a worker or workers with AA or River Barge untied the ladder and caused him to fall. Either AA or River Barge employees were assigned to wash various holds of barges docked at the Elmwood facility at the time of the alleged accident. At trial, the remaining defendants claimed that because the workers of both River Barge and AA were also borrowed servants of Elmwood, Arboleda is precluded from suing the defendants by virtue of the exclusivity afforded by the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 933(i) ("LHWCA") under the rule announced in Perron, supra.
Although there is a substantial issue as to whether AA or River Barge employees were working on the date of the alleged accident, that issue does not impact on the Court's borrowed servant analysis since the testimony indicates that both of these entities had the same working relationship with Elmwood.
There was near uniformity in the testimony relevant to the issue of borrowed servant status at trial. Harry Brock ("Brock"), an Elmwood manager of the dockside facility in 1995, testified that Elmwood's business at that facility was barge wash and repair and that AA and River Barge was paid on a per barge basis by Elmwood. Brock testified that he would advise the AA and River Barge foreman, Napoleon White ("White") the type and number of barges to be cleaned. He testified that Elmwood placed the barges at the wash facility and that Elmwood determined the order in which barges were cleaned. Although Brock testified that Elmwood did not instruct the cleaners as to the details for cleaning the barges, if he saw a barge cleaner doing something incorrectly, he would tell the cleaner directly. Brock testified that he has also told an employee of safety concerns and then followed up with the foreman White. Brock acknowledged that he had the right to go to White if he had a problem with or wanted an AA or River Barge cleaner off the job and that, at least on one occasion, he asked them not to bring a specific worker back. He acknowledged that most of the barge cleaners had been at the Elmwood facility for six months to a year. According to Brock, Elmwood provided supplies to the barge cleaners working for AA and River Barge and that those supplies were kept at the Elmwood facility.
Alvin Bairnsfather ("Bairnsfather") was the assistant manager at Elmwood at the time of the alleged accident. His duties were to walk around the facility and make sure jobs were done to Elmwood's satisfaction. If he was unsatisfied with an AA or River Barge job, he would tell White. However, he would issue safety warnings and instructions directly to the cleaners, who he admitted were experienced at their jobs. Bairnsfather acknowledged that, if it were appropriate, Brock and he would get an AA or River Barge employee off the site. In addition, after 1995, Elmwood decided to hire its barge cleaners directly instead of using River Barge. Many of the same cleaners worked directly for Elmwood, and he dealt with individual cleaners in the same way as when they were contract employees. Bairnsfather also testified that Elmwood's arrangement of barges determined which would be cleaned first since they were cleaned from the middle of the river toward the bank. He testified that the barge cleaners could attend Elmwood safety meetings if they wanted to.
Druis Lirette ("Lirette"), a senior vice president with Elmwood, testified that Elmwood would withhold money on a weekly basis from the barge cleaning entity to pay insurance premiums for it, although he was not sure which company was involved. He also testified that he withheld $2,000 per week in another fund to pay claims of Elmwood employees that Elmwood had paid for the barge cleaning entity.
Rayfield Lewis ("Lewis"), the owner of River Barge, was also the supervisor for AA in 1995. His testimony clearly indicated that the two companies were separate and distinct corporate entities necessitated, in part, by the owner of AA's desire to get out of the business and back into the field. Lewis had no ownership interest in AA, and paid his River Barge employees by check with taxes withheld, as opposed to AA's habit of paying cash to the workers. Lewis testified that not all of the AA cleaners worked for River Barge, but the workers were experienced and, in any event, not much training was required of the barge cleaners. He stated that there was "no difference at all" between the way AA and River Barge workers were treated by Elmwood. Lewis also acknowledged that Elmwood could order a barge cleaner off the Elmwood job, but that Lewis might place that cleaner at another job. He also agreed that Elmwood supervisors gave instructions directly to AA and River Barge employees and that, if there was a problem, the supervisors would talk directly to the cleaner and then let White know. Lewis testified to the $2,000 per week withholding by Elmwood, which he said was placed in a fund and that when $250,000 was reached, no further withholdings would occur. He testified that the fund was in case someone got hurt and that he did not understand that requirement since there was insurance. Lewis also testified that the contracts he signed with Elmwood on behalf of River Barge were written by Elmwood. Although Lewis testified that he never attended Elmwood safety meetings, he indicated that some of his men did although they were not expected to attend.
Napoleon White ("White"), the AA and River Barge foreman, testified in deposition that Brock would tell him how many barges and which barges to clean. He acknowledged that Bairnsfather would directly instruct the barge cleaners on occasion. He also testified that Bairnsfather would directly instruct the workers on safety matters such as tying off ladders and that Bairnsfather showed the barge cleaners how to tie knots. White confirmed the experience of the barge cleaners and that not all of the AA cleaners went with River Barge. White testified that he sometimes attended Elmwood safety meetings, but that the barge cleaners did not have to attend.
The other witnesses, James Black, George Disher and Irving Morris, did not testify to the issue of borrowed servant status.
Borrowed servant status is a question of law. Melancon v. Amoco Production Co., 834 F.2d 1238, 1244 (5th Cir.), amended on other grounds, 841 F.2d 572 (5th Cir. 1988). Nine factors are considered by the Court in making this determination under Ruiz v. Shell Oil Co., 413 F.2d 310 (5th Cir. 1969). Melancon, supra. Although the Court will discuss the facts relevant to each separately, no single factor, or any combination, is determinative of borrowed servant status. Brown v. Union Oil Co. of California, 984 F.2d 674, 676 (5th Cir. 1993).
1. Who has control over the employee and the work he is performing beyond mere suggestion of details or cooperation?
Fifth Circuit opinions repeat a special emphasis on the first Ruiz factor, control. Melancon, 834 F.2d at 1244-1245; Capps, 784 F.2d at 617; Hebron v. Union Oil Co. of California, 634 F.2d 245, 247 (5th Cir. 1981); Ruiz, 413 F.2d at 312. Here, the testimony of Elmwood supervisors Brock and Bairnsfather, the AA and River Barge supervisor Lewis and foreman White establishes that an AA or River Barge worker would receive orders directly from both Elmwood personnel and White and indirectly from Elmwood personnel through the foreman White. More importantly, perhaps, the testimony indicated that there was basically no change in this procedure after Elmwood began to directly employ barge cleaners in 1995. All the testimony establishes that Elmwood supervisors determined what barges would be cleaned, where they would be cleaned and the order in which they would be cleaned. Other than inspecting for cleanliness, the Elmwood supervisors would not dictate the details of how barges were cleaned; however, the result-oriented nature of the work required little supervision as its details. Elmwood supervisors would admonish a worker observed doing something unsafely or incorrectly. On at least one remembered occasion, Elmwood ordered a barge cleaner off the job. Finally, Elmwood made substantial weekly withholdings from both entities to provide for claims and insurance.
This constitutes a level of control that exceeds mere suggestion of details or cooperation for purposes of this first factor, which weighs in favor of borrowed servant status.
2. Whose work is being performed?
With regard to the second Ruiz factor, Brock uncontroverted testimony established that Elmwood was in the business of repairing and cleaning barges. In fact, Elmwood decided to directly employ barge cleaners in 1995. By cleaning those barges, AA and River Barge furthered the business of Elmwood for purposes of this factor, which favors a finding of borrowed servant.
3. Was there an agreement or understanding between the original and borrowing employer?
The third factor focuses on the agreements between the AA and River Barge on the one hand and Elmwood on the other. The written contracts, authored by Elmwood, provided that both AA and River Barge and, for that matter, L'Homme, were independent contractors and ". . . neither Contractor nor anyone employed by it shall be deemed for any purpose to be the employee, agent, servant or representative of Elmwood. . . In the event any employee of Contractor is held to be a borrowed servant of Elmwood, Contractor shall reimburse Elmwood for any cost incurred by Elmwood due to such finding". In any event, the contract provision is not determinative of this factor where, as here, ". . . the reality of the worksite and the parties' actions in carrying out a contract . . . impliedly modify, alter, or waive express contract provisions."Melancon, 834 F.2d at 1245. See also Billizon v. Conoco, Inc., 993 F.2d 104, 105-106 (5th Cir. 1993). By separate agreement, Elmwood withheld substantial sums from Elmwood to pay claims and insurance. Under the facts and the evidence of the actual arrangement between the parties, this factor supports a finding of borrowed servant status.
4. Did the employee acquiesce in the new work situation?
The fourth Ruiz factor also weighs in favor of a finding of borrowed servant status. "The focus of this factor is whether the employee was aware of his work conditions and chose to continue working in them."Brown, 984 F.2d at 678. The testimony established that most of the cleaners working for AA and River Barge were there for over six months to a year. Id. AA and River Barge and their workers were well aware of the work conditions and chose to continue working at Elmwood, which supports a finding of borrowed servant status.
5. Did the original employer terminate his relationship with the employee?
With regard to the termination of the employee's relationship with his original employer under the fifth factor, complete severance of that relationship is not required. Capps v. N. L. Baroid-N L Industries, Inc., 784 F.2d 615, 617 (5th Cir.), cert. denied, 479 U.S. 838 (1986). Rather, it focuses on the relationship between the AA and River Barge workers and Elmwood while the borrowing occurs. Capps, 784 F.2d at 618. While the testimony establishes that Elmwood did directly and indirectly control the activities of the barge cleaners at its facility, those workers predominately dealt with the foreman White, who also dealt directly with Elmwood supervisors. However, many of the River Barge cleaners went to work for Elmwood directly in 1995. The Court finds that this factor is neutral for purposes of this analysis.
6. Who furnished the tools and place for performance?
The uncontroverted facts support a finding in favor of borrowed servant status with regard to the sixth Ruiz factor. All the testimony establishes that Elmwood provided the tools, supplies and equipment required by the barge cleaners at the Elmwood facility.
7. Was the new employment over a considerable period of time?
Most of the AA and River Barge workers worked regularly and over a period of years at the Elmwood facility and that when Elmwood directly employed barge cleaners in 1995, many of the River Barge workers went to work directly for Elmwood. This establishes a presence at Elmwood for a substantial period of time. Therefore, this seventh Ruiz factor lends support to a finding of borrowed servant status.
8. Who had the right to discharge the employee?
The eighth Ruiz factor focuses on the right of Elmwood to terminate the services of a worker such as those employed by AA or River Barge, although it is not necessary to show that Elmwood could have "fired" such a worker from the employment of AA or River Barge. Melancon, 834 F.2d at 1246; Capps, 784 F.2d at 618; Hebron, 634 F.2d at 247. The Elmwood, AA and River Barge supervisors all testified that Elmwood did possess this right of termination from the job site and, at least on one occasion, did exercise that right. This favors a finding of borrowed servant status.
9. Who had the obligation to pay the employee?
Finally, the undisputed facts indicate that AA and River Barge received the funds to pay its workers on a per-barge basis from Elmwood. The fact that Elmwood provided the funds from which the contract barge cleaners employees were paid is determinative of this final Ruiz factor.Melancon, 834 F.2d at 1246; Capps, 784 F.2d at 618. This finding is bolstered by the fact that Elmwood withheld funds owed to AA and River Barge in order to secure payment of insurance and past and future claims.
On balance, the evidence and testimony presented at trial support a finding of borrowed servant status. of the nine factors, only one is neutral to such a finding. AA and River Barge employees were borrowed servants of Elmwood at all times relevant to this matter.
Accordingly,
IT IS ORDERED that the judgment be entered against the plaintiff Carlos Arboleda and in favor of AA Barge Cleaning, River Barge Cleaning, Inc. and Odyssey Re (London) Limited (f/k/a Sphere Drake Insurance Company p.l.c.), dismissing plaintiff's claims with prejudice.