Opinion
11-P-44
11-09-2011
JEFFREY A. BORN v. PRECISION CASTPARTS CORP.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
We discern no error in the conclusion by the motion judge, expressed in his thorough and thoughtful memorandum of decision, that the summary judgment record presents no genuine issue of any material fact on the question whether the defendant Precision Castparts Corp. (PCC) is entitled to judgment as matter of law.
The plaintiff's claims against two other defendants, Simonds International Corporation and A B Engineering Company, were subject to a settlement and a stipulation of dismissal and are not before us.
The plaintiff, Jeffrey A. Born, contends that PCC may be held liable for his injuries under the so-called 'direct participant' theory of liability. See Forsythe v. Clark USA, Inc., 224 Ill. 2d 274 (2007). However, as the motion judge observed, the summary judgment record, viewed in the light most favorable to Born, furnishes no evidence beyond speculation to establish that PCC directed its subsidiary Wyman-Gordon Company (Wyman-Gordon) to require or allow its employees to operate the machine that caused Born's injury in a defective condition or an unsafe manner.
The plaintiff has effectively conceded that no other theory is at issue.
As the motion judge observed, the direct participant theory of liability has never been recognized in any Massachusetts case in the manner in which Born seeks to have it applied. (Indeed, it appears that Forsythe has never been cited in a Massachusetts appellate opinion.) However, because we conclude that the facts developed through the summary judgment record entitle PCC to judgment even if the theory were open to Born, we need not consider whether the theory is available to a plaintiff under Massachusetts law, or alternatively whether the discussion in My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614, 619 (1968), of direct participation by a parent corporation in the activities of its subsidiary as a ground to 'pierce the corporate veil' precludes treatment of such participation as an independent basis for direct liability on the part of the parent, without extending to the parent the benefit of the immunity accorded to its employer subsidiary under the workers' compensation statute. See G. L. c. 152, §§ 23, 24.
Born points to PCC's imposition of new financial oversight mechanisms, which allocated costs (including maintenance costs) to individual cost centers, and to deposition testimony which may be construed to suggest the possibility that the new financial oversight mechanisms created incentives for production units to cut back on maintenance in order to reduce such expenses. However, 'allegations of mere budgetary mismanagement alone do not give rise to the application of direct participant liability.' Forsythe v. Clark USA, Inc., supra at 290. Instead, in order for direct participant liability to arise, such budgetary mismanagement must be 'accompanied by the parent's negligent direction or authorization of the manner in which the subsidiary accomplishes that budget.' Ibid.
In the context of the present case, while it is certainly true that close attention to cost center accounting might create some incentive in operating units to reduce costs of all kinds (including maintenance), there is no evidence in the summary judgment record that PCC directed Wyman-Gordon to engage in any act that would foreseeably result in an unsafe working condition (or to refrain from taking any act that would correct a known unsafe working condition). Indeed, the deposition testimony of senior maintenance supervisor James Caputo (on which the plaintiff places great reliance) was that he was unaware of any instance in which managers deferred required maintenance out of concern for cost. As the motion judge observed, '[e]vidence that a saw was operated at Wyman-Gordon in a hazardous manner is quite simply not evidence that the parent corporation directed the subsidiary to engage in unsafe practices.'
Indeed, as the motion judge observed, the summary judgment record contains no evidence that anyone informed the PCC officers who also served in executive positions at Wyman-Gordon that the stock cutting saw that caused Born's injury was being operated in an unsafe manner. Invited at oral argument to submit (in a letter pursuant to Mass.R.A.P. 16[l], as amended, 386 Mass. 1247 [1982]) any record evidence that the need for maintenance to address the defective saw was discussed at any meeting at which Ericksen (an officer of both PCC and Wyman-Gordon) was present, Born cites only testimony by Caputo regarding area manager staff meetings, at which various matters, including unspecified maintenance issues, were discussed. Nothing in that testimony identifies any expressed concern about operation of the stock cutting saw. Pointedly, however, when asked to clarify the discussion of maintenance issues at area manager staff meetings, Caputo specifically denied that area managers expressed any concern about pressure being placed on them not to perform necessary maintenance.
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Judgment affirmed.
By the Court (Green, Hanlon & Carhart, JJ.),