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In re McKinney Salvage Heavy Lifting, Inc.

United States District Court, E.D. Louisiana
Dec 27, 2001
CIVIL ACTION 00-966 C/W 00-2908, SECTION "T"(5) (E.D. La. Dec. 27, 2001)

Opinion

CIVIL ACTION 00-966 C/W 00-2908, SECTION "T"(5)

December 27, 2001


Before the Court is a Motion for Summary Judgment filed on behalf of the defendant. Raymond McDougall. Oral argument was waived by the parties and the matter was submitted on the briefs only. The Court, having considered the memoranda filed, the evidence submitted, the law and applicable jurisprudence, is fully advised in the premises and ready to rule.

ORDER AND REASONS

I. BACKGROUND:

On September 29, 1999, Charles Hickman, III ("Hickman"), a Project Manager employed by the AmClyde Gulf Coast Division of Halter Marine Group, Inc. ("AmClyde"), was injured while working on the construction of a derrick barge being built for the United States Army. Before retiring in 1997. Raymond McDougall was also employed as a Project Manager for Utility Steel. a company purchased by Halter Marine. After retiring, McDougall continued to perform work for AmClyde, however on a part-time basis. There was no written contract between McDougall and AmClyde; McDougall was responsible for all taxes to be paid; McDougall periodically invoiced AmClyde for work performed; McDougall only worked on specified projects when called upon by AmClyde; and, all payments for work performed were made directly to Mac-Tec, Limited, a Subchapter S Corporation, of which McDougall and his wife were the principals. McDougall was working. pursuant to this arrangement, on the derrick barge when Hickman was injured.

Hickman has alleged coverage for his injuries under the Longshoremen's and Harbor Worker's Compensation Act. He and his wife filed claims against: (1) McKinney Towing, Inc. and McKinney Salvage Heavy Lift, Inc. pursuant to 33 U.S.C.A. § 905(b) and the general maritime Law (2) a product liability claim against Certex Lifting Products Services, Certex-America, and Certex-General (collectively "Certex"); and, (3) a general maritime negligence claim against Raymond McDougall(Civil Action 00-2908). By Motion for Summary Judgment, the claims against Certex were dismissed on November 29, 2001. Raymond McDougall now brings this present Motion for Summary Judgment.

II. ARGUMENTS OF THE RESPECTIVE PARTIES

A. Arguments of McDougall in Support:

McDougall argues that he is an "employee" of AmClyde for purposes of the LHWCA. 33 U.S C.A. § 902(3). As such, Hickman and McDougall would be co-employees and Hickman would not have a tort claim against McDougall. 33 U.S.C.A. § 933(i); Perron v. Bell Maintenance and Fabricators, Inc., 970 F.2d 1409 (5th Cir. 1992).

McDougall refers to the "relative nature of the work" test as the proper test to determine an employer — employee relationship. Haynie v. Tideland Welding Service. 631 F.2d 1242 (5th Cir. 1980). The test was set forth in Oilfield Safety and Machine Specialities v. Harman Unlimited. Inc., 625 F.2d 1248 (5th Cir. 1980). There are two elements: (1) the nature of the alleged employee's work, and (2) the relation of that work to the employer's business. Oilfield Safety, 625 F.2d at 1253. McDougall claims that the part-time work performed for AmClyde was the same as that which he performed for Utility Steel in a full-time capacity, the exception being that he did not have the full responsibility or supervisory authority of a Project Manager in his part-time status. McDougall argues that all of the part-time work performed was part of AmClyde's regular business: claiming to be part of an AmClyde crew involved in the assembly of the derrick barge.

McDougall also notes the borrowed employee test and that the Fifth Circuit has recognized its factors when determining an employer-employee relationship. Gaudet v. Exxon, 562 F.2d 351 (5th Cir. 1977). UnderGaudet, two factors were deemed relevant: (1) whether the employer was responsible for the working conditions experienced by the alleged employee and the inherent risks therein; and, (2) was the alleged employee's work of such a duration that he could reasonably be presumed to have evaluated these risks and acquiesced to them. Gaudet, 562 F.2d at 357. McDougall asserts that: AmClyde determined when and where he would work, and had the right to fire him; AmClyde supplied all necessary equipment; and, all work performed was completed at AmClyde's facility. McDougall claims that he was doing the same work as he had performed for AmClyde on a full-time basis, thus he was familiar with the risks and acquiesced thereto.

Lastly, McDougall attempts to rebut the arguments in opposition to his Motion arguing that he was not an employee of Mac-Tec. Limited. He claims that Mac-Tec was only used as a tax savings vehicle for he and his wife and that Mac-Tec conducted no business whatsoever and did not have any employees. He notes Mac-Tec's corporate records to argue that no compensation was paid to any officers of the corporation nor were salaries or wages paid to any employees.

B. Arguments in Opposition:

The non-moving parties (collectively "non-movants") argue that McDougall was not an employee of AmClyde at the time Hickman was injured. Non-movants assert that McDougall's employment with Utility Steel-AmClyde ended on February 3, 1994 and did not resume thereafter. They cite McDougall's claim for unemployment benefits received on February 11, 1994 as evidence of his termination of employment with AmClyde and note that McDougall cited "lack of work" as his reason for termination of employment.

The parties in opposition further assert that McDougall is actually an employee of Mac-Tec, Limited; McDougall invoiced AmClyde instructing that payments were to be made directly to Mac-Tec and not McDougall individually. Additionally. the parties note that AmClyde did not pay any taxes and that McDougall was not on AmClyde's payroll. The non-movants also point out that McDougall failed to note the existence of Mac-Tec in his original Memorandum in Support or in his original affidavit to this Court, and that McDougall did not acknowledge the corporation's function until his Supplemental Memorandum. As such, the parties in opposition assert that McDougall was in fact an employee of Mac-Tec, performing work for AmClyde not as a part-time employee, but as an independent contractor.

Lastly, the opposition argues that the function for which McDougall was hired by AmClyde required a great deal of skill and experience. They claim that McDougall was there as a highly skilled professional. not merely a day laborer and as such was not subject to the control of Hickman.

III. LEGAL ANALYSIS

A. Law on Summary Judgment

The Federal Rules of Civil Procedure provide that summary judgment should be granted only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. Civ. P. 56(c). The party moving for summary judgment bears the initial responsibility of informing the district court of the basis for its motion. and identify those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. Stults v. Conoco, Inc., 76 F.3d 651, 655-56 (5th Cir. 1996) (citing Skotak v. Tenneco Resins. Inc., 953 F.2d 909, 912-13 (5th Cir.) (quoting Celotex Corp v. Catrett, 477 U.S. 317.323 (1986)), cert. denied, 506 U.S. 832 (1992)). When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. The nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis supplied); Tubacex. Inc. v. M/V RISAN, 45 F.3d 951, 954 (5th Cir. 1995).

Thus, where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial." Matsushita Elec. Indus. Co., 475 U.S. at 588. Finally, the Court notes that substantive law determines the materiality of facts and only "facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

B. Court's Analysis

As previously stated. McDougall argues that he is an "employee" of AmClyde under the "relation to work" test of Oilfield Safety, supra, and the borrowed employee — "right to control" test of Gaudet. supra, for purposes of § 902(3) of the LHWCA. McDougall applies the factors enumerated in Oilfield Safety urging this Court to hold that he was AmClyde's employee. Of these factors, the Court listed "the degree to which the work constitutes a separate calling or enterprise" to apply in evaluating the nature of McDougall's work. Oilfield Safety, 625 F.2d at 1253. This Court looks to many elements of the relationship between McDougall and AmClyde when considering this factor; more specifically, the method of payment, directly from AmClyde to Mac-Tec: the fact that AmClyde was not responsible for McDougall's taxes; the irregular invoicing at McDougall's discretion; and since Mac-Tec made no distributions of salary or officer compensation. As such, it is the holding of this Court that McDougall's work constituted an enterprise separate from AmClyde.

In light of the relationship of McDougall's work to that of AmClyde, the Oilfleld Safety factors further indicate the lack of an employer-employee relationship. Amongst those factors listed are "whether [McDougall's] work [was] continuous or intermittent, and whether the duration of [his] work [was] sufficient to amount to the hiring of continuing services as distinguished from the contracting for the completion of a particular job". Oilfield Safety, 625 F.2d at 1253. Both sides asserted to this Court that the work McDougall performed in his part-time status could be a few hours, a fex day's, or sometimes a few weeks. While there was not a written contract noting a particular job, McDougall was called upon intermittently by AmClydc to bring his experience and expertise to a particular project. McDougall would then invoice AmClyde for payment when he saw fit. not at AmClyde's request. Considering the intermittent nature and since McDougall was called upon for particular jobs, this Court holds that the relationship of McDougall's work to that of AmClyde was insufficient to show an employer-employee relationship between the two parties. It is additionally noted that McDougall's reference to the elements of the "right to control" test from Gaudet is inapplicable. This Fifth Circuit in Oilfield Safety noted that while the "right to control" test may not be irrelevant, "the proper test to be used in determining whether an employer-employee relationship exists is the relative nature of the work test". Oilfield Safety, 625 F.2d at 1254. As such, this Court rests its reasoning on the Oilfield Safety factors noted above and does not address claimant's arguments referring to the factors outlined in Gaudet.

The parties in opposition claim that McDougall is not an employee of AmClyde, but is actually an employee of Mae-Tec. McDougall claims that Mac-Tec existed only as a tax savings device and that the corporation did not conduct any business and did not have any employees. Not surprisingly, the non-moving parties argue that Mac-Tec did conduct business with AmClyde and McDougall was its employee. In considering this Motion for Summary Judgment. this Court does not need to reach a factual finding on this issue. It is simply this Court's holding that the nonmoving parties have proven "specific facts [to show] that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis supplied); Tubacex. Inc. v. M/V RISAN, 45 F.3d 951, 954 (5th Cir. 1995).

Therefore, in accordance with Rule 56(e) of the Federal Rules of Civil Procedure, the Court has determined that the motion for summary judgment discussed above is not "appropriate" under the circumstances involved in this case.

Accordingly.

IT IS ORDERED that the Motion for Summary Judgement, filed on behalf of Raymond McDougall be and the same is hereby DENIED.


Summaries of

In re McKinney Salvage Heavy Lifting, Inc.

United States District Court, E.D. Louisiana
Dec 27, 2001
CIVIL ACTION 00-966 C/W 00-2908, SECTION "T"(5) (E.D. La. Dec. 27, 2001)
Case details for

In re McKinney Salvage Heavy Lifting, Inc.

Case Details

Full title:IN RE McKINNEY SALVAGE HEAVY LIFTING, INC. AS THE OWNER OF THE D/B ROBYNE…

Court:United States District Court, E.D. Louisiana

Date published: Dec 27, 2001

Citations

CIVIL ACTION 00-966 C/W 00-2908, SECTION "T"(5) (E.D. La. Dec. 27, 2001)