Opinion
Nos. C1-00-1646, C1-00-1680, C7-00-1814.
Filed May 22, 2001.
Appeal from the District Court, Hennepin County, File No. W.D. 98-004375.
Walter E. Sawicki, and Wilbur W. Fluegel, (for appellant-respondent Montano)
Timothy W. Waldeck, (for respondent-appellant ASAP); and Michael J. Sauntry, (for respondent-appellant BFI)
Considered and decided by Amundson, Presiding Judge, Klaphake, Judge, and Willis, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Decedent was working at a waste management company's warehouse when she was struck and killed by a forklift operated by a co-worker, whose paycheck was issued by an employment service. Appellant, a trustee for decedent's heirs, brought a wrongful death action against the employment service, which then sought indemnification and contribution from the waste management company. The waste management company cross-claimed against the employment service for indemnification and moved for costs and attorney fees. The district court dismissed appellant's complaint against the employment service, denied appellant's motion to amend the complaint, granted the employment service's motion for summary judgment on the waste management company's indemnification claim, granted the waste management company's motion for summary judgment on the employment service's claim, and granted the waste management company's motion for costs and attorney fees. The parties challenge the rulings in these consolidated appeals. We affirm in part and reverse in part.
FACTS
In January 1996, Bradley R. Mitchell commenced employment at BFI Waste System of North America, Inc., d/b/a BFI Recyclery (BFI) as a forklift driver. After beginning the hiring process, Mitchell was told by BFI that he would be "hired" and paid through an employment service identified only as MinnTemps. Mitchell did not visit the MinnTemps facility at the time of hiring or before he began working at BFI. Although MinnTemps paid Mitchell's salary, he received no benefits from them, and BFI alone set his pay rate and provided him with all training.
During the spring of 1997, BFI terminated its relationship with MinnTemps and signed a "temporary personnel supply agreement" with ASAP Employment Services, Inc. (ASAP). During that time, BFI requested that ASAP "hire" Mitchell, and Mitchell filled out an employment form for ASAP. BFI set Mitchell's pay rate and, thereafter, ASAP issued Mitchell his paychecks. In billing BFI, ASAP added a premium to Mitchell's hourly rate to reflect its costs. As with MinnTemps, ASAP provided no benefits or training. Mitchell worked at BFI exclusively, and BFI alone scheduled his work time and set his duties. Both BFI and ASAP retained the right to discharge Mitchell.
On January 23, 1998, Mitchell was loading empty bins onto his forklift and driving them across the BFI warehouse floor when he struck another worker, Asuncion Godines, as she was leaving the lunchroom and crossing through the warehouse on a designated crosswalk. Mitchell was driving with an obstructed view and was apparently unaware that he had hit Godines. A coworker yelled to Mitchell to stop and Mitchell let up on the gas, felt a drag on the forklift, and eventually stopped 10 to 15 feet later, about 35 feet from where he first hit Godines. Godines died from her injuries.
Pursuant to the Workers' Compensation Act, Minn. Stat. §§ 176.001-.862 (2000), BFI paid $343.85 for ambulance services, $7,191.23 in medical expenses, and $6,041.54 in funeral expenses. Because Godines died without dependents eligible to receive death benefits under the Workers Compensation Act, BFI also paid a fee of $25,000 to the Workers' Compensation Special Compensation Fund.
Lino Vega Montano, a trustee for Godines's heirs, filed a complaint alleging negligence against ASAP. ASAP answered and filed a third party complaint against BFI for indemnification and contribution. BFI raised the workers' compensation exclusivity defense in its answer and tendered defense to ASAP. BFI also subsequently moved to intervene to recover its workers' compensation payments from any successful third party claim and filed a cross-claim for indemnification based on its contract with ASAP. Upon the parties' motions for summary judgment, the district court dismissed the complaint against ASAP, denied Montano's alternative motion to amend the complaint to allege gross negligence on the part of Mitchell, dismissed ASAP's claims for indemnification and contribution against BFI, dismissed BFI's claim for indemnification against ASAP, and granted BFI's motion for costs and attorneys' fees, awarding it $40,000. After the entry of final judgment, all three parties appealed, and we have consolidated their appeals for review.
DECISION
On appeal from summary judgment, we inquire whether there are any genuine issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990) (citation omitted). We review the evidence "in the light most favorable to the party against whom judgment was granted." Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).
I.
Montano contends that the district court erroneously granted summary judgment in favor of ASAP. First, he claims that a material question of fact exists about whether the "loaned servant" doctrine applies to this case. The district court applied the doctrine, concluding that it barred Montano's common law claim against ASAP because, as Mitchell's co-employer, the Workers' Compensation Act provided the sole remedy. Second, Montano argues that the district court's alternate conclusion that BFI and ASAP were engaged in a "common enterprise" is not an appropriate matter to be decided on summary judgment under these facts. Third, Montano argues that Mitchell's conduct involved gross negligence in which case the workers' compensation exclusivity provision would not bar a negligence action against BFI or ASAP. Finally, Montano argues that the district court abused its discretion by prohibiting Montano from amending his complaint to allege gross negligence against Mitchell.
a. Employment status
Before reviewing the issues Montano raises in his brief, it is necessary to answer the threshold question: Who employed Mitchell? The parties do not dispute that Mitchell was a BFI employee. However, the issue of whether he was employed by ASAP is contested and resolution of that issue will control several issues raised on appeal.
The labels given by the parties themselves do not necessarily determine whether a relationship is that of employer and employee; rather that relationship is determined by law. Johnson v. Independent School District No. 535, 291 N.W.2d 699, 702 (Minn. 1980). No single test exists for determining that relationship. Boland v. Morrill, 270 Minn. 86, 91, 132 N.W.2d 711, 715 (1965). But, in deciding whether a worker is deemed an "employee," reference is made to the following factors:
(1) The right to control the means and manner of performance; (2) the mode of payment; (3) the furnishing of material or tools; (4) the control of the premises where the work is done; and (5) the right of the employer to discharge.Guhlke v. Roberts Truck Lines, 268 Minn. 141, 143, 128 N.W.2d 324, 326 (1964) (citations omitted). The right of the employer to control the physical movements of the employee, however, is the single most important element in most situations. Boland, 270 Minn. at 92, 132 N.W.2d at 715 (citation omitted).
The evidence here, viewed most favorably to Montano, demonstrates that Mitchell was not an employee of ASAP. BFI controlled the means and manner of Mitchell's performance of his job, ASAP did not. ASAP neither hired nor screened Mitchell; it simply received Mitchell's application made in accordance with BFI's request and hired him at their direction. BFI alone determined all of Mitchell's scheduling and assignments. Although ASAP issued Mitchell his paychecks, BFI determined Mitchell's rate of pay and instructed ASAP to pay Mitchell based on the rates it set. BFI furnished Mitchell with all equipment and training. BFI controlled the premises where Mitchell's work occurred. ASAP's only control over Mitchell was the right to discharge him, which was a right shared with BFI.
Because Mitchell was not an ASAP employee, but only an employee of BFI, Montano's arguments involving the loaned servant and common enterprise doctrines do not apply to this case . See Meiske v. Lift-Stak Stor, Inc., 599 N.W.2d 175, 177 (Minn.App. 1999) (loaned servant doctrine premised on simultaneous employment by two entities: a general employer and a special employer); O'Malley v. Ulland Bros., 549 N.W.2d 889, 894 (Minn.App. 1996) (common enterprise doctrine based on injury to employee of one employer caused by employee of another employer while working on a common project).
b. Negligence action
Since Mitchell was not an employee of ASAP, Montano is not barred by the workers' compensation exclusivity provision from filing a common law tort claim against ASAP. Montano set forth two counts of negligence against ASAP in his complaint. The question is whether those causes of action survive summary judgment. The first negligence claim alleged that an unnamed forklift operator "carelessly and recklessly" operated the forklift when it hit Godines. The second claim alleged negligent hiring and failure to train and supervise. Both claims are based on ASAP's alleged vicarious liability for Mitchell's negligent acts.
Vicarious liability applies only where the principal retains detailed control over a wrongdoer's actions. Sutherland v. Barton, 570 N.W.2d 1, 6 (Minn. 1997). Here, because ASAP was not Mitchell's employer and had no control over Mitchell's actions during the performance of his duties, no relationship exists to hold ASAP liable for Mitchell's actions. Thus, although the Workers' Compensation Act does not bar Montano from bringing a common law tort claim against ASAP, Montano's negligence claims cannot survive summary judgment.
c. Gross negligence
Montano argues that he is entitled to sue BFI for gross negligence. Generally, employers are not liable in tort to an injured worker for work-related injuries since the Workers' Compensation Act provides the exclusive remedy. Minn. Stat. § 176.031 (2000). But, if the employer or one of its servants commits an act of gross negligence, a claim may be made in tort for the injury. Minn. Stat § 176.061, subd. 5(c) (2000).
The district court also denied Montano's motion to amend his complaint to sue Mitchell directly for gross negligence. The district court is given wide discretion to deny an amendment of the pleadings, which will not be reversed absent an abuse of discretion. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). The district court based its denial on the fact that Montano delayed joinder of Mitchell until the close of discovery and until the trial date was imminent. The judge also reasoned that joining Mitchell, who was deposed without representation, would result in substantial prejudice to him. Denying the motion to amend the complaint was not an abuse of discretion.
Gross negligence is "negligence of the highest degree." High v. Supreme Lodge of the World, 214 Minn. 164, 170, 7 N.W.2d 675, 679 (1943). It is
substantially and appreciably higher in magnitude than ordinary negligence. It is materially more want of care than constitutes simple inadvertence. It is an act or omission respecting legal duty of an aggravated character as distinguished from a mere failure to exercise ordinary care.Ackerman v. American Family Mut. Ins. Co., 435 N.W.2d 835, 840 (Minn.App. 1989) (citation omitted).
Here, Montano claims that, driving the forklift at an "unreasonable, unsafe speed," failing to stop at a cross walk, failing to yield to a pedestrian, failing to sound a horn before proceeding into an obstructed area, and operating with obscured vision add up to gross negligence. The record presents uncontradicted evidence that Mitchell sounded his horn before driving off, had a partial, albeit tiny, view forward, and took some safety precautions. Although the evidence shows negligence, these actions fail to meet the standard of gross negligence. Thus, the district court's judgement dismissing Montano's claims was proper.
II.
BFI contends that if Montano is successful in the common law claim, Montano should indemnify it for the workers' compensation benefits it paid. However, because no tort claims exist against ASAP, it is not necessary to address the issue of whether Montano must indemnify BFI.
BFI next argues that, under its agreement with ASAP, ASAP should indemnify BFI for the workers compensation benefits it paid. The interpretation of an unambiguous contract is a question of law. Wolfson v. City of St. Paul, 535 N.W.2d 384, 386 (Minn.App. 1995), review denied (Minn. Sept. 28, 1995). When interpreting a contract, it is read in its entirety and considered in the light of the subject matter, the object and purpose of the parties, and the natural meaning of the language used so that the contract's provisions are "made to harmonize and unite in a consistent agreement in consonance with the intention of the parties." Independent School District No. 877 v. Loberg Plumbing and Heating Co., 266 Minn. 426, 436, 123 N.W.2d 793, 800 (1963) (citation omitted). Where a contract contains ambiguous terms or the intent is doubtful, the terms are construed against the author. Turner v. Alpha Phi Sorority House , 276 N.W.2d 63, 66 (Minn. 1979).
Throughout the agreement between BFI and ASAP, which was drafted by BFI, employees such as Mitchell working at BFI's facility and paid through ASAP are explicitly termed "personnel." However, Article VII of the parties' agreement requires ASAP to indemnify BFI for
acts or failures to act by [ASAP] or its employees or agents in the performance of this Agreement, or in any manner arising from the work to be performed by [ASAP].
The agreement is silent on requiring ASAP to indemnify BFI for acts of personnel. Therefore, the indemnification clause does not obligate ASAP to indemnify BFI for Mitchell's negligence and the portion of the district court's judgment dismissing BFI's claim for indemnification is affirmed.
III.
ASAP contends that the district court erred by denying its cross-claim against BFI for indemnity and contribution. But, because no claim exists against ASAP and no damages will be assessed against it, it is unnecessary to address this question. ASAP also argues the district court erred by awarding BFI attorneys' fees and that the attorney fees awarded were excessive.
After the Montano complaint was filed, ASAP brought a third party action against BFI for "indemnity and/or contribution" based on BFI's negligence. Under Article IX of the contract between ASAP and BFI, ASAP agreed to
waive any and all rights of subrogation it may have against [BFI] by virtue of any claims which may arise as a result of services performed in connection with this contract.
Because the district court concluded ASAP's action was one for subrogation, and not indemnity or contribution, it awarded attorney fees based on a breach of Article IX.
Contribution is based on the common liability of two or more parties. American Auto Ins. Co. v. Molling, 239 Minn. 74, 76, 57 N.W.2d 847, 849 (1953). It is applied
where several persons are under a common liability to one, when equity will distribute the burden among the obligors in proportion to their respective shares.
Id. at 77, 57 N.W.2d at 850.
Here, ASAP's cross-claim against BFI is a claim for contribution. Montano alleged that ASAP was negligent and brought a negligence claim against it. But, because of the workers' compensation exclusivity provision, Montano was prohibited from bringing a claim against BFI and did not do so. However, BFI controlled and trained Mitchell, and was a potentially negligent party and, thus, a potential joint tortfeasor. ASAP's basis for bringing its cross-claim against BFI was its status as a joint tortfeasor. Thus, ASAP properly impleaded BFI for contribution.
It is not, as ASAP alleges, a claim for indemnity since indemnity is based, not on common liability, but on a contractual relationship, either express or implied by law, that requires one party to reimburse another entirely. Hermeling v.Minnesota Fire Cas. Co., 548 N.W.2d 270, 273 n. 1 (Minn. 1996). Here, there is no contractual or legal basis to require BFI to indemnify ASAP.
While an employer normally is not liable in tort for injuries to its workers, the supreme court has recognized a third party tortfeasor's right to bring an action for contribution against an injured worker's employer in "an amount proportional to its percentage of negligence, but not to exceed its total workers' compensation liability to the plaintiff. Lambertson v. Cincinnati Corp., 312 Minn. 114, 130, 257 N.W.2d 679, 689 (1977). The third party tortfeasor, like ASAP here, may implead the employer, in this instance BFI, before the trial on the underlying personal injury claim. See Johnson v. Raske Building Sys., Inc., 276 N.W.2d 79, 80 (Minn. 1979).
Thus, ASAP's cross-claim against BFI was properly brought as a claim for contribution and, as the clear terms Article IX of the ASAP/BFI agreement do not prohibit actions for contribution, the cross-claim was not improper. Based on this conclusion, the district court improperly concluded that ASAP violated the terms of the agreement and improperly awarded attorney fees. The district court erred in awarding attorney's fees.