Opinion
50261/01.
Decided August 2, 2004.
plaintiff Rafael Ortega ("Ortega") moves for an order, pursuant to CPLR 3120 (1) (ii), authorizing his representative to enter upon the property of defendant Noxxen Realty Corporation ("Noxxen") in order to inspect the area where plaintiff's accident occurred. Noxxen separately moves for an order, pursuant to CPLR 3212, granting summary judgment dismissing the complaint as against it on the grounds that plaintiff's claims are barred by operation of the Workers' Compensation Law. Plaintiff cross-moves for an order striking Noxxen's second affirmative defense that the Workers' Compensation Law is plaintiff's exclusive remedy, and for an order extending his time to file a note of issue and certificate of readiness.
Background
This personal injury action stems from a January 10, 2000 accident which occurred at a car wash/gasoline station, located at 3327 Connor Street in Bronx County. Plaintiff, an electro-mechanical maintenance worker employed by Gaseteria Oil Corporation ("Gaseteria"), fell while standing atop a scaffolding, soldering a piece of metal. Plaintiff maintains that unsecured planks on the scaffolding shifted, causing him to fall. As a result of the accident plaintiff sustained back injuries requiring surgery. Plaintiff commenced this action, alleging that Noxxen, the building's owner, was negligent in its maintenance of the property and alleging violations of Labor Law Sections 240 (1), 200 and 241 (6).
Gaseteria, plaintiff's employer, is the parent company of Noxxen. According to Louis Fresolone, the Chief Financial Officer of both corporations, Noxxen is a real estate holding company and is a wholly-owned subsidiary of Gaseteria. Gaseteria funded Noxxen's purchase of the subject property, engaged in construction work at the site, purchased the construction materials used, and paid all property and real estate taxes, franchise taxes and utility bills for the premises. There is no written lease between Noxxen and Gaseteria, Noxxen charged Gaseteria no rent for use of the premises and the two companies created no written construction contract for the work performed.
Noxxen operates without employees, without its own bank account, without business stationary and letterhead, and without filing a separate income tax return. Instead, Gaseteria files consolidated tax returns on behalf of both corporations. Noxxen uses Gaseteria's letterhead and stationery, keeps its books and records at Gaseteria's main office, and acts through Noxxen's president and sole corporate officer, Oscar Porcelli, who also functions as Gaseteria's corporate officer. A single workers' compensation policy issued by the State Insurance Fund names Noxxen, Gaseteria and all of Gaseteria's related entities. Indeed, plaintiff received Workers' Compensation benefits under that policy. A single liability policy issued by AIG with one overall premium likewise covers all Gaseteria entities, including Noxxen.
Mr. Porcelli testified at his deposition that no other corporate officers have served Noxxen since he became president in 1979, except possibly his wife. Mr. Fresolone, the Chief Financial Officer of both corporations, asserts in paragraph 4 of his affidavit that "Gaseteria and Noxxen have a single common corporate officer, namely Oscar Porcelli."
Plaintiff's motion for discovery and inspection of the accident site in order to resolve questions which had arisen regarding the height of the ceiling in the area where the accident occurred has been held in abeyance pending determination of Noxxen's summary judgment motion.
CPLR 3214 (b) provides that "[s]ervice of a notice of motion under rule . . . 3212 . . . stays disclosure until determination of the motion unless the court orders otherwise."
The Parties' Positions
Noxxen claims that its relationship with Gaseteria renders it an alter ego of Gaseteria and, therefore, recovery against it is precluded by the Workers' Compensation Law. Plaintiff, on the other hand, argues that Noxxen and Gaseteria are not the same entity, nor can defendant establish that they are alter egos of each other. Each company had different functions and Noxxen exercised no control over the day-to-day operations of Gaseteria. Thus, argues plaintiff, the Workers' Compensation Law does not preclude a suit against Noxxen the owner of the property.
Discussion
"As a general rule, when an employee is injured in the course of his [or her] employment, [the] sole remedy against [the] employer lies in [the] ability to recover under the Workers' Compensation Law (Workers' Compensation Law § 11)" ( Billy v. Consolidated Machine Tool Corp., 51 NY2d 152, 156, rearg. denied 52 NY2d 829). "The Workers' Compensation Law was designed to spread the risk of industrial accidents through the vehicle of insurance coverage and . . . 'provide[s] a swift and sure source of benefits to the injured employee or to the dependents of [a] deceased employee' ( O'Rourke v. Long, 41 NY2d 219, 222). . . . In exchange for the security of knowing that fixed benefits will be paid without the need to resort to expensive and sometimes risky litigation, however, the employee . . . [loses] his [or her] common-law right to sue his [or her] employer in tort . . . The legislative implementation of this 'trade-off' is embodied in Section 11 of the Workers' Compensation Law, which precludes suit against the employer and limits the employees to the recompense afforded under the statute when [s]he is injured in the course of his [or her] employment" ( Billy, 51 NY2d at 159-160). Accordingly, recovery under the Workers' Compensation Law is the exclusive remedy against an employer for injuries incurred during the course of employment ( Ploszaj v. Cooper Tank and Welding Corp., 213 AD2d 385).
Section 11 provides that: "[t]he liability of an employer . . . shall be exclusive and in place of any other liability whatsover, to such employee, his or her personal representatives, spouse, parents, dependents, distributees, or any other person otherwise entitled to recover damages, contribution or indemnity, at common law or otherwise, on account of such injury or death or liability arising therefrom . . ." Worker's Compensation Law § 29 (6) which provides that: "[t]he right to compensation or benefits under this chapter, shall be the exclusive remedy to an employee, or in case of death his or her dependents, when such employee is injured or killed by the negligence or wrong of another in the same employ, the employer's insurer or any collective bargaining agent of the employer's employees or any employee, of such insurer or such collective bargaining agent [while acting within the scope of his or her employment]."
Moreover, the Court of Appeals has held that the salutary scheme of the Workers' Compensation Law would be undermined by permitting an employer to be subject to a civil suit in the employer's dual capacity as property owner ( Billy, 51 NY2d at 160). In this regard, the Court has noted that the "obligation to provide a safe workplace simply cannot be separated in a logical and orderly fashion from the duties owed by the employer to his employees by reason of his ownership of the premises . . . [as] these duties are merely subcategories within the complex of obligations that arise in connection with the employment relation[ship]" ( see Billy, 51 NY2d at 160, citing Williams v. Hartshorn, 296 NY 49, 50-51). Accordingly, an employer cannot be held liable as landowner for job-related injuries its employee sustains while working on the employer's premises ( see Billy v. Consolidated Machine Tool Corp., 51 NY2d 152, 158-159; Rainey v. Jefferson Vil. Condo No. 11 Assocs., 203 AD2d 544)" ( Diaz v. Rosbrock Assoc. Ltd. Partnership, 298 AD2d 547, 548).
Here, Noxxen an entity separate from Gaseteria, plaintiff's employer, owns the property at which the accident occurred. Noxxen is Gaseteria's wholly-owned subsidiary. Noxxen argues that it functions merely as the alter ego of Gaseteria and, thus, is entitled to assert the immunity conferred by the Workers' Compensation Law as a bar to plaintiff's claims against it. Before a subsidiary corporation may be considered the alter ego of its parent corporation, "there must be direct intervention by the parent in the management of the subsidiary to such an extent that the subsidiary's paraphernalia of incorporation, directors and officers are completely ignored" ( Shelley v. Flow Int'l Corp., 283 AD2d 958, 960, appeal dismissed 96 NY2d 937, quoting Billy v. Consolidated Machine Tool Corp., 51 NY2d at 163, quoting Lowendahl v. Baltimore Ohio R.R. Co., 247 App Div 144, 155 affd 272 NY 360, rearg. denied 273 NY 584). In other words, "the parent corporation must exercise complete domination and control of the subsidiary's day-to-day operations ( see Smith v. Roman Catholic Diocese, 252 AD2d 805, 806)" ( Dennihy v. Episcopal Health Services, Inc., 283 AD2d 542, 543).
Gaseteria and Noxxen share the same principal office location, share the same liability and Worker's Compensation policies, and filed a combined tax return. Noxxen uses Gaseteria's letterhead and stationery and operates without employees or its own bank account. Oscar Porcelli, Noxxen's president and only corporate officer, also functions as Gaseteria's corporate officer and gave work site instructions to plaintiff, who testified at his deposition that he regarded Mr. Porcelli as his supervisor. Gaseteria funded Noxxen's purchase of the property where the accident occurred and paid all property and real estate taxes, franchise taxes and utility bills for the premises. Gaseteria paid no rent to Noxxen, entered into no written construction contract with Noxxen for the work performed and holds no written lease for the property. These circumstances demonstrate that Gaseteria controlled, administered and funded Noxxen, its wholly-owned subsidiary, and exercised ultimate decision-making authority and financial responsibility for Noxxen ( Smith v. Roman Catholic Diocese, 252 AD2d 805, 806).
In Thompson v. Bernard G. Janowitz Construction Corporation, ( 301 AD2d 588-589), many of these same considerations lead the Appellate Division, Second Department to conclude that a subsidiary was in fact the alter ego of its parent corporation ( see Thompson, supra, [only an oral contract existed between Shore to Shore Carpentry and AFG Contracting Company, shares of Shore and AFG were owned by the same two stockholders, the companies' directors and officers consisted of those same two shareholders, both companies shared the same offices and support staff, and Workers' Compensation and general liability coverage was issued to both AFG and Shore under the same policies]; see also, Kuznetz v. County of Nassau, 229 AD2d 476, 476-477 ["The college and the county were joint employers of the plaintiff. The county is the local sponsor of the college and holds title to its property . . . The plaintiff was appointed . . . pursuant to a contract between the Adjunct Faculty Association, the college, and the county"]).
Thus, Noxxen has met its burden of establishing, prima facie, its defense under Section 11 of the Workers' Compensation Law. Plaintiff's reference to the supervisory responsibility of a Gaseteria employee, and other contentions in opposition to the motion, fail to demonstrate the existence of a factual question requiring a trial. Accordingly, Noxxen is entitled to summary judgment dismissing the complaint and to denial of plaintiff's cross-motion to strike the second affirmative defense. Accordingly, it is
Discovery has been completed and plaintiff was to file a Note of Issue on March 5, 2004 (see, Affirmation of Robert G. Abruzzino, Esq., dated April 15, 2004, Para. 3).
ORDERED, that the motion of Noxxen for summary judgment is granted and the complaint is dismissed; and it is further
ORDERED, that plaintiff's cross motion for an order striking Noxxen's second affirmative defense and extending the time in which to file a Note of Issue is denied; and it is further
ORDERED, that plaintiff's motion for discovery, pursuant to CPLR 3120 (1) (ii), is denied as moot.