Opinion
1052 EDA 2021 J-A03017-22
08-17-2022
RONALD AND JILL OSTER, H/W Appellants v. SERFASS CONSTRUCTION COMPANY, INC., AND CITY CENTER INVESTMENT CORPORATION RONALD AND JILL OSTER H/W Appellants v. TOWER SIX OP, LP
NON-PRECEDENTIAL DECISION
Appeal from the Order Entered May 4, 2021 In the Court of Common Pleas of Lehigh County Civil Division at No(s): 2018-C-2235, 2018-C-3087
BEFORE: STABILE, J., DUBOW, J., and McCAFFERY, J.
MEMORANDUM
DUBOW, J.
Appellants, Ronald and Jill Oster, appeal from two orders which respectively granted summary judgment in favor of Appellees Serfass Construction Co., Inc. ("Serfass") and Tower Six OP, LP ("Tower") in Appellants' personal injury action. After careful review, we affirm.
In addition to Ronald Oster's negligence claims, Jill Oster, his wife, pleaded counts of loss of consortium against all defendants. For ease of reference, we refer to the Osters collectively as Appellants.
Factual and procedural history
In 2016, Serfass and Tower entered a contract whereby Serfass provided general contracting for demolition of a building (the "Tower Building") and construction of a new building in Allentown (generally, the "Tower Project"). Serfass employed several subcontractors during the project, including Duggan & Marcon, Inc. ("Duggan") for whom Mr. Oster worked. Sometime in 2016, Serfass completed demolition of the main portion of the Tower Building. The demolition left brick from the Tower Building adhered onto an adjoining building (the "Trifecta Building"). In fall 2016, two pairs of Serfass employees began chipping the adhered brick off the Trifecta Building.
In mid-November 2016, an excavator struck the Trifecta Building. As a result, on November 17, 2016, Serfass commissioned an engineer to "inspect[] demolition activity along the west wall of [the Tower Building] and the interior and exterior faces of the east wall of the abutting [Trifecta Building]." Memorandum in Opposition to Center City Investment Corp. Motion for Summary Judgment, filed 10/9/20, at Exh. D (hereinafter "Engineering Report"). The engineer concluded that "[b]ased on my observation, the demolition work associated with the [Tower Building] has no discernable effect on the adjoining Trifecta Building [s]tructure." Id.
On November 26, 2016, Mr. Oster and another Duggan employee took the place of one of the pairs of Serfass employees, picking up where they had left off chipping leftover Tower brick from the Trifecta Building. At some point that day, the chimney of the Trifecta Building unexpectedly collapsed while the Duggan and Serfass employees worked. As a result, multiple bricks fell and struck Mr. Oster in the head, neck, and shoulders, causing injury.
On August 22, 2018, and November 20, 2018, Appellants filed negligence actions against Serfass and Tower, respectively. The defendants filed motions for summary judgment. Specifically, on September 9, 2020, Tower filed a motion for summary judgment alleging that, as owner of the property, it did not owe Mr. Oster a duty of care. On October 6, 2020, Serfass filed a separate motion for summary judgment alleging that it was entitled to immunity as Mr. Oster's statutory employer under the Pennsylvania Workers' Compensation Act.
On March 6, 2019, by stipulation of the parties, the trial court ordered the consolidation of these actions. Appellants also filed suit against Center City Investment Corporation ("CCIC"). The court granted summary judgment in CCIC's favor, and it is not a party to this appeal.
77 P.S. §§ 1-1041.1, 2501-2626.
In opposition to Tower's summary judgment motion, Appellants argued that a question of fact existed regarding Tower's awareness of the allegedly dangerous condition posed by the Trifecta Building chimney. Appellants asserted that "there is evidence that [Tower] knew of potential structural damage to the Trifecta Building due to the excavator striking it." Memorandum in Opposition to Tower Motion for Summary Judgment, filed 10/9/20, at 5 (unpaginated). Appellants argued that "[t]here is no evidence that [Mr.] Oster knew of any collision between an excavator and the [Trifecta Building]" and reasoned, therefore, that Tower "had superior knowledge of the danger posed by the chimney attached to the Trifecta Building[.]" Id. Appellants asserted that because of Tower's superior knowledge, it owed Mr. Oster a duty of care.
In opposition to Serfass' summary judgment motion, Appellants argued that questions of fact existed regarding Serfass' occupation and control of the Tower Project site, whether a subcontract existed between Serfass and Duggan, and whether Duggan assumed a part of Serfass' regular business. Appellants reasoned that these questions of fact precluded a finding that Serfass was Mr. Oster's statutory employer.
On November 23, 2020, the trial court held a hearing on these motions. On May 4, 2021, the trial court granted summary judgment to all defendants. In its order granting summary judgment to Tower, the court found that Tower did not possess superior knowledge of the potential danger posed by the Trifecta Building chimney and, as a result, did not owe Mr. Oster a duty of care. In a separate order granting Serfass' motion, the court found that Serfass was entitled to immunity as Mr. Oster's statutory employer.
Appellants timely filed a Notice of Appeal and both they and the trial court complied with Pa.R.A.P. 1925.
Although Appellants violated Commonwealth v. Walker, 185 A.3d 969 (Pa. 2018) by filing one Notice of Appeal from two court orders involving different defendants at different underlying dockets, our Supreme Court's holding in Commonwealth v. Young, 265 A.3d 462 (Pa. 2021) permits us to overlook the deficiency.
Issues
Appellants raise the following issues for our review:
1. Whether the [t]rial [c]ourt erred as a matter of law in granting [Tower's] Motion for Summary Judgment where there exist genuine issues of material fact as to whether [Tower] had knowledge of the dangerous condition which caused the injury superior to that of [Mr.] Oster where the condition was not obvious to the [Mr. Oster].
2. Whether the [t]rial [c]ourt erred as a matter of law in granting [Serfass'] Motion for Summary Judgment based upon the statutory employer doctrine where genuine issues of material fact exist as to whether [Serfass] could establish the defense of a statutory employer at trial.Appellants' Br. at 6 (reordered for ease of analysis).
Legal analysis
We review a trial court's order granting summary judgment for an error of law or abuse of discretion. Hovis v. Sunoco, Inc., 64 A.3d 1078, 1081 (Pa. Super. 2013). We view the record in the light most favorable to the nonmoving party and resolve all doubts as to the existence of a genuine issue of material fact against the moving party. Id. Summary judgment is only appropriate where the record clearly shows that no genuine issue of material fact exists and, as a result, the moving party is entitled to judgment as a matter of law. Id.
Where the nonmoving party bears the burden of proof on an issue, that party may not merely rely on the pleadings or answers to survive summary judgment. Moranko v. Downs Racing LP, 118 A.3d 1111, 1113 (Pa. Super. 2015) (en banc). "Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law." Id. (citation omitted). In the instant case, Mr. Oster pleaded a negligence claim against Tower, which requires, among other things, proof that Tower owed Mr. Oster a duty of care. Toro v. Fitness International LLC, 150 A.3d 968, 976 (Pa. Super. 2016).
Finally, concessions made in pleadings and by stipulation are binding judicial admissions. See Steinhouse v. Herman Miller, Inc., 661 A.2d 1379, 1382 (Pa. Super. 1995) ("Averments in pleadings constitute binding judicial admissions, conclusive in their nature insofar as their effect is confined to the case in which they are filed."); Tyler v. King, 496 A.2d 16, 21 (Pa. Super. 1985) ("The court will hold a party bound to his stipulation; concessions made in stipulations are judicial admissions, and accordingly may not later in the proceeding be contradicted by the party who made them."). See also Sheard v. J.J. DeLuca Co., 92 A.3d 68, 78 (Pa. Super. 2014) (holding the appellant to admission in complaint that the appellee was general contractor). As a result, the parties are bound by these admissions.
Issue 1 - Summary judgment in favor of Tower
In their first issue, Appellants argue that the trial court erred by finding that Tower did not possess "superior knowledge" and, therefore, did not owe Mr. Oster a duty of care. Appellants' Br. at 31-34. Appellants renew their argument that Tower knew that an excavator hit the Trifecta Building shortly before Mr. Oster's incident and, as a result, Tower had superior knowledge about the potential danger posed by the chimney of the Trifecta Building. Id.
"For over 100 years, the accepted and general rule regarding liability in our Commonwealth has been that a landowner who engages an independent contractor is not responsible for the acts or omissions of such independent contractor or his employees." Beil v. Telesis Const., Inc., 11 A.3d 456, 466 (Pa. 2011). Unless an exception applies, "a property owner has no duty to warn the contractor or its employees of conditions that are at least as obvious to the contractor and its employees as they are to the landowner. Responsibility for protection, and liability for negligence, therefore, are placed on the contractor and its employees." Id. at 460.
One recognized exception to this general rule is where the landowner has "'superior knowledge' or information which places [the landowner] in a better position to appreciate the risk posed to the contractor or his employees by the dangerous condition." Gutteridge v. A.P. Green Servs., Inc., 804 A.2d 643, 657-58 (Pa. Super. 2002). When the landowner has superior knowledge, it can no longer be said that the dangerous condition is at least as obvious to the contractor as it is to the landowner and the landowner, thus, has a duty of care to warn the contractor of the dangerous condition. See Colloi v. Phila. Elec. Co., 481 A.2d 616, 620 (Pa. Super. 1984).
Here, the trial court found that Tower did not possess superior knowledge such that it owed Mr. Oster a duty of care. Trial Ct. Op., 5/4/21, at 7. It explained that Appellant adduced no evidence that Tower knew that the excavator caused the Trifecta Building chimney to pose a danger. Id. at 9. Moreover, the court observed that Engineering Report "did not place [Tower] on notice of any dangerous condition posed by the area struck by the excavator bucket" because the report concluded that "the vertical impact from an excavator bucket . . . did not in any way adversely affect the [Trifecta Building]." Id. at 8 (citing Engineering Report).
The record supports the trial court's determination. Appellants have identified no evidence of record that Tower had any knowledge that the Trifecta Building posed a danger to Mr. Oster, and our review of the record reveals no such evidence. Specifically, the record indicates that Appellants adduced no evidence creating a question of fact as to whether Tower had any knowledge that the excavator's impact with the Trifecta Building caused the chimney to pose a danger to workers at the Tower Project site. The Engineering Report, moreover, informed Tower's knowledge at the time of Mr. Oster's incident, and the report concluded that the Trifecta Building was unaffected by the excavator impact.
As a result of Appellants' failure to adduce any evidence to prove that Tower had superior knowledge and, therefore, owed Mr. Oster a duty of care, an essential element of Appellants' case and an issue on which they bear the burden of proof, we affirm the trial court's order granting Tower's Motion for Summary Judgment.
Issue 2 - Summary judgment in favor of Serfass
In their second issue, Appellants argue that the court erred by finding that Serfass was Mr. Oster's statutory employer and, therefore, entitled to immunity under the Workers' Compensation Act. Appellants' Br. at 25-30.
Pursuant to Section 302(b) of the Workers' Compensation Act, "general contractors bear secondary liability for the payment of workers' compensation benefits to injured workers employed by their subcontractors. In this sense, general contractors have been denominated 'statutory-employers' relative to workers' compensation liability[. S]tatutory employers under Section 302(b) enjoy a measure of immunity from liability in tort pertaining to work-related injuries for which they bear secondary liability under the [A]ct." Sheard, 92 A.3d at 74-75 (citations omitted). See also Patton v. Worthington Associates, Inc., 89 A.3d 643, 645 (Pa. 2014) (reinforcing the established doctrine of statutory employer immunity).
Pennsylvania courts have long applied the following five-factor test to determine if a general contractor was the statutory employer of an injured employee of a subcontractor:
(1) The general contractor was under contract with an owner or one in the position of the owner;
(2) The general contractor controlled or occupied the premises where the injury occurred;
(3) The general contractor entered a subcontract;
(4) The general contractor designated part of its regular business to the subcontractor; and
(5) The injured party was an employee of such subcontractor.See McDonald v. Levinson Steel Ct., 153 A. 424, 426 (Pa. 1930).
Here, the trial court found that Serfass was Mr. Oster's statutory employer and, therefore, entitled to immunity under the Workers' Compensation Act. Trial Ct. Op., 5/4/21, at 9-14. In support, the court referenced admissions Appellants made in various pleadings and stipulations establishing that (1) Serfass was the general contractor on the Tower Project; (2) Serfass directed Mr. Oster's conduct on the Tower Project site and was responsible for worker safety; (3) Mr. Oster was working on the Tower Project pursuant to a subcontract between Duggan and Serfass; (4) demolition work was part of Serfass' regular business; and (5) Duggan employed Mr. Oster at the time of his injury. Id.
The record supports the trial court's findings. See Reply to New Matter, filed 3/14/19, at ¶¶ 36, 39, 40; Plaintiffs' Complaint, filed 12/2/19, at ¶ 12; Plaintiffs' Amended Complaint, filed 11/14/18, at ¶¶ 8, 11, 18, 20; Stipulation of Parties, dated 7/17/20, at 2 (unpaginated). Of particular relevance, the parties entered the following stipulation on July 17, 2020, which alone establishes several elements of the McDonald test:
At the time of [Mr. Oster's injuries], [Mr.] Oster was employed as a construction laborer by Duggan & Marcon, Inc., performing demolition work in the nature of chipping brick and mortar from the exterior of a building at a construction project known as Tower 6 Project in Allentown, Pennsylvania, pursuant to a Subcontract Agreement dated November 2, 2016[,] between Duggan & Marcon, Inc. and Serfass Construction Company, Inc., attached hereto as Exhibit A.Stipulation of Parties at 2 (emphasis added). As the trial court observed, Appellants are bound by admissions made in their pleadings and stipulations.
Additionally, the following evidence, viewed in the light most favorable to Appellants as the non-moving party, provides further support for the court's determination that Serfass was Mr. Oster's statutory employer. Deposition testimony from Mr. Oster and two Serfass employees, Joshua Sterner and Derrick Keeler, established that Serfass controlled access to the Tower Project site via a locked gate, Duggan's employees did not have the access code for the gate, Sterner instructed Mr. Oster on what work to do and where to do it on the worksite, and Mr. Oster took over work that had been started by Serfass employees before his arrival. N.T. Deposition of Ronald Oster, 8/27/19, at 25-26, 31-32, 37; N.T. Deposition of Joshua Sterner, 1/24/20, at 7-8, 12-14, 16, 18-21; N.T. Deposition of Derek Keeler, 1/24/20, at 25-26.
Serfass also produced in discovery a contract dated September 27, 2016, between it and Tower establishing the parties' relationship, including "demolition and masonry" as part of Serfass' job duties. Serfass Motion for Summary Judgment, filed 10/6/20, at Exh. G.
Finally, Appellants' engineering expert opined that Mr. Oster was a Duggan employee, he took direction from Serfass at the Tower Project, and Serfass "had actual and practical control of the project site, authority over the worksite, and authority and power to correct safety and health violations." Plaintiffs' Expert Report, dated 8/31/20, at 25-26.
These uncontested facts provide additional support to the trial court's finding that no question of fact existed regarding Serfass' status as Mr. Oster's statutory employer. Although Appellants assail the trial court's finding, they direct this court to no evidence demonstrating a question of fact to be decided by a jury. This Court's review of the record, moreover, demonstrates that no such question exists. As a result of the foregoing, we affirm the trial court's Order grant of summary judgment in favor of Serfass.
Appellants raise an additional argument that "the mandatory nature of workers' compensation coverage in modern construction practice has rendered the statutory employer doctrine obsolete" and, therefore, we should "restrict the application of the statutory employer doctrine to those cases where the general contractor is liable for the injured worker's [] compensation benefits, as adopted by the State of New Jersey." Appellants' Br. at 30-31. Appellants did not raise this issue before the trial court in their opposition to Appellees' motions for summary judgment and, thus, it is waived. Krentz v. CONRAIL, 910 A.2d 20, 37 (Pa. 2006) ("arguments not raised initially before the trial court in opposition to summary judgment cannot be raised for the first time on appeal." (citation omitted)).
Conclusion
We discern no error of law or abuse of discretion in the trial court's orders granting summary judgment in favor of Tower and Serfass. As a result, we affirm.
Orders affirmed.
Judge Stabile joins the memorandum.
Judgment Entered.
CONCURRING/DISSENTING MEMORANDUM
McCAFFERY, J.
Because I conclude the record contains a genuine issue of material fact as to whether Tower had superior knowledge of the dangerous condition which led to Mr. Oster's injury, I would vacate the order granting Tower summary judgment and remand the case for trial. However, I am constrained to concur with the Majority's decision to affirm the trial court's grant of summary judgment in favor of Serfass. Although I strongly disagree with the manner in which the statutory employer doctrine has been wielded by negligent general contractors to shield themselves from civil liability when they have not taken any steps to ensure the employees of their subcontractors will be adequately compensated (or even insured) for on-the-job injuries they sustain as a result of that negligence, I acknowledge we are bound by existing, controlling statutory and case law to the contrary. Thus, I respectfully dissent in part and concur in part from the Majority's memorandum decision.
I. Summary Judgment in favor of Tower
With regard to Tower's liability, or lack thereof, the Majority concludes the record "supports the trial court's determination" that Appellants failed to identify any "evidence of record" that Tower possessed "superior knowledge" that the condition of the Trifecta Building posed a danger to Mr. Oster, and thus, the court's entry of summary judgment in favor of Tower was proper. See Majority's Memorandum at 8. However, I find the Majority's application of the law to be too limited.
Generally, "a landowner who engages an independent contractor is not responsible for the acts or omission of such independent contractor or his employees." Beil v. Telesis Const., Inc., 11 A.3d 456, 466 (Pa. 2011) (citations omitted). Nevertheless, there are several exceptions to this general rule. See id. One such exception applies when the landowner possesses "superior knowledge" of a potentially dangerous condition. See Gutteridge v. A.P. Green Servs., Inc., 804 A.2d 643, 657-58 (Pa. Super. 2002).
A landowner owes a duty to warn an unknowing independent contractor of existing dangerous conditions on the landowner's premises where such conditions are known or discoverable to the owner. Such a duty to warn is owed irrespective of whether the independent contractor exercises full control over the work and premises entrusted to him. However, [a]n owner of land who delivers temporary possession of a portion of the land to an independent contractor owes no duty to the employees of the independent contractor with respect to an obviously dangerous condition on that portion of the land in the possession of the contractor. It has also been said that the employer of an independent contractor has no duty to warn the contractor or his employees of a condition that is at least as obvious to them as it is to him. In addition, the owner of property is under no duty to protect the employees of an independent contractor from risks arising from or intimately connected with defects or hazards which the contractor has undertaken to repair or which are created by the job contracted.Colloi v. Philadelphia Elec. Co., 481 A.2d 616, 619-20 (Pa. Super. 1984) (citations & quotation marks omitted; emphasis added & some emphasis removed). Thus, a landowner owes a duty of care to protect the employee of an independent contractor from potential dangers that are known or "discoverable" to the landowner, and not as obvious to the employee.
In the present case, it is undisputed that the employee, Mr. Oster, had no knowledge the Trifecta Building was struck by an excavator bucket a few weeks before his first day at the jobsite, or that the incident may have affected the structural integrity of the chimney located directly above the area where he was assigned to work. The relevant question is whether the potentially dangerous condition was "known or discoverable to" the landowner, Tower. See Colloi, 481 A.2d at 619 (emphasis added). As this Court explained in Gutteridge:
The question of whether a landowner owes a duty to warn an independent contractor of dangerous conditions on the premises turns on whether the owner possesses "superior knowledge" or information which places him in a better position to appreciate the risk posed to the contractor or his employees by the dangerous conditions.Gutteridge, 804 A.2d at 657-58 (emphasis added).
In my view, the fact that those in charge of the jobsite retained an engineer, less than 10 days before the accident, to conduct a structural assessment of the building on which Mr. Oster was working when he was injured, raises a jury question as to whether Tower had "superior knowledge" of the potential danger or whether such knowledge was discoverable to Tower.
In granting summary judgment to Tower, the trial court first emphasized that the engineering report was addressed to Serfass, and there was "no indication that Tower . . . solicited the . . . Report or received a copy of the . . . . Report." Trial Ct. Op. (No. 2018-C-3087), 5/4/21, at 8. I find it implausible that the landowner, who contracted with Serfass to perform the demolition work, would not have been informed of the potentially dangerous condition resulting from an excavator bucket striking the connecting building, and, indeed, would not have received a copy of the engineering report. Nevertheless, even if Tower can establish it did not request or receive the Report, it is still liable to Appellants if a jury determines the dangerous condition was "discoverable to" Tower, and that Tower was in a better position to appreciate the risk than Mr. Oster. I conclude that these two critical questions are for the jury to decide.
Second, both the Majority and the trial court maintained that Appellants presented no evidence Tower "had any knowledge that the excavator's impact with the Trifecta Building caused the chimney to pose a danger to workers at the Tower Project site" - primarily because the engineering report "concluded that the Trifecta Building was unaffected by the excavator impact." Majority Memo at 8; see also Trial Ct. Op. at 8-9. Again, I would conclude the Majority and the trial court made a factual determination which should have been left for the jury.
First, I emphasize that the excavator incident was alarming enough to those in charge of the jobsite that they requested a structural assessment by an engineer. Moreover, as Appellants pointed out in their brief, the report provided an assessment of only the exterior wall of the Trifecta Building and made no mention of the chimney that later collapsed. See Appellants' Brief at 33. Although the trial court found this argument misleading - noting that the report spoke "directly to the area of the Trifecta Building previously struck by the excavator bucket" - I cannot agree. It is unclear from the record whether the engineer did, in fact, assess the condition of the chimney, and the determination of whether Tower should have conducted a more thorough assessment or taken steps to protect the subcontractors are, again, questions for the fact finder.
Trial Ct. Op. at 9.
Viewing the record in the light most favorable to Appellants - the nonmoving parties - I conclude that the record does not clearly demonstrate Tower is entitled to judgment as a matter of law, and, in fact, there exists a genuine issue of material fact as to whether Tower either had superior knowledge of the potential danger to Mr. Oster, or that such knowledge was discoverable to it, and not apparent to Mr. Oster. See Hovis v. Sunoco, Inc., 64 A.3d 1078, 1081 (Pa. Super. 2013). Thus, I dissent from the Majority's decision to affirm the order granting summary judgment to Tower.
II. Summary judgment in favor of Serfass
The Majority also affirms the order of the trial court granting summary judgment to Serfass concluding that, pursuant to the five-part test outlined in McDonald v. Levinson Steel Co., 153 A. 424 (Pa. 1930), Serfass was Mr. Oster's "statutory employer" and, thus, is entitled to immunity from civil liability under Section 302(b) of the Workers' Compensation Act. See Majority Memorandum at 8-12. Reluctantly, I acknowledge the five-part McDonald test remains the standard by which the courts of this Commonwealth determine whether a general contractor is the statutory employer of the employee of a subcontractor, and consequently, immune from civil liability. Moreover, I concur that upon application of the McDonald test, the trial court properly determined Serfass was Mr. Oster's statutory employer in the present case, and, thus, immune from liability.
Nevertheless, I am compelled to express my opinion that statutory employer doctrine, as applied via the McDonald test, is "an irrational relic of a bygone era." Patton v. Worthington, 89 A.3d 643, 651 (Pa. 2014) (Baer, J., concurring). "The Legislature's purpose in imposing this status upon general contractors was remedial, as it wished to ensure payment of workers' compensation benefits in the event of defaults by primarily liable subcontractors." Id. at 645 (emphasis added; citations omitted). See Peck v. Delaware Cnty. Bd. of Prison Inspectors, 814 A.2d 185, 188 (Pa. 2002) (Per Newman, J., with two Justices concurring, and one Justice concurring with separate opinion) ("The purpose of this provision is clear: to ensure the payment of compensation benefits by a financially responsible party in the injured worker's chain of employment from subcontractor to general contractor.") (emphasis added); Dougherty v. Conduit & Found. Corp., 674 A.2d 262, 265 (Pa. Super. 1996) ("The intent behind the doctrine of statutory employer is 'to hold a general contractor secondarily liable for injuries to the employees of a subcontractor, where the subcontractor primarily liable has failed to secure benefits with insurance or self-insurance.'") (citation omitted; emphasis added).
When Section 302(b) was enacted in 1915, employers were not required to obtain Workers' Compensation insurance for their employees. Thus, if an employee of a subcontractor was injured on a jobsite, that employee was not guaranteed workers' compensation benefits if their employer failed to obtain the coverage. The statutory employer doctrine was enacted to address this potential lapse, and impose "secondary liability on statutory employers . . . to ensure that an injured worker will be afforded payment of benefits, even in the event of default by his primary employer." Doman v. Atlas America, Inc., 150 A.3d 103, 109-10 (Pa. Super. 2016). As this Court observed in Doman,
The tort immunity associated with the imposition of secondary liability reflects the historical quid pro quo between an employer and employee whereby the employer assumes liability without fault for a work-related injury . . . . However, the Act was amended in 1974 to require that all employers provide workers' compensation coverage. Notwithstanding, the 1974 amendments allowed general contractors to remain insulated from tort liability, despite never being required to provide workers' compensation benefits to injured employees of subcontractors, and created a windfall immunity shield. Thus, "the mandatory nature of workers' compensation has rendered the statutory employer doctrine obsolete[,] ... [and] adversely impact[s] worker safety by eliminating the traditional consequences (money damages) when a general contractor's negligence harms a subcontractor's employee."Id. at 110 (citations & quotation marks omitted; emphases added). Accordingly, the Doman Court called upon the Pennsylvania Legislature to "reconsider [this] statutory scheme." Id. at 109.
Heretofore, judicial criticism of the statutory employer doctrine has fallen on deaf ears. Justice Nigro authored a dissenting opinion in Fonner v. Shandon, Inc., 724 A.2d 903 (Pa. 1999), advocating for the addition of a sixth element to the McDonald test - proof that the general contractor "assumed responsibility for providing workers' compensation to the injured employee[.]" Fonner, 724 A.2d at 908 (Nigro, J. dissenting). He explained:
[The 1974 amendments for the Workers' Compensation Act made] its application . . . mandatory. The impetus of this change was to afford protection to employees. The Legislature never intended that the amendments would allow a general contractor to escape
civil liability if it did not pay for the injured employee's workers' compensation insurance. I find the clear meaning of the 1974 amendments was to place responsibility for workers' compensation benefits upon the general contractor only where the subcontractor or direct employer failed to do so. In reality, application of these amendments rarely, if ever, will result in the general contractor assuming responsibility for providing workers' compensation insurance because in the modern construction workplace, general contractors will rarely, if ever, award a contract absent the subcontractor showing proof of workers' compensation coverage. Common sense and logic dictate that the general contractor should not reap the benefits of civil liability immunity unless it undertakes responsibility of compensation coverage. If however, a general contractor does assume responsibility for the payment of workers' compensation, then it should be afforded statutory employer immunity.
* * *
As Judge Hoffman stated more than thirty years ago, . . . very great care . . . must be exercised before allowing an employer to avoid its liability at common law by asserting that he is a statutory employer. Section 203 of the Workmen's Compensation Act, which was designed to extend benefits to workers, should not be casually converted into a shield behind which negligent employers may seek refuge.Id. at 908-09 (some emphases added), citing Stipanovich v. Westinghouse Elec. Corp., 231 A.2d 894, 898 (Pa. Super. 1967).
More recently, another Supreme Court Justice reiterated this same concern in a concurring opinion in Patton. See Patton, 89 A.3d at 650-51. Justice Baer advocated that the Pennsylvania Legislature
revise the statutory employer doctrine to mirror that of our sister state, New Jersey. There, the doctrine only operates where a subcontractor has violated the mandatory provisions of the New Jersey Act and failed to obtain workers' compensation insurance. Under these circumstances, the general contractor steps into the shoes of the subcontractor, paying the
subcontractor's employee's workers' compensation, and then receiving immunity from common law tort damages, while further having the ability to assert a right of subrogation against the noncompliant subcontractor. Otherwise, [w]here the subcontractor takes out compensation insurance . . . the general contractor is treated as a third party and is not granted immunity from a common law negligence suit by an employee of a subcontractor. Notably, the subcontractor is then likewise given a right of subrogation, should the general contractor be found negligent at common law.Id. at 652 (Baer, J. concurring) (citations & quotation marks omitted). The Justice opined that "adopting such a paradigm would achieve" the primary purposes of the Act: (1) ensure "prompt payment" of benefits to an injured worker regardless of fault; and (2) "perpetuate[ ] the concomitant quid pro quo of immunity to the paying employer[.]" Id. Justice Baer anticipated that this approach would also "help to ensure safety in the workplace, and hopefully lead to the prevention of tragic accidents due to someone's carelessness . . ., by incentivizing general contractors to adopt more rigorous safety regimes." Id. See also Doman, 150 A.3d at 109 (Superior Court panel stating that it "echo[s] those calls" that the legislature "reconsider Pennsylvania's [workers' compensation] statutory scheme").
Therefore, like my honorable colleagues on the Supreme Court and the Doman panel, I advocate for a change in the workers' compensation law. In my opinion, as suggested by Justice Nigro, the McDonald test should require a sixth element - proof that the general contractor either paid the injured worker's benefits, or prior to the injury, obtained a policy which would have covered the injured employee. Only when a general contractor has assumed responsibility for an injured worker's benefits should it be entitled to immunity under the Act. To do so would be in furtherance of the initial legislative intent which is to provide a failsafe for injured workers in the event of a lapse in workers' compensation insurance by the primary employer. Imposing such a requirement would also promote public policy considerations of assuring safe worksites and providing maximum protection and compensation to injured workers. However, because, as noted above, I concede we are bound by controlling statutory and case law to affirm the trial court's grant of summary judgment in favor of Serfass, I am constrained to concur in the Majority's decision.
I note that unlike my colleagues in the Majority, I do not find Appellants waived this claim. See Majority Memorandum, at 12 n.5. Indeed, they discussed the "judicial calls to the Pennsylvania legislature to reconsider [this] statutory scheme" in their Memorandum of Law accompanying their response to Serfass' motion for summary judgment, and asserted that the "present statutory scheme allows general contractors to remain insulated from tort liability despite never being required to provide . . . benefits to injured employees of subcontractors, thus creating a windfall immunity shield." Appellants' Memorandum of Law in Opposition to [Serfass'] Motion for Summary Judgment, 11/19/20, at 12.
Thus, I concur with the decision to affirm the order granting summary judgment to Serfass, and dissent from the decision to affirm the order granting summary judgment to Tower.