Summary
holding that the defendant's work of digging trenches and installing gas lines rendered the defendant no stranger to the work of building and developing condominiums, thus barring the plaintiff's suit under the VWCA
Summary of this case from Demetres v. E. W. Constr., Inc.Opinion
Record No. 001615.
June 8, 2001.
Present: Carrico, C.J., Lacy, Keenan, Koontz, Kinser, and Lemons, JJ., and Whiting, S.J.
A limited liability company was the owner of a project to create a condominium complex. It had no employees, and subcontracted all the work to various subcontractors. Plaintiff was employed by a subcontractor engaged to perform exterior finish work on the project. Another subcontractor, a natural gas company, agreed to dig, install, and test natural gas lines on the site. The gas company further subcontracted with a construction company. While the construction company was testing a gas line, a plastic gas cap blew off the line, striking and injuring the plaintiff. Plaintiff filed a personal injury action against the construction subcontractor, which filed a plea in bar in which it maintained that the court had no jurisdiction to adjudicate the common-law claim because the construction company was plaintiff's co-employee under the terms of the Workers' Compensation Act, and therefore his exclusive remedy was under Code § 65.2-300. The trial court sustained the plea, and the plaintiff appeals.
1. Because plaintiff was not the construction subcontractor's common-law employee, the controlling statute is Code § 65.2-302, which provides that when an owner undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (referred to in this section as "subcontractor") for performance of the whole or any part of the work, the owner shall be liable to pay to any worker employed in the work any compensation which he would have been liable to pay if the worker had been immediately employed by him.
2. Code § 65.2-302 further provides that when a subcontractor in turn contracts with still another person for performance of the whole or any part of the work, then the liability of the owner or contractor shall be the same as the liability imposed by subsections A and B of this section.
3. Under this statute, even though a third party subcontractor may not have a common-law employer-employee relationship with injured workers, their respective rights and obligations may be affected.
4. The purpose of Code § 65.2-302 is to bring within the operation of the Act all persons engaged in work that is a part of the trade, business, or occupation of the party who undertakes as owner or who contracts as contractor to perform the work, and to make liable to every employee engaged in the work every such owner contractor, or subcontractor above such employee.
5. If the injured worker has a remedy against his statutory employer, that remedy is exclusive under Code § 65.2-307 and the worker has no right to bring a common-law action against any such statutory employer.
6. If a particular subcontractor and an injured employee's common law or statutory employer are both working on the same project and are also engaged in the owner or general contractor's work, that particular subcontractor, as a statutory co-employee of the injured worker, is also entitled to the common law immunity provided by the exclusivity provision.
7. Because the construction subcontractor contends that it and the exterior finishing company that employed the plaintiff were both subcontractors under the owner's project, the construction company asserts the immunity of a statutory co-employee here.
8. On the other hand, if a subcontractor like the construction subcontractor here had been engaged in work that was not a part of the trade, business, or occupation of the injured party's common law or statutory employer, as plaintiff asserts, that subcontractor would be "another party" or a "stranger to the employment", and not a statutory co-employee under the provisions of Code § 65.2-302. In that situation, the construction subcontractor would be subject to a common-law action by the injured worker.
9. Hence, the dispositive issue framed by the parties in this case is whether the construction subcontractor's installation of the gas line was a part of the trade, business or occupation of the project owner, making the construction company plaintiff's statutory co-employee.
10. Persons who function solely as suppliers and deliverers of goods are not within the scope of the Act. In another case, it was held that because an injured employee's employer was not engaged in the construction process, the injured employee was permitted to maintain a common-law action against the general contractor.
11. However, the facts in this case indicate more than a mere sale and final act of delivery. Before the gas company could deliver the natural gas, its oral contract with the general contractor required it to dig the ditches, install the gas lines, connect them to the condominium buildings, and test them. These contractual obligations were subcontracted and the subcontractor was engaged in a part of the construction process. Hence, the contention that the construction subcontractor was simply a supplier and deliverer is without merit.
12. In a common-law action by an injured employee, contractors are not entitled to the protection of the exclusive remedy provisions of the Act if they were strangers to the work. Here, however, the project owner was formed solely to build and develop these condominiums. Installation of the gas line was part of its construction project, covered by the contract with the gas company, and thus the construction subcontractor was not a stranger to project owner's business.
13. The argument that the digging, placing, connecting, and testing of the gas lines could never have been a part of the project owner's business because the gas company and its construction company subcontractor as agent are both subject to Title 56 of the Virginia Code relating to public service companies fails. Although the gas company is a public service company and subject to regulation as such, no statutory provision has been found that regulates a subcontractor's construction of facilities like these gas lines.
14. Provisions in a gas company tariff, allegedly filed in the records of the State Corporation Commission, are not considered because they were not brought to the attention of the trial court.
15. The construction subcontractor was doing work that was a part of project owner's construction of the condominium project and, therefore, a part of the owner's trade, business or occupation. Hence, the construction company was plaintiff's statutory co-employee and the trial court correctly held he had no common-law remedy against the construction subcontractor.
Appeal from a judgment of the Circuit Court of the City of Virginia Beach. Hon. A. Bonwill Shockley, judge presiding.
Affirmed.
M. Eve Grandis ( Robert L. Samuel; Williams, Mullen, Clark Dobbins, on briefs), for appellant.
John S. Norris, Jr. ( Kent K. Stanley; Norris St. Clair, on brief), for appellee.
This appeal of a personal injury claim involves Code § 65.2-307, the exclusive remedy provision of the Virginia Workers' Compensation Act, Code §§ 65.2-100 through 1310 (the Act), and its applicability to a common-law claim of Bruce Ray Pfeifer, an employee of one subcontractor on a construction job who sued another subcontractor for personal injuries received on the job.
Code § 65.2-307 provides in pertinent part:
A. The rights and remedies herein granted to an employee [against his employer] . . . shall exclude all other rights and remedies of such employee . . . at common law or otherwise, on account of such injury, loss of service or death.
The parties stipulated the facts. Linkhorn Bay Associates, L.L.C. (Linkhorn Bay) was the owner of a project known as Linkhorn Bay Condominiums in the City of Virginia Beach. Linkhorn Bay had no employees, and subcontracted all the work to various subcontractors. One such contract was an oral contract with Virginia Natural Gas (the gas company), in which the gas company agreed to dig, install, and test natural gas lines, and to connect them to the condominium buildings on the site at no charge to Linkhorn Bay, in return for Linkhorn Bay's agreement to install appliances using natural gas in the planned condominium units. Linkhorn Bay executed another contact with Pfeifer's common-law employer, Tidewater Applicators, Inc. (Tidewater), in which Tidewater was to "complete `Exterior Finish System for construction' of the Project."
The gas company subcontracted its contractual obligation to Krauss Construction Company of Virginia, Inc. (Krauss). While Krauss' employees were testing the gas line, a plastic gas cap blew off the line, striking and injuring Pfeifer, who was working on the job.
Pfeifer filed a personal injury action against Krauss. Krauss filed a plea in bar in which it maintained that the court had no jurisdiction to adjudicate Pfeifer's common-law claim because Krauss was Pfeifer's co-employee under the terms of the Act, and therefore his exclusive remedy was under Code § 65.2-300. Pfeifer denied that Krauss was his statutory co-employee and asserted that the exclusive remedy provision of the Act was inapplicable.
Pfeifer's action was filed in the Circuit Court of the City of Norfolk and, on motion by the defendant, it was later transferred to the Circuit Court of the City of Virginia Beach under the provisions of Code § 8.01-264.
After hearing argument, the trial court sustained Krauss' plea. We granted this appeal to Pfeifer.
[1-2] Because Pfeifer was not Krauss' common-law employee, the controlling statute is Code § 65.2-302. With the names of the parties hereto added in brackets, it provides in relevant part as follows:
§ 65.2-302. Statutory employer.
A. When any person (referred to in this section as "owner") [Linkhorn Bay] undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (referred to in this section as "subcontractor") [the gas company] for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any worker employed in the work any compensation under this title which he would have been liable to pay if the worker had been immediately employed by him.
. . . .
C. When the subcontractor [the gas company] in turn contracts with still another person (also referred to as "subcontractor") [Krauss] for the performance or execution by or under such last subcontractor of the whole or any part of the work undertaken by the first subcontractor, then the liability of the owner or contractor shall be the same as the liability imposed by subsections A and B of this section. [Emphasis added.]
[3-5] Under this statute, even though a third party subcontractor like Krauss may not have a common-law employer-employee relationship with injured workers like Pfeifer, their respective rights and obligations may be affected.
The purpose of [Code § 65.2-302] is to bring within the operation of the Act all persons engaged in work that is a part of the trade, business, or occupation of the party who undertakes as owner or who contracts as contractor to perform the work, and to make liable to every employee engaged in the work every such owner contractor, or subcontractor above such employee.
The reference was to Code § 65.1-29 "and related provisions" of the Act, which are now embodied in Code § 65.2-302.
Smith v. Horn, 232 Va. 302, 305, 351 S.E.2d 14, 16 (1986). If the injured worker has a remedy against his statutory employer, that remedy is exclusive under Code § 65.2-307, and the worker has no right to bring a common-law action against any such statutory employer. See Smith, 232 Va. at 306-07, 351 S.E.2d at 16; Anderson v. Thorington Construction Company, Inc., 201 Va. 266, 272, 110 S.E.2d 396, 400-01 (1959), appeal dismissed, 363 U.S. 719 (1960).
[6-7] If a particular subcontractor and an injured employee's common law or statutory employer are both working on the same project and are also engaged in the owner's or general contractor's work, that particular subcontractor, as a statutory co-employee of the injured worker, is also entitled to the common law immunity provided by the exclusivity provision. Evans v. Hook, 239 Va. 127, 131, 387 S.E.2d 777, 779 (1990). Because Krauss contends that it and Tidewater were both subcontractors under Linkhorn Bay, Krauss asserts the immunity of a statutory co-employee here.
[8-9] On the other hand, if a subcontractor like Krauss had been engaged in work that was not a part of the trade, business, or occupation of the injured party's common law or statutory employer, as Pfeifer asserts, that subcontractor would be "another party" or a "stranger to the employment," and not a statutory co-employee under the provisions of Code § 65.2-302. Therefore, Krauss would be subject to a common-law action by the injured worker. Evans v. Hook, 239 Va. at 130-31, 387 S.E.2d at 778. Hence, the dispositive issue framed by the parties in this case is whether Krauss' installation of the gas line was a part of the trade, business, or occupation of Linkhorn Bay, making Krauss Pfeifer's statutory co-employee.
"Another party" or "stranger to the employment" is the person or entity not entitled to the benefit of the exclusivity provision of the Act against whom the injured employee (or his employer who has a subrogation claim for benefits paid under the Act) has a common law claim arising out of the industrial accident. Code § 65.2-309; Sykes v. Stone Webster Eng'r Corp,. 186 Va. 116, 120-21, 41 S.E.2d 469, 471 (1947).
First, Pfeifer argues that the gas company was a mere supplier of materials to the job and was not engaged in the trade, business, or occupation of Linkhorn Bay. In support of this position, Pfeifer cites the case of Burroughs v. Walmont, Inc., 210 Va. 98, 168 S.E.2d 107 (1969). In Burroughs, a worker for a sheetrock supplier was injured on a construction job and was permitted to maintain a tort claim against the general contractor. The contract between the supplier and the general contractor required the worker to deliver and stack in each room sufficient quantities of sheetrock to construct the walls in that room. Noting prior cases in which we held that "persons who function solely as suppliers and deliverers of goods" were not within the scope of the Act, we concluded that this was the final act of delivery and not an act of construction. Id. at 100, 168 S.E.2d at 108. Because the injured employee's employer was not engaged in the construction process, the injured employee was permitted to maintain a common-law action against the general contractor. Id.
However, the facts in this case indicate more than a mere sale and final act of delivery. Before the gas company could deliver the natural gas, its oral contract with Linkhorn Bay required it to dig the ditches, install the gas lines, connect them to the condominium buildings, and test them. Those contractual obligations were subcontracted to Krauss and, as it dug the ditches, installed the gas lines, connected them to the condominium buildings and tested them, Krauss was engaged in a part of the construction process. Thus, the circumstances in this case are more like those in the case of Bosher v. Jamerson, 207 Va. 539, 151 S.E.2d 375 (1966), relied upon by Krauss.
In Bosher, an employee of a material supplier was spreading sand as contractually required and as directed on the job by the general contractor when his truck struck and injured an employee of the general contractor. The injured employee sued the material supplier at common law claiming that it was a mere supplier of materials and not his statutory employer. Because spreading the sand was a part of the construction process, we held that the truck driver was engaged in the construction process and applied the exclusive remedy provision of the Act, dismissing the tort claim.
We conclude that digging the necessary trenches, installing the gas lines, connecting them to the buildings, and testing them was more than a simple supply and delivery of materials. Hence, Pfeifer's contention that Krauss was simply a supplier and deliverer is without merit.
Next, Pfeifer argues that Krauss was a stranger to Linkhorn Bay's business of building the condominium units since digging ditches outside those units "was not aiding in the construction of those units." In support of this argument, he notes that we last applied the "stranger to the work test" in Stone v. Door-Man Manufacturing Co., 260 Va. 406, 417-19, 537 S.E.2d 305, 310-12 (2000). In Stone, an employee of a manufacturer was injured because of the negligent design and construction of an overhead door by independent construction contractors who were held strangers to the manufacturer's business. Id. In a common-law action by the injured employee, we held that these contractors were not entitled to the protection of the exclusive remedy provisions of the Act because they were strangers to the manufacturing work.
Krauss responds that it was not a stranger to the work of Linkhorn Bay, but was performing an essential part of that work. We agree with Krauss because Linkhorn Bay had been formed solely to build and develop these condominiums. Unlike the manufacturer in Stone, Linkhorn Bay had no other function, and the installation of the gas lines was part of Linkhorn Bay's construction project covered by the terms of Linkhorn Bay's oral contract with the gas company. Thus, we conclude that Krauss was not a stranger to Linkhorn Bay's business and reject this contention.
Finally, Pfeifer contends that the digging, placing, connecting, and testing of the gas lines could never "have been a part of Linkhorn Bay's business, or the business of any other owner or general contractor on a construction project," because the gas company and Krauss as its agent are "both subject to Title 56 of the Virginia Code relating to public service companies." Although the gas company is a public service company and subject to regulation as such, Pfeifer cites, and we find, no statutory provision that regulates a subcontractor's construction of facilities like these gas lines.
Pfeifer quotes from provisions in a gas company tariff, allegedly filed in the records of the State Corporation Commission, which he says support his contention. We do not consider these provisions, because neither they nor the tariff was brought to the attention of the trial court. Rule 5:25; Commonwealth v. Woodward, 249 Va. 21, 23, 452 S.E.2d 656, 656 (1995).
For the same reason, we do not consider Pfeifer's arguments relating to on which side of the proposed meter or meters the injury occurred.
We conclude that Krauss was doing work that was a part of Linkhorn Bay's construction of the condominium project and, therefore, a part of Linkhorn Bay's trade, business, or occupation. Hence, Krauss was Pfeifer's statutory co-employee and the trial court correctly held he had no common-law remedy against Krauss.
Accordingly, the judgment will be
Affirmed.