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MARSH v. TILLEY STEEL COMPANY

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Court of Appeal, Second District, Division 4, California.

Robert H. MARSH, Plaintiff and Appellant, v. TILLEY STEEL COMPANY, Defendant and Respondent.

Civ. 54588.

Decided: August 01, 1979

Jeffrey B. Harrison, Gerald H. B. Kane, Jr. and Martin & Harrison, Los Angeles, for plaintiff and appellant. John Koslov, Los Angeles, for defendant and respondent.

This is an action for damages for negligence. Plaintiff Robert H. Marsh sought damages for personal injuries sustained by him in Pasadena, California on February 7, 1975, during plaintiff's employment as a truck driver for Maxwell Construction Company. Plaintiff alleged that the accident occurred because of the negligent operation of a crane by Andy Wynglarz, an employee of Maxwell's subcontractor, Tilley Steel Company.

Named as defendants were Tilley Steel, Matich Construction Company, the State of California, and Andy Wynglarz. Industrial Indemnity Company, the workmen's compensation carrier for plaintiff's employer, Maxwell Construction, filed a complaint in intervention against the named defendants, seeking reimbursement for workmen's compensation benefits provided for plaintiff.

Plaintiff's action against Matich, the State of California and Wynglarz was subsequently dismissed, as was the complaint in intervention, leaving Tilley Steel Company as the sole defendant.

Trial by jury commenced against defendant Tilley Steel. After evidence had been presented on the issue of liability, defendant, Tilley Steel, moved for a judgment of nonsuit on the ground that plaintiff's evidence established that, at the time of the accident, Wynglarz, the crane operator, was the special employee of Maxwell Construction, plaintiff's employer, thus precluding plaintiff from seeking damages from Tilley Steel as the general employer of Wynglarz, and limiting plaintiff to the benefits available to him from workmen's compensation insurance. The trial court at first denied the motion. Defendant subsequently renewed the motion, however, and, after considerable oral argument on its merits, the trial court granted the motion for a judgment of nonsuit and the jury was discharged. This appeal by plaintiff from the judgment of nonsuit followed.

I

The Rule of Law for Granting a Motion for Judgment of Nonsuit

The legal principle which governs the granting of a motion for judgment of nonsuit following a plaintiff's evidentiary showing in his case in chief is so well established that there should be no necessity for repeating this rule of law. Nevertheless, because of the erroneous granting of a judgment of nonsuit which occurs more than occasionally, we deem it helpful to set forth this rule of law. “A nonsuit in a jury case . . . may be granted only when disregarding conflicting evidence, giving to the plaintiffs' evidence all the value to which it is legally entitled, and indulging every legitimate inference which may be drawn from the evidence in plaintiffs' favor, it can be said that there is no evidence to support a jury verdict in their favor.” (Elmore v. American Motors Corp. (1969) 70 Cal.2d 578, 583, 75 Cal.Rptr. 652, 655, 451 P.2d 84, 87; Estate of Lances (1932) 216 Cal. 397, 400, 14 P.2d 768.)

II

A Summary of the Evidence

We summarize the evidence, being mindful of the appropriate standard of review just stated.

At the time of the accident, plaintiff's employer, Maxwell Construction, was the general contractor for all reinforced concrete bridges and retaining walls necessary for the construction of Interstate Highway 210, commonly known as the Foothill Freeway in Pasadena. Plaintiff had been hired by Maxwell Construction in 1972 as a truck driver, and was assigned to the freeway project. His duties included heavy manual labor. Maxwell Construction's principal subcontractor for the freeway project was defendant Tilley Steel, whose task it was to install reinforced steel in Maxwell Construction's concrete work. A regular employee of Tilley Steel was Andy Wynglarz, a crane operator, who had worked at the freeway site for about a year and a half.

Maxwell Construction and Tilley Steel worked closely together as their joint efforts required coordination of supplies and labor. Maxwell Construction's superintendent, Hendricks, and Tilley Steel's superintendent Ritchie, had orally agreed that, when either company required the use of a crane but did not have an appropriate one available, such company could borrow a crane and its operator from the other.

Although this understanding was not spelled out in great detail, it was contemplated that cranes would be borrowed on a temporary basis usually for half a day or less and would not involve any payment on either side. The agreement did not require any formal shifting of personnel; each organization's employees were expected to report to their own supervisors, and were not required, while on borrowed status, to adopt the insignia, if any, of the borrowing company. Each organization's employees were retained on the payroll of their initial employer.

The borrowing agreement did not expressly spell out the degree of control over the borrowed employee to be exercised by the borrowing employer. According to Maxwell Construction's superintendent, Hendricks, however, it was implicitly understood, on the basis of industry custom and practice, that the borrower would advise the crane operator of the result to be achieved, but would leave the method for completing the assigned task to the crane operator. Crane operators traditionally have been charged with the responsibility for the safe operation of their equipment and, as a result, determine the details of positioning the crane and the operation of its controls, regardless of the overall nature of the work to be performed. In practice, crane operators depend on occasion on hand signals from ground men or others involved in the particular task, to obtain the information needed to exercise their discretion.

Also implicit in the borrowing arrangement between Maxwell Construction and Tilley Steel was the idea that any dispute concerning crane operation would be resolved between the employers, and, while the borrowing employer could return an unsatisfactory crane operator to the lender, the borrower did not have the power to terminate such an operator's employment.

During the period Maxwell Construction and Tilley Steel had worked at the particular freeway site, there had been considerable borrowing of cranes and their operators. Tilley Steel's crane operator, Wynglarz, had worked with plaintiff on a number of occasions; both had understood that Wynglarz would be apprised of what was needed to be done, but would decide the method to be employed to achieve the needed purpose. It appears that Wynglarz did not always rely upon, or require, signalling by other employees as he worked, although there was testimony that safe crane operation demanded the use of signals.

On February 7, 1975, the day of the accident, Wynglarz reported for work to his employer, Tilley Steel, and spent the morning on a Tilley Steel assignment. At noon, however, superintendent Ritchie advised Wynglarz to report in the afternoon to Maxwell Construction foreman Upton, at a railroad tunnel under the freeway. Wynglarz did so, taking his small, truck-mounted hydraulic crane, to the tunnel. He was aware when he arrived of what was to be done, i. e., the removal of some curing rugs from a retaining wall and the transportation of concrete forms to another location.

Wynglarz did not speak to Upton when he arrived at the tunnel site, but commenced work with plaintiff and a Maxwell Construction foreman, Figueroa. After hauling away the rugs, the three men loaded the concrete forms on plaintiff's truck. These forms were large reinforced steel panels weighing 1400 pounds each. After ten of them had been placed on plaintiff's truck, with the help of the crane, plaintiff transported the forms to their destination, the Wilson Street bridge. There he and Wynglarz prepared to unload the forms. Plaintiff climbed up on his truck and rigged the load, attaching a choker to the crane as Wynglarz had positioned it.

Plaintiff then returned to the ground, and was intending to signal the crane operator concerning where the forms were to be deposited. Plaintiff stopped, however, to bend down to push a chain under his truck. He heard the sound of metal grating against metal above him. He looked up and saw the crane boom swinging overhead and one of the forms sliding off the stack toward him. Plaintiff tried to dive out of the way, but the panel struck him at two places: in the face, breaking his nose, and on the right leg, causing a severe compound comminuted fracture above the ankle.

After months in a cast, plaintiff's right leg measured shorter than the other, and there was some angulation in the right ankle area. At the time of trial, these complications were causing stress and pain to plaintiff. He decided that it would be necessary to give up the truck-driver and labor occupation for retraining as a commercial artist, despite the lowered earnings this occupation would bring.

III

The Doctrine of Dual Employment The Effect of An Employee Having Two Employers, a General Employer and a Special Employer

The above summary presents the state of the evidence upon which the trial court relied in determining that, as a matter of law, Wynglarz had been the “special employee” of Maxwell Construction at the time of the accident, thereby precluding any recovery of damages from defendant Tilley Steel as the general employer of Wynglarz, the allegedly negligent cause of plaintiff's injury. If the Only employer of Wynglarz, the crane operator, was Tilley Steel, the latter could be held liable to plaintiff under the tort doctrine of respondeat superior.

But if Wynglarz is to deemed an employee of Maxwell Construction as well as of Tilley Steel, the dual employment forecloses plaintiff from recovery of general damages against Tilley Steel, since plaintiff has been injured as the result of negligence of a fellow employee. Where dual employment exists, the original employer is termed the “general” employer and the second employer is termed the “special” employer.

The existence of dual employment is well recognized by the decisional law. “ ‘Where an employer sends an employee to do work for another person, and both have the right to exercise certain powers of control over the employee, that employee may be held to have two employers his original or ”general“ employer and a second, the ”special“ employer.’ ” (Kowalski v. Shell Oil Company (1979) 23 Cal.3d 168, 174, 151 Cal.Rptr. 671, 674-75, 588 P.2d 811, 814.)

The legal consequences of the existence of dual employment are indeed significant. An injured workman is limited to recovery of workers' compensation benefits and is denied any cause of action for general damages against the “general” employer based upon third-party liability. “If general and special employment exist, ‘the injured workman can look to both employers for (workers') compensation benefits. (Citations.) If workmen's compensation is available, it constitutes, with an exception not pertinent here, the workman's Sole remedy against the employer. (Lab.Code, s 3601.) Thus where there is dual employment the workman is barred from maintaining an action for damages against either employer.’ (Citations.)” (Kowalski, supra, 23 Cal.3d 168, 175, 151 Cal.Rptr. 671, 675, 588 P.2d 811, 815; fn. omitted.)

The determination of whether the borrowing employer has become the “ special” employer of the borrowed employee has generally been regarded as a factual one, to be made by the trier of fact in this case, the jury. (Miller v. Long Beach Oil Dev. Co. (1959) 167 Cal.App.2d 546, 550, 334 P.2d 695.)

The principal factor to be considered is the existence, on the part of the borrowing employer, of “ ‘(t)he right to control and direct the activities of the alleged employee or the manner and method in which the work is performed, whether exercised or not, . . .’ ” (McFarland v. Voorheis-Trindle Co. (1959) 52 Cal.2d 698, 704, 343 P.2d 923, 927.) It is insufficient to rely on a general assignment of a task in ascertaining the right of control; the right of control and direction that indicates a special employment relationship between the borrowing employer and the employee must be concerned with the details of the work to be performed. (Umsted v. Scofield Eng. Const. Co. (1928) 203 Cal. 224, 227, 263 P. 799.)

Since the question of whether the lending employer has relinquished to the borrowing employer the right to control the employee in question is basically one of fact. However, the decisional law has developed a number of factors as evidentiary indicia of the existence or nonexistence of this special employment relationship between the borrowing employer and the employee lent to such employer.

The Kowalski court has summarized these factors by observing: “Evidence that the alleged special employer has the power to discharge a worker ‘is strong evidence of the existence of a special employment relationship. (Citations.) The payment of wages is not, however, determinative.’ (Citation.) Other factors to be taken into consideration are ‘the nature of the services, whether skilled or unskilled, whether the work is part of the employer's regular business, the duration of the employment period, . . . and who supplies the work tools.’ (Citations.) Evidence that (1) the employee provides unskilled labor, (2) the work he performs is part of the employer's regular business, (3) the employment period is lengthy, and (4) the employer provides the tools and equipment used, tends to indicate the existence of special employment. Conversely, evidence to the contrary negates existence of a special employment relationship. (P) In addition, consideration must be given to whether the worker consented to the employment relationship, either expressly or impliedly, and to whether the parties believed they were creating the employer-employee relationship.” (Kowalski, supra, 23 Cal.3d 168, 177-178, 151 Cal.Rptr. 671, 676-677, 588 P.2d 811, 816-817; fns. omitted; see also Martin v. Phillips Petroleum Co. (1974) 42 Cal.App.3d 916, 921-923, 117 Cal.Rptr. 269, for a discussion of relevant factors.)

On this appeal, defendant Tilley Steel asks that we adopt a “whole business” test for determining when a borrowed employee becomes the special employee of the borrower employer. This test would ask one simple question: About whose business was the employee engaged at the time? If the borrowed employee was engaged in the business of the borrower employer at the time of the accident, such employee would be considered the special employee of the borrower employer. If, however, the borrowed employee was about the business of his lending employer at the time of the accident, such employee would Not be considered to be the special employee of the borrowing employer.

We must reject Tilley Steel's suggestion that we adopt the so-called “ whole business” test. Two reasons stand out for our rejection of the suggested test. In the first place, it has not been adopted by our Supreme Court to create binding authority upon us. But equally important is the fact that we view the “whole business” test as too simplistic a doctrine; it does not appeal to our view of logic or fairness, and would lead to a finding of special employment in most cases. As we have pointed out, a review of the decisional law indicates that the doctrine of special employment is not particularly favored in the law. Thus, it has been held that employers may not create a dual employment by contractual provisions if the true relationship of the parties is contrary to the terminology used. “Although the terms of a contract may specify that a special employer retains the right to control the details of an individual's work or purports to establish an employment relationship, ‘the terminology used in an agreement is not conclusive . . . even in the absence of fraud or mistake.’ (Citations.) ‘The contract cannot affect the true relationship of the parties to it. Nor can it place an employee in a different position from that which he actually held.’ ” (Kowalski, supra, 23 Cal.3d 168, 176, 151 Cal.Rptr. 671, 675-676, 588 P.2d 811, 815-816.)

IV

The Trial Court's Error in Holding, as a Matter of Law, that the Evidence Established a Dual Employment Relationship

With the principles outlined above in mind, we turn to the case at bench. In order to sustain the trial court in granting Tilley Steel's motion for judgment of nonsuit, the evidence must be such that no reasonable jury could find that Wynglarz was Not the special employee of Maxwell Construction. (See Elmore, supra, 70 Cal.2d 578, 75 Cal.Rptr. 652, 451 P.2d 84.)

Our analysis of the evidence leads us to conclude that the jury could reasonably have found that Wynglarz was Not the special employee of Maxwell Construction but only the employee of Tilley Steel, with no dual employment involved.

It seems clear that the oral agreement between Maxwell Construction and Tilley Steel for temporary loans of cranes and crane operators was entered into with a mutual benefit in mind, i. e., to further the business interests of both entities in completing the freeway project with as much efficiency and dispatch as possible. Since it was contemplated that the borrowing periods would be of short rather than long duration, no provision was made for the relinquishment of control by either organization over its employees. The employees continued to report to their respective employers at the beginning of each working day, were paid by their respective employers, and could only be terminated by their respective employers. The serious question at issue is whether such casual and limited borrowing, done in the spirit of mutual aid, must be deemed to have resulted in a special employment relationship during such temporary lending or borrowing periods.

In the instant case, the fact that Wynglarz was a skilled craftsman rather than an unskilled worker also tends to negate the existence of a special employment relationship. It was uncontradicted that such an employee, a specialist in crane operation, would determine the details of his temporary employment and the methods to be used to complete the assignment, without detailed supervision from any particular person. Another factor tending to negate the concept of special employment here was the fact that Tilley Steel, not Maxwell Construction, supplied not only the employee but the equipment necessary for the task to be completed.

A reasonable argument could be made that it would be unreasonable to assume that Tilley Steel would hazard a piece of industrial equipment such as a crane by relinquishing control of the crane and its operator in the unequivocal manner required to establish special employment by Maxwell Construction. The instant case is not unlike that of Doty v. Lacey (1952) 114 Cal.App.2d 73, 249 P.2d 550, in which a judgment insulating the general employer of a crane operator from liability was reversed by the appellate court.

We conclude that the evidence was sufficient for a jury to reasonably determine that Wynglarz was not Maxwell Construction's special employee but remained at all times the employee of Tilley Steel only, with no dual employment present. The issue was thus one for the jury to decide upon presentation of all the evidence by both parties. One final argument was made by defendant Tilley Steel an argument with which we deal briefly. Tilley Steel asserts that plaintiff did not challenge the trial court's nonsuit ruling that Wynglarz was the special employee of Maxwell Construction, and should not now be allowed to challenge the ruling on appeal. We have searched the record and can find no basis for this contention. However imperfectly the issue may have been described in the record below, the parties knew what the issue was, and argued before the trial court judge at length, discussing the various factors that tend to show the existence or the nonexistence of the special employment relationship. By deciding the issue through the granting of defendant's motion for a judgment of nonsuit, the trial court committed reversible error. The issue should have been left to the jury to decide.

The judgment is reversed.

JEFFERSON, Associate Justice.

KINGSLEY, Acting P. J., and ALARCON, J., concur.

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