Cranshaw Construction Inc. v. Ghrist , 290 Pa. Super. 286 ( 1981 )

BROSKY, Judge:

This is a trespass action which appellee, Ghrist, commenced to recover damages he suffered when a concrete wall fell upon him. The accident occurred at a construction site where appellee was employed by a subcontractor. Appellant, Cranshaw Construction, Inc., one of the named defendants in the case below, was the general contractor. Appellant argued in a motion for summary judgment that, as the general contractor, it had the status of “statutory employer” conferred by the Pennsylvania Workmen’s Compensation Act.¹ The lower court found that appellant was Mr. Ghrist’s statutory employer but concluded that it did not enjoy the immunity from suit which appellant contends follows from that status and therefore denied the motion. We find that Cranshaw is immune and therefore reversed the order.

Section 203² of the Workmen’s Compensation Act establishes the requisites of statutory employer status in negligence actions. It provides:

An employer who permits the entry upon premises occupied by him or under his control of the laborer or an assistant hired by an employe or contractor, for the performance upon such premises of a part of the employer’s regular business entrusted to such employe or contractor, shall be liable to such laborer or assistant in the same manner and to the same extent as to his own employe.

In Nineteen North, Inc. v. Workmen’s Compensation Appeal Board, 48 Pa.Cmwlth. 208, 409 A.2d 503 (1979), the Commonwealth Court explained that,

In construing Section 203 of the Act, our Supreme Court has provided us with five requirements necessary to bring an employer within the Act’s definition of a “statutory employer”:

“(1) An employer who is under contract with an owner or one in the position of an owner. . .

(2) Premises occupied by or under the control of such employer. . .

(3) A subcontract made by such employer. ..

(4) Part of the employer’s regular business entrusted to such subcontractor. ..

(5) An employee of such subcontractor.”

[Citing McDonald v. Levinson Steel Co., 302 Pa. 287, 295, 153 A. 424, 426 (1930)]. See Pape v. Smith, 227 Pa.Super. 80, 323 A.2d 856 (1974).

Appellant contends that it was appellee’s statutory employer. It argues that it is entitled to the immunity of a statutory employer and that therefore its motion for summary judgment should have been granted.

Because this case is before us on appeal from the denial of a motion for summary judgment, we must view the evidence in light of Pennsylvania Rule of Civil Procedure 1035(b). The Rule provides that summary judgment should be granted if:

. .. the pleadings, depositions, answers to interrogatories, and admission on file, together with the affidavits, if any, show that there is no genuine issue as to material fact and that the moving party is entitled to a judgment as a matter of law.

The pleadings, depositions and interrogatories contain the following evidence. A vice-president of National Development Corporation, the owner of the property on which the accident occurred, stated in an affidavit that appellant had entered into a construction contract with the owner for the erection of buildings on that property.

The officer also stated in his affidavit that on the date of the accident the appellant occupied and was in possession of the premises and was in control of the construction project. In a deposition, a former employee of the subcontractor stated that an employee of appellant, the general contractor, was “more or less” the “boss of the job site.” The witness said that the employee of the appellant was “completely the general of the whole thing.”

A copy of the subcontract agreement between appellant and Mar Ray, Inc., the subcontractor, was attached to the affidavit of the president of Mar Ray, Inc.

In his complaint, appellee alleged that appellant was the general contractor employed to construct a building on the premises where the accident occurred. Appellant later introduced a copy of its contract with the owner of the premises showing it to be the general contractor for the construction of many buildings, including one on the premises in question. The subcontract with Mar Ray, Inc. indicated that Mar Ray was to perform the carpentry work on the property on which the accident occurred.

We believe that there is no genuine question that, under these circumstances, the subcontractor was entrusted with part of the employer’s regular business (that being the construction of the buildings).

Appellee’s complaint states that he was an employee of Mar Ray, Inc. As we have seen, Mar Ray, Inc. was the subcontractor.

Given the above described evidence and the lack of other evidence favorable to appellee, we find no error in the lower court’s finding that there is no genuine issue as to whether appellant was appellee’s statutory employer. See Pape v. Smith, supra.

The effect of this section was explained in Barbieri, Pennsylvania Workmen’s Compensation & Occupational Disease (1975) as follows:

Thus, in negligence cases, the general contractor has the full immunity from suit by the employee of a subcontractor which an immediate employer would have. He is the statutory employer and is the injured employe’s employer for negligence immunity purposes and is secondarily liable for compensation even though the immediate employer or some other intermediate subcontractor ... is insured and responds fully on the injured employe’s claim. The reason for this difference cannot be found in the language of the statute, but the rationale must be that, since the general contractor remains statutorily liable, although only in a reserve status, in return for this he has the statutory employer’s immunity from statutory employe negligence suits in all events.

Barbieri, supra, vol. 1, § 4.09(3) (footnotes deleted) (citing cases). See Capozzoli v. Stone & Webster Engineering Corporation, 352 Pa. 183, 42 A.2d 524 (1945).

Section 203 was last amended in 1939. Section 302³ of the Act, which is under Art. Ill, formerly entitled, “Elective Compensation,” was amended in 1974. Appellee argues that the amendments to this section also effectively amended § 203 which is part of Art. II, “Damages by Action at Law.”

We are concerned in the present case with subsections (a) and (b) of Section 302. Subsection (a) is found at 77 P.S. § 461, “coverage of employees of subcontractor”; subsection (b) is found at 77 P.S. § 462, “coverage of laborer or assistant hired by employe or contractor.”

Prior to the 1974 amendments, the statute stated that it was to be conclusively presumed that the employer or contractor had agreed to pay compensation. However, the statute did contain what is termed “elective compensation” language. That is, an employer or contractor could, if he complied with the terms of the statute, opt not to pay compensation as called for in the Act.

The present statute includes no elective compensation language. Instead, it provides that contractors and employers are to pay compensation as mandated by the Act, unless the subcontractor (§ 461) or hiring employer (§ 462), primarily liable has secured its payment. The employer referred to in Section 462 is defined in the same way as in the former statute and as in Section 203 of the Act.

Under the former statute, an employer who did not pay compensation was nonetheless accorded the immunity that stems from statutory employer status. As Barbieri, supra, explained:

. . . [W]hen the general contractor is the statutory employer in a negligence suit brought against him by the statutory employe and derives immunity therefore from the statutory employment relationship.....this does not mean that he must pay compensation in a case like Mengi-nie where he has complied with those requirements of Section 302(b) which should save him from compensation liability.

Id. at p. 32 § 409 (citing Menginie v. Savine, 170 Pa.Super. 582, 88 A.2d 106 (1952) where the question was whether the general contractor is liable to pay compensation to the employee of a second subcontractor with whom the general had no contract.)

In Capozzoli, supra, our Supreme Court held that, under the former statute, an agreement by a subcontractor to provide workmen’s compensation for its employees does not operate to remove the statutory employer from the scope of Art. II of the Workmen’s Compensation Act, even though it may operate to relieve such employer from payment of compensation by placing that responsibility upon the subcontractor.

Since Section 203 was not changed by the amendment, we see no reason to construe the alteration of Section 302 as an indirect amendment of the former section. Our research has disclosed no evidence of legislative intent to alter the result in cases like Capozzoli, in which compensation was paid by a party other than the statutory employer.

Furthermore, rules of statutory construction require that every statute be construed, if possible, to give effect to all of its provisions. See 1 Pa. C.S. § 1921(a); Hospital Association of Pennsylvania v. MacLeod, 487 Pa. 516, 410 A.2d 731 (1980).

To find that appellant was not appellee’s statutory employer would be in disregard of the terms of Section 203 of the Act.

Having concluded that appellant was entitled to immunity from liability to the appellee, Ghrist, we come finally to the question of whether he is similarly immune from being joined as an additional defendant by appellee, Wolk.

Section 303 of the Act provides:

(a) The liability of an employer under this act shall be exclusive and in place of any and all other liability to such employes, his legal representative, husband or wife, parents, dependents, next of kin or anyone otherwise entitled to damages in any action at law or otherwise on account of any injury or death as defined in section 301(c)(1) and (2) or occupational disease as defined in section 108.

(b) In the event injury or death to an employe is caused by a third party, then such employe, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to receive damages by reason thereof, may bring their action at law against such third party, but the employer, his insurance carrier, their servants and agents, employes, representatives acting on their behalf or at their request shall not be liable to a third party for damages, contribution or indemnity in any action at law, or otherwise, unless liability for such damages contributions or indemnity shall be expressly provided for in a written contract entered into by the party alleged to be liable prior to the date of the occurrence which gave rise to the action.

Act of December 5, 1974, P.L. 782, No. 263, § 6; 77 P.S. § 481 (Supp.1980-1981) (emphasis added) (footnotes deleted).

Section 303(b) prohibits the joinder of an employer as an additional defendant. Arnold v. Barbonus, 257 Pa.Super. 110, 390 A.2d 271 (1978). Hefferin v. Stempkowski, 247 Pa.Super. 366, 372 A.2d 869 (1977).

The Hefferin court wrote:

The Supreme Court has made it clear that the purpose of [Section 303(b)] of the Act was to restrict the remedy available to an employer against the employer to compensation, and to close to the employee, and to third parties, any recourse against the employer in tort for negligence. (emphasis added) (citing cases)

Id., 247 Pa.Super. at 369, 372 A.2d at 871.

Prior to the enactment of the 1974 amendments to Section 303 of the Act, the issue of whether an employer was liable for contribution to a third party was controlled by case law. See Giordano v. Clement Martin, Inc., 347 Pa. 61, 31 A.2d 504 (1943); Hattersley v. Bollt, 512 F.2d 209 (1975) (where the Third Circuit Court of Appeals applied cases limiting the contribution of employers to statutory employers).

Case law limited the contribution recoverable from the employer by a third party to the extent of the employer’s statutory liability under the Act. See Tsarnas v. Jones & Laughlin Steel Corporation, 488 Pa. 513, 412 A.2d 1094 (1980). In the event the general contractor had been relieved of the obligation to pay compensation for which it would otherwise have been liable, no right of contribution existed. See Giordano v. Clement Martin, Inc., supra.

The present statute relieves the employer of the obligation to contribute to an award imposed upon a third party. That is, unlike the former approach, the current statute relieves an employer of the obligation to contribute, even if he has paid compensation. The statute broadens the employer’s immunity; it does not diminish it. Appellee’s argument that appellant’s failure to pay compensation should deny it immunity from contribution conflicts with the statute. As this .court’s opinion in Hefferin makes clear, with the enactment of the 1974 amendments, “the Legislature made the Pennsylvania Workmen’s Compensation Act a complete substitute for, not a supplement to, common law tort actions.” Id., 247 Pa.Super. at 369, 372 at 871.

We have found appellant to be appellee’s statutory employer. To find that it is not the “employer” referred to in Section 303, would frustrate the legislative intent as enunciated in Hefferin.

We find that summary judgment should have been granted to appellant and therefore reverse the lower court’s order.

DiSALLE, J., files a concurring statement. SHERTZ, J., files a dissenting opinion.

1 . Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 1, et seq.

Appellant’s motion followed its assertion of this claim in its Answer to the New Matter filed by appellee, Paul Wolk. In New Matter, Wolk joined appellant as an additional defendant in order to protect his right to contribution or indemnity. The question of whether appellant can be so joined will be discussed at the conclusion of this opinion.

2 . 77 P.S. § 52, as amended.

3 . As amended in 1974 § 302 provides in relevant part:

(a) A contractor who subcontracts all or any part of a contract and his insurer shall be liable for the payment of compensation to the employes of the subcontractor unless the subcontractor primarily liable for the payment of such compensation has secured its payment as provided for in this act. Any contractor or his insurer who shall become liable hereunder for such compensation may recover the amount thereof paid and any necessary expenses from the subcontractor primarily liable therefor. 77 P.S. § 461.

* * # * if: #

(b) Any employer who permits the entry upon premises occupied by him or under his control of a laborer or an assistant hired by an empiloye or contractor, for the performance upon such premises of a part of such employer’s regular business entrusted to that employe or contractor, shall be liable for the payment of compensation to such laborer or assistant unless such hiring employe or contractor, if primarily liable for the payment of such compensation, has secured the payment thereof as provided for in this act. Any employer or his insurer who shall become liable hereunder for such compensation may recover the amount thereof paid and any necessary expenses from another person if the latter is primarily liable therefor. 77 P.S. § 462.