Molina v. State Garden, Inc. ( 2015 )

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14-P-676 Appeals Court
ANTONIO PEREZ MOLINA vs. STATE GARDEN, INC.
No. 14-P-676.
Suffolk. December 10, 2014. - September 3, 2015.
Present: Katzmann, Hanlon, & Maldonado, JJ.
Practice, Civil, Summary judgment. Workers' Compensation Act,
Action against third person, Identity of employer,
Exclusivity provision. Waiver. Insurance, Waiver.
Release.
Civil action commenced in the Superior Court Department on
October 17, 2011.
The case was heard by Robert B. Gordon, J., on a motion for
summary judgment.
Mark S. Horrigan for the plaintiff.
Martha J. Zackin for the defendant.
John Pagliaro & Martin J. Newhouse, for New England Legal
Foundation & another, amici curiae, submitted a brief.
KATZMANN, J. This appeal presents the question whether
the "alternate employer endorsement" to a staffing company's
workers' compensation insurance policy satisfies the
requirements of G. L. c. 152, §§ 15 and 18, such that an injured
2
employee's employer, a customer of the staffing company and
named in the endorsement, is immune from tort liability under
the Workers' Compensation Act (Act). We answer that question in
the affirmative.
The plaintiff, Antonio Perez Molina (Molina or employee),
was injured while providing services on assignment from American
Resource Staffing Network, Inc. (ARS), to State Garden, Inc.
(State Garden or defendant), and brought suit against State
Garden for negligence. While his case was pending in the trial
court, he was awarded workers' compensation benefits on ARS's
policy, which named the defendant as an additional insured. A
Superior Court judge allowed State Garden's motion for summary
judgment and dismissed Molina's complaint on the ground that his
claim was barred by the exclusivity provisions of the Act, G. L.
c. 152, §§ 23-24.1 Molina appeals. We affirm.2
1
General Laws c. 152, § 23, as appearing in St. 1985,
c. 572, § 34, provides:
"If an employee files any claim or accepts payment of
compensation on account of personal injury under this
chapter, or submits to a proceeding before the department
under sections ten to twelve, inclusive, such action shall
constitute a release to the insurer of all claims or
demands at common law, if any, arising from the injury. If
an employee accepts payment of compensation under this
chapter on account of personal injury or makes an agreement
under section forty-eight, such action shall constitute a
release to the insured of all claims or demands at common
law, if any, arising from the injury."
3
Background. ARS is a staffing company that provides
temporary staffing to clients such as State Garden, a produce
business. State Garden uses ARS employees to supplement its
workforce. Molina was assigned to State Garden as a temporary
worker at its processing facility in Chelsea, Massachusetts. On
or about December 22, 2010, Molina sustained a low back injury
in the course of his work for State Garden.3 Molina's injury was
covered by the Act. He applied for and received benefits from
A.I.M. Mutual Insurance Company, ARS's workers' compensation
insurer. State Garden and ARS both acted as Molina's employer,
General Laws c. 152, § 24, as amended through St. 1986, c. 662,
§ 18, provides in relevant part:
"An employee shall be held to have waived his right of
action at common law or under the law of any other
jurisdiction in respect to an injury that is compensable
under this chapter, to recover damages for personal
injuries, if he shall not have given his employer, at the
time of his contract of hire, written notice that he
claimed such right, or, if the contract of hire was made
before the employer became an insured person or self-
insurer, if the employee shall not have given the said
notice within thirty days of the time said employer became
an insured person or self-insurer."
2
We acknowledge the amicus brief submitted by the New
England Legal Foundation and Associated Industries of
Massachusetts.
3
The complaint alleges, "On or about December 22, 2010 the
defendant, by its agents, servants or employees created an
unreasonably hazardous work environment for the plaintiff that
required the plaintiff to repeatedly lift heavy rolls of
wrapping material either above his head or above shoulder level
and load it onto a wrapping or food processing machine."
4
controlling different aspects of his employment. ARS was the
"general employer," to whom Molina applied for work. It
retained control over several personnel and administrative
functions, including purchasing and paying for insurance.
Compare Galloway's Case, 354 Mass. 427, 429-430 (1968); Ramsey's
Case, 5 Mass. App. Ct. 199, 201-202 (1977). However, ARS was
not Molina's "direct employer"; it could not arbitrarily
terminate, transfer, or remove Molina on a unilateral basis.
See Fleming v. Shaheen Bros., 71 Mass. App. Ct. 223, 227 (2008)
(Fleming). State Garden was both the "special employer" and the
"direct employer": it set Molina's hours, established his
duties and responsibilities, directed him to perform certain
tasks, and managed his day-to-day performance. See Galloway's
Case, supra; Ramsey's Case, supra; Fleming, supra.4 State Garden
was liable for the payment of Molina's wages by virtue of its
arrangement with ARS, whereby it paid ARS an amount equivalent
to his wages plus a service fee.
4
General and special employment have been acknowledged
since very early in the Act's history, appearing in "Scribner's
Case, 231 Mass. 132, 135 (1918), in which the court adhered to
the common-law criteria of control and assent by the employee in
imposing liability as between 'a special employer as
distinguished from his [. . . "lent" employee's] general
employer.'" Ramsey's Case, 5 Mass. App. Ct. at 203. On general
and special employers, see 3 Larson, Workers' Compensation Law
§ 67 (2014).
5
ARS has a workers' compensation policy, which includes an
"alternate employer endorsement." The endorsement states:
"This endorsement applies only with respect to bodily
injury to your employees while in the course of special or
temporary employment by the alternate employer . . . named
in Item 2 of the Schedule. Part One (Workers Compensation
Insurance) and Part Two (Employers Liability Insurance)
will apply as though the alternate employer is insured."5
The alternate employer endorsement specifically names State
Garden. State Garden is also identified as an "additional
employer" under the "Certificate of Liability Insurance." An
affidavit by Michele Bordieri, State Garden's human resources
manager, as well as the "Workers Compensation and Employers
Liability Insurance Certificate," indicate that State Garden
carries workers' compensation insurance that covers its
employees, and for which it pays as the named insured.6
In addition, during ARS's hiring process, Molina signed a
"Waiver and Release," which states as follows:
5
The alternate employer endorsement has been approved in
Massachusetts by the Division of Insurance. See Workers'
Compensation Rating and Inspection Bureau of Massachusetts,
Filed and Approved Endorsements, Alternate Employer Endorsement
WC 00 03 01 A, https://www.wcribma.org/Mass/ToolsandServices/
UnderwritingToolsandForms/FiledandApprovedEndorsements.aspx
[http://perma.cc/3E6W-8AUF].
6
Although State Garden states in its brief that its
workers' compensation policy covers only employees for whom it
is the "sole employer," the Bordieri affidavit did not so
specify.
6
"In consideration of any offer of employment by American
Resource Staffing, I hereby acknowledge, understand and
agree that the following will constitute terms and
conditions of any such employment.
"In recognition that any work related injuries which might
be sustained by me are covered by state Workers'
Compensation statutes, and to avoid the circumvention of
such state statutes which may result from suits against the
customers or clients of American Resource Staffing, based
on the same injury or injuries, and to the extent permitted
by law, I HEREBY WAIVE AND FOREVER RELEASE ANY RIGHTS I
MIGHT HAVE to make claims or bring suit against any client
or customer of American Resource Staffing, for damages
based upon injuries which are covered under such Workers'
Compensation statutes."
Molina sued State Garden for his injuries notwithstanding
his receipt of workers' compensation benefits on ARS's insurance
policy, the alternate employer endorsement, State Garden's
designation as an additional insured employer, and the waiver
and release of liability. State Garden filed a motion to
dismiss and, in the alternative, a motion for summary judgment.
In opposing Molina's suit, State Garden contended that, where
the general employer, ARS, carried a workers' compensation
policy containing an alternate employer endorsement naming State
Garden as an additional insured employer, State Garden was
entitled to immunity from suit under the exclusivity provisions
of the Act. Molina countered that §§ 15 and 18 of the Act limit
immunity for special employers such as State Garden to
circumstances where, among other things, the special employer
actually pays the workers' compensation benefit, and that the
7
alternate employer endorsement did not satisfy this requirement.
The judge allowed the motion for summary judgment on the ground
that the alternate employer endorsement shielded State Garden
from common-law liability under the exclusivity provisions of
the Act. We agree.7 We also conclude that Molina's action is
barred by the waiver and release he signed.
Discussion. On appeal, we review the motion judge's grant
of summary judgment de novo. Twomey v. Middleborough, 468 Mass.
260, 267 (2014). Fraco Prods., Ltd. v. Bostonian Masonry Corp.,
84 Mass. App. Ct. 296, 299 (2013). "The standard of review of a
grant of summary judgment is whether, viewing the evidence in
the light most favorable to the nonmoving party, all material
facts have been established and the moving party is entitled to
judgment as a matter of law." Augat, Inc. v. Liberty Mut. Ins.
Co., 410 Mass. 117, 120 (1991), citing Mass.R.Civ.P. 56(c), 365
Mass. 824 (1974). We may affirm the entry of summary judgment
on any ground supported by the record. See American Intl. Ins.
Co. v. Robert Seuffer GmbH & Co., 468 Mass. 109, 113 (2014).
7
The motion judge stated that it was undisputed that ARS,
as the "direct employer," was immune from suit. However, State
Garden argued on its motion for summary judgment that it (State
Garden) was the direct employer. We agree. See discussion,
passim; Fleming, 71 Mass. App. Ct. at 227. In any event,
because Molina only brought suit against State Garden, we are
not presented with the question whether ARS would be immune from
suit and express no opinion regarding that question.
8
1. Alternate employer endorsement as source of immunity.
The issue before us is whether the alternate employer
endorsement written into ARS's workers' compensation insurance
policy immunizes State Garden from common-law liability under
the exclusivity provisions of the Act.
We begin by observing, as did the motion judge, that there
is no Massachusetts case squarely on point. In Lang v. Edward
J. Lamothe Co., 20 Mass. App. Ct. 231, 232-233 (1985) (Lang),
and Numberg v. GTE Transport, Inc., 34 Mass. App. Ct. 904, 905
(1993) (Numberg), this court acknowledged that, pursuant to
§§ 15 and 18 of the Act, a special employer who was also the
direct employer could be immune from suit if it had made an
agreement with the general employer to pay the workers'
compensation benefits for the injured employee. No such
agreement had been made in either case, and, thus, the special
employers were not immune from common-law tort liability.
Because there was no alternate employer endorsement in either
case, we had no occasion to examine the effect of such an
endorsement on a special employer's tort immunity. A third
case, Fleming, 71 Mass. App. Ct. at 228-229, is not directly
applicable because there was no general- or special-employer
relationship in that case. Thus, these cases do not resolve the
issue before us. To resolve that issue, we look primarily to
the Act.
9
a. Statutory scheme. The Act was enacted as a
humanitarian measure in July, 1911, see St. 1911, c. 751, in
response to public sentiment that previous remedies under common
law and the employers' liability act did not sufficiently
protect against injuries or provide relief for workplace
accidents. See Meley's Case, 219 Mass. 136, 139 (1914); Cox's
Case, 225 Mass. 220, 223-224 (1916); LaClair v. Silberline Mfg.
Co., 379 Mass. 21, 27 (1979). The goal of the workers'
compensation scheme is the protection of the injured worker from
the sudden loss of cash income. See Sellers's Case, 452 Mass.
804, 810-811 (2008).
The Act provides the exclusive remedy for claims brought by
an injured employee against an employer. See G. L. c. 152,
§§ 23-24; Green v. Wyman-Gordon Co., 422 Mass. 551, 558 n.10
(1996) (reciting the relevant part of § 24: "[a]n employee
shall be held to have waived his right of action at common law
. . . in respect to an injury that is compensable under this
chapter, to recover damages for personal injuries . . .").
"[U]nder G. L. c. 152, § 24, unless an employee expressly
preserves his or her common law rights of action, a claim
alleging negligence of an employer . . . is foreclosed by the
exclusivity provisions of the workers' compensation act."
Perkins v. Commonwealth, 52 Mass. App. Ct. 175, 176-177 (2001).
"The [A]ct was designed to replace tort actions, by providing a
10
uniform, statutory remedy for injured workers, in contrast to a
piecemeal, tort-based system." Saab v. Massachusetts CVS
Pharmacy, LLC, 452 Mass. 564, 566-567 (2008) (quotations and
citations omitted). The exclusivity provisions are the
"cornerstone" of the Act. Id. at 568. Employees get a
"guaranteed right of recovery," but they are in turn barred from
"recovering against their employers for injuries received on the
job." Barrett v. Rodgers, 408 Mass. 614, 616 (1990). Workers'
compensation laws represent "the Legislature's balance of
competing societal interests." Squillante's Case, 389 Mass.
396, 398 (1983) (quotation omitted). See generally Restatement
of Employment Law c. 4 (2015).
Section 15 of the Act leaves open the possibility that,
notwithstanding receipt of workers' compensation benefits from
the employer, an injured employee may bring tort actions against
other entities.8 To be eligible for the limited immunity from
suit provided by the Act, a defendant must satisfy a two-part
8
General Laws c. 152, § 15, as appearing in St. 1991,
c. 398, § 39, provides, in pertinent part:
"Nothing in this section, or in section eighteen or
twenty-four shall be construed to bar an action at law for
damages for personal injuries or wrongful death by an
employee against any person other than the insured person
employing such employee and liable for payment of the
compensation provided by this chapter for the employee's
personal injury or wrongful death and said insured person's
employees."
11
test. See Lang, 20 Mass. App. Ct. at 232 ("[1] the employer
must be an insured person liable for the payment of [workers']
compensation [benefits to the injured employee], and [2] the
employer must be the direct employer of the employee").
In part two of the test, the employer asserting an immunity
defense must establish that it is also the "direct" employer.
See, e.g., Fleming, 71 Mass. App. Ct. at 227 ("[I]n order to
determine whether an employer-employee relationship exists, the
finder of fact must identify who has direction and control of
the employee and to whom does he owe obedience in respect of the
performance of his work. Method of payment for work, though
important, is not controlling in determining the terms of an
employment relationship. The primary test is whether one has a
right to control the individual's work performance") (quotations
and citations omitted).
In part one of the test, as to whether the employer is
insured and liable for the workers' compensation benefits owed
the employee, in cases such as the instant matter, where there
is both a general and a special employer, § 18 of the Act comes
into play. The last paragraph of § 18, inserted by St. 1969,
c. 755, § 2, provides:
"In any case where there shall exist with respect to an
employee a general employer and a special employer
relationship, as between the general employer and the
special employer, the liability for the payment of
compensation for the injury shall be borne by the general
12
employer or its insurer, and the special employer or its
insurer shall be liable for such payment if the parties
have so agreed or if the general employer shall not be an
insured or insured person under this chapter."
Thus, if a special employer is also the injured employee's
direct employer (thus satisfying part two of the test), and the
general and special employer have agreed that the latter shall
be liable for carrying workers' compensation insurance and
paying workers' compensation benefits, the special employer may
be immune from tort liability. Otherwise, § 18 creates the
presumption that the general employer will be liable for
benefits, and the special employer will thus fail part one of
the Lang test and will not enjoy immunity from tort liability.
See Lang, 20 Mass. App. Ct. at 232-233; Numberg, 34 Mass. App.
Ct. at 904-905.
b. The alternative employer endorsement. Here, as we have
noted, the defendant satisfies the requirements of being the
direct employer. It thus meets part two of the Lang immunity
test. Because ARS and the defendant, respectively, are the
general and special employer of the plaintiff, § 18 of the Act
applies in determining whether the defendant meets part one of
the Lang immunity test. The question before us is whether the
alternate employer endorsement constitutes the agreement
contemplated by § 18, that "the special employer or its insurer
shall be liable for such [workers' compensation] payment," such
13
that under Lang, 20 Mass. App. Ct. at 232, the defendant is "an
insured person liable for the payment of [workers'] compensation
[benefits to the injured employee]." We conclude that the
alternate employer endorsement is such an agreement.
The clear purpose of the endorsement's provision that "Part
One (Workers Compensation Insurance) . . . will apply as though
the alternate employer [State Garden] is insured," is to provide
coverage to State Garden. The endorsement makes State Garden an
insured employer9 with respect to workers' compensation claims
brought against it for workplace injuries, and thus satisfies
the requirements of § 18 of the Act.
Although Molina argues that allowing the Act to bar his
complaint for damages would circumvent the explicit provisions
of G. L. c. 152, § 15 (see note 8, supra), State Garden's
designation as an additional insured legitimately protects it
against Molina's claims. As to the effect of naming a party as
9
This view of the alternate employer endorsement, a
standard endorsement used in other States, has been articulated
in at least one reported Federal Court of Appeals decision. See
Cal-Dive Intl., Inc. v. Seabright Ins. Co., 627 F.3d 110, 114
(5th Cir. 2010) ("when endorsements such as the Alternate
Employer Endorsement add additional insureds to the policy,
these additional insureds enjoy the same benefits and are
subject to the same restrictions as a named insured absent
policy language to the contrary. . . . It is significant that
the Alternate Employer Endorsement provides that 'this
endorsement will apply as though the alternate employer is an
insured'").
14
an additional insured, see, e.g., Massachusetts Turnpike Authy.
v. Perini Corp., 349 Mass. 448, 457 (1965) ("The naming of
additional insureds does not extend the nature of the
substantive coverage originally given by the policy but merely
gives to other persons the same protection afforded to the
principal insured). See generally Mootz, 3 New Appleman on
Insurance Law Library Edition § 16.05[1][c][i], at 16-144
(2013).
In sum, in contracting to have State Garden sheltered under
ARS's workers' compensation policy, the alternate employer
endorsement naming State Garden as an additional insured is
precisely the kind of agreement between general and special
employer envisioned in § 18 of the Act, and, thus, renders State
Garden immune from suit. Contrast Lang, 20 Mass. App. Ct. at
232-233; Numberg, 34 Mass. App. Ct. at 904-905. Moreover, our
conclusion as to the alternate employer endorsement is
consistent with the statutory goal of protecting an employee who
is injured on the job, within the framework of replacing a
piecemeal tort system with a uniform statutory remedy.
2. Validity of waiver and release. Molina argues that the
waiver and release he signed at the beginning of his employment
-- contracting not to sue for damages based upon injuries
covered by the Act -- is invalid because it was signed before
any employment relationship existed and therefore was only a
15
covenant not to sue. We disagree. The release in Horner v.
Boston Edison Co., 45 Mass. App. Ct. 139, 141 n.3 (1998), nearly
identical to the release here, was deemed enforceable. In
Horner, as here, the release was provided by a staffing company
employing the plaintiff. The release waived the plaintiff's
right to bring suit against any client of the staffing company
for injuries covered under State workers' compensation statutes,
and was signed by the plaintiff as part of his employment
application with the staffing company, prior to any employment
relationship existing between the parties and prior to any cause
of action arising. This court ruled that the release was valid
and barred suit against the defendant, a client of the staffing
company. Id. at 142-145. The Horner court noted that the
agreement "extinguishes only the employee's right to recover
additional amounts as a result of a work-related injury for
which the employee has already received workers' compensation
benefits," id. at 142 (emphasis added), that the agreement "does
not require Horner to strip himself of compensation benefits for
his injury, and [that] allocation of risk by means of a release
is generally not against public policy." Ibid. "Viewed as a
whole, the release is not extracted by the employer as a shield
against its own liability but rather as protection for its
customers for those risks assumed by its employees who, in turn,
are covered by workers' compensation insurance." Ibid. We see
16
no reason to depart from the reasoning of the Horner court.
Therefore, in addition to having immunity under the Act, State
Garden is protected by the waiver and release Molina signed.
Judgment affirmed.