Vernon Tyson, Janice Tyson v. Litwin Corporation v. Hess Oil V.I. Corporation, Third Party Appeal of Litwin Panamerican Corporation , 826 F.2d 1255 ( 1987 )

OPINION OF THE COURT

SEITZ, Circuit Judge.

Litwin Panamerican Corporation (Litwin) appeals from the August 4, 1986 order of the district court. We have jurisdiction under 28 U.S.C. § 1291 (1982).

I.

Vernon Tyson is a permanent employee of Hess Oil V.I. Corporation (HOVIC). On April 6, 1984, Tyson was injured when a temporary drainpipe at the Hess refinery malfunctioned. It is undisputed that the drainpipe was installed by Type I Litwin employees supplied to HOVIC.

HOVIC has an agreement with Litwin whereby Litwin employees perform turnaround and maintenance work at the Hess refinery. This agreement divides the work into two classes. Type I work, according to the agreement,

is defined as that performed by [Lit-win’s] craftsmen, foremen and supervisors ... where such employees have been loaned to HOVIC and are under HOVIC’s direct supervision, direction and control, and [Litwin] has no general or turnaround superintendent assigned to the work. Upon having furnished such personnel to HOVIC, [Litwin] shall not be responsible to HOVIC or liable for the workmanship of such personnel or for any mistake, error or act of negligence of such personnel.

In another section, the agreement provides that HOVIC will defend, indemnify and hold Litwin harmless for all property and personal damages resulting from the performance of Type I work.

Type I employees are required to sign a “rehire form” supplied by Litwin. The form provides:

1. HOVIC personnel will control, direct and supervise all aspects of your work.

2. At no time should you receive, or act under instructions from Litwin Supervision.

Tyson and his wife brought this personal injury action against Litwin on the theory that Litwin was vicariously liable for the negligence of its employees, the Type I pipefitters. Litwin joined HOVIC as a third party defendant based on its indemnification agreement. Litwin relied on the borrowed employee doctrine for its defense to Tyson’s action. It argued that it had surrendered all authority to control the pipefitter as to the installation of the temporary drainpipe to HOVIC and that the pipe-fitters were HOVIC’s borrowed employees. Thus, said Litwin, it could not be held liable to the Tysons under the respondeat superi- or doctrine because the pipefitters were not acting as its employees.

Litwin moved for summary judgment, arguing that the negligent pipefitters were, as a matter of law, the borrowed employees of HOVIC. The district court denied the motion.

The case proceeded to a bifurcated jury trial. At the close of the Tysons’ case on liability, Litwin unsuccessfully moved for a directed verdict. The jury returned a verdict holding Litwin liable. The jury marked “yes” in response to the special interrogatory “Were the persons who installed the temporary drainpipe on April 6, 1984, subject to the control or the right to control of Litwin Panamerican Corporation as to that specific act?” The jury next considered damages and returned a verdict of $1,150,000.

Litwin moved for judgment n.o.v., a new trial, or remittitur. By order dated June 2, 1986, the district court denied the motions for j.n.o.v. and a new trial on liability. However, the district court ruled that it would grant a new trial on damages unless the Tysons agreed to a reduction of damages to $550,000. The Tysons agreed, and, on June 27, 1986, the district court entered judgment in that amount. The size of the judgment is not an issue on appeal. The district court then certified its June 27, 1986 judgment as final pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. This appeal followed.

II.

THE BORROWED SERVANT DOCTRINE

Litwin argues that the negligent pipefitters were, as a matter of law, the borrowed employees of HOVIC as to the negligent act, and Litwin could not be held vicariously liable for the consequences of their negligence. Our review of this legal issue is plenary. Alternatively, Litwin argues that the record evidence is insufficient to support the jury finding that the pipefitters were under Litwin’s control. In reviewing a jury verdict, we view the evidence and all reasonable inferences therefrom in the light most favorable to the verdict winner and ascertain whether there is sufficient evidence to support that verdict. See Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265, 1273 (3d Cir.1979) (in banc).

A

We turn first to Litwin’s argument that the negligent borrowed pipefitters were, as a matter of law, exclusively HOVIC employees as to the negligent acts. This contention is based primarily on the statement in Vanterpool v. Hess Oil V.I. Corp., 766 F.2d 117 (3d Cir.1985), cert. denied, 474 U.S. 1059, 106 S.Ct. 801, 88 L.Ed.2d 777 (1986) that “any assigned Type-I employee would necessarily work under the direct supervision and control of HOVIC.”

Whatever the import of the quoted language from Vanterpool, it is clear that the court did not evaluate evidence of contemporaneous control by Litwin and HOVIC such as is present here. Our decision in Vanterpool is, therefore, not decisive because of proof here that both Litwin and HOVIC exercised some control over the borrowed employees. The control issue is not necessarily a matter of one or the other of two employers. Indeed, the district court here instructed the jury:

[A] person can be in the employ of two employers, not joint employees [sic], but at one time, as to one act, if the service to one does not involve him abandoning the service as to the other.

Vanterpool held that an injured borrowed employee who has made a contract with a borrowing employer is limited to a workers’ compensation claim against the borrowing employer. Since Tyson was not a borrowed servant we are therefore not concerned with the contractual limitations applicable to the plaintiff in Vanterpool. In our case Tyson is suing the lending employer (Litwin) of the borrowed servants on the theory that Litwin retained sufficient control over them to permit a jury to find Litwin legally responsible, even though the borrowing employer could also be said to have been responsible. As Comment (b) to § 227 of the Restatement (Second) of Agency (Servant Lent to Another Master) notes:

b. Inference that original service continues. In the absence of evidence to the contrary, there is an inference that the actor remains in his general employment so long as, by the service rendered another, he is performing the business entrusted to him by the general employer. There is no inference that because the general employer has permitted a division of control, he has surrendered it.

Thus, while the contractual provisions may have controlled the relationship between Litwin and HOVIC in a workers’ compensation context, they were not decisive of Tyson’s non-contractual claim against Litwin. We say this because the status of the borrowed employees continued to bear a sufficient “control” relationship to Litwin to permit a jury to conclude that they were also Litwin employees at the time of the accident. Litwin was, therefore, not entitled to judgment as a matter of law.

B

We now address Litwin’s alternative argument that the evidence was insufficient to support the jury’s finding that the pipe-fitters supplied by Litwin were under its control in connection with the accident.

A number of factors are relevant in determining whether a loaned employee has become the employee of the borrowing employer. Foremost is whether the general employer or the borrowing employer exercises control over the details of the work in addition to supervision of the project generally. See Standard Oil Co. v. Anderson, 212 U.S. 215, 29 S.Ct. 252, 53 L.Ed. 480 (1909); Restatement (Second) of Agency § 227 comment c (1958); Restatement (Second) of Agency § 220(1) (1958). Further, “a continuation of the general employment is indicated by the fact that the general employer can properly substitute another servant at any time, that the time of the new employment is short, and that the lent servant has the skill of a specialist.” Restatement (Second) of Agency § 227 comment c (1958).

In suing Litwin, Tyson asserted that Litwin was liable for the negligence of its employees. For derivative liability to attach Litwin must have borne some responsibility for the conduct of its “loaned” employees when they negligently installed the temporary drainpipe. This question is ultimately a jury issue if sufficient evidence is presented. See Franks v. Associated Air Center, Inc., 663 F.2d 583, 587 (5th Cir.1981) (Texas law); Dickerson v. American Sugar Refining Co., 211 F.2d 200, 203 (3d Cir.1954) (Pennsylvania law).

Litwin argues that HOVIC’s exclusive authority to control Type I employees is conclusively established by the Litwin— HOVIC agreement and the rehire forms. While the contract is probative of at least two factors relevant to the borrowed servant doctrine, namely, the parties’ intent in having Litwin employees perform services for HOVIC and the allocation of the right to control and supervise those employees, it is not conclusive of the negligent employees’ status in the present context.

The record contains sufficient evidence of control to support the jury verdict holding Litwin liable for the negligence of the borrowed pipefitters. A Litwin construction manager, Frank Comly, testified, by deposition, that although a HOVIC supervisor told John Hughes, a Litwin foreman, where to install the drainpipe, Hughes directed his Litwin crew in the actual installation. Accelyn Morton, a HOVIC employee, confirmed this by testifying that the HOVIC foreman would tell the Litwin men where to install a drainpipe and the Litwin pipefitters would go ahead and do the job. Tyson testified that although HOVIC supervisors told Litwin employees what they wanted done, the HOV-IC people relied on Litwin for the performance of the work. Tyson justified this reliance by noting that the pipefitters are skilled workers.

Frank Comly explained the HOVIC — Lit-win arrangement at length. He stated that HOVIC informed Litwin of its needs at any particular time and Litwin selected the specific workers to send to HOVIC. These “loanees” entered the HOVIC refinery through a separate entrance and used separate toilet and water facilities. Litwin supplied them with hard hats, safety glasses, and gloves. Litwin was responsible for hiring, firing, paying, insuring, withholding taxes, supplying benefits, and negotiating with the union. HOVIC was not a party to the agreement between Litwin and the union.

Although the evidence is far from overwhelming, given our standard of review, the jury could reasonably conclude that the pipefitters were sufficiently under Litwin’s control when they negligently installed the drainpipe resulting in Tyson’s injuries to justify the verdict against Litwin as a co-employer.¹

III

We find no merit to Litwin’s argument that the district court committed reversible error by declining to dismiss the case for failure to join the Commissioner of Labor.

IV

We next address Litwin’s contention that the special jury verdict form was sufficiently objectionable to require reversal. Litwin first objected to question 1:

1. Were the persons who installed the temporary drainpipe on April 6, 1984, subject to the control or right to control of Litwin Panamerican Corporation as to that specific act?

_YES_NO

Litwin argues that the phrasing of the question prejudicially slanted the control issue by focusing exclusively on Litwin rather than considering both Litwin and HOVIC. While we think the objection has some merit, we are unwilling to characterize it as reversible error under the circumstances.

Litwin also vigorously attacks the phrasing of the question because, it asserts, the wording excludes the possibility of a finding of dual control. However, a finding of dual control would not have relieved Litwin of responsibility to Tyson where, as here, the negligence of employees also subject to Litwin control caused Tyson’s injury. Under Virgin Islands law, the “Liability of defendants to plaintiff shall be joint and several,____” 5 V.I.C. § 1451(d) (Supp.1986). Under the common law, when two tortfeasors are jointly and severally liable, each is liable to the plaintiff for the entire harm. Restatement (Second) of Torts § 875 (1979).

Litwin next argues that the district court erred in refusing its request to use a verdict form that would reflect the application of the Murray credit doctrine. Murray v. United States, 405 F.2d 1361 (D.C.Cir.1968). Application of this highly controversial doctrine would result in a reduction in the amount of an injured employee’s judgment against a third party tortfeasor where the employer-tortfeasor cannot be sued for contribution. See Brown v. Ivarans Rederi, 545 F.2d 854, 858 n. 6 (3d Cir.1976); Zapico v. Bucyrus-Erie Co., 579 F.2d 714, 724-25 (2d Cir.1978).

The use of the Murray or equitable credit doctrine seems to run counter to the spirit of the unconditional provision in 5 V.I.C. § 1451(d) that, “Liability of defendants to the plaintiff shall be joint and several____” Furthermore, the government insurance fund of the Virgin Islands is entitled to recover all of its expenses (compensation payments) from the judgment obtained by Tyson. 24 V.I.C. § 263. This, in essence, cancels the compensation benefits received by Tyson. Reducing his judgment still further by application of the Murray doctrine hardly smacks of equity.

Since the Restatements provide no answer to this issue, and since there is no controlling local law, it is our considered judgment that if the Murray doctrine is to be applied in the Virgin Islands, its adoption is best left for legislative consideration. We, therefore, find no error in the refusal of the district court to use a verdict form that would have allowed for the application of the Murray doctrine.

We find no merit to Litwin's other contentions.

V

For the foregoing reasons, the judgment of the district court will be affirmed.

1 . In view of our liability determination, we need not decide whether the so-called skilled worker exception to the borrowed servant doctrine also supported the jury’s liability determination against Litwin.