Dobransky, E. v. EQT Production ( 2022 )

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2022 PA Super 61ERIC DOBRANSKY : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
EQT PRODUCTION COMPANY AND : No. 900 WDA 2019
HALLIBURTON ENERGY SERVICES, :
INC. :
Appeal from the Order Entered May 22, 2019
In the Court of Common Pleas of Greene County Civil Division at No(s):
AD 142-2014
BEFORE: PANELLA, P.J., BENDER, P.J.E., BOWES, J., LAZARUS, J., OLSON,
J., DUBOW, J., KUNSELMAN, J., MURRAY, J., and McCAFFERY, J.
DISSENTING OPINION BY BOWES, J.: FILED: APRIL 11, 2022
I respectfully dissent. Although I concur with the learned Majority’s
conclusion that the trial court erred in granting summary judgment in favor of
EQT Production Company (“EQT”) and Halliburton Energy Services, Inc.
(“HESI”) (collectively, “Appellees”) pursuant to 77 P.S. § 461(1)(i) (“Section
302(a)(1)”), I would nonetheless find that Appellees were Eric Dobransky’s
statutory employers pursuant to 77 P.S. § 461(2) (“Section 302(a)(2)”) and,
consequently, entitled to tort immunity. Thus, I would affirm the trial court’s
order on that basis.
Summary judgment is “appropriate only in those cases where the record
clearly demonstrates that there is no genuine issue of material fact and that
the moving party is entitled to judgment as a matter of law.” Summers v.
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Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010). Our scope and
standard of review in this specific context is well-established:
When considering a motion for summary judgment, the trial court
must take all facts of record and reasonable inferences therefrom
in a light most favorable to the non-moving party. In so doing,
the trial court must resolve all doubts as to the existence of a
genuine issue of material fact against the moving party, and, thus,
may only grant summary judgment where the right to such
judgment is clear and free from all doubt. On appellate review,
then, an appellate court may reverse a grant of summary
judgment if there has been an error of law or an abuse of
discretion. But the issue as to whether there are genuine issues
as to any material fact presents a question of law, and therefore,
on that question our standard of review is de novo. This means
we need not defer to the determinations made by the lower
tribunals.
Id. (cleaned up). Additionally, “[t]o the extent that this Court must resolve a
question of law, we shall review the grant of summary judgment in the context
of the entire record.” Id.Section 302(a)(2) is part of the Pennsylvania Workers Compensation
Act (“the WCA”), under which employers are “liable for compensation for
personal injury” that an employee sustains “in the course of his employment
. . . without regard to negligence[.]” 77 P.S. § 431. In consideration of this
mandated liability, the WCA immunizes employers from additional civil claims
for damages. See 77 P.S. § 481(a) (“The liability of an employer under this
act shall be exclusive and in place of any and all other liability . . . in any
action at law or otherwise on account of any injury or death.”). Our Supreme
Court has described this trade-off in clear terms:
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By virtue of the [WCA], an employee’s common law right to
damages for injuries suffered in the course of his employment as
a result of his employer’s negligence is completely surrendered in
exchange for the exclusive statutory right of the employee to
compensation for all such injuries, regardless of negligence, and
the employer’s liability as a tortfeasor under the law of negligence
for injuries to his employee is abrogated.
Kohler v. McCrory Stores, 615 A.2d 27, 30 (Pa. 1992) (cleaned up). Thus,
the WCA provides the exclusive remedy for an aggrieved employee. Bigley
v. Unity Auto Parts, Inc., 436 A.2d 1172, 1178 (Pa. 1981).
Section 302(a) pertains to the duties owed under the WCA by
contractors with respect to the employees of its subcontractors, and it
provides as follows:
A contractor who subcontracts all or any part of a contract and his
insurer shall be liable for the payment of compensation to the
employees 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.
For purposes of this subsection, a person who contracts with
another (1) to have work performed consisting of (i) the removal,
excavation or drilling of soil, rock or minerals, or (ii) the cutting
or removal of timber from lands, or (2) to have work performed
of a kind which is a regular or recurrent part of the business,
occupation, profession or trade of such person shall be deemed a
contractor, and such other person a subcontractor.
77 P.S. § 461. Thus, a contractor may be deemed the statutory employer of
an employee of its subcontractor if this “specialized definition” is satisfied.
See Doman v. Atlas America, Inc., 150 A.3d 103, 106-08 (Pa.Super.
2016). If a contractor is deemed a statutory employer, the contractor is
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secondarily liable for worker’s compensation claims to the subcontractor’s
employees but immunizes such entity from tort liability in the same manner
as a “direct employer.” Id. at 107 (citing 77 P.S. § 52). Thus, Section 302(a)
provides a liability backstop against direct employers who are unable to pay
WCA compensation to their employees.
With these basic legal principles in mind, I briefly review the basic and
undisputed facts of this case. On June 19, 2012, several corporate entities
were involved in work to prepare a Marcellus shale drilling site in Greene
County (“Scotts Run”) for natural gas production. EQT owned the mineral
rights on the property and contracted with HESI to assist its efforts pursuant
to a Master Service Agreement (“MSA”). The MSA broadly provides for a wide
range of potential responsibilities that could be delegated to HESI by EQT. Of
particular note, HESI has a contractual obligation to “cause all materials and
other parts of the Work to be readily available as and when required or needed
for or in connection with the construction, furnishing and equipping of the
Project or the Work.” MSA at § 8.5. Indeed, the MSA defines the “Work” to
include all “labor, materials, equipment and services” needed under the
particular circumstances. Id. at § 1.1-1.2.
Although the specific scope of HESI’s duties at Scotts Run is not evident
from the contractual documents, it is well-established in the certified record.
Bradley Maddox, who was EQT’s drilling manager at the time of the accident,
testified in a deposition HESI was providing “mud services” at all of EQT’s well
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sites, which included responsibility for the ”inventory” of barite. See
Dobransky’s Omnibus Brief in Opposition to Summary Judgment, 8/1/18, at
Exhibit 21 at 16-19, 27; see also Dobransky’s Omnibus Brief in Opposition to
Summary Judgment, 8/1/18, at Exhibit 19 at 44 (same). In HESI’s
interrogatory responses, it described itself as providing “barite and other bulk
items such as sand and cement” at Scotts Run. Dobransky’s Omnibus Brief in
Opposition to Summary Judgment, 8/1/18, at Exhibit 16 at ¶ 22.
While HESI took on the ultimate responsibility for ensuring a regular and
steady supply of barite at Scotts Run, it elected to subcontract the
transportation of the materials to the well site into the care of Northwest
Concrete Products, Inc. d/b/a Northwest Logistics (“Northwest”) under a
separate agreement (“Transportation Agreement”). Pursuant to this contract,
Northwest was engaged “to transport the goods or materials tendered to it”
by HESI. Transportation Agreement at § 1.
The record confirms that Northwest was responsible for shipping and
unloading, inter alia, barite on behalf of HESI at Scotts Run. Jeremy Johnson,
operations manager for Northwest’s dry bulk division in Greensburg,
Pennsylvania at the time of Dobransky’s accident, testified in a sworn
deposition that Northwest regularly transported barite, cement, and sand in
connection with HESI’s work at such drilling operations. See Dobransky’s
Omnibus Brief in Opposition to Summary Judgment, 8/1/18, at Exhibit 20 at
49; see also Appellees’ Brief in Support of Summary Judgment, 9/17/18, at
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Exhibit I at 34 (“My understanding is that [Northwest] provided transportation
services for [HESI], transporting and unloading things like barite and sand
that [HESI] would use as part of its business activities at the well site[.]”).
Finally, a sales order form issued by HESI to EQT on June 20, 2012, confirms
that Northwest was responsible for shipping barite purchased by HESI to the
Scotts Run well site. Id. at Exhibit G at 1.
Of particular importance, the record also indicates that HESI was
subcontracting a substantial amount of well site shipments to Northwest in
2012. As noted above, Mr. Maddox testified that he administered a program
under which HESI was responsible for providing similar mud services at all of
EQT’s well sites. See Dobransky’s Omnibus Brief in Opposition to Summary
Judgment, 8/1/18, at Exhibit 21 at 16-19. Mr. Johnson confirmed that HESI
was Northwest’s “primary customer” in 2012, accounting for at least “99
percent” of the company’s business. Dobransky’s Omnibus Brief in Opposition
to Summary Judgment, 8/1/18, at Exhibit 20 at 9. Furthermore, testimony
from other Northwest personnel stated HESI’s well site support business was
so extensive that it had retained multiple transportation subcontractors like
Northwest. See Dobransky’s Omnibus Brief in Opposition to Summary
Judgment, 8/1/18, at Exhibit 14 at 15.
With these facts in mind, I turn to the merits of this case. As noted
above, I agree with the Majority’s apt analysis as to Section 302(a)(1).
Accordingly, I need not discuss that section further. However, I note that it
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is well-settled that this Court may affirm on an alternate basis in the context
of summary judgment where that basis was raised by the moving party in the
trial court, such that the non-moving party had an opportunity to respond.
Hassel v. Franzi, 207 A.3d 939, 957 n.6 (Pa.Super. 2019); see also, e.g.,
Branton v. Nicholas Meat, LLC, 159 A.3d 540, 562 n.21 (Pa.Super. 2017).
Turning to Section 302(a)(2), our Supreme Court has described the
application of this statutory provision, as follows:
[E]mploying the principle of liberal construction in furtherance of
the Act’s remedial purposes, . . . we find it to be plain enough that
the Legislature meant to require persons (including entities)
contracting with others to perform work which is a regular or
recurrent part of their businesses to assure that the employees of
those others are covered by workers’ compensation insurance, on
pain of assuming secondary liability for benefits payment upon a
default.
Six L’s Packing Co v. W.C.A.B. (Williamson), 44 A.3d 1148, 1151 (Pa.
2012) (“Six L’s”). Thus, coverage under Section 302(a)(2) is drawn broadly:
[T]he statute extends to any scenario in which “a contractor . . .
subcontracts all or any part of a contract,” within the scope of the
work delineated in Section 302(a)’s specialized definition of
“contractor” (including work of a kind which is a ‘regular or
recurrent part of the business’ of the putative statutory employer).
Id. (quoting 77 P.S. § 461) (emphasis added).
A survey of binding and persuasive precedent applying Section
302(a)(2) reveals it to be a factually intensive undertaking. Of particular note,
however, Pennsylvania courts confronting this issue in cases involving truck
drivers have tended to conclude that Section 302(a)(2) applies and, thereby,
renders the hiring entity both secondarily liable for WCA compensation and
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immune from further tort litigation. See Six L’s, supra at 1150-51
(concluding a company that “grows, harvests, processes, and distributes
tomatoes” was the statutory employer of a subcontractor truck driver who
suffered a vehicular accident while “transporting tomatoes between a
warehouse . . . and a processing facility”); Six L’s Packing Co. v. W.C.A.B.
(Williamson), 2 A.3d 1268, 1280-81 (Pa.Cmwlth. 2010), affirmed, 44 A.3d
1148 (Pa. 2012) (“Williamson”) (same); Cargill Meats v. W.C.A.B.
(Heffner), 164 A.3d 651 (Pa.Cmwlth. 2016) (non-precedential memorandum
at 5-6) (holding that a company who subcontracted transportation of a
“finished meat product” was the statutory employer of an injured truck
driver); Garlick v. Trans Tech Logistics, Inc., 636 F. App’x 108, 112 (3d
Cir. 2015) (finding company providing water deliveries to drilling sites was the
statutory employer of a subcontractor’s trucker killed during delivery because
“[t]ransporting bulk liquids was a regular and recurrent part” of the company’s
business).1
Applying this case law to the instant circumstances, I reject the
Majority’s conclusion that HESI was not in the business of supplying and
transporting barite. While there is no “purchase order” in the record as
contemplated by § 2.1.1 of the MSA, I find the Majority’s analysis places
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1 As the Majority notes in its writing, while these cases from the
Commonwealth Court and the U.S. Court of Appeals for the Third Circuit are
not binding upon this Court, we may rely upon them as persuasive authority.
See Majority Opinion at 25 n.10.
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outsized importance upon the absence of this document. See Majority Opinion
at 26-27 (“Further, Appellees point us to no purchase order issued by EQT in
the record . . . . Thus, we cannot agree with Appellees that the MSA and the
sales order form indisputably establish that HESI was in the business of
supplying and transporting barite.”) As noted above, our Supreme Court has
observed that we must “review the grant of summary judgment in the context
of the entire record.” Summers, supra at 1159 (emphasis added). The
contractual documents referenced by the Majority are merely silent on the
issue of the scope of HESI’s specific duties at Scotts Run, as opposed to
contradictory. Yet, there is sufficient documentary evidence to confirm the
existence of contractual relationships amongst the parties at the time of the
underlying incident in this case. To my mind, whatever silence remains is
sufficiently dispelled by the testimony and discovery responses noted above.
Indeed, despite the absence of these documents, the Majority seems to
have no difficulty in specifically characterizing HESI’s duties at Scotts Run as
follows: “[T]he evidence establishes, at most, that HESI needed barite for
making the drilling mud and that it had Northwest transport and deliver barite
to it at the well site.” Majority Opinion at 28. Having narrowly construed
HESI’s duties, the Majority concludes that “the fact that an entity contracts
with a subcontractor to have materials delivered to it in order to conduct its
business or trade does not mean that a part of that entity’s business or trade
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is the transporting and/or shipping of those materials from one place to
another.” Id. at 28. I cannot join this analysis.
To briefly summarize the relevant facts, all parties agree that the
contractual relationships amongst EQT, HESI, and Northwest were in force on
the date of this incident. The certified record clearly indicates that at Scotts
Run HESI was responsible for “mud services” which included, inter alia,
maintaining an inventory of barite. HESI was under a contractual obligation
to ensure that barite was “readily available as and when required or needed
for or in connection with the construction, furnishing and equipping of the
Project or the Work.” MSA at § 8.5. Rather than assume direct responsibility
for the necessity of transporting barite to Scotts Run, HESI “tendered” these
materials to Northwest pursuant to the Transportation Agreement. These
deliveries of barite by Northwest were not isolated or infrequent. To the
contrary, the record shows that HESI accounted for virtually all of Northwest’s
business in 2012. This information also underscores the breadth of HESI’s
business of supporting EQT’s development of natural gas wells by providing
barite, which required the assistance of multiple transportation subcontractors
in addition to Northwest. With these facts in mind, it seems beyond cavil
HESI’s “business” encompassed these activities.2
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2 The second requirement of Section 302(a)(2) mandates that the business
activity must also be a “regular or recurrent” undertaking. See 77 P.S. § 461.
The Majority has not discussed this factor. Briefly, I note that the evidence
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These circumstances do not implicate the unrelated and delivery drivers
referenced in the Majority’s writing. The delivery of materials in this case was
not merely incidental to HESI’s contractual obligations but was one of its
explicit duties, i.e., ensuring access to and inventory of barite. Rather, the
record indicates Northwest was essentially operating as HESI’s transportation
and distribution network in June 2012, with these activities accounting for at
least ninety-nine percent of Northwest’s business that year. Indeed, HESI
made use of multiple such transportation subcontractors as part of its well
support business. Accordingly, the transportation and delivery of barite by
Northwest was a critical and extensive part of HESI’s well support business at
the time of the accident. Dobransky’s own testimony confirms as much. See
Dobransky’s Omnibus Brief in Opposition to Summary Judgment, 8/1/18, at
Exhibit 1 at 52, 101 (“[A] lot of times when they needed barite, they needed
it, like, now. Like, when they called you for barite, it was almost ASAP.”).3
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detailed throughout this writing readily establishes the frequency of the barite
deliveries directed by HESI and carried out by Northwest.
3 Under these facts, the parade of horribles raised by the Majority lacks teeth.
See Majority Opinion at 28 n.14, 29 n.16. If a delivery company’s entire
operation consisted of providing transportation and delivery services on behalf
of a single entity, e.g., the same chain of grocery stores or bakeries, it may
make sense to construe the drivers as statutory employees of the contracting
company pursuant to Section 302(a)(2). Moreover, if a mining operation’s
only task was to provide barite to a single company, its miners might fairly be
considered statutory employees under the same. I speak conditionally here
only because, ideally, this Court should not traffic in hypotheticals based on
facts not squarely before us. See Phila. Entertainment and Dev. Partners,
L.P. v. City of Philadelphia, 937 A.2d 385, 392 (Pa. 2007).
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I also find the Commonwealth Court’s holding in Zwick v. W.C.A.B.,
106 A.3d 251 (Pa.Cmwlth. 2014) instructive on this issue. In that case, Marco
Popchocoj (“the claimant”) was a subcontractor who was injured while
performing construction and rehabilitation work at a property for a licensed
realtor named Mark Zwick. Zwick was determined to be the claimant’s
statutory employer under Section 302(a)(2). On appeal, Zwick argued that
the dissimilarity between his and the claimant’s respective occupations should
preclude the application of Section 302(a)(2). The Commonwealth Court
disagreed, and offered the following rationale:
Zwick asserts that Section 302(a) is inapplicable because he is a
licensed realtor, so the work the claimant performed at the time
of his injury was not a regular part of Zwick’s business. The record
belies this claim. Zwick testified that construction rehabilitation
work was a part of his business. Zwick further testified that he
hired [the claimant’s employer] to do construction work at the
[p]roperty to prepare it for resale and that Zwick was ‘essentially’
the general contractor on the job. Zwick also testified that [the
claimant’s employer] had previously done construction work for
him at another property. . . . The credited evidence supports the
WCAB’s conclusion that Zwick was in the business of rehabilitating
properties for resale and that he hired [the claimant’s employer]
to perform work that was a regular part of his business.
Therefore, Zwick met the definition of a “contractor” under Section
302(a) of the Act.
Zwick, supra at 255. Since Zwick regularly solicited construction
rehabilitation work from the claimant and other parties, the Commonwealth
Court found that Zwick met the definition for a statutory employer under
Section 302(a)(2) even though he was not directly engaged in carrying out
construction work himself. Id. at 255 (“‘[S]ection 302(a), on its terms, also
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pertains to contractual delegations of aspects of an employer's regular or
recurrent business activities.’” (quoting Six L’s, supra at 1158)).
Applying Zwick to the instant circumstances, it matters not at all that
HESI was not directly involved in transporting and delivering barite. By its
very nature, subcontracting involves a delegation of responsibility to another
party. HESI took on a responsibility to, inter alia, ensure the availability and
inventory of barite at EQT well sites, including Scotts Run. HESI relied upon
Northwest to fulfill that obligation by effectuating deliveries of the material to
the sites. The record uniformly reflects the frequency and volume of barite
deliveries required pursuant to HESI’s well support business with EQT and
Northwest, which monopolized Northwest’s business activities in 2012.
On this point, I find that the Majority has taken a too-monolithic view of
business activities that risks creating an unnecessary bright-line rule
concerning the coverage of transportation contractors under the WCA. Where
part of an entity’s business activities includes some regular or recurrent
activity relying upon the assistance of subcontractors, Section 302(a)(2)
applies.4 Furthermore, the party contesting that his injuries are “not work-
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4 The learned Majority has quoted opinions from both this Court and our
Supreme Court expressing concern with the application of Section 302(a)(2)
and discussing the alleged rarity of secondary liability under the WCA. See
Patton v. Worthington Associates, Inc., 89 A.3d 643, 652 (Pa. 2014)
(Baer, J., concurring); Doman v. Atlas America, Inc., 150 A.3d 103, 110
(Pa.Super. 2016). I do not find this issue as clearcut as the Majority, which
seems focused on the potential evils worked by the litigation immunity
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related” under the WCA bears the burden of rebutting the presumption that
he is covered. Kohler v. McCrory Stores, 615 A.2d 27, 32 (Pa. 1992). Here,
“it is the plaintiff who asserts he is not covered by the [WCA] and he must
allege facts to show that he is not.” Id. at 32 n.5 (cleaned up).
Although this Court must view the record in the light most favorable to
Dobransky as the non-moving party, he has a concomitant obligation under
Pennsylvania law to adduce evidence in support of his position, i.e., that
Appellees are not his statutory employers. See Finder v. Crawford, 167
A.3d 40, 44 (Pa.Super. 2017) (“Failure of a non-moving party to adduce
sufficient evidence on an issue essential to his case and on which he bears the
burden of proof establishes the entitlement of the moving party to judgment
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afforded to statutory employers by Section 302(a)(2). Concomitantly, this
statute also makes statutory employers potentially liable without regard for
negligence. Thus, “[t]he tort immunity associated with the imposition of
secondary liability ‘reflects the historical quid pro quo between an employer
and employee whereby the employer assumes liability without fault for a
work-related injury[.]’” Doman, supra at 110 (quoting Tooey v. AK Steel
Corp., 81 A.3d 851, 860 (Pa. 2013)). While the WCA requires employers to
provide workers’ compensation coverage to their employees, this mandate
does not dispel the possibility that a direct employer will be unable to pay
when the time comes. See Six L’s, supra at 1150 (“[I]t was determined
during the course of the ensuing litigation that [the truck driver’s direct
employer] did not maintain workers’ compensation insurance.”).
Furthermore, I note that the concerns raised in both Patton and Doman
acknowledged that this Court is bound to apply the WCA as currently drafted
by the General Assembly. See Patton, supra at 651 (“I would advocate to
the General Assembly that it revise the statutory employer doctrine[.]”);
Doman, supra at 109 (“[W]e note that there have been prior calls to the
legislature to reconsider Pennsylvania’s statutory scheme.”). Since those
holdings, no legislation has been adopted amending Section 302(a)(2).
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as a matter of law.”). Instantly, Dobransky has produced no affirmative
evidence or testimony to dispute the basic facts set forth above concerning
the applicability of Section 302(a)(2). Since he bears the burden of proof on
this specific aspect of the case, HESI is entitled to summary judgment as a
matter of law based upon the undisputed facts of record. Thus, I would affirm
the trial court’s grant of summary judgment in favor of HESI.
Although this issue is understandably absent from the Majority’s writing,
I will also briefly address whether EQT should also be considered Dobransky’s
statutory employer due to “vertical privity.” This Court has concluded that
“no statutory employee status exists where no vertical contractual privity
exists.” Emery v. Leavesly McCollum, 725 A.2d 807, 811 (Pa.Super. 1999)
(en banc) (holding that statutory employer immunity extends to all
contractors and subcontractors in vertical contractual privity). However, “an
immediate contractual relationship is not required for statutory employer
immunity.” Id. (emphasis added). Rather, “the determining factor in these
cases is whether or not there is a vertical ‘chain’ of contracts,” wherein “all of
the contracts proceed downwards from the owner, i.e., owner contracts with
general contractor, general contract contracts with subcontractor,
subcontractor contracts with sub-subcontractor, and so on.” Id. at 812.
Here, EQT functioned as both the owner and the general contractor at
Scotts Run with the overall intent of preparing the site for natural gas
production. As detailed above, EQT contracted with HESI. In turn, HESI
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subcontracted a portion of its duties under that agreement to Northwest.
Thus, vertical contractual privity is present in this case. Accordingly, EQT is
similarly entitled to statutory employer immunity under Section 302(a)(2).
See Emery, supra at 811-12 (holding that a “subcontractor is [the] statutory
employer of [a] sub-subcontractor’s employee because of vertical relationship
between general contractor, subcontractor and sub-subcontractor.”). Thus, I
would also affirm the trial court’s grant of summary judgment in favor of EQT.
Based on the foregoing, I respectfully dissent.
Judge Olson, Judge Dubow, and Judge Murray join this Dissenting
Opinion.
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