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Brown v. Gaydos, 2023 Pa. Super. LEXIS 582 (December 7, 2023) (McCaffery, J.)

John Brown (Brown) appeals from the order entered in the Allegheny County Court of Common Pleas granting summary judgment in favor of George Gaydos (Gaydos), as an individual and doing business as Gaydos Construction, in this negligence action seeking damages for a work-related injury Brown suffered while operating a skid loader owned by Gaydos. Because we conclude the record contains genuine issues of material fact concerning whether Gaydos is statutorily immune from liability under Pennsylvania’s Workers’ Compensation Act (WCA) as Brown’s employer or co-employee, we reverse the trial court’s order granting summary judgment and remand for further proceedings.

In 2007 or 2008, . . . Gaydos began doing construction work as a sole proprietor using the name Gaydos Construction. [Gaydos], as a sole proprietor, did general construction work with a focus on heating, air conditioning, concrete and masonry. For [the] business, [Gaydos] purchased two dump trucks, a utility truck, a skid loader and an assortment of tools. On April 9, 2016[, Gaydos] and his cousin, Mark Raymond, signed a partnership agreement to operate a business under the name American Concrete Solutions[ (ACS)]. A few months later[, they] filed a Certificate of Organization Domestic Limited Liability Company with the Pennsylvania Department of State[.]

[Gaydos], on occasion, continued to bid on heating and air conditioning jobs as a sole proprietor. But, all concrete and masonry jobs were bid and performed by [ACS]. The construction equipment and tools owned by [Gaydos], including the skid loader, continued to be owned by him. [Gaydos] and [Raymond], who also owned construction equipment and tools, agreed that each of them would furnish any equipment or tools they owned individually that were needed to perform the work on [ACS’s] jobs. They agreed that [ACS] would not own those tools and equipment and would not compensate either of them for use of those tools and equipment.

[Brown] began working as an [ACS] employee on September 1, 2016. On that day, [ACS] was preparing to pour a flat slab of concrete inside a pole building located in the City of Pittsburgh. [Gaydos] was at the job site “first thing in the morning, and then . . . left to go pay a vendor for some stone.” The skid loader owned by [Gaydos] was at the site. At approximately 11:00 a.m., as [Brown] “attempted to enter the subject skid loader, the arm of the skid loader caught [Brown’s] body, crushing him between the top of the cab and the arm of the bucket and subsequently, dropped [him] to the ground.” [Brown] was seriously injured and thereafter made a claim for workers compensation benefits from [ACS]. The workers compensation claim was not disputed, and as of June of 2019, approximately $561,000 had been paid to [Brown] for lost wages and to medical providers for medical treatment.

On May 31, 2018, Brown initiated this civil action against Gaydos, alleging his negligence in improperly maintaining the skid loader and failing to supervise or train Brown on its use. On January 5, 2021, Gaydos filed a motion for summary judgment asserting, inter alia, that Brown’s claims were barred by the WCA.

Employer immunity is codified at Section 481, which provides, in relevant part:

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 . . . or occupational disease[.]

77 P.S. § 481(a) (footnotes omitted). See also 77 P.S. § 411(1)-(2) (defining “injury,” “personal injury,” and “injury arising in the course of his employment”).

Nevertheless, the courts of this Commonwealth have recognized the “dual capacity” doctrine, which provides:

[A]n employer normally shielded from tort liability by the exclusive remedy principle may become liable in tort to his own employee if he occupies, in addition to his capacity as employer, a second capacity that confers on him obligations independent of those imposed on him as an employer.

Neidert v. Charlie, 2016 PA Super 138, 143 A.3d 384, 388 (Pa. Super. 2016) (citations omitted & emphasis added). This narrowly-applied doctrine, however, is inapplicable when “the employee’s compensable injury occurred while he was actually engaged in the performance of his job.” Id. at 390 (emphasis omitted), citing Heath v. Church’s Fried Chicken, Inc., 519 Pa. 274, 546 A.2d 1120, 1121 (Pa. 1988).

In addition to employer immunity, the WCA provides immunity to a co-employee whose negligent actions caused the claimant’s injuries, so long as the injury occurred while the co-employee was “in the same employ” as the injured claimant. See 77 P.S. § 72.7 See also Apple v. Reichert, 443 Pa. 289, 278 A.2d 482, 485 (Pa. 1971) (explaining the WCA is “clearly phrased to protect all co-employes in all situations where negligent conduct of one employe may cause injury to a fellow employe, provided only that the injury in question is one that is compensable under the Act.”).

Here, there is no dispute that Gaydos held an ownership interest in ACS and had the ability to direct ACS employees, including Brown, with respect to the work to be performed and the equipment that could be used for each task. However, as an LLC, ACS was a distinct legal entity and, therefore, Gaydos was not personally responsible for ACS’s legal obligations, such as maintaining workers’ compensation insurance for its employees. See Kiehl v. Action Manufacturing Co., 517 Pa. 183, 535 A.2d 571, 574-75 (Pa. 1987) (parent corporation of subsidiary that employed injured worker was not entitled to invoke WCA employer immunity bar to worker’s suit at common law where parent had intentionally formed a separate entity in order to shield itself from the subsidiary’s liabilities and had distinct operational functions from the subsidiary). Thus, Brown filed his workers’ compensation claim against ACS rather than Gaydos or Gaydos Construction, and ACS, through its insurer, paid workers’ compensation benefits to Brown.

In light of the fact that Gaydos did not directly employ Brown and did not exert exclusive control over ACS, we conclude that there remains a genuine issue of material fact as to whether Gaydos was Brown’s “master” under the WCA. See 77 P.S. § 21. Accordingly, the trial court erred by granting summary judgment in favor of Gaydos on the basis of the employer immunity set forth in Section 481(a). Cf. Lutjens v. Bayer, 3165 EDA 2018, 2019 Pa. Super. Unpub. LEXIS 3271 (Pa. Super. Aug. 27, 2019) (unpub. memo at 13-15) (holding that defendant, who was the sole member of LLC that employed the plaintiff, was also the employer for purposes of WCA employer immunity where defendant had exclusive authority to hire, fire, and direct the activities of the LLC’s employees). Furthermore, because there remains a triable issue of fact as to whether Gaydos was Brown’s employer, we need not address whether the dual capacity exception to WCA employer immunity has any application here. See Neidert, 143 A.3d at 388 (dual capacity doctrine is exception to employer immunity).

Turning to the primary issue before us, we reiterate that the trial court granted summary judgment on the alternative basis that Gaydos was Brown’s co-employee at the time of the accident, and, therefore, entitled to immunity under Section 72 of the WCA.

[T]he mere fact that both parties held positions of employment with the same employer at the time of the accident is not sufficient to show that they were in the same employ at the time of the accident. Rather, the act or omission must occur while both employees are in the performance of their duties as employees. In order to establish immunity under the [WCA], the defendant is required to establish that [their] act or omission occurred while [they were] in the same employ as the plaintiff, that is, in the course of [their] performance of duties for the employer.

Bell v. Kater, 2008 PA Super 18, 943 A.2d 297-98 (Pa. Super. 2008) (quotation marks omitted; some emphases added), citing Fern v. Ussler, 428 Pa. Super. 210, 630 A.2d 896 (Pa. Super. 1993), appeal granted, 539 Pa. 681, 652 A.2d 1326 (Pa. 1994).

The facts presented in this case are significantly different from those in which a co-owner or manager has been found to be immune from civil liability as a co-employee under the WCA. See Jadosh, 275 A.2d at 452-54 (defendant manager was entitled to co-employee immunity pursuant to WCA where allegedly defective piece of equipment was property of employer, and plaintiff alleged manager was negligent in simply performing duties for employer); Adams v. U.S. Air, Inc., 438 Pa. Super. 190, 652 A.2d 329, 330-31 (Pa. Super. 1994) (defendant managers were entitled to co-employee immunity pursuant to WCA when plaintiff’s negligence claims were based on firing following managers’ internal investigation of plaintiff’s violation of company policy). Here, the co-owner — Gaydos — operated a separate sole proprietorship, that independently owned, maintained, and insured the allegedly defective skid loader which caused Brown’s injuries. Although Gaydos may have “loaned” the skid loader to ACS free of charge, he made it clear that none of ACS’s employees were to operate it.
Lastly, it merits emphasis that Brown sued Gaydos, as owner of the skid loader — not as his employer or co-employee — based upon Gaydos’s personal failure to “exercise reasonable care in the safe, proper and lawful maintenance of the subject skid loader[,]” including his failure to warn Brown that “the safety mechanism[s] were not working properly[.]”

Upon our review, we conclude that the determination of whether Gaydos was working “in the course of [his] performance of duties for the employer[,]” ACS, is a genuine issue of material fact since Gaydos admitted the following: (1) his sole proprietorship owned, maintained, and insured the skid loader, (2) he loaned the skid loader to ACS for use on job sites, although it is not clear if he intended to use the skid loader at the job site in question, and (3) he was the only person permitted to use the equipment, that he owned, maintained, and insured. Accordingly, the trial court erred in granting summary judgment on this basis.