Lee v. M&H Enterprises, Inc., __Ariz. Adv. Rep. __, No. 1 CA-CV 13-0257 (App. Div. I, April 21, 2015) (J. Brown)

LANDOWNERS NOT LIABLE FOR INJURY ON PREMISES WHERE CONTRACTOR HAS CONTROL OF EMPLOYEE AND MANNER OF WORK/”LENT EMPLOYEE” DOCTRINE RENDERS CONTRACTOR  PROVIDED WORKERS FROM ANOTHER IMMUNE WHERE RIGHT TO CONTROL MANNER OF WORK IS RETAINED BY CONTRACTOR

Plaintiff suffered serious injury while cleaning up on a construction site where a new Sam's Club was being built. He was an employee of Able Body Labor [Able Body] which supplied workers to M&H Enterprises [M&H], the general contractor.  The work was performed on property owned by defendant Wal-Mart. Plaintiff obtained workers compensation benefits against Able Body and then sued M&H and Wal-Mart for negligence. The trial court granted Wal-Mart summary judgment and after jury trial granted M&H judgment as a matter of law. the Arizona Court of Appeals affirmed.

As a general rule, a property owner is not vicariously liable for the negligence of an independent contractor because the property owner typically has no control over how the independent contractor performs its work.  A landowner in Arizona does not have a non-delegable duty to an employee of an independent contractor. Welker v. Kennecott, 1 Ariz. App. 395, 401 -04,  403  P.2d  330, 336 -39  (1965). This is because workers ' compensation is essentially paid by the landowner through a negotiated contract price with the contractor.

Here it was nonetheless argued that Wal-Mart could be held liable because it retained control over the work when it asked that the particular clean up plaintiff was engaged in be performed during a final walk through. This argument failed because the contract between Wal-Mart and M&H specifically assigned all responsibility for safety of workers to M&H. Further, a request for clean-up is too general to create liability where there was no evidence the landowner retained actual control of the method and manner of clean up. Wal-Mart was appropriately granted summary judgment.

As to M&H, the trial court properly granted judgment as a matter of law based upon the “lent employee” doctrine.  An employee must affirmatively reject the right to workers compensation in order to pursue a tort claim against the employer.  Plaintiff did not.  Thus, if plaintiff was an employee of M&H his claim is barred by workers compensation.  The lent employee doctrine establishes that when an employer (the “general employer”) provides laborers to another (the “special employer”), the party receiving the “lent” employee becomes the employee's second employer and therefore may not be sued in tort by the employee where workers compensation has not been rejected. The three factors that must be established for the lent employee doctrine to apply are:

1. That the employee has an express or implied contract of hire with the general employer
2. The work in question is “essentially” that of the special employer
3. The special employee has the right to control the details of the work

When these factors are met, both the general and special employers are responsible to secure workers compensation insurance and therefore hold immunity from suit. To meet the third element there need not be proof the special employer “exercised” the right of control, only that it had the “right” to exercise it. There also need not be proof the special employer actually obtained workers compensation insurance. Even where the special employer does not obtain workers compensation to cover the injured employee, the employee would still receive workers compensation benefits from the Special Fund within the Industrial Commission. See A.R.S. § 23-907(C) and the immunity would apply.

Here all three elements are met and judgment as a matter of law was appropriate.