Alvarado v. Wingfoot Enterprises

53 S.W.3d 720, 2001 Tex. App. LEXIS 5003, 2001 WL 840383

• Court: Court of Appeals of Texas
• Decided: July 26, 2001
• Docket: 01-00-01199-CV
• Status: Published

Opinions

OPINION

TAFT, Justice.

Appellant, Marleny Alvarado, appeals two summary judgments rendered in favor of appellee, Wingfoot Enterprises d/b/a Tandem Staffing (“Tandem”). We review whether: (1) Alvarado’s negligence and gross negligence claims against Tandem are barred by the “exclusive remedy” provision of the Labor Code; and (2) whether there are fact issues concerning whether Tandem acted negligently and grossly negligently. We affirm in part and reverse in part and remand the cause.

Facts

Tandem is a staffing business that provides workers to industrial clients. In November 1997, Tandem hired Alvarado as a worker. Tandem sent Alvarado to work at Web Assembly, Inc. (“Web”). Tandem was solely responsible for hiring, terminating, and screening all employees assigned to Web. Tandem also paid Alvarado’s FICA and Social Security taxes. Tandem had an oral agreement with Web under which all workers Tandem sent to Web were considered Tandem employees. This oral agreement does not appear to address the “right to control” the workers’ activities.

While at Web, Alvarado operated a staking machine. In the course of her employment, Alvarado had an accident in which she partially severed three of her fingers. Before the accident, Alvarado complained several times to Web personnel that the machine had mechanical problems. At the time of Alvarado’s accident, Tandem had workers’ compensation insurance covering all of its employees, including Alvarado. Web did not carry Tandem employees on its workers’ compensation policy. Shortly after the accident, Alvarado applied for and received workers’ compensation benefits under Tandem’s policy.

Alvarado then sued Tandem, alleging that her injury resulted from Tandem’s negligent and grossly negligent failure to provide her with a safe work environment. Tandem filed two motions for summary judgment. In its first, “traditional,” summary judgment motion, Tandem argued Alvarado’s claims were barred by the exclusive remedy provision of the Labor Code. In its second, “no-evidence,” motion, Tandem reiterated its exclusive remedy argument as a basis for relief, and further asserted it was entitled to summary judgment because there was no evidence: (1) that Tandem owed Alvarado a legal duty; (2) that Tandem proximately caused Alvarado’s injuries; and (3) that Tandem was grossly negligent. The trial court granted both motions. Alvarado then filed a motion for new trial, which the trial court denied.

Standard of Review

We review the traditional summary judgment under the usual standard of review. See Nixon v. Mr. Prop. Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). We review the no-evidence summary judgment by construing the record in the light most favorable to the nonmov-ant and disregarding all contrary evidence and inferences. See Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex.App.—Houston [1st Dist.] 1999, no pet.). A no-evidence summary judgment is improperly granted if the nonmovant brings forth more than a scintilla of evidence to raise a genuine issue of material fact. See Tex. R.CivP. 166a(i); Greathouse v. Alvin Indep. School Dist., 17 S.W.3d 419, 423 (Tex.App.—Houston [1st Dist.] 2000, no pet.). When the trial court' does not state the specific grounds on which it granted summary judgment, we will affirm if any of the theories advanced is meritorious. State Farm Fire & Cas. Co. v. S.S. & G.W., 858 S.W.2d 374, 380 (Tex.1993).

Exclusive Remedy under the Labor Code

In her first point of error, Alvarado asserts the trial court erred by granting Tandem’s first summary judgment motion on the grounds of the Labor Code’s exclusive remedy provision. Alvarado contends Tandem is not protected from common law liability under the Labor Code’s exclusive remedy bar because it is not her employer for workers’ compensation purposes.

A. Right to Control

“Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee.” Tex. Lab.Code Ann. § 408.001(a) (Vernon 1996) (emphasis added). The analysis thus turns on whether Tandem is Alvarado’s employer.

When “one entity ‘borrows’ another’s employee, workers’ compensation law identifies one party as the ‘employer’ and treats all others as third parties.” Archem Co. v. Austin Indus., Inc., 804 S.W.2d 268, 269 (Tex.App.—Houston [1st Dist.] 1991, no writ). Within the “borrowed servant” context, the party with the “right to control” the employee at the time of the injury is the “employer” for workers’ compensation purposes. Texas Workers’ Compensation Ins. Fund v. Del Indus., Inc., 35 S.W.3d 591, 595 (Tex.2000) (citing Thompson v. Travelers’ Indem. Co. of R.I., 789 S.W.2d 277, 278 (Tex.1990)); Archem, 804 S.W.2d at 270.

“If a contract between a general and special employer expressly provides that one party has the ‘right to control’ the employee, then that employer is liable for workers’ compensation benefits and is entitled to the [Labor Code’s] protection from liability for negligence.” Archem, 804 S.W.2d at 270. When the contract between the companies does not address who has the “right to control” the employee’s activities, however, “courts review the facts of each case to determine which entity had the ‘right to control’ the employee’s activities.”¹ Id.

In this case, no written contract identifies whether Tandem or Web had the right to control Alvarado. The oral agreement between Web and Tandem does not address this issue either. We therefore review the record to determine whether a fact issue exists as to which entity had the right to control Alvarado’s work when she was injured.

Tandem’s summary judgment proof shows it gave Alvarado safety training and equipment. Tandem had supervisors at Web’s facility who ensured the leased employees arrived on time and received proper equipment. Tandem’s supervisors also instructed the leased employees about breaks and lunch hours.

On the other hand, Tom Landry, Tandem’s president, admitted in his deposition that the client company (Web) supervised the specific tasks the leased employees such as Alvarado performed. Moreover, Peter Shukas, Web’s Human Resource manager, testified that Web directed, controlled, and supervised the workers it leased from Tandem while they were in Web’s facilities. Specifically, Shukas admitted that Web controlled the specific task Alvarado was performing on the day of her accident. Shukas also admitted that when Alvarado had her accident, “Web was the only one that had the right to control Ms. Alvarado with regard to her work.” This testimony reveals a fact issue whether Tandem or Web had the right to control Alvarado when she was injured. Accordingly, an issue of fact exists as to which entity is Alvarado’s employer for workers’ compensation purposes.

Consequently, even though it is undisputed that Alvarado applied for, and received workers’ compensation benefits from Tandem’s insurance carrier following an award of the Texas Workers’ Compensation Commission, the exclusive remedy provision does not as a matter of law preclude her recovering from Tandem at common law. See Archem, 804 S.W.2d at 270 (citing Smith v. Otis Eng’g Corp., 670 S.W.2d 750, 752 (Tex.App.—Houston [1st Dist.] 1984, no writ)) (“[T]he payment of benefits to an employee on behalf of an employer does not entitle the employer to enjoy status of ‘employer’ under the workers’ compensation act.”).

Tandem counters that Alvarado’s suit is barred because she made an “election of remedies” by applying for and accepting workers’ compensation benefits. Election of remedies is an affirmative defense which must be specifically pleaded, and a general denial is not sufficient to raise such an affirmative defense. France v. American Indem. Co., 648 S.W.2d 283, 285 (Tex.1983); see also Bocanegra v. Aetna Life Ins. Co., 605 S.W.2d 848, 851-52 (Tex.1980). The record shows that Tandem did not plead an election-of-remedies defense and did not assert the defense in any of its answers or motions for summary judgment.² Accordingly, Tandem has waived this defense. See Tex.R. Civ. P. 94; Shoemake v. Fogel, Ltd., 826 S.W.2d 933, 937 (Tex,1992) (“Generally, an affirmative defense is waived if it is not pleaded.”); cf. Roark v. Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 494 (Tex.1991) (holding that a summary judgment may be based on an unpleaded affirmative defense if it is asserted in the motion for summary judgment and the opposing party does not object to the lack of pleading).

B. Co-employer Status

Tandem contends it is entitled to summary judgment because, even if it did not have the right to control Alvarado’s work, it is Web’s co-employer. “For workers’ compensation insurance purposes, a license holder and the license holder’s client company shall be co-employers.” Tex.Lab.Code Ann. § 91.042(c) (Vernon 1996) (emphasis added). Therefore, the Labor Code affords co-employer status to temporary labor agencies that are licensed. Because Tandem is not a license holder, it cannot be a co-employer under the Labor Code.

Tandem also relies on Brown v. Aztec Rig Equipment, Inc., 921 S.W.2d 835 (Tex.App.—Houston [14th Dist.] 1996, no writ), to argue that it is a co-employer of Alvarado. The Brown court held that the staff leasing company and its client were both employers of the injured worker for workers’ compensation purposes because “[t]he Client Service Agreements and [the employee’s] employment agreements, presented as summary judgment proof, unequivocally [stated] Administaff and Aztec [were] co-employers for purposes of workers’ compensation.” Id. at 844. Unlike Brown, Tandem and Web had no written agreement between themselves, or with Alvarado, stating they were co-employers. Accordingly, Brown does not apply to this case, and Tandem and Web are not co-employers for workers’ compensation purposes. Accordingly, the trial court erred by rendering judgment in Tandem’s favor on the grounds of the Labor Code’s exclusive remedy provision.

We sustain Alvarado’s first point of error.

No Evidence Motion

In her second point of error, Alvarado asserts the trial court erred by rendering judgment in Tandem’s favor because there was some evidence that Tandem acted negligently and grossly negligently.

A. Negligence

In its second motion for summary judgment, Tandem argued there was no evidence to sustain Alvarado’s negligence claim. “A plaintiff seeking to recover in negligence must prove that the defendant’s breach of a legal duty proximately caused his damages.” Peeler v. Hughes & Luce, 909 S.W.2d 494, 498 (Tex.1995). The existence of a duty is a threshold question of law. Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex.1990). In the employment law context, an employer has a duty to use ordinary care in providing a safe work place for its employees. Leitch v. Hornsby, 935 S.W.2d 114, 117 (Tex.1996). “A corporation has the non-delegable duty to provide rules and regulations for the safety of its employees, to furnish safe machinery and instrumentalities, to provide a safe place to work, and to select careful and competent fellow servants.” Burk Royalty Co. v. Walls, 616 S.W.2d 911, 923-24 (Tex.1981).

Tandem argues that, if it is not Alvarado’s employer, it could not owe Alvarado a duty to provide her a safe workplace. We reject Tandem’s argument because Tandem can be Alvarado’s primary employer, even if it is not her employer for workers’ compensation purposes under the Labor Code’s exclusive remedy provision. The employee of the general employer may become the special employee or “borrowed servant” of another entity that is, in turn, the employer for workers’ compensation purposes because it has the right to control the employee at the time of the employee’s injury. See Archem, 804 S.W.2d at 269; Esquivel v. Mapelli Meat Packing Co., 932 S.W.2d 612, 614 (Tex.App.—San Antonio 1996, writ denied).

Moreover, Alvarado has offered evidence that Tandem knew its temporary employers were operating machinery at Web, in violation of Tandem’s policy. Alvarado also offered evidence that Tandem did not properly instruct her in operating the type of machine that caused her injury. Accordingly, Alvarado has raised an issue of fact whether Tandem breached the duty it owed her to provide her with safety training and a safe workplace.

Alvarado has offered evidence that Tandem’s breach of its duty proximately caused the accident because her lack of training caused her to operate the machine incorrectly and place her hand in it. Tandem offers controverting evidence that Alvarado’s injury was caused by a mechanical malfunction that was itself caused by the manufacturer’s faulty maintenance and repair. Tandem also offers evidence that it instructed Alvarado not to operate machinery that needed repair. Reviewing the evidence, and construing every reasonable inference, in the light most favorable to Alvarado, there is a fact issue whether Tandem’s breach of duty proximately caused Alvarado’s damages.

Accordingly, the trial court erred by rendering judgment in Tandem’s favor on Alvarado’s negligence claim.

B. Gross Negligence

In its second motion for summary judgment, Tandem argued there was no evidence to sustain Alvarado’s gross negligence claim. Gross negligence has two elements: (1) viewed objectively from the actor’s standpoint, the act or omission must involve an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and (2) the actor must have actual, subjective awareness of the risk involved, but nevertheless proceeds in conscious indifference to the rights, safety, or welfare of others. Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 921 (Tex.1998); Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 23 (Tex.1994).

Under the first element, “extreme risk” is not a remote possibility of injury or even a high probability of minor harm, but rather the likelihood of serious injury to the plaintiff. Moriel, 879 S.W.2d at 22. Under the second element, “actual awareness” means the defendant knew about the peril, but its acts or omissions demonstrated that it did not care. Id.

In this case, Alvarado has offered evidence that Tandem did not properly train her to operate machinery, and that it allowed her to operate such machinery in violation of its own internal policies. Furthermore, Alvarado infers that Tandem knew she was operating the machine incorrectly because she placed her hands inside the machine despite the warning on the machine’s front.³ Alvarado argues that Tandem did nothing, but allowed her to continue working in a dangerous environment.

The summary judgment proof does not support Alvarado’s assertion that Tandem knew she was operating the- machine incorrectly. Alvarado has offered no evidence showing that anyone from Tandem observed her placing her hands inside the machine in contravention of the warning. Consequently, there is no evidence that Tandem had actual or subjective awareness of the risk to which Alvarado was exposing herself by operating the machine incorrectly. Therefore, Alvarado has not met the second prong of the “gross negligence” test. Accordingly, the trial court did not err by rendering judgment in Tandem’s favor on Alvarado’s gross negligence claim.

We sustain Alvarado’s second point of error in regard to her negligence claim and overrule her second point of error in regard to her gross negligence claim.

Conclusion

We affirm the judgment of the trial court in regard to Alvarado’s gross negligence claim. We reverse the trial court’s conclusive finding that Tandem was Alvarado’s employer for workers’ compensation purposes, reverse the judgment of the trial court in regard to Alvarado’s negligence claim, and remand the cause.

1 . The right to control is determined by examining the nature of the general project, the nature of the work to be performed by the employees furnished, length of the special employment, and acts representing an exercise of actual control. Producers Chem. Co. v. McKay, 366 S.W.2d 220, 226 (Tex.1963); Esquivel v. Mapelli Meat Packing Co., 932 S.W.2d 612, 614-15 (Tex.App.—San Antonio 1996, writ denied).

2 . Tandem asserted the affirmative defense of the statutory bar under the Labor Code’s exclusive remedy provision. See Tex.Lab.Code Ann. § 408.001(a) (Vernon 1996). Tandem did not assert the "election of remedies” affirmative defense in any of its answers or motions for summary judgment.

3 . The warning read: "Never place any part of your body under the RAM or within the die area.” The warning was in English only, which Alvarado could not read.