F I L E D United States Court of Appeals Tenth Circuit UNITED STATES CO URT O F APPEALS June 6, 2007 TENTH CIRCUIT Elisabeth A. Shumaker Clerk of Court
SU SA N BAIN, individually and as the personal representative of TH E ESTA TE O F JEFFR EY BA IN , D eceased, and C HR IS B AIN , individually,
Plaintiffs-Appellants,
v. No. 05-2351 (D. of N.M .) IM C GLOBAL OPERATIO NS, IN C., (D.C. No. CIV-03-1354-RCB) IM C K ALIUM CA RLSBAD POTA SH COM PANY , and PHILCO CONSTRUCTIO N, IN C.,
Defendants-Appellees.
OR D ER AND JUDGM ENT *
Before TA CH A, T YM KOV IC H, and GORSUCH, Circuit Judges.
Jeffrey Bain’s surviving wife and son brought a wrongful death suit against
Philco Construction, Inc., IM C Global Operations, Inc., and IM C Kalium
Carlsbad Potash Company for fatal injuries suffered by Bain when a roll of
* This order and judgment is not binding precedent except under the doctrines of law of the case, res judicata and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. industrial belting was knocked off of a flatbed and killed him. The IM C entities
settled with the Bains prior to trial, leaving only Philco to face trial.
A federal jury sitting in diversity decided the accident was caused by a
Philco employee working under the control of IM C at the time of the accident.
Under N ew M exico law , such a finding insulated Philco from wrongful death
liability. The Bains challenge the district court’s interpretation of New M exico
law , arguing that the court erred in instructing the jury as to the elements of their
claim.
On appeal, our disposition of this case turns on the following question of
New M exico law : whether an employer must demonstrate it relinquished control
of its employee to another em ployer to escape liability for the employee’s
negligence? W e find the district court’s interpretation of New M exico law
correct, and that it accurately instructed the jury.
Having jurisdiction pursuant to 28 U.S.C. § 1229, we AFFIRM .
I. Background
The Accident. IM C owned and operated a potash mine outside Carlsbad,
New M exico. IM C retained Philco Construction, Inc., an independent contractor,
to construct a warehouse and other plant facilities at the IM C mine site. Jeffrey
Bain w as employed by a third company at the time as a delivery driver. As part
of his duties, he delivered two rolls of industrial belting to the IM C site for use in
IM C’s mining operations.
-2- W hen Bain arrived at the work site, an IM C employee, Amos Urquidez,
began helping Bain unload the belting from a flatbed trailer with a forklift. But
when James Frintz, an employee of Philco, happened on the scene with a different
forklift, the men decided to unload the belting using Frintz’s forklift. In the
process, Frintz accidentally knocked one of the two rolls of belting from the
flatbed with his forklift. The belting rolled onto Bain, resulting in injuries that
led to his death.
The Trial. Bain’s surviving wife and son brought a diversity suit for
wrongful death against IM C and Philco in the District of New M exico. They
alleged independent acts of negligence by IM C and Philco caused Bain’s death.
Prior to trial, the Bains reached a settlement with IM C, and the case proceeded to
trial against Philco.
Philco’s trial defense was threefold. It argued (1) Frintz was not negligent
in knocking the belting onto Bain; (2) Bain was contributorily negligent; and (3)
under New M exico law, Frintz was a “special employee” of IM C at the time of
the accident so that any negligence attributable to him should be imputed to IM C,
not Philco. 1 At trial, the Bains conceded the belting was strictly for IM C’s use
1 According to the jury instruction used at trial, a “special employee” arises from the circumstances of the employment relationship:
A “special employer” is one which borrows the employee of another to perform work for its benefit, even if the employee is borrow ed for a limited period of time, and the “special em ployer” has the right to (continued...)
-3- and not for any construction work performed by Philco. In addition, M r.
Urquidez testified that he had “absolute and complete authority for all facets of
the unloading process.” J. App. at 377. The jury found Frintz a special employee
of IM C at the time of the accident, and the court entered judgment in favor of
Philco.
The Jury Instructions. On appeal, the Bains challenge two of the district
court’s instructions to the jury, one tendered to the jury and one requested but
refused.
The first challenge arises from the language of the verdict form. The
district court instructed the jury as to the definition of a special employee under
New M exico law. It then submitted the following question on the verdict form:
“W as Frintz an employee of Philco Construction, Inc. or was he a ‘special
employee’ of IM C at the time of the accident?” J. App. at 204. The Bains
objected to the either/or nature of the instruction, arguing Frintz could at the same
time be an employee of Philco and a special employee of IM C. According to the
Bains, under this dual employment theory, if Frintz could be employed by both
companies at the time of the accident, the finding that he was a special employee
1 (...continued) control the manner in which the details of the work are to be done, even though the right of control m ay not be exercised. An employee borrowed under these circumstances is called a “special employee.”
J. App. at 180.
-4- of IM C would not absolve Philco of liability since Philco could remain liable as a
second employer of Frintz during the accident. W ithout the dual employment
theory available, the jury’s conclusion that Frintz was IM C’s special employee
meant Frintz was not employed by Philco at the time of the accident; therefore,
Philco shared no liability for the accident. The Bains’ objection to the either/or
question was overruled.
The Bains also objected to the district court’s exclusion of a proffered jury
instruction based on the dual employment theory. The Bains wanted the district
court to instruct the jury, “. . . in cases such as this, the entity raising the defense
of special employee must also show that such workman’s status as a general
employee of the defendant had temporarily ceased and negative the fact that the
employee was the servant of both employers at the time of the accident in order to
prevail.” J. App. at 158. They argued that New M exico law required the jury
find Philco had relinquished control of Frintz in order for Philco to escape
liability under the special employee defense. The district court omitted this
instruction over the Bains’ objection, concluding New M exico law did not require
a factual determination that the employee had ceased working for the primary
employer at the time of the negligence.
II. Discussion
On appeal, the Bains seek remand to the district court for a new trial. They
claim the district court erred in failing to craft jury instructions and a verdict form
-5- that represent both (1) a relinquishment requirement when using the special
employee defense and (2) the dual employment theory. They have also filed a
motion to certify the legal questions in this appeal to the New M exico Supreme
Court. 2
W e review de novo a district court’s jury instructions when objection was
made to the challenged instruction at trial. 3 Osteguin v. S. Pac. Transp. Co., 144
F.3d 1293, 1295 (10th Cir. 1998). Challenges to a judge’s decision to give or
withhold a particular jury instruction are reviewed for abuse of discretion. See
Royal M accabees Life Ins. Co. v. Choren, 393 F.3d 1175 (10th Cir. 2005).
“Because verdict forms are essentially instructions to the jury,” we apply the same
standard as we would to jury instructions. See United States v. Jackson, 213 F.3d
1269, 1285 (10th Cir. 2000), rev’d on other grounds, 531 U.S. 1033 (2000). Under
these standards of review, we review the district court’s jury verdict form de novo
and its decision not to include the Bains’ proffered instruction for an abuse of
discretion.
2 W e deny the motion to certify. The issues of state law are not exceedingly complex or unsettled. M oreover, the Bains chose a federal forum when their claims could have been brought in the New M exico courts in the first instance. 3 Philco claims insufficient objections were made to preserve de novo review for the jury instructions, but we conclude the record was adequate to demonstrate the basis of the Bains’ objection and their preferred alternatives. See J. App. at 584–585; see also J. App. at 556–559, 572–577.
-6- In addition, we review the district court’s interpretation and determination
of state law de novo. Freightquote.com v. Hartford Cas. Ins., 397 F.3d 888, 892
(10th Cir. 2005). “W here the state’s highest court has not addressed the issue
presented, the federal court must determine what decision the state court would
make if faced with the same facts and issue.” Oliveros v. M itchell, 449 F.3d 1091,
1093 (10th Cir. 2006) (internal quotations omitted); Johnson v. Riddle, 305 F.3d
1107, 1118 (10th Cir. 2002).
A. New M exico’s Special Employee D efense
Philco’s principal trial defense was that Frintz was under the control of IM C
at the time of the accident. Under New M exico employment law, an employer
may be sued only for employee torts committed within the scope of employment.
M onett v. Dona Ana County Sheriff’s Posse, 840 P.2d 599, 603 (N.M . Ct. App.
1992); Restatement (Second) of Agency § 219(1) (1957) (“A master is subject to
liability for the torts of his servants committed while acting in the scope of their
employment.”).
But, “[a]s a general rule, an employer is not liable under respondeat
superior for an injury negligently caused by a[n employee] if the [employee] is not
acting at the time as the [employee] of that employer, and the evidence shows that
the employee has been loaned to the service of another who controls the manner
and details of the employee’s work.” Los Ranchitos v. Tierra Grande, 861 P.2d
263, 267 (N .M . Ct. App.1993). This is known as the special employee defense.
-7- Under this defense, the employee’s primary employer is not liable for negligent
conduct where the employee was temporarily in the employ of another employer at
the time of the accident.
To establish a special employee relationship, New M exico cases require tw o
findings of fact: One, for which employer is work being performed at the time of
the tortious conduct, and two, which employer had the power to control the w ork
performed and the conduct of the employee. Dunham v. Walker, 288 P.2d 684,
689 (N .M . 1955); see also Wuertz v. Howard, 421 P.2d 441 (N.M . 1966).
The district court tendered this two-part test to the jury. The Bains argue,
however, that the test applies only when workers compensation claims are
involved. Outside the workers compensation context, as is the case here, they
contend New M exico case law requires a tripartite finding to establish the special
employee defense. They argue an additional element of relinquishment by the
primary employer is necessary— not only was the employee under the control of
another employer and performing work for that employer, but also that the primary
employer relinquished control of its employee, relying on our decision in Jones v.
George F. Getty O il, 92 F.2d 255 (10th Cir. 1937).
W e disagree that the New M exico courts have adopted a relinquishment
requirement as part of the special employee defense. In Jones, we addressed the
question of whether employees temporarily borrowed by another employer under
-8- the tenets of agency law, so-called “special” employees, were covered by New
M exico’s workers compensation statute. W e answered in the affirmative,
concluding that the special employer’s “sole liability to [the injured worker] is
under the New M exico Compensation Act; no common-law liability having
application” because of the preemption of common-law suits provided by workers
compensation. Id. at 258.
Our decision in Jones was notable because it was the first reported case that
addressed the special employee defense under New M exico law. The Bains argue
that Jones embodies a relinquishment element for cases outside the workers
compensation context that New M exico courts would adopt if presented the
opportunity. 4
In the seventy years since Jones, a substantial body of case law on the
special employee defense has been developed by the New M exico courts. The
New M exico courts first adopted the two-part test laid out above, with its focus on
for whom the work is done and who controls the work, in Dunham v. Walker, 288
P.2d 684, 689 (N.M . 1955) (citing Jones, 92 F.2d at 258). M any subsequent cases
have reaffirmed this rule. See, e.g., Shipman v. M acco Corp., 392 P.2d 9 (N .M .
4 By demonstrating relinquishment, the employer would sever the agency relationship necessary to respondeat superior liability by showing the employee was not working within the scope of his employment at the time of the negligence. Under this theory, without a showing of relinquishment both the special employer and the defendant employer could be directing the employee— leaving both susceptible to respondeat superior liability.
-9- 1964); Wuertz v. Howard, 421 P.2d 441 (N.M . 1966); Barger v. Ford Sales Co.,
546 P.2d 873 (N.M . Ct. App. 1976); Fresquez v. Sw. Indus. Contractors &
Riggers, 554 P.2d 986 (N .M . Ct. App. 1976).
W e must ask whether New M exico law then left the door open for an
additional relinquishment requirement in cases where workers compensation
preemption does not apply as the Bains contend. The answ er to that question is
no.
In our view , the N ew M exico Supreme Court rejected the relinquishment
requirement outside the workers compensation context in Weese v. Stoddard, 312
P.2d 545 (N .M . 1956). There, a local American Legion post helped construct a
refreshment stand for use at a rodeo. The stand was to be operated by a separate
and distinct sister organization, the W omen’s Auxiliary. The American Legion
loaned one of its members, M r. Stoddard, to the Auxiliary to help with heavy labor
chores. An Auxiliary member asked Stoddard to move a truck that was supporting
a beam attached to a tarpaulin sheltering the refreshment stand from the wind and
sun. As Stoddard moved the truck, the beam fell upon plaintiff Bertha W eese of
the Auxiliary and injured her. W eese sued both Stoddard and the American
Legion.
In assessing the scope of the special employee defense, the court used the
two-part test adopted in D unham to determine whether the W omen’s Auxiliary or
-10- the American Legion controlled and directed Stoddard’s work. After finding
Stoddard a special agent of the W omen’s Auxiliary, the court decided special
agency alone (without relinquishment) was sufficient to sever the American
Legion’s respondeat superior liability for W eese’s injury. W hile the case
involved a special agent rather than a special employee, the court made clear the
analysis was the same by using the two-part test established in Dunham for special
employees. 5
The Bains seek to distinguish Weese by arguing it is really a w orkers
compensation case and should not be applied outside that specific context.
Unfortunately for the Bains, there is nothing in Weese to narrow its holding in that
fashion. First of all, the New M exico Supreme Court plainly found respondeat
superior inapplicable because the agency relationship between the defendant
employer and tortfeasor had been severed by the special employee doctrine. The
court no where relied on workers compensation preemption to support this
rationale. In fact, citing to an agency treatise and the nature of the agency
relationship, the court explained its holding to the contrary:
[I]n determining whether, in respect of a particular act, a servant, in the general employment of one person, who has been loaned for the time being to another is the servant of the original employer or of the person whom he has been loaned, the test is whether in the particular service which he is engaged to perform, the servant continues liable to the direction and
5 The court even cited to our Jones decision as an illustration of the application of the test. Weese, 312 P.2d at 547–48.
-11- control of his general employer or becomes subject to that of the person to whom he is lent.
Id. at 547 (citation omitted) (emphasis added).
Secondly, while Weese cites to some workers compensation cases for its
agency proposition, it also cites to numerous non-workers compensation cases and
an agency treatise that places no reliance whatsoever upon workers compensation
for its analysis. Id. at 547–48 (citing to Finegan v. H.C. & A.I. Piercy Contracting
Co., 189 A.D. 699 (1919); Issacs v. Prince & Wilds, 133 M iss. 195 (1923); Denton
v. Yazoo & M.V.R. Co., 284 U.S. 305 (1931); 35 Am. Jur. (M aster and Servant)
§ 541). The special employee defense in Weese is solely premised on severing
respondeat superior liability for the primary employer rather than in establishing
workers compensation preemption.
Although occurring in the workers compensation context, Wuertz, 421 P.2d
441, also undermines the notion that New M exico courts w ould adopt a
relinquishment requirement if given the chance. In Wuertz, the New M exico
Supreme Court had an opportunity to make it more difficult for an employer to use
the special employee defense by adding a consent exception to the defense.
Instead of doing so, the court cited to the Weese decision for the proposition that
even though the general employer consented to his employee helping a special
employer, the special employee defense still applied. Id. at 443.
-12- In sum, we cannot ignore the clarity of logic and reasoning with which the
New M exico Supreme Court ignored the relinquishment requirement outside the
workers compensation context in Weese and opted against reducing the availability
of the special employee defense in Wuertz. W ithout a relinquishment requirement,
the two-part test for establishing the special employee defense that the district
court used in the jury instructions correctly stated New M exico law.
Accordingly, the district court did not abuse its discretion in withholding the
Bains’ requested instruction on relinquishment.
B. Dual Em ployment
The Bains also object to the either/or nature of the jury verdict form: “W as
Frintz an employee of Philco Construction, Inc. or was he a ‘special employee’ of
IM C at the time of the accident?” J. App. at 204. They claim it ignored New
M exico’s recognition of dual employment and allowed Philco to escape liability
through the special employee defense without consideration of whether Frintz
might remain in Philco’s employ at the same time. W e agree that New M exico law
allowed the Bains to assert a dual employment theory, but even so, it would not
have changed the outcome of trial.
New M exico courts recognize dual employment. Rivera v. Sagebrush Sales,
884 P.2d 832, 834 (N.M . Ct. App. 1994) (“Under certain conditions, both the
general and special employer are liable for workers’ compensation.”); Street v.
-13- Alpha Constr. Servs., 143 P.3d 187, 191 (N.M . Ct. App. 2006) (Kennedy, J.
dissenting) (“[W]orkers can have multiple employers, each of which is immune
from suit” due to workers compensation preemption.). 6 Dual employment is
especially relevant in co-employee workers compensation cases where the
defendant employer and the special employer are both seeking insulation from
liability or where the victim seeks benefits from both employers when one of them
is unable to fully cover the workers compensation expenses. See 3 Arthur Larson
& Lex K. Larson, Larson’s W orkers’ Compensation Law § 67.01[1] (2006).
New M exico law also recognizes dual employment outside the workers
compensation context. As the New M exico Supreme Court noted in Weese, “if one
person lends his servant to another for a particular employment, the servant, for
anything done in that employment, is dealt with as the servant of the one to whom
he has been lent, although he remains the general servant of the person who lent
him.” Weese, 312 P.2d at 547 (citing 35 Am. Jur. (M aster and Servant) § 541).
But by recognizing dual employment while simultaneously rejecting a
relinquishment requirement, the Weese court made clear that dual employment does
not matter for purposes of respondeat superior liability. The defendant employer
escapes liability by demonstrating the tortfeasor was the special employee of
6 Both Rivera and Street are workers compensation cases, but that does not undermine their relevance as it did when we analyzed the relinquishment requirement above. W orkers compensation preemption has no logical effect on whether an employee could have two employers.
-14- another at the time of the negligent conduct regardless of whether the tortfeasor
also remained an employee of the defendant.
The Bains argue that under dual employment theory Frintz could still have
been acting within the scope of his employment with Philco at the time of the
accident, making Philco liable under Rivera. The Bains are correct that New
M exico law recognizes dual employment. In the circumstances here, however, it is
obvious that the district court’s failure to craft a different verdict form did not
matter. If the jury had been presented with and chosen the option requested by the
Bains, i.e., Frintz was both the special employee of IM C and the general employee
of Philco, then Philco w ould still remain immune from liability. As Weese makes
clear, a determination of special employment is the sole finding required to insulate
the primary employer. A finding of dual employment in this case would
necessarily also include the required finding of special employment by
IM C— thereby sheltering Philco from liability for Frintz’s negligence.
Accordingly, the district court’s instructions on dual employment did not
affect the verdict.
III. Conclusion
For these reasons, we AFFIRM the district court. W e also DENY the motion
-15- to certify questions of state law to the New M exico courts.
Entered for the Court
Timothy M. Tymkovich Circuit Judge
-16-