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Lee v. M&H Enterprises, Inc.

Court of Appeals of Arizona, First Division

April 21, 2015

TIMOTHY LEE, a single man, Plaintiff/Appellant/Cross-Appellee,
v.
M AND H ENTERPRISES, INC. dba MARTIN HARRIS CONSTRUCTION, a Nevada corporation, Defendant/Appellee/Cross-Appellant, and WAL-MART STORES, INC. dba SAM'S CLUB, a foreign corporation, Defendant/Appellee

Page 1154

Appeal from the Superior Court in Maricopa County. No. CV2010-001154. The Honorable Mark H. Brain, Judge. The Honorable Joseph B. Heilman, Judge, Retired. The Honorable Donald Daughton, Judge, Retired.

For Plaintiff/Appellant/Cross-Appellee: Stephen M. Hopkins, Hopkins Law Offices PLC, Phoenix.

For Defendant/Appellee/Cross-Appellant M and H Enterprises: James K. Kloss, Lewis Brisbois Bisgaard & Smith LLP, Phoenix.

For Defendant/Appellee Wal-Mart Stores, Inc.: Douglas H. Fitch, The Law Office of Don D. Skypeck.

Judge Michael J. Brown delivered the opinion of the Court, in which Presiding Judge Kent E. Cattani and Judge Margaret H. Downie joined.

OPINION

Page 1155

Michael J. Brown, Judge:

[¶1] Timothy Lee suffered serious injuries while performing clean-up duties during the final stages of construction at a Sam's Club store located on property owned by Wal-Mart Stores, Inc. (" Wal-Mart" ). Lee was employed at the time by Able Body Labor (" Able Body" )[1] which supplied workers for M& H Enterprises, Inc. (" M& H" ), the general contractor on the project. After Lee successfully pursued a workers' compensation claim against Able Body, he sued Wal-Mart and M& H for negligence.

[¶2] On appeal, Lee challenges the trial court's orders granting summary judgment in favor of Wal-Mart and granting judgment as a matter of law in favor of M& H. The issues we address are: (1) whether Lee, as an employee of an independent contractor, could properly assert a vicarious liability negligence claim against Wal-Mart; (2) whether Lee presented evidence creating a material factual dispute as to whether Wal-Mart retained some control over his work and was therefore directly negligent; and (3) whether the lent employee doctrine relieves M& H from liability because Lee elected to pursue a workers' compensation award for his injuries. For the following reasons, we affirm.

BACKGROUND

[¶3] At the request of M& H, Able Body provided workers to perform clean-up work at the Sam's Club construction site. Lee, who began employment with Able Body in 2007, had been regularly assigned such work over the course of several months. In January 2009, shortly before the planned opening date of the store, Able Body directed Lee to report for work at the construction site. An M& H representative instructed Lee to clean the tops of various freezers, which were roughly ten feet high. Lee used an onsite scissor-lift to access the portion that needed cleaning, and proceeded to remove debris. Next to the ten-foot freezers, separated by a small section of fiberboard, were taller freezers, roughly sixteen feet high. Rather than use the scissor-lift to reach the taller freezers, Lee attempted to access them by stepping on the fiberboard. While doing so, the fiberboard collapsed and Lee was seriously injured when he fell to the floor.

[¶4] Lee sued Wal-Mart and M& H, alleging they each acted negligently by failing to maintain a safe place to work, free of hidden dangers. Lee also alleged that both Wal-Mart and M& H were in control of the property and therefore owed him a " non-delegable duty to . . . provide a safe place to work, free of hidden dangers." Although he acknowledged receipt of an award for workers' compensation benefits (based on his claim against Able Body), Lee asserted the

Page 1156

award was inadequate to compensate him for his injuries.

[¶5] M& H moved for summary judgment, asserting that the lent employee doctrine barred Lee's cause of action because he had elected to pursue his statutory right to obtain a workers' compensation award for his injuries. The trial court denied the motion. After reassignment of the case to a different judge, M& H filed a second motion for summary judgment. M& H argued that if it had a duty to control Lee's actions, then his only remedy was workers' compensation; but if M& H had no duty to control, then as a matter of law it could not have breached any duty to Lee.

[¶6] Wal-Mart also filed a motion for summary judgment, arguing that as a landowner, it did not owe a non-delegable duty to Lee because his injury occurred while he was working as an employee of an independent contractor. Wal-Mart also asserted it did not contractually assume responsibility or exercise actual control over the work of M& H, Able Body, or Lee. Lee countered that, notwithstanding his status as an employee of a subcontractor and the terms of Wal-Mart's contract with M& H, a landowner has a non-delegable duty to provide a reasonably safe place for business invitees and there was evidence that Wal-Mart and M& H exercised shared control over the premises at the time of the accident.

[¶7] The trial court denied M& H's motion but granted Wal-Mart's, finding that Wal-Mart had hired M& H to build the Sam's Club and thereby " effectively relinquished control of (and liability for), the project to [M& H]" through its contract. The court explained that although the project was nearing completion and Wal-Mart possibly had " taken possession" of part of the site, there was " nothing in the record suggesting that Wal-Mart had taken possession or control of the area in which Lee was working, nor that it controlled Lee's work." The court denied Lee's subsequent motion for reconsideration and/or new trial, and entered judgment in favor of Wal-Mart.

[¶8] A jury trial ensued on Lee's claim against M& H. At the close of Lee's presentation of evidence, M& H moved for judgment as a matter of law, reasserting its argument that Lee's claims were barred based on the lent employee doctrine. The court granted the motion, explaining that a contract for hire was implied from the circumstances and finding that M& H exercised control over Lee and no reasonable jury could conclude otherwise. Therefore, applying the lent employee doctrine, the court found that the exclusive remedy of workers' compensation barred Lee from pursuing civil damages.

[¶9] The court entered a final judgment in favor of M& H. Lee timely appealed and M& H cross-appealed the denial of its second motion for partial summary judgment.

DISCUSSION

I. Wal-Mart's Motion for Summary Judgment

[¶10] Summary judgment is proper when " there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Ariz. R. Civ. P. 56(a). We review de novo the grant of summary judgment and view the evidence in the light most favorable to the non-moving party. Read v. Keyfauver, 233 Ariz. 32, 35, 308 P.3d 1183, 1186 (App. 2013).

[¶11] Lee argues the trial court erred in granting summary judgment because, pursuant to Restatement (Second) of Torts (" Restatement" ) § 422 (1965), Wal-Mart necessarily retained a non-delegable duty, as the landowner, to keep its premises reasonably safe for business invitees. Lee further asserts the court erred because Wal-Mart retained control over his work and is therefore directly liable for his injuries.

A. Premises Liability (Vicarious) under Restatement § 422(a)

[¶12] Arizona courts have consistently recognized that a landowner is not liable for the negligent conduct of an independent contractor unless the landowner has been independently negligent. See Welker v. Kennecott, 1 Ariz.App. 395, 401-04, 403 P.2d 330, 336-39 (1965) (citing Restatement (Second) of Torts ...


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