Opinion
96KCV2003.
Decided July 8, 2004.
Bader, Yakaitis Nonnenmacher, LLP, (Wendi M. Edelman, of counsel) for plaintiff.
Gould Cimino, P.C. (Arthur M. O'Leary, of counsel) for defendant.
Plaintiff moves by notice of motion for an order scheduling a frame issue and factual determination hearing regarding whether the plaintiff was employed by the defendant Country Life Realty Co., at the time of the accident. Defendant opposes this motion and cross-moves for an order pursuant to CPLR § 3212 granting summary judgment to the defendant based on Workers Compensation Law §§ 11 and 29(6).
This is an action under Section 200, 240(1) and 241(6) of the Labor Law to recover damages for injuries sustained by plaintiff, a laborer, in a construction accident which occurred on February 24, 1995 during the demolition, alteration and renovation of premises located at 401 Franklyn Avenue Garden City, New York. These premises are owned by the defendant.
At the time of the accident plaintiff was standing on a scaffold approximately six feet above the ground, removing a sprinkler system from the ceiling above him. A section of piping fell down from the ceiling, hit the scaffold causing plaintiff to fall to the ground sustaining injuries. Plaintiff was an employee of CLR Construction Corp., a New York Corporation whose sole shareholders and corporate officers at the time were Frederick Elghanayan, H. Henry Alghanayan and Karam T. Alghanayan.
See affidavit of Frederick Alghanayan, defendant's moving papers, Exhibit H.
Plaintiff filed for and received workers compensation benefits under a workers compensation policy issued by the New York State Insurance Fund. This policy covered C.L.R. construction corp., Rockrose development corp., and Rockrose (able) Construction Corporation. These three companies have as officers and sole shareholders Frederick Elghanayan, H. Henry Alghanayan and Karam T. Alghanayan.
See Affidavit of Jane Boltrek, defendant's moving papers, Exhibit B.
The master policy covering these three companies was listed under the name of Rockrose Development Corp.
On May 12, 1988, the three officers and sole shareholders of the corporations and a Mr. James J. Warfield formed Country Life Realty Co., a partnership. On April 1, 1992, the Elghanayan's acquired the interest of James J. Warfield and assigned their partnership interest in Country Life Realty Co. to two partnerships, Fairfax Company and West Coast Co. On June 18, 1993 Fairfax and West Coast filed a partnership certificate certifying they are conducting business as Country Life Realty Co. The general partners of Fairfax and West Coast Company are the Elghanayans.
See defendant's moving papers, Exhibit I.
Each corporation is a separate entity and each partnership is a separate entity. Plaintiff received W-2 forms for the year 1994 from both CLR Construction and Rockrose (Able) Construction Corporation. In the year 1995, he received a W-2 only from CLR Construction.
See defendant's moving papers, Exhibit G.
Defendant admits in its answer that it was the owner of the property. It also admits that plaintiff was not its employee, but the employee of CLR Construction Corp., however, it argues it is entitled to summary judgment because the owners/principals of CLR Construction Corporation were also the owners principal of Country Life Realty Co. entitling defendant to the protections afforded by the Workers Compensation Law. This court disagrees with defendant's position and for the reasons that follows denies its cross-motion for summary judgment.
LAW
Billy v. Consolidated Machine Tool Co., 51 NY2d 152, 432 NYS2d 879, 412 NE2d 934 and Heritage v. Vanpatten, 59 NY2d 1017, 466 NYS2d 958, 453 NE2d 1247 established the general rule that a plaintiff injured during the course of his employment cannot maintain an action against the owner of the property where the accident occurred, where the owner is also an officer of the corporation which employed the plaintiff. The Court reasoned that "regardless of his status as owner of the premises where the injury occurred, he remains a co-employee in his relations with plaintiff in all matters arising from and connected with their employment." Workers Compensation Law §§ 11 and 29(6) make compensation the exclusive remedy of an employee injured by the negligence or wrong of another in the same employ. "The statute, having deprived the injured employee of a right to maintain an action against a negligent co-employee, bars a derivative action which necessarily is dependent upon the same claim of negligence for which the exclusive remedy has ben provided."
For purposes of the §§ 11 and 29 defenses to a common law action, a partnership and its partners are considered one entity when acting in furtherance of partnership business (Cipriano v. FYM Associates, 117 AD2d 770, 575 NYS2d 370, (2nd Dept. 1986); Jackson v. Tivoli Towers Housing Corporation, 176 AD2d 918, 575 NYS2d 370, (2nd Dept. 1991); Raney v. Jefferson Village Condo No. 11 Associates, 203 AD2d 544, 611 NYS2d 207 (2nd Dept. 1994).
In Cipriano, Jackson and Raney, supra, the Appellate Division, Second Department citing Billy v. Consolidate Machine Tools Co., and Heritage v. Van Patten, supra, dismissed an action against a general partner where the partnership was the plaintiff's employer and the general partner also supervised the work at the premises where plaintiff was injured. The facts in these cases are distinguishable from the facts of this case.
Plaintiff was the employee of a corporation, not a partnership. The papers submitted by defendant are silent as to the level of supervision exercised by any of the officers and stockholders of plaintiff's employer. There is no indication that any of them supervised any of the work performed by the plaintiff or that they had an active role in the partnership that owned the premises. At best they were merely partners in two partnerships that in turn were partners in Country Life Realty Co., the owner of the premises. They are so far removed from the premises' owner as to be considered separate legal entities and not one and the same entity as held in Cipriano, Jackson and Raney, supra.
The exclusivity provisions of the workers compensation law preclude an injured worker from recovering from a co-employee only for tortious conduct of a co-employee committed within the course of employment (Cusano v. Staff, 191 AD2d 918, 595 NYS2d 248 (3rd Dept. 1993) citing Maines v. Cronomer Val. Fire Dept., 50 NY2d 535, 429 NYS2d 622, 407 NE2d 466; Lefever v. Stultz, 93 AD2d 794, 461 NYS2d 832). The holding of Vanpatten and the cases following it apply where the defendant was the chief officer of the plaintiff's corporate employer and the injury to the plaintiff occurred at a work site controlled by the employer or at the employer's premises that was actually the plaintiff's work place. Thus the defendant had indistinguishable responsibilities as an executive employee and as property owner for safety precautions to avoid the plaintiff's injury (Johnson v. Eaton, 178 AD2d 101, 577 NYS2d 1; Caceras v. Zorbas, 148 AD2d 339, 538 NYS2d 552; Lindner v. Kew Realty Co., 113 AD2d 36, 494 NYS2d 870).
In Rosenberg v. Anguili Buick, 220 AD2d 654, 632 NYS2d 658 (2nd Dept. 1995), the Appellate Division, Second Department reversed a lower court's decision dismissing plaintiff's complaint. The lower court held that "where the owner, president and sole stockholder of two corporations is the same person the mere fact that title to the premises is held in the name of a corporation different from that of the corporate employer should not expose that corporation to suit by the injured plaintiff." The Appellate Division held that defendant was a "separate legal entity" from the plaintiff's employer and therefore not shielded from tort liability.
When an employer and the owner of the premises where a plaintiff is injured are distinct legal entities, there is no basis to dismiss an action against the landowner based on the exclusivity provisions of the Worker's Compensation Law (Richardson v. Benoit's Electric, Inc., 254 AD2d 798, 677 NYS2d 855; Laudisio v. Diamond D. Construction Corporation, 309 AD2d 1178, 765 NYS2d 720; O'Connor v. Spencer Investment LTD. Partnership, 2 AD3 513; 2003 NY Slip Op 19294, 769 NYS2d 276 (2nd Dept. 2003).
In O'Connor, supra, at the time of the accident, plaintiff was employed by GTI Harbor Trucking Riggin Inc. (GTI), Spencer Investment LTD partnership (Spencer) owned the premises where the accident took place. Spencer Realty Inc. was its general partner. The president and sole shareholder of GTI was also the president and sole shareholder of Spencer Realty Inc., the property owner's general partner. Supreme Court held that the action was not barred by the exclusivity provisions of the Workers Compensation Law §§ 11 and 29(6), because "none of the property owner's partners are officers of the injured plaintiff's corporate employer, and the partnership and corporate employer are distinct legal entities." The Appellate Division Second Department affirmed.
In the matter at hand none of the property owner's partners are officers of the injured plaintiff's corporate employer. Fairfax Company and West Coast Company are the only partners of Country Life Realty Co. and they are not officers of plaintiff's corporate employer. O'Connor, supra, falls squarely within the four corners of this case, it is a Second Department decision and binding on this Court.
Where the individual principals in an enterprise for their own business and legal advantage elect to operate that enterprise through separate corporate entities, the structure they create should not be ignored at their behest in order to shield one of the entities they created from common law tort liability (Richardson, supra; Laudisio, supra).
Thus, following the holdings in these cases, this Court finds that plaintiff's action is not barred by the exclusivity provisions of worker's compensation law §§ 11 and 29(6).
Turning now to plaintiff's motion for a framed issue hearing, given defendant's admissions in its answer, the evidence submitted in support of its cross-motion, more specifically w-2 forms and the affidavit of Frederick Elghanayan, wherein he states under oath that plaintiff was the employee of CLR Construction Corp., this Court finds this issue to be moot. Defendant has admitted that plaintiff was not its employee, therefore plaintiff's motion for the scheduling of a framed issue and factual determination hearing is hereby denied as moot.
CONCLUSION
Accordingly, for the foregoing reason's plaintiff's motion for a framed issue and factual determination hearing and defendant's cross-motion for summary judgment based on the exclusivity provisions of workers compensation law §§ 11 and 29(6) are respectively denied.
This constitutes the decision and order of this Court.