Opinion
307553/08.
Decided March 11, 2010.
Steven Krentsel, ESQ (Krentsel Guzman, LLP), (Plaintiff).
Albert E Risebrow, ESQ (Fumuso, Kelly, Deverna, Snyder, Swart Farrell, LLP), (Defendants).
The following papers numbered 1 to 6 read on this Motion noticed on July 27, 2009 and on the Motion Calendar of January 21, 2010 of Part A 15.
Papers Submitted Numbered Notice of Motion, Affirmation Exhibits 1, 2, 3 Affirmation in Opposition Exhibits 4,5 Reply Affirmation 6Upon the foregoing papers, Defendant East 175th Street Housing Development Fund Corporation (hereinafter, "Defendant") moves this Court for an Order granting summary judgment against Chesney Carty (hereinafter, "Plaintiff") on the issue of liability pursuant to CPLR § 3212 and on the ground that the action is precluded by the Workers' Compensation Law §§ 11 and 29 in that the exclusivity of the remedy afforded by the award of workers compensation benefits applies to insulate Defendant from liability.
The instant action is a claim for negligence and Labor Law violations, brought by Plaintiff who fell from a ladder on December 29, 2005, while replacing the pull-chain switch of a ceiling fan affixed to property owned by Defendant.
Plaintiff was employed by Volunteers of America Greater New York, Inc. (hereinafter, "Volunteers") as a maintenance worker at the Lydia Hoffman facility located at 855 East 175th Street in Bronx, New York. Plaintiff alleges that on the date of the accident, he was replacing the pull-chain switch of the aforementioned ceiling fan in a vacant apartment on the premises, which was being readied for an incoming occupant. Furthermore, that at the time of his replacement of the pull-chain switch, that he was also instructing and supervising other employees of Volunteers, who were plastering and painting the walls of the vacant apartment. Upon inspecting the vacant apartment and recognizing that the pull-chain switch was not functioning, Plaintiff states that he retrieved fan components and ascended a six-foot A-frame ladder to remove faulty wiring from the ceiling fan. Thereafter, the ladder shifted and kicked out, causing him to fall to the ground and injure himself.
Defendant seeks dismissal on the grounds that Plaintiff's action is barred by the exclusivity provision of Workers' Compensation Law as Defendant is an "alter ego" of Plaintiff's employer. In the alternative, Defendant seeks dismissal on the grounds that Plaintiff's claims do not fall within the ambit of Labor Law §§ 240(1) and 241(6).
A proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Zuckerman v. City of New York, 49 NY2d 557 (1980) Once this showing has been made, the burden shifts to the party opposing the motion to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action. Romano v. St. Vincent's Med Ctr. of Richmond, 178 AD2d 467 (2nd Dept 1991).
In this action, Defendant argues that it is a mere "alter ego" of Plaintiff's employer, Volunteers, and that the two corporations operate as a single integrated entity. As a result, Defendant should be afforded the same immunity pursuant to the exclusivity provisions of the Workers' Compensations Law.
Where an employee is injured in the course of employment, his exclusive remedy against his employer is ordinarily a claim for workers' compensation benefits. Here, plaintiff is not suing his employer. Nevertheless, defendant argues the action is precluded by Workers' Compensation Law § 11.
The exclusivity rule of Workers' Compensation Law § 11 applies to insulate a person or entity from liability to a worker for tortious conduct, where the person or entity is the alter ego of the worker's direct employer or exercises such control over that employer as to retain ultimate decision-making authority and financial responsibility over it. ( See e.g., Kudelski v. 450 Lexington Venture, 198 AD2d 157 (1st Dept 1993); Smith v. Roman Catholic Diocese of Syracuse, 252 AD2d 805 (3rd Dept 1998). Likewise, where there is more than one employer in a joint venture, an employee working for one such employer is considered an employee of all other employers in the joint venture, and thus the employee's exclusive remedy against the entities forming the joint venture is workers' compensation. Mitchell v. A.F. Roosevelt Ave. Corp., 207 AD2d 388 (2nd Dept 1994).
Similarly, separate corporations may be considered a single employer entitled to invoke the exclusivity rule where they comprise a single integrated entity. Kudelski v. 450 Lexington Venture, 198 AD2d 157 (1st Dept 1993); see also, Ramnarine v. Memorial Ctr for Cancer Allied Diseases, 281 AD2d 218 (1st Dept 2001). The same is true where corporations have lost their separate corporate status due to having become divisions of the same corporation by virtue of a merger.( Levensen v. Berkey Professional Processing, 122 AD2d 867 (2nd Dept 1986). An employer may also be regarded as insulated from liability by virtue of the exclusivity provision where the employee was injured while working for the employer's wholly owned subsidiary. Sanna v. Rim, Inc. , 8 AD3d 649 (2nd Dept 2004).
Plaintiff argues that Defendant fails to establish that it is an alter ego of Volunteers because they did not exclusively direct or control him at the time of his work and resulting accident on the subject premises. Plaintiff avers that Defendant is a corporate entity, separate and distinct from Volunteers and that their only similarity is that they share a common president. Plaintiff asserts that Defendant fails to offer proof that they and Volunteers share bank accounts or that Defendant exercised exclusive supervision and control over him. Plaintiff further states that he received all training, communication and checks from Volunteers and that a question of fact remains for the jury, as to Plaintiff's employment. However, Defendant argues that they cannot exist, except as an alter ego of Volunteers and that there are so interconnected that working for Volunteers is, in effect, working on behalf of Defendant
In Ramnarine v. Memorial Center for Cancer and Allied Diseases, 281 AD2d 218 (1st Dept 2001), the Appellate Division held that evidence submitted, showing that two entities operate as a single entity by sharing corporate officers, a single insurance policy and a single human resources department among sharing other essential aspects of their operations, can demonstrate that even entities with separate certificates of incorporation may be considered to be "alter egos" of each other. In Hernandez v. Sanchez , 40 AD3d 446 (1st Dept 2008) citing Ramnarine, supra., it was also held, that two entities, "functioning as one in their day-to-day operations" are afforded the same immunities and therefore an action barred against one for civil liability by Workers' Compensation Law §§ 11 and 29(6) is also barred as to their alter ego entity.
While there are no definitive or enumerated factors that can evince the existence of a corporate "alter ego" relationship, courts may consider the following additional factors when determining whether such a relationship exists: (1) shared offices and employees, Crespo v Pucciarelli, et al., 21 AD3d 1048 (2nd Dept 2003).; (2) a shared CEO or president, Id.; (3) a shared Workers' Compensation Insurance policy, Id.; (4) both companies are engaged in the "precisely the same work", Thompson v. Bernard G. Janowitz Constr. Corp., 301 AD2d 588 (2nd Dept 2003).; (5) or a shared corporate purposes such as one corporation being formed only for the purpose of holding title to a property and another corporation being formed for the purpose of providing services to a disadvantaged group of persons, Anduaga v. AHRC NYC New Projects, Inc. , 57 AD3d 925 (2nd Dept 2008). In the alternative, closely held corporations sharing the same directors and officers, may not be considered alter egos if, "they were formed for different purposes, neither is a subsidiary of the other, their finances are not integrated, assets are not commingled, and the principals treat the two entities as separate and distinct." Longshore v. Paul Davis Sys. of the Capital Dist., 304 AD2d 964 (3rd Dept 2003).
Essential to all these decisions is a working relationship with the injured plaintiff sufficient in kind and degree so that the third party, or the third party's employer, may be deemed plaintiff's employer.
In the instant case, Defendant submits sufficient evidence to show that Defendant and Volunteers operate as a single integrated entity, Defendant asserts and provides evidence of the following:
(1) that it was organized for the same charitable purposes as Volunteers, which are ". . . owning, constructing, rehabilitating, leasing, managing, equipping maintaining, developing and operating a housing project for persons of low income . . ." as stated in Defendants certificate of incorporation; (2) that Richard Motta, the CEO of Volunteers was appointed President of Defendant as shown in copies of their minutes from their Annual Meeting of the Member and Board of Directors; (3) that Volunteers is a board member of Defendant corporation and cannot be removed as a member, as is shown in a copy of Defendants bylaws; (4) that both Volunteers and Defendant share the same Director of Finance, Avia Rose, as stated by Richard Motta in his affidavit; (5) that while the premises at which Plaintiff was injured is owned by Defendant, Volunteers pays all operating expenses for the premises, also stated by Richard Motta in his affidavit; (6) that both Defendant and Volunteers are insured under the same Workers' Compensation Insurance Policy for which Volunteers makes the premium payment, which is evidence by a copy of their provided certificate of insurance; (7) that Volunteers acted as a guarantor for a bank loan Defendant procured in order to supply furniture and other supplies to the premises, which is evidenced by a copy of the letter from Chase bank to Defendant, acknowledging Volunteers assignment to them for said loan; (8) that Defendant and Volunteers utilize common administrative, financial and insurance reserves to jointly provide services to the homeless, also as stated in Richard Motta's affidavit; (9) moreover, that Defendant has no employees of its own, also stated in Richard Motta's affidavit.
Defendant has established, through evidentiary proof in admissible form, that it is an alter ego of Volunteers and is deemed co-employer of Plaintiff for workers compensation purposes. Brent Fung et. Al v. Japan Airlines, 9 NY3d 351 (2007). Plaintiff has not established that triable issues of fact exists as to whether Defendant is an alter ego of Volunteers. Therefore it is,
Ordered, that Defendant EAST 175TH Street Housing Development Fund Corporation's motion for summary judgment dismissing the complaint, on the ground that the action is barred by the exclusivity of the remedy afforded by the award of workers compensation benefits, against Plaintiff Chesney Carty pursuant to CPLR § 3212 and Workers' Compensation Law §§ 11 and 29 is granted.
Plaintiff's claim for negligence and Labor Law violations is hereby moot.
This constitutes the Decision and Order of the Court