J-A03017-22
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
RONALD AND JILL OSTER, H/W : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellants :
:
:
v. :
:
:
SERFASS CONSTRUCTION COMPANY, : No. 1052 EDA 2021
INC., AND CITY CENTER :
INVESTMENT CORPORATION :
:
RONALD AND JILL OSTER, H/W :
:
Appellants :
:
:
v. :
:
:
TOWER SIX OP, LP
Appeal from the Order Entered May 4, 2021
In the Court of Common Pleas of Lehigh County Civil Division at No(s):
2018-C-2235,
2018-C-3087
BEFORE: STABILE, J., DUBOW, J., and McCAFFERY, J.
CONCURRING/DISSENTING MEMORANDUM BY McCAFFERY, J.:
FILED AUGUST 17, 2022
Because I conclude the record contains a genuine issue of material fact
as to whether Tower had superior knowledge of the dangerous condition which
led to Mr. Oster’s injury, I would vacate the order granting Tower summary
judgment and remand the case for trial. However, I am constrained to concur
with the Majority’s decision to affirm the trial court’s grant of summary
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judgment in favor of Serfass. Although I strongly disagree with the manner
in which the statutory employer doctrine has been wielded by negligent
general contractors to shield themselves from civil liability when they have
not taken any steps to ensure the employees of their subcontractors will be
adequately compensated (or even insured) for on-the-job injuries they sustain
as a result of that negligence, I acknowledge we are bound by existing,
controlling statutory and case law to the contrary. Thus, I respectfully dissent
in part and concur in part from the Majority’s memorandum decision.
I. Summary Judgment in favor of Tower
With regard to Tower’s liability, or lack thereof, the Majority concludes
the record “supports the trial court’s determination” that Appellants failed to
identify any “evidence of record” that Tower possessed “superior knowledge”
that the condition of the Trifecta Building posed a danger to Mr. Oster, and
thus, the court’s entry of summary judgment in favor of Tower was proper.
See Majority’s Memorandum at 8. However, I find the Majority’s application
of the law to be too limited.
Generally, “a landowner who engages an independent contractor is not
responsible for the acts or omission of such independent contractor or his
employees.” Beil v. Telesis Const., Inc., 11 A.3d 456, 466 (Pa. 2011)
(citations omitted). Nevertheless, there are several exceptions to this general
rule. See id. One such exception applies when the landowner possesses
“superior knowledge” of a potentially dangerous condition. See Gutteridge
v. A.P. Green Servs., Inc., 804 A.2d 643, 657-58 (Pa. Super. 2002).
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A landowner owes a duty to warn an unknowing
independent contractor of existing dangerous conditions
on the landowner’s premises where such conditions are
known or discoverable to the owner. Such a duty to warn is
owed irrespective of whether the independent contractor
exercises full control over the work and premises entrusted to
him. However, [a]n owner of land who delivers temporary
possession of a portion of the land to an independent contractor
owes no duty to the employees of the independent contractor with
respect to an obviously dangerous condition on that portion of the
land in the possession of the contractor. It has also been said that
the employer of an independent contractor has no duty to warn
the contractor or his employees of a condition that is at least as
obvious to them as it is to him. In addition, the owner of property
is under no duty to protect the employees of an independent
contractor from risks arising from or intimately connected with
defects or hazards which the contractor has undertaken to repair
or which are created by the job contracted.
Colloi v. Philadelphia Elec. Co., 481 A.2d 616, 619–20 (Pa. Super. 1984)
(citations & quotation marks omitted; emphasis added & some emphasis
removed). Thus, a landowner owes a duty of care to protect the employee of
an independent contractor from potential dangers that are known or
“discoverable” to the landowner, and not as obvious to the employee.
In the present case, it is undisputed that the employee, Mr. Oster, had
no knowledge the Trifecta Building was struck by an excavator bucket a few
weeks before his first day at the jobsite, or that the incident may have affected
the structural integrity of the chimney located directly above the area where
he was assigned to work. The relevant question is whether the potentially
dangerous condition was “known or discoverable to” the landowner, Tower.
See Colloi, 481 A.2d at 619 (emphasis added). As this Court explained in
Gutteridge:
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The question of whether a landowner owes a duty to warn an
independent contractor of dangerous conditions on the premises
turns on whether the owner possesses “superior knowledge” or
information which places him in a better position to
appreciate the risk posed to the contractor or his
employees by the dangerous conditions.
Gutteridge, 804 A.2d at 657–58 (emphasis added).
In my view, the fact that those in charge of the jobsite retained an
engineer, less than 10 days before the accident, to conduct a structural
assessment of the building on which Mr. Oster was working when he was
injured, raises a jury question as to whether Tower had “superior knowledge”
of the potential danger or whether such knowledge was discoverable to Tower.
In granting summary judgment to Tower, the trial court first emphasized
that the engineering report was addressed to Serfass, and there was “no
indication that Tower . . . solicited the . . . Report or received a copy of the .
. . . Report.” Trial Ct. Op. (No. 2018-C-3087), 5/4/21, at 8. I find it
implausible that the landowner, who contracted with Serfass to perform the
demolition work, would not have been informed of the potentially dangerous
condition resulting from an excavator bucket striking the connecting building,
and, indeed, would not have received a copy of the engineering report.
Nevertheless, even if Tower can establish it did not request or receive the
Report, it is still liable to Appellants if a jury determines the dangerous
condition was “discoverable to” Tower, and that Tower was in a better position
to appreciate the risk than Mr. Oster. I conclude that these two critical
questions are for the jury to decide.
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Second, both the Majority and the trial court maintained that Appellants
presented no evidence Tower “had any knowledge that the excavator’s impact
with the Trifecta Building caused the chimney to pose a danger to workers at
the Tower Project site” — primarily because the engineering report “concluded
that the Trifecta Building was unaffected by the excavator impact.” Majority
Memo at 8; see also Trial Ct. Op. at 8-9. Again, I would conclude the Majority
and the trial court made a factual determination which should have been left
for the jury.
First, I emphasize that the excavator incident was alarming enough to
those in charge of the jobsite that they requested a structural assessment
by an engineer. Moreover, as Appellants pointed out in their brief, the report
provided an assessment of only the exterior wall of the Trifecta Building and
made no mention of the chimney that later collapsed. See Appellants’ Brief
at 33. Although the trial court found this argument misleading — noting that
the report spoke “directly to the area of the Trifecta Building previously struck
by the excavator bucket”1 — I cannot agree. It is unclear from the record
whether the engineer did, in fact, assess the condition of the chimney, and
the determination of whether Tower should have conducted a more thorough
assessment or taken steps to protect the subcontractors are, again, questions
for the fact finder.
____________________________________________
1 Trial Ct. Op. at 9.
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Viewing the record in the light most favorable to Appellants — the
nonmoving parties — I conclude that the record does not clearly demonstrate
Tower is entitled to judgment as a matter of law, and, in fact, there exists a
genuine issue of material fact as to whether Tower either had superior
knowledge of the potential danger to Mr. Oster, or that such knowledge was
discoverable to it, and not apparent to Mr. Oster. See Hovis v. Sunoco,
Inc., 64 A.3d 1078, 1081 (Pa. Super. 2013). Thus, I dissent from the
Majority’s decision to affirm the order granting summary judgment to Tower.
II. Summary judgment in favor of Serfass
The Majority also affirms the order of the trial court granting summary
judgment to Serfass concluding that, pursuant to the five-part test outlined in
McDonald v. Levinson Steel Co., 153 A. 424 (Pa. 1930), Serfass was Mr.
Oster’s “statutory employer” and, thus, is entitled to immunity from civil
liability under Section 302(b) of the Workers’ Compensation Act. See Majority
Memorandum at 8-12. Reluctantly, I acknowledge the five-part McDonald
test remains the standard by which the courts of this Commonwealth
determine whether a general contractor is the statutory employer of the
employee of a subcontractor, and consequently, immune from civil liability.
Moreover, I concur that upon application of the McDonald test, the trial court
properly determined Serfass was Mr. Oster’s statutory employer in the present
case, and, thus, immune from liability.
Nevertheless, I am compelled to express my opinion that statutory
employer doctrine, as applied via the McDonald test, is “an irrational relic of
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a bygone era.” Patton v. Worthington, 89 A.3d 643, 651 (Pa. 2014) (Baer,
J., concurring). “The Legislature’s purpose in imposing this status upon
general contractors was remedial, as it wished to ensure payment of
workers’ compensation benefits in the event of defaults by primarily liable
subcontractors.” Id. at 645 (emphasis added; citations omitted). See Peck
v. Delaware Cnty. Bd. of Prison Inspectors, 814 A.2d 185, 188 (Pa. 2002)
(Per Newman, J., with two Justices concurring, and one Justice concurring
with separate opinion) (“The purpose of this provision is clear: to ensure the
payment of compensation benefits by a financially responsible party in the
injured worker’s chain of employment from subcontractor to general
contractor.”) (emphasis added); Dougherty v. Conduit & Found. Corp.,
674 A.2d 262, 265 (Pa. Super. 1996) (“The intent behind the doctrine of
statutory employer is ‘to hold a general contractor secondarily liable for
injuries to the employees of a subcontractor, where the subcontractor
primarily liable has failed to secure benefits with insurance or self-
insurance.’”) (citation omitted; emphasis added).
When Section 302(b) was enacted in 1915, employers were not
required to obtain Workers’ Compensation insurance for their employees.
Thus, if an employee of a subcontractor was injured on a jobsite, that
employee was not guaranteed workers’ compensation benefits if their
employer failed to obtain the coverage. The statutory employer doctrine was
enacted to address this potential lapse, and impose “secondary liability on
statutory employers . . . to ensure that an injured worker will be afforded
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payment of benefits, even in the event of default by his primary employer.”
Doman v. Atlas America, Inc., 150 A.3d 103, 109-10 (Pa. Super. 2016).
As this Court observed in Doman,
The tort immunity associated with the imposition of secondary
liability reflects the historical quid pro quo between an employer
and employee whereby the employer assumes liability without
fault for a work-related injury . . . . However, the Act was
amended in 1974 to require that all employers provide
workers’ compensation coverage. Notwithstanding, the 1974
amendments allowed general contractors to remain
insulated from tort liability, despite never being required to
provide workers’ compensation benefits to injured employees of
subcontractors, and created a windfall immunity shield. Thus,
“the mandatory nature of workers’ compensation has
rendered the statutory employer doctrine obsolete[,] ...
[and] adversely impact[s] worker safety by eliminating the
traditional consequences (money damages) when a general
contractor’s negligence harms a subcontractor's employee.”
Id. at 110 (citations & quotation marks omitted; emphases added).
Accordingly, the Doman Court called upon the Pennsylvania Legislature to
“reconsider [this] statutory scheme.” Id. at 109.
Heretofore, judicial criticism of the statutory employer doctrine has
fallen on deaf ears. Justice Nigro authored a dissenting opinion in Fonner v.
Shandon, Inc., 724 A.2d 903 (Pa. 1999), advocating for the addition of a
sixth element to the McDonald test — proof that the general contractor
“assumed responsibility for providing workers’ compensation to the injured
employee[.]” Fonner, 724 A.2d at 908 (Nigro, J. dissenting). He explained:
[The 1974 amendments for the Workers’ Compensation Act made]
its application . . . mandatory. The impetus of this change was to
afford protection to employees. The Legislature never intended
that the amendments would allow a general contractor to escape
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civil liability if it did not pay for the injured employee’s workers’
compensation insurance. I find the clear meaning of the 1974
amendments was to place responsibility for workers’
compensation benefits upon the general contractor only
where the subcontractor or direct employer failed to do so. In
reality, application of these amendments rarely, if ever, will result
in the general contractor assuming responsibility for providing
workers’ compensation insurance because in the modern
construction workplace, general contractors will rarely, if ever,
award a contract absent the subcontractor showing proof of
workers’ compensation coverage. Common sense and logic
dictate that the general contractor should not reap the
benefits of civil liability immunity unless it undertakes
responsibility of compensation coverage. If however, a
general contractor does assume responsibility for the payment of
workers’ compensation, then it should be afforded statutory
employer immunity.
* * *
As Judge Hoffman stated more than thirty years ago,
. . . very great care . . . must be exercised before allowing
an employer to avoid its liability at common law by asserting
that he is a statutory employer. Section 203 of the
Workmen’s Compensation Act, which was designed to
extend benefits to workers, should not be casually
converted into a shield behind which negligent
employers may seek refuge.
Id. at 908-09 (some emphases added), citing Stipanovich v. Westinghouse
Elec. Corp., 231 A.2d 894, 898 (Pa. Super. 1967).
More recently, another Supreme Court Justice reiterated this same
concern in a concurring opinion in Patton. See Patton, 89 A.3d at 650-51.
Justice Baer advocated that the Pennsylvania Legislature
revise the statutory employer doctrine to mirror that of our sister
state, New Jersey. There, the doctrine only operates where a
subcontractor has violated the mandatory provisions of the
New Jersey Act and failed to obtain workers’ compensation
insurance. Under these circumstances, the general contractor
steps into the shoes of the subcontractor, paying the
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subcontractor’s employee’s workers’ compensation, and then
receiving immunity from common law tort damages, while further
having the ability to assert a right of subrogation against the
noncompliant subcontractor. Otherwise, [w]here the
subcontractor takes out compensation insurance . . . the general
contractor is treated as a third party and is not granted immunity
from a common law negligence suit by an employee of a
subcontractor. Notably, the subcontractor is then likewise given
a right of subrogation, should the general contractor be found
negligent at common law.
Id. at 652 (Baer, J. concurring) (citations & quotation marks omitted). The
Justice opined that “adopting such a paradigm would achieve” the primary
purposes of the Act: (1) ensure “prompt payment” of benefits to an injured
worker regardless of fault; and (2) “perpetuate[ ] the concomitant quid pro
quo of immunity to the paying employer[.]” Id. Justice Baer anticipated that
this approach would also “help to ensure safety in the workplace, and
hopefully lead to the prevention of tragic accidents due to someone’s
carelessness . . ., by incentivizing general contractors to adopt more rigorous
safety regimes.” Id. See also Doman, 150 A.3d at 109 (Superior Court
panel stating that it “echo[s] those calls” that the legislature “reconsider
Pennsylvania’s [workers’ compensation] statutory scheme”).
Therefore, like my honorable colleagues on the Supreme Court and the
Doman panel, I advocate for a change in the workers’ compensation law. In
my opinion, as suggested by Justice Nigro, the McDonald test should require
a sixth element — proof that the general contractor either paid the injured
worker’s benefits, or prior to the injury, obtained a policy which would have
covered the injured employee. Only when a general contractor has assumed
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responsibility for an injured worker’s benefits should it be entitled to immunity
under the Act. To do so would be in furtherance of the initial legislative intent
which is to provide a failsafe for injured workers in the event of a lapse in
workers’ compensation insurance by the primary employer. Imposing such a
requirement would also promote public policy considerations of assuring safe
worksites and providing maximum protection and compensation to injured
workers. However, because, as noted above, I concede we are bound by
controlling statutory and case law to affirm the trial court’s grant of summary
judgment in favor of Serfass, I am constrained to concur in the Majority’s
decision.2
Thus, I concur with the decision to affirm the order granting summary
judgment to Serfass, and dissent from the decision to affirm the order granting
summary judgment to Tower.
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2 I note that unlike my colleagues in the Majority, I do not find Appellants
waived this claim. See Majority Memorandum, at 12 n.5. Indeed, they
discussed the “judicial calls to the Pennsylvania legislature to reconsider [this]
statutory scheme” in their Memorandum of Law accompanying their response
to Serfass’ motion for summary judgment, and asserted that the “present
statutory scheme allows general contractors to remain insulated from tort
liability despite never being required to provide . . . benefits to injured
employees of subcontractors, thus creating a windfall immunity shield.”
Appellants’ Memorandum of Law in Opposition to [Serfass’] Motion for
Summary Judgment, 11/19/20, at 12.
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