No. 2078 October Term, 1979, No. 2079 October Term, 1979, No. 2080 October Term, 1979, No. 2081 October Term, 1979, No. 2082 October Term, 1979, No. 2083 October Term, 1979, No. 410 Philadelphia 1980, Appeal from the Order of the Court of Common Pleas of Lehigh County, Civil Action Law, at No. 221 of Sept. Term 1974 and No. 544 April Term 1975.
Jerry A. Snyder, Allentown, for Kelly Labor, appellant in Nos. 2078, 2079 and 410 and appellee in Nos. 2081 and 2083.
Keith S. Erbstein, Philadelphia, for English, appellee in Nos. 2078, 2079, 2082, 2083, and 410 and appellant in Nos. 2080 and 2081.
Joseph Leeson, Bethlehem, for Lehigh County, appellee in Nos. 2078, 2080, 2082 and 410.
John Mason, Philadelphia, for Malcolm Pirnie, appellee in Nos. 2078, 2082 and 410.
David L. Pennington, Philadelphia, for Kelly Service, appellee in Nos. 2078, 2080, 2082 and 410.
Gary S. Figore, Easton, for Wiesenberger, appellee in Nos. 2079, 2081 and 410 and appellant in Nos. 2082 and 2083.
Thomas J. Calnan, Jr., Allentown, for Malcolm Pirnie, appellee in No. 2080.
Spaeth, Hester and Cavanaugh, JJ.
[ 286 Pa. Super. Page 316]
This case arises on consolidated appeals from orders granting summary judgment.
On July 13 or 14, 1973, Thomas R. English died as a result of inhaling noxious fumes. His administrator, Richard B. English, brought two actions to recover damages under the wrongful death or survival statutes, or under both. The first action, No. 221 September Term 1974, is against Lehigh County Authority, Malcolm Pirnie, Inc., and Kelly Services, Inc. The second action No. 544 April Term 1975, is against A. L. Wiesenberger Associates, Inc., and Kelly Labor of
[ 286 Pa. Super. Page 317]
Allentown, Inc. In the second action, Wisenberger joined the Authority, Pirnie, and Kelly Services as additional defendants. The actions were consolidated for trial. The Authority moved for summary judgment on the theory that Thomas English had been its employee and, therefore, under the Workmen's Compensation Act, it was immune from suit. Kelly Labor moved for summary judgment on the theory that English had been its employee and, therefore, under the Workmen's Compensation Act, it was immune from suit. Kelly Services moved for summary judgment on the theory that it had not violated any duty to English. The lower court concluded that English had been the Authority's employee, and not Kelly Labor's. It therefore granted the Authority's motion, and denied Kelly Labor's. The lower court further concluded that Kelly Services had not violated any duty to English, and therefore granted its motion.*fn1
Was Lehigh County Authority or Kelly Labor Thomas English's employer for workmen's compensation purposes?
Kelly Labor is a franchisee of Kelly Services. Its business is to provide temporary laborers, called "Kelly Workers." "Kelly Workers" are paid by Kelly Labor but only if they work for one of Kelly Labor's customers. Kelly Labor withholds federal, state, and local income taxes as well as social security payments from its workers' wages. It also pays unemployment compensation tax, maintains workmen's compensation insurance, and issues W-2 forms to its workers. It bills its customers at a rate that provides the funds
[ 286 Pa. Super. Page 318]
necessary to pay both its workers' wages and these several deductions and expenses. Kelly Labor has the exclusive right to hire and discharge its workers, and to remove workers from one customer and assign them to another.
In 1973 Kelly Labor entered into a written contract with the Lehigh County Authority go supply temporary labor to take samples of sewage pursuant to a program designed by Malcolm Pirnie, Inc.; the sewage system itself had been designed by A.L. Wiesenberger Associates, Inc. The agreement required Kelly Labor to supply the Authority with enough labor for an around-the-clock sampling at a sewage metering station commonly known as "the pit." The sampling began on Thursday, July 12, 1973. Kelly Labor supplied three of its Kelly Workers: Charles Alley, Wayne Nagle, and a third person, who is unidentified. When the unidentified person failed to report for work, Thomas English was directed by Kelly Labor to report in his place. English had applied to Kelly Labor for employment during the summer of 1973, and had received several assignments for which he had been paid wages. On Friday, July 13, he reported to Marlyn Stroh, an Authority employee, at a sewage pretreatment plant. Stroh directed English to report to the metering station, which was about ten miles away. There English was supposed to go into the pit every half hour to remove samples of sewage for testing. He was supposed to relieve Nagle and work until 8:00 a. m. on Saturday, July 14. When Alley reported for work at 8:00 a. m. on Saturday, he found Nagle and English at the bottom of the pit dead. The two young men had apparently died from noxious fumes that emanated from the sewage.
English's administrator and Wiesenberger first argue that the Authority has waived its right to raise the defense of immunity under the Workmen's Compensation Act, Act of 1915, June 2, P.L. 736, 77 P.S. § 1 et seq.
In its answer and new matter the Authority pleaded that it was immune as a statutory employer under § 52 of the Act, which provides as follows:
[ 286 Pa. Super. Page 319]
An employer who permits the entry upon premises occupied by him or under his control of a laborer or an assistant hired by an employe or contractor, for the performance upon such premises of a part of the employer's regular business entrusted to such employe or contractor, shall be liable to such laborer or assistant in the same manner and to the same extent as to his own employe.
As the lower court observed, slip op. at 16, this provision typically applies to the construction industry, where a general contractor subcontracts work to others, and the question arises whether an injured employee of the subcontractor may bring an action in trespass against the general contractor. See McDonald v. Levinson Steel, 302 Pa. 287, 153 A. 424 (1930). In a memorandum of law filed with the lower court, English's administrator took the position that the Authority did not qualify as a statutory employer. The authority apparently then abandoned its claim that it had been English's statutory employer, and instead argued that it was entitled to immunity as an "employer" under Section 481 of the Workmen's Compensation Act. It is the position of English's administrator and Wiesenberger that the Authority should not have been allowed thus to "expand" its defense.
"Employer" is defined in the Act as follows:
The term "employer," as used in this act, is declared to be synonymous with master, and to include natural persons, partnerships, joint-stock companies, corporations for profit, corporations not for profit, municipal corporations, the Commonwealth, and all governmental agencies created by it.
Section 481 of the Act provides:
(a) The liability of an employer under this act shall be exclusive and in place of any and all other liability to such employes, his legal representative, husband or wife, parents, dependents, next of kin or anyone otherwise entitled to damages in any action at law or otherwise on account
[ 286 Pa. Super. Page 320]
of any injury or death as defined in section 301(c)(1) and (2) or occupational disease as defined in section 108.
(b) In the event injury or death to an employe is caused by a third party, then such employe, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to receive damages by reason thereof, may bring their action at law against such third party, but the employer, his insurance carrier, their servants and agents, employes, representatives acting on their behalf or at their request shall not be liable to a third party for damages, contribution, or indemnity in any action at law, or otherwise, unless liability for such damages, contributions or indemnity shall be expressly provided for in a written contract entered into by the party alleged to be liable prior to the date of the occurrence which gave rise to the action.
Rule 1032 of the Pennsylvania Rules of Civil Procedure states:
A party waives all defenses and objections which he does not present either by preliminary objection, answer or reply . . . .
A literal reading of Rule 1032 would seem to bar the Authority from raising the defense of "general employer" as distinguished from "statutory employer." However, the rules are not to be read literally. Rule 126 states:
The Rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. The Court at every stage of any proceeding may disregard any error or defect of procedure which does not affect the substantial rights of the parties.
The lower court held that liberally construed, Rule 1032 did not preclude the Authority from arguing its immunity as a general employer. In the court's opinion, English's administrator and Wiesenberger were "clearly . . . on notice that [the] . . . Authority was claiming a general immunity as an employer under the Act . . . ." Slip op. at 17. In addition,
[ 286 Pa. Super. Page 321]
the court found that the administrator and Wiesenberger had suffered no prejudice. Id.
A review of the pre-trial documents persuades us that the lower court was correct.
In September 1974 the administrator submitted the following interrogatory to the Authority:
77. Describe in detail the nature of your relationship, past and present, with the following:
In June 1975, more than three years before its motion for summary judgment the Authority answered as follows:
(b) Customer. Kelly Services, Inc. furnished to the defendant the employees to perform our work. Said employees were the employees of ...