Court Declines to Find Construction Company “Statutory Employer” of Injured Worker, Denies Construction Company’s Motion for Summary Judgment

Baugh v. Gale Lim Holdings, Inc., 2009 WL 33149 (D. Idaho Jan 5, 2009)

In this case, Gale Lim Construction contracted with the State of Idaho to repair portions of the Tin Cup Highway.  Lim contacted Silver Star Communications before excavating, as required, and Silver Star then sent its employee, John Baugh, to the jobsite to mark its fiber optic cable.  Baugh was injured and brought a tort action against Lim.

Lim filed a motion for summary judgment claiming that worker’s compensation law made it a "statutory employer" of Baugh and therefore immune from tort claims.  Baugh defended the motion by arguing that immunity was not applicable in this case where there was no contract between Lim and Silver Star.  Holding that a question of fact remained as to the existence of a contract, the court denied the motion.

Idaho Code § 72-223 grants immunity to two categories of statutory employers:

(1) "those employers described in section 72-216, Idaho Code, having under them contractors or subcontractors who have in fact complied with the provisions of section 72-301, Idaho Code" and (2) "the owner or lessee of premises, or other person who is virtually the proprietor or operator of the business there carried on, but who, by reason of there being an independent contractor or for any other reason, is not the direct employer of the workmen there employed."

(Citation ommitted.)  Lim argued that it was a statutory employer of Baugh through its contract with Silver Star and Silver Star’s compliance with Section 72-301.  Baugh argued that immunity was not applicable because there was no contract between his employer and Lim.  Accordingly, the court stated that “Lim’s motion for summary judgment turns on whether Lim had a contract with Silver Star.”

In a contract dispute, “it is incumbent upon the plaintiff to prove a distinct and common understanding between the parties.”  In this case, the court found that Lim had not carried its burden of proving such an understanding.

Moreover, the court found that Lim oversimplified the holding of a prior case by suggesting that “when a person is present in furtherance of an entity’s business, the business is entitled to immunity under Idaho’s worker’s compensation statutes.”  Rather, the Idaho Supreme Court has stated:

To determine who is a virtual proprietor or operator, the Court must consider whether the work being done pertains to the business, trade, or occupation of the owner or proprietor and whether such business, trade, or occupation is being carried on by it for pecuniary gain.  Generally, to find a business or person to be a statutory employer, the work being carried out by the independent contractor on the owner or proprietor’s premises must have been the type that could have been carried out by employees of the owner or proprietor in the course of its usual trade or business.  In short, if a person is normally equipped with manpower and tools to do a job and nevertheless contracts it to another employer, he is the statutory employer of the second employer’s employees.

Robinson v. Bateman Hall, Inc., 139 Idaho 207, 76 P.3d 951 (Idaho 2003).  Here, the court found “that simply was not the case…”

Instead, the court found “the more reasonable” interpretation of the evidence suggested that Lim had a statutory duty to contact Silver Star prior to beginning work at the jobsite and that Silver Star sent Baugh to the jobsite to locate and protect its own lines, not to further Lim’s pecuniary interest.  Accordingly, the court held that “at the very least” there was a question of fact as to whether Lim and Silver Star had a “sufficient meeting of the minds to create a contract between them” and denied Lim’s motion for summary judgment.