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Anderson v. Tuboscope (10/6/00) sp-5319
Anderson v. Tuboscope (10/6/00) sp-5319
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
LANCE ANDERSON, )
) Supreme Court No. S-9080
Appellant, )
) Superior Court No.
v. ) 3KN-96-852 CI
)
TUBOSCOPE VETCO, INC. and )
OLSTEN STAFFING SERVICES, ) O P I N I O N
)
Appellees. ) [No. 5319 - October 6, 2000]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Kenai,
Harold Brown, Judge.
Appearances: Michael J. Schneider, Anchorage,
and John C. Dittman, Anchorage, for Appellant. Robert L. Griffin
and Linda J. Hiemer, Law Offices of Robert L. Griffin, Anchorage,
for Appellees.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
CARPENETI, Justice.
I. INTRODUCTION
Lance Anderson appeals the superior court's grant of
summary judgment to Tuboscope Vetco, Inc. (Tuboscope) and Olsten
Staffing Services (Olsten) on Anderson's negligence claim against
Tuboscope for injuries he suffered while working as a temporary
employee at Tuboscope's plant. Anderson argues that the superior
court erred in ruling that Tuboscope was Anderson's special
employer and was therefore exempted from suit by the exclusive
remedy provision of the Alaska Workers' Compensation Act. Anderson
further argues that the superior court erred in failing to assess
a portion of Tuboscope's costs and fees against Olsten as a
partially subrogated insurer.
Because the superior court ruled correctly on both the
summary judgment and the attorney's fees issues, we affirm.
II. FACTS AND PROCEEDINGS
A. Facts
In 1991 Olsten and Tuboscope entered into a continuing
contract agreement for Olsten to provide temporary employees to
Tuboscope to assist Tuboscope in its business of providing
oilfield-related materials and services. Olsten provided Tuboscope
with various categories of temporary employees, including
"personnel transfer plan" (PTP) employees. Tuboscope recruited,
hired, placed, and directly and exclusively supervised PTP
employees; Olsten provided the payroll administration, benefits,
and workers' compensation coverage for PTP employees.
In October 1994 Tuboscope hired Anderson as a PTP
employee. Pursuant to the provisions governing PTP employees laid
out in Tuboscope and Olsten's contract, Anderson was recruited,
interviewed, and placed in his position by Tuboscope. Tuboscope
also set Anderson's wages [Fn. 1] and had the authority to fire him
without the prior approval or consent of Olsten.
Anderson's daily work activities at the Tuboscope job
site were supervised by Tuboscope employees. His direct supervisor
was Tuboscope employee Frank McAnally.
On December 30, 1994, Anderson was injured at Tuboscope's
job site in Kenai when Ronald Finch, a Tuboscope employee, picked
up some drill pipe in a manner that caused Anderson to fall and
hurt his shoulder. Anderson's injury occurred while he was
performing job duties directed and supervised by McAnally.
Subsequent to his injury, Anderson received workers' compensation
benefits through the policy secured by Olsten. [Fn. 2]
B. Proceedings
In December 1996 Anderson filed a complaint against
Tuboscope in superior court. Tuboscope filed a third party
complaint against Olsten in April 1997 to enforce its agreement
with Olsten that Olsten would hold harmless and indemnify
Tuboscope.
The parties cross-moved for summary judgment, seeking a
determination as to whether the exclusivity provisions of the
Alaska Workers' Compensation Act (the Act) barred Anderson's suit.
Olsten later filed an opposition to Anderson's motion for summary
judgment, alleging that Tuboscope was a joint or dual employer of
Anderson and was therefore immune from common law tort liability.
On March 27, 1998, the superior court granted Tuboscope's
motion for summary judgment, finding that an implied contract of
employment existed between Anderson and Tuboscope and that
Anderson's claims against Tuboscope were consequently barred by the
exclusive remedy provision of the Act. The superior court also
assessed $5,693.70 in costs and attorney's fees against Anderson,
declining to rule that Olsten was liable for a portion of the costs
and fees. Anderson now appeals.
III. STANDARD OF REVIEW
We review a grant of summary judgment de novo. [Fn. 3]
The question of whether the superior court erred in failing to
enter a portion of Tuboscope's costs and fees against Olsten as a
partially subrogated insurer is a legal question that we also
review de novo. [Fn. 4]
IV. DISCUSSION
A. As Anderson's Employer, Tuboscope Is Immune from Tort
Liability under the Exclusive Remedy Provision of the Alaska
Workers' Compensation Act.
The primary question raised in this appeal is whether a
labor service company's employee, who is assigned to a temporary
employer, makes a contract of hire with the temporary employer and
thus comes under the exclusive remedy provision of Alaska's
Workers' Compensation Act. [Fn. 5] Anderson argues that Tuboscope
is subject to tort liability for his injury because he is not a
Tuboscope employee. We disagree. Temporary employees are
employees of the temporary employer for workers' compensation
purposes as a matter of law.
1. Tuboscope was Anderson's employer at the time of
his injury.
Although this is a case of first impression in Alaska,
the question of a temporary employee's ability to sue a temporary
employer in tort has been addressed in numerous jurisdictions. [Fn.
6]
Under the "special employment" doctrine, temporary agency
employees are employees of both the temporary agency and the
company to which they are assigned. [Fn. 7] This doctrine states
that if a labor broker contracts to provide the services of a
temporary employee to a customer company, which serves as a
temporary employer, the labor broker is considered a "general
employer" and the company is considered a "special employer." [Fn.
8] As a special employer, the temporary employer is considered to
have the same rights and privileges as a regular employer for
workers' compensation purposes. [Fn. 9] Consequently, the
exclusive remedy provision of the workers' compensation act [Fn.
10] generally precludes a temporary employee from suing the
temporary employer for negligence in connection with a work-related
activity. [Fn. 11]
In his treatise on workers' compensation law, Professor
Larson sets forth a commonly used test for determining whether a
special employer is liable for workers' compensation (and therefore
immune from tort liability):
When a general employer lends an employee to a
special employer, the special employer becomes liable for workmen's
compensation only if:
(a) the employee has made a contract of
hire, express or implied, with the special employer;
(b) the work being done is essentially
that of the special employer; and
(c) the special employer has the right to
control the details of the work.
When all three of the above conditions
are satisfied in relation to both employers, both employers are
liable for workmen's compensation. [Fn. 12]
Although we have not previously addressed the question at
issue in the instant case, we have recognized and used Professor
Larson's test in other contexts. [Fn. 13] In keeping with our
earlier decisions, we today adopt this test as the standard for
determining workers' compensation liability in the temporary
employee context. We hold that Tuboscope meets all three
requirements of this test.
a. Anderson had an implied contract of employment
with Tuboscope.
The very nature of the contract between Olsten and
Tuboscope suggests that an implied employment contract existed
between Tuboscope and Anderson. [Fn. 14] The contract between
Olsten and Tuboscope regarding PTP employees effectively provided
that Tuboscope would interview, hire, train, and employ the PTP
employees, while Olsten would provide payroll administration and
workers' compensation insurance premiums. Under this arrangement,
Anderson's primary employment contact from the time of his initial
interview was with Tuboscope. He had no contact with Olsten
whatsoever except to fill out forms for them and receive his
paycheck from them. When he worked, all of his assignments were
given to him by Tuboscope management and were performed for the
sole benefit of Tuboscope, not Olsten. Aside from the fact that
Olsten performed administrative tasks for Tuboscope regarding his
employment, there is no essential difference between Anderson and
a regular Tuboscope employee. [Fn. 15]
If the temporary employer hires, trains, employs,
directs, and reserves the right to terminate the temporary
employee, and the labor broker merely acts in the capacity of a
payroll and benefits administrator, an employment contract exists
between the temporary employer and the temporary employee. [Fn. 16]
The type of temporary employment situation existing in the instant
case satisfies this standard.
When Anderson first sought employment with Tuboscope, he
interviewed directly with the company. His job duties and the
terms of his employment were communicated to him by Tuboscope
personnel. Anderson was also told that Tuboscope had the right to
terminate him without the consent of Olsten. He did not have any
contact with Olsten until after he was hired by Tuboscope, at which
time he filled out various forms and paperwork. Anderson worked at
Tuboscope's facility and was directly supervised and given
assignments by a Tuboscope employee. Tuboscope provided his tools
and equipment. Anderson's only contact with Olsten, after he
filled out the forms, was to receive his paychecks from Olsten.
Tuboscope's acts of hiring Anderson, assigning him work,
and paying him, manifest its consent that Anderson would act on its
behalf and under its control. Anderson's acts of accepting work
from Tuboscope, and working at its facilities under the exclusive
control and supervision of Tuboscope employees, constitute consent
by him to act on Tuboscope's behalf and under its control.
Therefore, Anderson and Tuboscope had an implied employment
contract.
Because an implied employment contract between Anderson
and Tuboscope existed, the first prong of the Larson test for
determining whether Tuboscope is a special employer that is covered
by the Act's tort immunity is satisfied. [Fn. 17]
b. Anderson performed his work exclusively for
Tuboscope.
The second prong of the Larson test -- that the work
being done by the employee must be essentially that of the special
employer [Fn. 18] -- is met here. It is undisputed that all of
Anderson's work was for Tuboscope. He worked exclusively at
Tuboscope's facilities, performed tasks as directed by Tuboscope
management, and was exclusively supervised by a Tuboscope employee.
Tuboscope provided his tools and equipment.
Anderson's limited relationship with Olsten provides
further evidence that the work he performed was solely for
Tuboscope. His only contact with Olsten was to receive his
paychecks; he performed no duties for Olsten. In fact, Anderson
never even met in person with Olsten management or employees. We
therefore conclude that the second prong of the Larson test is met.
c. Tuboscope had complete control over Anderson's
work.
The third prong of the Larson test is that the special
employer must have the right to control the details of the
employee's work. [Fn. 19] In this case, Tuboscope clearly had the
right to control the details of Anderson's work. As mentioned
above, he was supervised only by Tuboscope employees. His work
never came under the review of Olsten.
Because (1) Anderson and Tuboscope had an implied
contract of employment; (2) the work performed by Anderson was
exclusively for Tuboscope; and (3) Tuboscope had the right to
control Anderson's work, the three parts of the Larson test are
satisfied. Consequently, Tuboscope is the type of special employer
that comes under the reach of the Alaska Workers' Compensation Act,
and Anderson's exclusive remedy against Tuboscope is workers'
compensation. The trial court's grant of summary judgment to
Tuboscope was therefore proper.
B. Olsten Is Not Liable for the Superior Court's Award of
Costs and Attorney's Fees Against Anderson.
Anderson argues that the trial court erred in entering an
award of attorney's fees and costs against him only and not against
him and Olsten jointly and severally. He asserts that had he
prevailed in this action, Olsten would be unjustly enriched by
recouping the workers' compensation payment its insurer made to
Anderson without Olsten having to bear the costs and burden of
litigation. Anderson also contends that Olsten is liable for costs
and fees because it is a "partially subrogated insurer" that is
essentially a real party in interest in the present case. We
disagree.
The general principle of the doctrine of unjust
enrichment is that "one person should not be permitted unjustly to
enrich himself at [the] expense of another, but should be required
to make restitution of or for property or benefits received,
retained or appropriated." [Fn. 20] As its definition indicates,
the doctrine of unjust enrichment is predicated on the theory of
restitution: When a party unjustly receives, retains, or
appropriates property or a benefit, the party should repay the
source of the property or benefit. There is nothing in this
doctrine that suggests that a party must pay restitution for the
creation of a rather slim possibility that the party may receive
some benefit in the future.
In the present case, Anderson lost on summary judgment.
Therefore, Olsten gained nothing by Anderson's prosecution of his
action against Tuboscope. If anything, Olsten lost by having to
defend Tuboscope's third-party suit. Consequently, Anderson's
unjust enrichment argument fails, and Olsten is not liable for
attorney's fees and costs on this ground.
Anderson alternatively argues that our decision in
Truckweld Equipment Co. v. Swenson Trucking & Excavating, Inc. [Fn.
21] requires us to hold that Olsten is a "partially subrogated
insurer" who is a real party in interest subject to an assessment
of fees and costs. However, Anderson disregards our explicit
statement that "our holding in Truckweld should not be applied in
the workers' compensation context due to the specific statutory
procedures set out in AS 23.30.015." [Fn. 22]
Because Anderson's arguments as to why Olsten should be
held jointly and severally liable for the attorney's fees and costs
arising out of this action are meritless, we affirm the superior
court's ruling that these fees and costs be assessed only against
Anderson.
V. CONCLUSION
Because the trial court ruled correctly on both the
summary judgment and the attorney's fees issues, we AFFIRM.
FOOTNOTES
Footnote 1:
Olsten issued Anderson's paycheck, based on the hours he
worked for Tuboscope. Tuboscope reimbursed Olsten for Anderson's
wage, plus an additional 32% to cover Anderson's payroll
administration and workers' compensation insurance. There is no
record of Anderson having any other contact with Olsten.
Footnote 2:
On August 14, 1995, Tuboscope hired Anderson as a full-time
regular employee. From this point forward, Anderson was no longer
a PTP employee for whom administrative services were provided by
Olsten. Tuboscope now pays Anderson directly, provides him with
benefits, and covers him for workers' compensation.
Footnote 3:
See Wilson v. Municipality of Anchorage, 977 P.2d 713, 719
(Alaska 1999).
Footnote 4:
See State v. Arbuckle, 941 P.2d 181, 184 (Alaska 1997)
(stating that attorney's fees award is reviewed under the de novo
standard because it involves contract interpretation); Palmer G.
Lewis Co. v. Arco Chemical Co., 904 P.2d 1221, 1234 n.31 (Alaska
1995) ("Review of attorney's fees based on indemnity is a question
of law which we may review de novo.").
Footnote 5:
Alaska Statute 23.30.055 provides that workers' compensation
is the exclusive remedy available against an employer to an
employee injured at work. In this case, the parties do not dispute
that workers' compensation is the exclusive remedy available to an
employee against the employer, nor do they dispute any facts.
Rather, the parties dispute the legal consequences of the
undisputed facts. Therefore, the question before us is whether
Anderson was an employee of Tuboscope.
Footnote 6:
See cases cited infra note 11.
Footnote 7:
See Wedeck v. Unocal Corp., 69 Cal. Rptr. 2d 501, 505 (App.
1997); Ruble v. Arctic General, Inc., 598 P.2d 95, 97 n.3 (Alaska
1979) (citation omitted). Although we have not previously
addressed the present situation, we have acknowledged the "special
employment" doctrine in the context of deciding whether a general
employment relationship existed at the time of the employee's
accident. See id. at 97-98.
Footnote 8:
See 3 Arthur Larson & Lex K. Larson, Larson's Workers'
Compensation Law sec. 48.23, at 8-524, 528, 532 (1997).
Footnote 9:
See Wedeck, 69 Cal. Rptr. 2d at 505.
Footnote 10:
See AS 23.30.055.
Footnote 11:
See Pettaway v. Mobile Paint Mfg. Co., 467 So. 2d 228, 229-30
(Ala. 1985); Araiza v. U.S. W. Bus. Resources, Inc., 904 P.2d 1272,
1276 (Ariz. App. 1995); Wedeck, 69 Cal. Rptr. 2d at 505; Kelly v.
Geriatric and Med. Servs. Inc., 671 A.2d 631, 634 (N.J. App.),
aff'd sub nom. Kelly v. Geriatric & Med. Ctrs., Inc., 685 A.2d 943
(N.J. 1996) (per curiam); Vigil v. Digital Equip. Corp., 925 P.2d
883, 887 (N.M. App. 1996); Shoemaker v. Manpower, Inc., 635
N.Y.S.2d 816, 817-18 (App. Div. 1996); Poirier v. Manpower Inc. of
Providence, 689 A.2d 1036, 1036-37 (R.I. 1997) (per curiam);
Goodman v. Sioux Steel Co., 475 N.W.2d 563, 564-65 (S.D. 1991).
Footnote 12:
Larson & Larson, supra note 8, sec. 48.00, at 8-434. Cases
that
apply this test in similar contexts include Pettaway, 467 So. 2d at
229; Vigil, 925 P.2d at 886-87; and Goodman, 475 N.W.2d at 564-65.
While this test focuses on liability for workers' compensation, it
is useful here because an employer's liability to an employee for
common-law negligence is precluded by that employer's liability for
workers' compensation under the Alaska Workers' Compensation Act.
See AS 23.30.055.
Footnote 13:
See Cluff v. NANA-Marriott, 892 P.2d 164, 168-71 (Alaska 1995)
(using portions of this test to determine workers' compensation
coverage in lent-employee context); Ruble, 598 P.2d at 97-98 (using
this test to determine whether employee of subcontractor could sue
general contractor for negligence).
Footnote 14:
The parties do not dispute that there was no express
employment agreement between Anderson and Tuboscope.
Footnote 15:
Anderson does cite a number of superficial differences between
PTP employees and regular Tuboscope employees. However, it is
immaterial that Tuboscope treated Anderson differently from its
other employees. Tuboscope is Anderson's special employer, not his
general employer; therefore, he shares a different relationship
with Tuboscope than its general employees. This special employment
relationship does not bring Anderson or Tuboscope out of the ambit
of workers' compensation.
Footnote 16:
In Cluff v. NANA-Marriott, we stated that "[a]n implied
employment contract is formed by a relation resulting from the
manifestation of consent by one party to another that the other
shall act on his behalf and under his control, and consent by the
other so to act." 892 P.2d at 171 (internal quotation marks
omitted) (quoting Childs v. Kalgin Island Lodge, 779 P.2d 310, 314
(Alaska 1989)).
Footnote 17:
Anderson argues that Tuboscope should not be considered an
employer for workers' compensation purposes because Olsten, not
Tuboscope, paid for his workers' compensation insurance premiums.
However, the fact that Tuboscope did not directly provide workers'
compensation coverage is immaterial. Under the contract between
Tuboscope and Olsten, Tuboscope reimbursed Olsten for the wages it
paid Anderson; Tuboscope also paid Olsten an additional 32 percent
to cover Olsten's payroll administration and other costs associated
with Anderson. Because the contract between Olsten and Tuboscope
specified that Olsten must provide workers' compensation coverage
for PTP employees, a portion of Tuboscope's 32 percent payment
effectively constitutes a payment of Anderson's workers'
compensation premium. See Sorenson v. Colibri Corp., 650 A.2d 125,
130 (R.I. 1994).
Footnote 18:
See Larson & Larson, supra note 8, sec. 48.00, at 8-434.
Footnote 19:
Id.
Footnote 20:
Black's Law Dictionary 1535 (6th ed. 1990).
Footnote 21:
649 P.2d 234, 238-39 (Alaska 1982) (stating that where
plaintiff was suing for property damage for which it had been
partially reimbursed by insurer, insurer could be considered a real
party in interest if insurer was timely joined in action).
Footnote 22:
Exxon Corp. v. Alvey, 690 P.2d 733, 744 (Alaska 1984).
