Michael Vatterott, Plaintiff/Appellant, v. Hammerts Iron Works, Inc., Defendant/Respondent.

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court. Opinion Missouri Court of Appeals Eastern District Case Style: Michael Vatterott, Plaintiff/Appellant, v. Hammerts Iron Works, Inc., Defendant/Respondent. Case Number: No. 71973 Handdown Date: 08/26/1997 Appeal From: Circuit Court of the City of St. Louis, Hon. Robert H. Dierker, Jr. Counsel for Appellant: Michael D. Stokes Counsel for Respondent: T. Michael Ward, Robert W. Cockerham & Russell F. Watters Opinion Summary: DIVISION SIX Plaintiff appeals from the trial court's dismissal for lack of subject matter jurisdiction of plaintiff's action for personal injuries. REVERSED AND REMANDED. DIVISION SIX HOLDS: The trial court erred in dismissing plaintiff's personal injury claim for lack of subject matter jurisdiction because plaintiff is not defendant's statutory employee. He was an ironworker who installed floor decking for a steel erection company. Hammerts usual business is fabrication of parts and supply of parts. It does not engage in construction work. On agreed facts it "did not participate in the construction of the building at the job site." Citation: Opinion Author: Kent E. Karohl, Judge Opinion Vote: REVERSED AND REMANDED. Reinhard, P.J., and Dowd, Jr., J., concur. Opinion: DIVISION SIX Plaintiff appeals from the trial court's dismissal for lack of subject matter jurisdiction of plaintiff's action for personal injuries. Plaintiff is an ironworker who was injured "while installing metal floor decking at a construction site" as an

employee of Big Boy's Steel Erection, Inc. (Big Boy's). The parties have stipulated to the facts. Paric Corporation (Paric) was the general contractor for construction of the City Place Office Building (City Place). Paric entered into a "Subcontract Agreement for Construction" with defendant on March 1, 1988. Defendant agreed with Paric "to furnish certain metal decking, including the decking which caused plaintiff's fall." Furthermore, defendant agreed to "furnish all of the labor, material, tools, equipment, and hoisting if required, along with competent supervision, shop drawings and samples, scaffolding, and permits which are necessary for such performance." Defendant, a structural steel fabricator, fabricates steel beams and columns from raw structural steel products. The fabrication of structural steel is performed at defendant's plant. Defendant does not manufacture or fabricate metal floor decking. Defendant did not fabricate the floor decking which plaintiff was installing. It contracted with other companies to furnish the metal floor decking for City Place. The parties stipulated, "Hammerts [defendant] generally does not participate in the construction of a building at a job site, and specifically, Hammerts did not participate in the construction of the building at the job site." Defendant entered into a subcontract with Big Boy's for all of the steel erection work required by defendant's agreement with Paric. Pursuant to the subcontract agreement, defendant agreed to comply with all applicable workers' compensation laws and to maintain workers' compensation insurance. Plaintiff brought a common law negligence action against defendant. He alleged he sustained injuries and damages during the construction of City Place. According to plaintiff, "the metal floor decking was . . . warped, bowed and distorted and was therefore dangerous when put to a reasonably expected use." Defendant filed a motion to dismiss plaintiff's first amended petition for lack of subject matter jurisdiction. Defendant contended that "Plaintiff's exclusive remedy for any and all claims against [defendant] is under the Missouri Workers' Compensation Law." The trial court agreed with defendant and dismissed plaintiff's claim. The trial court concluded, "[T]his case is controlled by the plain meaning of [section] 287.040.3, RSMo 1994. [Defendant] was an independent contractor engaged in erection of improvements on the City Place premises. As such, [defendant] is deemed the employer of the employees of its subcontractors." On appeal, plaintiff argues the trial court erred in granting defendant's motion to dismiss "in that [plaintiff] was not [defendant's] statutory employee. . . ." Plaintiff contends that: (1) his work was not in the usual course of defendant's business; and, (2) defendant "lacked the control required for a finding of statutory employment" because Hammerts never worked on or about the premises of City Place office building.

When workers' compensation law applies, it provides an exclusive remedy and an injured worker may not pursue common law remedies. DuBose v. Flightsafety Intern., Inc., 824 S.W.2d 486, 488 (Mo. App. 1992). The trial court should grant a motion to dismiss for lack of subject matter jurisdiction whenever it appears the court lacks jurisdiction. Id. The burden of proof is on the party alleging that jurisdiction is lacking. Id. The quantity of proof required, however, is not high. Id. It must appear by a preponderance of the evidence that the court is without jurisdiction. Id. Section 287.040 RSMo 1986 defines a class of employees commonly known as "statutory employees." This statute provides:

1. Any person who has work done under contract on or about his premises which is an operation

of the usual business which he there carries on shall be deemed an employer and shall be liable under this chapter to such contractor, his subcontractors, and their employees, when injured or killed on or about the premises of the employer while doing work which is in the usual course of his business.

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1. The provisions of this section shall not apply to the owner of premises upon which

improvements are being erected, demolished, altered or repaired by an independent contractor but such independent contractor shall be deemed to be the employer of the employees of his subcontractors and their subcontractors when employed on or about the premises where the principal contractor is doing work.

1. In all cases mentioned in the preceding subsections, the immediate contractor or

subcontractor shall be liable as an employer of the employees of his subcontractors. All persons so liable may be made parties to the proceedings on the application of any party. The liability of the immediate employer shall be primary, and that of the others secondary in their order, and any compensation paid by those secondarily liable may be recovered from those primarily liable, with attorney's fees and expenses of the suit. Such recovery may be had on motion in the original proceedings. No such employer shall be liable as in this section provided, if the employee was insured by his immediate or any intermediate employer. Section 287.040 RSMo 1986. This statute establishes a constructive employment relationship in order to extend workers' compensation coverage to employers who have work done by contract. DuBose, 824 S.W.2d at 488. The purpose of Section 287.040.1 is to prevent an employer from avoiding workers' compensation liability by hiring independent contractors to do work that would otherwise be performed by its employees. Heller v. Aldi, Inc., 851 S.W.2d 82, 84 (Mo. App. E.D. 1993). Generally, an employee of a subcontractor may not sue the general contractor as a third party for negligence resulting in an employment related injury. Bunner v. Patti, 121 S.W.2d 153 (Mo. 1938); Mays v. Penzel Const. Co., 838 S.W.2d 1 (Mo. App. E.D. 1992); Horner v. Hammons, 916 S.W.2d 810 (Mo. App. W.D. 1995). The general contractor is a statutory employer of the injured employee where the subcontractor is under a contract to perform an operation of the general's business. In this case, we have Paric, a construction general contractor; Hammerts, a subcontractor whose employees

fabricated or supplied parts; and Big Boy's, a sub-subcontractor, installer. Plaintiff, an employee of Big Boy's, sued the intermediate subcontractor [Hammerts] for his personal injuries. The Supreme Court defined the issue in Anderson v. Steurer, 391 S.W.2d 839 (Mo. 1965) as follows: In those instances where an owner is having improvements erected, demolished, altered or repaired by an independent contractor, do the provisions of Sec. 287.040(3) and (4) make intermediate subcontractors which are between the general contractor and the subcontractor at the bottom of the chain occupy a status of statutory employer of the employees of their subcontractors? Id. at 844. The Anderson court answered this question in the affirmative. In Anderson, the George Moeller Construction Company (Moeller) had a general contract to build a church. Id. at 841. Moeller entered into a written contract with John Steurer, Jr., (Steurer) for the lathing and plastering work on the church. Id. Another contractor, George Stroup Lathing Company (Stroup), actually performed the lathing work. Id. The plaintiff, employed by Stroup, was injured when a scaffold collapsed. Id. at 840. The plaintiff sued Steurer for his personal injuries. Id. Steurer filed a motion for summary judgment contending that "plaintiff was a statutory employee of defendant, and that plaintiff's exclusive remedy . . . was under the Workmen's Compensation Act. . . . " Id. at 841. Plaintiff was performing work which was an operation of Steurer's business, construction. Thus, Steurer, Moeller's subcontractor, was a statutory employer of the plaintiff. Id. at 845-46. The court stated, "the statute makes the immediate (direct) employer of the injured employee primarily liable for compensation, and makes the intermediate subcontractor or subcontractors and finally the principal contractor secondarily liable 'in their order.'" Id. at 844-45. Stroup was primarily liable. If Stroup had not carried insurance, Steurer and then Moeller would have been liable. Id. at 845. The Anderson court was not confronted with a case in which the operation of the intermediate subcontractor did not include construction. It did consider whether an intermediate subcontractor was granted the same immunity at common law that is given to the general contractor under the statute as interpreted in Bunner. Id. The court found that each subcontractor is the statutory employer of the employees of any subcontractors under him or her and noted: To hold otherwise necessarily means that the legislature intended to and did impose secondary liability for compensation on an ascending scale from the immediate employer of an injured employee up through other subcontractors in the direct line and finally to the general contractor, but that the corresponding immunity as employer was accorded only to the immediate employer at the bottom of the chain and to the general contractor at the top. Id. Plaintiff does not contest the Supreme Court decisions in Anderson and Thompson v. Kroeger, 380 S.W.2d 339 (Mo. 1964). He argues that under subsection 1 of Section 287.040, RSMo 1986, he was not a statutory employee. Because "faithful application of the statute" requires recognition of "the real roles and relationships of the parties," subsection 1 of Section 287.040, RSMo 1986 controls. DuBose, 824 S.W.2d at 489. Under that subsection, statutory

employment exists when three elements are present: (1) the work is performed pursuant to a contract; (2) the injury occurs on or about the premises of the alleged statutory employer; and (3) the work is in the usual course of business of the alleged statutory employer. Bass v. National Super Markets, Inc., 911 S.W.2d 617, 619-20 (Mo. banc 1995), cert. denied, -- U.S. --, 116 S.Ct. 1825, 134 L.Ed.2d 930 (1996); Heller, 851 S.W.2d at 84. The first element is not at issue in this case. The parties have stipulated that the work was performed pursuant to a contract. Plaintiff argues that the second element, whether the injury occurred on or about the premises of Hammerts Iron Works, has not been met because no employee of Hammerts was ever on the job site and it never had control of the premises. In Dillard v. Leon Dickens/Forklift of Cuba, 869 S.W.2d 317, 319 (Mo. App. S.D. 1994), the appellant argued that he was a statutory employee if Dickens, the business operator, controlled the appellant's work.(FN1) In Dillard, the appellant contended that he was erroneously denied statutory employee status because Dickens exercised control over him in the performance of his services and because he was doing work in the usual course of Dickens' business. Dillard, 869 S.W.2d at 319. Although the appellant did not assert that Dickens' control over him established that the injury occurred on the statutory employer's premises, we cite Dillard because the court's analysis is relevant to plaintiff's argument in this case. The Southern District thought this argument assumed that control or right to control is a determinative element in establishing a person's status as a statutory employee. Id. The court stated: While there is some authority for the proposition that the issue of control can be relevant to the question of whether the work being performed was in the usual course of the alleged employer's business . . . that issue actually goes to the question of whether the worker was an independent contractor or an employee. . . . The fact that the issue of control is not determinative of the status of a worker as a statutory employee is indicated by the following language from Wood v. Proctor & Gamble Manufacturing Co., 787 S.W.2d 816, 820 (Mo. App. 1990): " . . . These control factors, however, are not statutory elements of section 287.040 and it has been recently held that lack of control is consistent with statutory employment. Shaver v. First Union Realty Management, 713 S.W.2d 297, 299 (Mo. App. 1986). Id. Plaintiff's argument is not the same. He does not contend he was not a statutory employee of Hammerts because it lacked control of his work. He argues Hammerts' "work done under contract" did not occur at City Place. The parties agreed Hammerts' usual business was limited to fabrication and supply of parts which did not anticipate or require any presence on the construction site or control of employees of construction companies. A statutory employee must be injured while "doing work which is in the usual course of [statutory employer's] business." Ownership of the property is not required to establish that work was being performed "on or about the premises" of a statutory employer. Horner, 916 S.W.2d at 817. Premises includes "any place where, in the usual operation of [the employer's] business, it is necessary for those whom [the employer] has employed . . . to be while doing [the work.]" Id. The construction at City Place was the subject of the agreement between Paric, as general contractor, and Hammerts.

Plaintiff's injury occurred during construction at City Place. However, the contract of Paric and Hammerts did not require any employee of Hammerts to do any fabrication or supply of parts at City Place or to do any construction work. Hammerts did not employ construction workers. Accordingly, City Place was never Hammerts' "premises." Plaintiff also argues the third element of statutory employment has not been met because he was not performing work within defendant's usual course of business. "Usual business" includes: pard [T]hose activities (1) that are routinely done (2) on a regular and frequent schedule (3) contemplated in the agreement between the independent contractor and the statutory employer to be repeated over a relatively short span of time (4) the performance of which would require the statutory employer to hire permanent employees absent the agreement. Bass, 911 S.W.2d at 621. Paric contracted with defendant to "furnish, install, and erect" the structural steel and metal floor by subcontracting for the labor. The parties agreed Hammerts' usual business was to contract for labor and equipment. Defendant took no part in installation or erection. Defendant's "only business is fabricating (cutting) steel. It has never had any of its employees install the steel...." If defendant was a construction company it may be a statutory employer of construction subcontractors, i.e., plumbers or painters, although it has no direct employees who are plumbers or painters. An "employer's regular employees need not normally perform the work for it to be considered in the usual course of business." Tumbas v. J.L. Mason Group, Inc., 809 S.W.2d 188, 190-91 (Mo. App. 1991) (although painting was not a job normally performed by Mason's direct employees, painting is activity done in usual course of Mason's business); McGuire v. Tenneco, Inc., 756 S.W.2d 532, 535-36 (Mo. banc 1988) (usual course of business does not "require that an employer's regular employees normally perform the work undertaken by the statutory employee"). However, the work activity must be part of the statutory employer's "usual business." Here, Hammerts was a supplier, not a builder, and plaintiff worked for a builder. Hammerts' contract with Big Boy's did not provide for use of employees of a subcontractor to perform work which defendant's direct employees would perform. Hammerts never hired construction workers and did not use subcontractor to do its usual business in order to avoid the workers' compensation law. The trial court erred in dismissing plaintiff's common law action. Plaintiff is not Hammerts' statutory employee. Judgment reversed, cause remanded. Footnote: FN1.In Dillard, the appellant contended that he was erroneously denied statutory employee status because Dickens exercised control over him in the performance of his services and because he was doing work in the usual course of Dickens' business. Dillard, 869 S.W.2d at 319. Although the appellant did not assert that Dickens' control over him established that the injury occurred on the statutory employer's premises, we cite Dillard because the court's analysis is

relevant to plaintiff's argument in this case. Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.