Great Atlantic & Pacific Tea Co. v. Imbraguglio

KARWACKI, Judge. Under Maryland Code (1991 Repl.Vol., 1996 Supp.), § 9-509 of the Labor and Employment Article, 1 colloquially dubbed the “exclusivity provisions” of Maryland’s Workers’ Compensation Act (“Workers’ Compensation Act” or “the Act”), employers are immune, save for two exceptions, from suit by their employees for work-related injuries. Injured employees’ sole recourse against their employers is ordinarily under the benefit provisions of the Workers’ Compensation Act. Petitioners, the Great Atlantic and Pacific Tea Company, Inc. (“A & P”) ⁵⁷⁹ and Super Fresh Markets of Maryland, Inc. (“Super Fresh”) have raised several issues in the instant case.

A & P asks whether § 9-509 of the Act bars an injured employee from maintaining an action in tort against a workers’ compensation insurer for injuring the employee by negligently maintaining real property that the insurer owns. We shall hold that § 9-509 does not bar such a suit. We shall also hold that the record does not conclusively establish as a matter of law that Super Fresh was the statutory employer of the injured employee and therefore immune from suit. For the reasons articulated below, we shall affirm the judgment of the Court of Special Appeals and remand the case for further proceedings consistent with this opinion.

I. The undisputed facts are as follows. On April 21, 1992, Salvatore Imbraguglio, Respondent’s husband, fell approximately fifteen to twenty feet while attempting to position some boxes in a warehouse with the assistance of a fellow employee and a “pallet jack.” Mr. Imbraguglio died two days later from his injuries. At the time of the accident, the decedent was working as a forklift operator for Supermarket Distribution Services, Inc. (“SDS”), a corporate entity distinct from, but wholly owned subsidiary of, A & P. The accident occurred in a warehouse owned by A & P, but managed by employees of Super Fresh, another corporate entity distinct from, but wholly owned subsidiary of, A & P. The record reveals that in Maryland, Super Fresh operates supermarkets on A & P’s behalf, while SDS provides warehousing and distribution services for those markets. A & P is self-insured for workers’ compensation purposes and is also the workers’ compensation insurer for both SDS and Super Fresh.

As the result of the accident, Respondent filed a Dependant’s claim with Maryland’s Workers’ Compensation Commission (“the Commission”). Following a hearing, the Commission concluded that Salvatore Imbraguglio sustained an injury arising out of and in the course of his employment that ultimately resulted in his death. Respondent, as the wholly ⁵⁸⁰ dependent widow of the decedent, 2 was awarded weekly death benefits of $355, and funeral expenses of $2,500, payable by the employer, SDS. Shortly thereafter, SDS and Respondent settled the claim for a lump sum amount.

A & P, as the workers’ compensation insurer for SDS, paid all workers’ compensation benefits, including the settlement amount. 3 Respondent then brought the action below in the Circuit Court for Baltimore City. In her original and Amended Complaint, Respondent alleged premises liability on the part of A & P and joint liability on the part of A & P and Super Fresh for failing to provide proper supervision of the activities at the warehouse where her husband was killed. In a Motion for Summary Judgment, A & P maintained that Respondent’s sole remedy was under the workers’ compensation statute. A & P insisted that it was immune from suit by virtue of its status as the workers’ compensation insurer for SDS and Super Fresh.

Seeking the same immunity from suit, Super Fresh claimed that it was Salvatore Imbraguglio’s statutory employer. After hearing argument on the issue, the circuit court granted summary judgment in favor of A & P and Super Fresh, concluding that they, along with SDS, were the decedent’s consolidated employers and therefore entitled to tort immunity under the exclusivity provisions of the Act. Respondent filed a timely appeal to the Court of Special Appeals. The intermediate appellate court reversed the judgment of the circuit court and concluded that A & P’s coinciden ⁵⁸¹ tal status as SDS and Super Fresh’s workers’ compensation insurer did not necessarily shield it from suit.

Imbraguglio v. Great Atlantic and Pacific Tea Co., 108 Md.App. 151 , 671 A.2d 72 (1996). The court instead held that “A & P’s immunity is limited to the extent that it was functioning as SDS’s insurer and to the extent it may have negligently performed duties it had undertaken pursuant to the insurance contract. In the absence of these agreements in the record, we cannot conclude that the circuit court was legally correct when it found A & P to be immune from suit.” Imbraguglio, 108 Md.App. at 163 , 671 A.2d at 78 . The court also concluded that a sufficient material factual dispute existed to preclude a finding, as a matter of law, that Salvatore Imbraguglio was the statutory employee of Super Fresh.

We issued a writ of certiorari to consider A & P’s claim of immunity and the contention that Super Fresh served as Salvatore Imbraguglio’s legal employer.

II

At the outset, we observe that summary judgment may be granted only when there is no dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Maryland Rule 2-501(a); Bowen v. Smith, 342 Md. 449, 454 , 677 A.2d 81, 83 (1996); White v. Friel, 210 Md. 274, 285 , 123 A.2d 303, 308 (1956). In that regard, our review of the case sub judice is identical to that undertaken by the Court of Special Appeals. III. a.

The first issue raised by A & P is a question of law. Our review is therefore expansive. A & P primarily contends that as the workers’ compensation insurer for SDS and Super Fresh, it is immune from suit to the same extent that SDS, as the employer, is immune from employee suits stemming from ⁵⁸² work related injuries and death. The Workers’ Compensation Act provides in pertinent part under § 9-509: “Exclusivity of compensation.

(a) Employers.—Except as otherwise provided in this title, the liability of an employer under this title is exclusive. (b) Covered employees and dependents.—Except as otherwise provided in this title, the compensation provided under this title to a covered employee or the dependents of a covered employee is in place of any right of action against any person. (c) Exception—Failure to secure compensation.—(1) If an employer fails to secure compensation in accordance with this title, a covered employee who has sustained an accidental personal injury, compensable hernia, or occupational disease or, in case of death, the personal representative of the covered employee may: (i) bring a claim for compensation under this title; or (ii) bring an action for damages. $$$$$$ (d) Same—Deliberate act.—If a covered employee is injured or killed as the result of the deliberate intent of the employer to injure or kill the covered employee, the covered employee or, in the case of death, the surviving spouse, child, or dependent of the covered employee may: (1) bring a claim for compensation under this title; or (2) bring an action for damages against the employee.” (Emphasis added in part (a), supra). Section 9-509 vindicates an essential and basic tenet of workers’ compensation law—limited employer liability.

In exchange, injured employees are provided the prospect of swift and sure compensation, without, regard to fault, under other provisions of the Act. First struck in 1914, that beneficial social contract continues unabated. See Polomski v. Mayor & City Council of Baltimore, 344 Md. 70, 76-77 , 684 A.2d 1338 , ⁵⁸³ 1340-41 (1996); DeBusk v. Johns Hopkins Hosp., 342 Md. 432, 437-38 , 677 A.2d 73, 75-76 (1996). The Act, however, neither excuses third-parties from their own negligence nor limits their liability. 4 Section 9-901 allows injured employees, or their personal representatives either to (1) file a claim for benefits under the workers’ compensation title; or (2) bring a third-party action against the person or persons responsible for the injury or death.

If the employee or their personal representative enforces the compensation remedy under the Act, § 9-902 permits the self-insured employer, the insurer, the Subsequent Injury Fund, 5 or the Uninsured Employers’ Fund 6 to bring an action for damages against the negligent third-party responsible for the injury or death of the employee. If the self-insured employer, the insurer, the Subsequent Injury Fund, or the Uninsured Employers’ Fund fails to do so within two months after an award by the Workers’ Compensation Commission, the injured employee or their personal representative may then proceed against a negligent third-party, notwithstanding the payment of workers’ compensation benefits. 7 ⁵⁸⁴ Although the Act expressly preserves a right of action against third-party tortfeasors, identifying an entity as such has been the subject of considerable dispute. A & P, in its role as the workers’ compensation insurer, seeks to cloak itself with the limited liability expressly provided for employers by § 9-509 of the Act. b. Flood v. Merchants Mutual Ins.

Co., 230 Md. 373 , 187 A.2d 320 (1963), upon which A & P heavily relies, first addressed the issue of insurer immunity for acts of its own negligence. In Flood , this Court rejected a workers’ compensation claimant’s argument that his employer’s workers’ compensation insurer was amenable to suit for allegedly failing to select competent physicians in evaluating and treating his work-related injuries. Our predecessors reasoned that former Md. Code (1957), Art. 101, § 58 evidenced an intent by the Legislature. to identify the workers’ compensation insurer with the employer. The Court relied upon provisions in former Art. 101, § 58, now codified in relevant part and with minor and ⁵⁸⁵ unrelated changes at §§ 9-901 and 9-902 of the Act, 8 which “provide[d] if it is necessary for the employer or insurance company to pay benefits to an employee for injuries sustained which are due to a third party’s negligence, the self-insured employer, ‘insurance company, association or the State Accident Fund,’ may enforce for their own benefit the third party’s liability.” Flood, 230 Md. at 377 , 187 A.2d at 322 .

Acknowledging that Maryland’s Workers’ Compensation Act allows third-party actions against “person[s] other than the employer,” the Court concluded that “the employer and the insurer [are] one and the same as far as the exclusivity of the remedy is concerned” and for that reason, the complainant could not maintain an independent action against the workers’ compensation insurer for “alleged malpractice of the physicians recommended by it to the [complainant].” Id. at 378 , 187 A.2d at 323 . Although not dispositive, the Court’s decision was influenced in part by a notion advanced by the United States District Court for the Eastern Division of the Northern District of Washington in Schulz v. Standard Accident Ins. Co., 125 F.Supp. 411 (E.D.Wash.1954). In Schulz , the federal district court was faced with the application of Idaho law.

The crux of the court’s opinion was that although the Supreme Court of Idaho sanctioned third-party actions against negligent physicians under Idaho’s Workers’ Compensation Act, it did not allow third-party actions against the workers’ compensation insurer. The Schulz court concluded that to do so would run contrary to the subrogation provisions of the act, leaving both the employer and the insurer subrogated to no one other than themselves. Schulz, 125 F.Supp. at 415 (citing Hancock v. Holliday, 65 Idaho 645 , 150 P.2d 137 (1944)). Three years later, the Federal District Court for the District of Maryland applied Flood in a case involving not medical malpractice, but allegations that the workers’ compensation insurer negligently performed a safety inspection at the in ⁵⁸⁶ sured’s workplace, thereby causing the employee’s injuries.

In rejecting the claim on exclusivity grounds, the federal district court observed: “On its facts, Flood thus holds that when an insurer is performing the duty of an insured employer imposed on him by Article 101, it obtains the employer’s immunity to suit for tort liability. In this case the duty which the insurer is charged with performing negligently is not a duty imposed on the employer by Article 101, but it is a duty which is imposed on the employer at common law. An employer has the duty to provide a reasonably safe place to work, and this includes the duty to make inspections and to take safety measures in fulfillment of that obligation. See [M.A.] Long Co. v. State Accident Fund, 156 Md. 639 , 144 A. 775 (1929)---- If it be held, as it was in Flood , that an insurer is immune from tort liability when it performs a duty imposed on the employer by the Workmens’ Compensation Act, no discernable reason is apparent why it should not also be immune when performing a duty imposed on the employer at common law, just as the employer is immune when performing either class of duties.” Donohue v. Maryland Casualty Co., 248 F.Supp. 588, 591 (D.Md.1965), aff'd, 363 F.2d 442 (4th Cir.1966); see also Young v. Hartford Accident & Indemnity Co., 303 Md. 182 , 492 A.2d 1270 (1985).

Taken to its logical extreme, Flood , as urged by A & P, stands for the proposition that an employee can never maintain an action sounding in tort against his employer’s workers’ compensation carrier for alleged acts of negligence that result in a work-related injury. 9 We disagree. The holding in Flood was not so broad. A & P seizes upon dicta in Flood where this Court stated that “[cjonsidering the employer and the insurer to be one and the same as far as the exclusiveness of the remedy is con ⁵⁸⁷ cerned, the [claimant is precluded from maintaining his action under this section.” 230 Md. at 378 , 187 A.2d at 323 . The holding, however, was limited to malpractice actions in which a carrier-recommended physician’s negligence allegedly aggravated an employee’s injury.

Further, the services undertaken by the insurer in both Flood and Donohue which allegedly resulted in the employee’s injuries were duties imposed upon the employer by, respectively, either the Workers’ Compensation Act 10 or the common law. 11 The carrier, as an integral part of the workers’ compensation system and as part of the insurance contract, merely assisted the employer in the fulfillment of those duties. In the case sub judice, A & P is charged with negligence in its capacity as a property owner, not as a workers’ compénsa ⁵⁸⁸ tion insurer or for any acts it undertook pursuant to that role. For that reason alone, Flood and Donohue are inapposite. In Young v. Hartford Accident & Indemnity Co., supra, (which was in part a medical malpractice action against the insurer) we recognized, without adopting, Professor Larson’s recommended solution to the “problem” of carrier liability.

He suggests that “ ‘[A] distinction should be drawn between the carrier’s function of payment for benefits and services, on the one hand, and, on the other, any function it assumes in the way of direct or physical performance of services related to the act. For negligent performance of the latter it should be liable in tort as a ‘person other than the employer’ [as those words are used in § 9-901 of the Act].” Young, 303 Md. at 195 , 492 A.2d at 1276 (citing 2A Arthur Larson, The Law of Workmen’s Compensation § 72.97 (1996)). Under Professor Larson’s view, “it is virtually impossible to cause physical injury by writing a check. It is very possible to cause physical injury by administering medical treatment to a patient or by making a safety inspection.” Larson, supra, § 72.97.

As we have indicated, A & P’s alleged negligence has nothing whatsoever to do with its coincidental status as Mr. Imbraguglio’s employer’s workers’ compensation insurer. As in Young , we need not accept or reject Professor Larson’s suggested approach to carrier liability. Nor are we inclined, at this juncture, to adopt the approach taken by the federal district court in Donohue. Neither is applicable here.

As the intermediate appellate court pointed out, “the instant case is no different than any other case presenting similar circumstances,” i.e.,—a land owner who injures a business invitee through an alleged act of negligence. Under A & P’s view, if an employee furthering his employer’s business, visits the place of business of his employer’s insurance carrier and is injured through an act of the insurer’s negligence, vicarious or otherwise, the former cannot maintain an action in tort against the insurance company simply because the latter was ultimately financially responsible for the ⁵⁸⁹ workers’ compensation claim filed by the injured employee. To “underscore[ ] the folly of the Court of Special Appeals’ rule” to the contrary, A & P points out that a judgment in favor of the employee would leave the insurer subrogated only to itself. A & P’s contention is not entirely correct.

If the workers’ compensation insurer is vicariously liable, it is entitled to indemnification from its negligent employee(s). Chilcote v. Von Der Ahe Van Lines, 300 Md. 106, 121 , 476 A.2d 204, 212 (1984) (citing Pennsylvania Threshermen & Farmers’ Mutual Cas. Ins. Co. v. Travelers Ins.

Co., 233 Md. 205, 215-16 , 196 A.2d 76, 81 (1963)). Further, any recovery by an injured employee after receiving workers’ compensation benefits is subject to § 9-902 of the Act. Subsection (e) of § 9-902 provides: “(e) Distribution of damages.—If the covered employee or the dependents of the covered employee recover damages, the covered employee or dependents: (1) first, may deduct the costs and expenses of the covered employee or dependents in the action; (2) next shall reimburse the self-insured employer, insurer, Subsequent Injury Fund, or Uninsured Employers’ Fund for: (i) the compensation already paid or awarded; and (ii) any amounts paid for medical services, funeral expenses, or any other purpose under Subtitle 6 of this title; and (3) finally, may keep the balance of the damages recovered.” Under § 9-902(e), a successful judgment against the insurer simply means that the insurer is entitled to offset any judgment entered against it for amounts already paid pursuant to its obligation as the workers’ compensation insurer. In sum, a workers’ compensation self-insurer cannot use its status as such to shield itself from the normal obligations attendant upon those acts unrelated to its role as a workers’ compensation insurer.

If A & P wishes to assume ⁵⁹⁰ multiple identities, it must concomitantly shoulder the risks independently associated with those identities.

IV

For both their parts, Super Fresh and A & P claim that the circuit court correctly determined that, as a matter of law, they were the decedent’s “consolidated” or “dual” employers, thereby barring Mrs. Imbraguglio’s suit under the exclusivity provisions of § 9-509 of the Act. Super Fresh also independently asserts that it was the decedent’s statutory employer within the meaning of § 9-508 of the Act—an assertion we take up in part V., infra. Ordinarily, the existence of the employer/employee relationship is a question reserved for the fact finder. Mackall v. Zayre Corp., 293 Md. 221, 230 , 443 A.2d 98, 103 (1982).

When, however, the existence of the relationship is undisputed, or the evidence on the issue is uncontroverted, unless conflicting inferences can be drawn from that evidence, the trial court is entitled to treat the matter as a question of law. Whitehead v. Safway Steel Products, 304 Md. 67, 76 , 497 A.2d 803, 808 (1985). In the present case, however, we cannot conclude that the record is sufficient to warrant the trial court’s conclusion on summary judgment that the decedent was simultaneously an employee of SDS, Super Fresh, and A &P. In Whitehead, supra, a worker employed by a temporary services agency was injured while working for Safway Steel Products (“Safway”), a company to which he was assigned. After receiving workers’ compensation benefits from the agency, he brought a negligence action against Safway.

Significantly, Whitehead conceded that “all control of specific tasks while he was at Safway belonged entirely to Safway.” Whitehead, 304 Md. at 76 , 497 A.2d at 808 . In considering the matter, we surveyed our prior decisions and concluded that the determination of the employer/employee relationship is properly based on five factors. They include “(1) the power to select and hire the employee, (2) the ⁵⁹¹ payment of wages, (3) the power to discharge, (4) the power to control the employee’s conduct, and (5) whether the work is part of the regular business of the employer.” 304 Md. at 77-78 , 497 A.2d at 808 -09 (citing Mackall v. Zayre Corp., 293 Md. 221, 230 , 443 A.2d 98, 103 (1982)); see also Keitz v. National Paving and Contracting Co., 214 Md. 479, 491 , 134 A.2d 296, 301 (1957). Of these five, control is paramount and, in most cases, decisive. 304 Md. at 78 , 497 A.2d at 809 (and cases cited).

After noting that Safway “instructed Whitehead on the tasks to be performed, supervised his work, [ ] was free to assign him to any other duties that warranted attention,” and contributed to Whitehead’s workers’ compensation insurance premium, we concluded that the trial court properly granted judgment n.o.v. in favor of Safway, because as a matter of law, Whitehead was both an employee of Safway and of his temporary services agency. See Mackall, supra, 293 Md. at 229 , 443 A.2d at 102 (worker may simultaneously be employee of two employers). That an employee can concurrently serve two employers is not a novel concept in Maryland law. Indeed, our predecessors considered the issue over sixty years ago in Saf-T-Cab Service, Inc. v. Terry, 167 Md. 46 , 172 A. 608 (1934).

In Saf-T-Cab, Terry, a taxicab driver, suffered injuries while operating his cab in Baltimore City. Although the Motor Cab Company, Inc. owned the taxicab that Terry was driving when he was injured, the Saf-T-Cab Service, Inc. concerned itself with the