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Untitled

TABLE OF CONTENTS
Appendix Page
Motion for Judgment
filed August 23, 1999 ... . .. . ...... . .. ... ................... 1
Grounds of Defense
filed September 14, 1999 ................................... 3
Defendant's Plea in Bar
filed September 14, 1999 ............. . ..................... 6
Defendant's Memorandum of Law in Support of
Plea in Bar
filed February 24, 2000 ................................ . ... 8
Plaintiff's Memorandum of Law in Opposition to
Defendant's Plea in Bar
filed March 2, 2000 ...................................... 14
Stipulation of Facts for Consideration of Plea in Bar
filed March 16, 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Transcript of Hearing on Plea in Bar before
The Honorable A. Bonwill Shockley
on March 27, 2000 ............ . .......................... 21
Order of
The Honorable A. Bonwill Shockley
Sustaining Defendant's Plea in Bar
entered April 3, 2000 ..................................... 53
Assignment of Error ... . ....... . .................. . .. . ... . .... 54
i
VIRGINIA: IN THE CIRCUIT COURT OF THE CITY OF NORFOLK
BRUCE R. PFEIFER,
Cl(-ti- 3531
Plaintiff,
ATLAWNO.
Y.
Lqq- 20to2
co
-<
KRAUSS CONSTRUCTION COMPANY
OF VIRGINIA, INC.
Serve: Carl W. Isbrandtsen
Registered Agent
307 Lynnhaven Parkway
Virginia Beach, VA 23452
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Defendant.
MOTION FOR JUDGMENT
Plaintiff, Bruce R. Pfeifer ("Pfeifer"), by counsel, for his Motion for Judgment
against the Defendant, ~auss Construction Company of Virginia, Inc. ("Krauss") states as
follows:
1.
Krauss is a Virginia corporation with its principal place of business in
irginia Beach, Virginia, but also does business throughout the Commonwealth of Virginia,
'ncluding Norfolk, Virginia.
2.
At all material times, Krauss was employed to install a gas line at
inkhorn Bay Condominiums located at 1268 Laskin Road in Virginia Beach, Virginia.
3.
At all material times, Plaintiff was lawfully on the premises of Linkhorn
ay Condominiums.
4.
On or about September 8, 1997, employees of Krauss acting at all times
·thin the scope and course of their employment with Krauss, were pressure testing the gas line
at Linkhorn Bay Condominiums.
99 DEC 20 Pl-i
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1: 33
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5.
Due to the negligence and carelessness of Krauss by and through its
employees, a plastic cap blew off the gas line being tested and smashed Plaintiff in the left
temple causing him serious injury.
6.
As a result of the negligence and carelessness of Krauss by and through its
employees, Pfeifer was severely and permanently injured of body and mind, has sustained
permanent, painful and disabling injuries, loss of income, has been prevented from transacting
his business, has a permanent disability, and has incurred and will continue to incur medical and
other related expenses in an effort to be cured of his injuries.
WHEREFORE, Plaintiff, Bruce R. Pfeifer, by counsel, moves this Court for
"udgment against the Defendant in the sum of $275,000 plus prejudgment and post judgment
interest and the cost of these proceedings.
Plaintiff demands a trial by jury.
obert L. Samuel, Jr., Esquire
A State Bar No. 18605
LLIAMS, MULLEN, CLARK & DOBBINS, P.C.
900 One Columbus Center
irginia Beach, VA 23462
(757) 499-8800
(757) 473-0395 (Facsimile)
2
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,..--
VIRGINIA: IN THE CffiCUIT COURT FOR THE CITY OF NORFOLK
BRUCE R PFEIFER,
Plaintiff,
v.
At Law No. CL99-2062
KRAUSS CONSTRUCTION
CO:MPANY OF Yrn.GINIA, INC.,
Defendant.
SEP t 4 ·~ -:}
GROUNDS OF DEFENSE
Defendant, Krauss Construction Company of Virginia, Inc. ("Krauss"), by
counsel, appears specially, without waiving its objection to venue, and files as its Grounds of
Defense to the Motion for Judgment herein the following:
1.
Krauss admits the allegation in Paragraph 1 of the Motion for Judgment
that it is a Virginia corporation with its principal place of business in Virginia Beach,
Virginia. Krauss denies that it now, or at the time suit was filed, regularly conducts affairs or
business activities in the City ofNorfolk, Virginia.
2.
The allegations in Paragraph 2 of the Motion for Judgment are
3.
Krauss is without sufficient information, at the present time, to either
admitted.
admit or deny the allegations of Paragraph 3 of the Motion for Judgment and it therefore
denies same and calls for strict proof thereof.
NORRIS & ST. CLAIR, P.C.
Attorneys al Law
440 VIking Drive, Suilo 230
VIrginia Beach, VA 23452·7308
Telephone (757) 498·7700
Facsimile (757) 498·7744
4.
The allegations of Paragraph 4 of the Motion for Judgment are
admitted.
-3-
5.
The allegations ofParagraph 5 of the Motion for Judgment are denied.
6.
The allegations ofParagraph 6 of the Motion for Judgment are denied.
7.
Krauss reserves the right to assert the affirmative defenses of
contributory negligence and/or assumption of the risk pending further discovery in this case
and based on the evidence adduced at trial.
8.
Kraus's denies that it is i~debted to the Plaintiff in any amount or for
any reason whatsoever.
9.
Krauss relies on the defenses raised in its Plea in Bar.
10.
Any allegation in the Motion for Judgment not specifically admitted
herein is denied.
WHEREFORE, Krauss prays that the Motion for
J~dgment
dismissed, with prejudice, and for such further relief as may be warranted.
John S. Norris, Jr., Esquire
NORRIS & ST. CLAIR, P .C.
440 Viking Drive, Suite 230
Virginia Beach, VA 23452-7308
Tel: (757) 498-7700
Fax: (757) 498-7744
Allomeys at Law
440 Viking Drive. Suite 230
VIrginia Beach. VA 23452·7308
Telephone (757l 498·7700
Facsi mtl o (757) 498·7744
2
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herein be
CERTIF1CATE OF MAILING
I hereby certify that the foregoing Grounds ofDefense was mailed this 13th day
of September, 1999, to:
Robert L. Samuel, Jr., Esquire
WilLIAMS, MULLEN, CLARK & DOBBINS, P.C.
Virginia·B.each, Virginia ~-~..::u.s~
......C...-.::::::;~---....
\
NORRIS & ST. ClAIR, P.C.
Altomeys at Law
440 Viking Onvo, Su1t1 230
Vlrgama Beach, VA 23452·7J08
Telephone (757) 496·7700
Facsimile (757) 496·7744
3
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VIRGINIA: IN THE CIRCUIT COURT FOR THE CITY OF NORFOLK
BRUCE R PFEIFER,
Plaintiff,
v.
KRAUSS CONSTRUCTION
CO:MPANY OF VIRGINIA, INC.,
Defendant.
SEP I 4 :~ · ~·
PLEAINBAR
NOW COMES Defendant, Krauss _Construction Company of Virginia, Inc.
-·
("Krauss"), by counsel, and files as its Plea in Bar to the Motion for Judgment herein the
following:
1.
This Court does not have subject matter jurisdiction to adjudicate the
claim asserted by the Plaintiff in its Motion for Judgment due to the fact that the Plaintiff,
who was at all relevant times an employee of Tidewater Applicators, Inc., was a co-employee
of the Defendant, an independent contractor performing work on behalf of Virginia Natural
Gas, for a common owner, to-wit, Linkhorn Bay Associates, L.L. C. As such, the Plaintiff's
cause of action is barred under the provisions of Title 65.2 of the Code of Virginia. as the
exclusive jurisdiction for this claim lies under the Worker' s Compensation Commission.
WHEREFORE, Krauss moves that the Motion for Judgment be dismissed,
with prejudice, and for such further relief as may be warranted.
N ORRIS &. ST. CLAIR. P.C.
A tto rneys at Law
<140 Vilong Onve, Suile 230
Virginia Be acn, VA 23452·T.l08
Telep hono (757) 49 8·7700
Facsimile (757) 498·7744
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JohnS . Norris, Jr., Esquire
NORRIS & ST. CLAlR, P .C.
Virginia Beach, VA 23452-7308
Tel: (757) 498-7700
Fax: (757) 498-7744 .
CERTIFICATE OF M.All..ING
I hereby certify that the foregoing Plea in Bar was mailed this
September, 1999, to :
13th
WILLIAMS, MULLEN, CLARK & DOBBIN'S, P.C.
Virginia Beach, Virgini
t
Atlomeys at Law
440 Viking Orivo, Suite 230
Virginia Beach, VA 23452·7308
Telephone (7571 498·7700
Facsimile (7571 498·7744
2
-7-
day of
VIRGINIA: IN THE CffiCUIT COURT FOR THE CI1Y OF VIRGINIA BEACH
BRUCE R. PFEIFER,
Plaintiff,
v.
KRAUSS CONSTRUCTION
COMPANY OF VIRGINIA, INC.,
Defendant.
MEMORANDUM OF LAW IN SUPPORT
OF PLEA IN BAR
CO:fvfES NOW the Defendant, Krauss Construction Company of Vrrginia, Inc.
(hereinafter ''Krauss"), by counse~ and submits the following Memorandum of Law in support
of the Plea in Bar previously filed herein.
STATEMENT OF FACTS
The PlaintUI: Bruce R. pfeifer (hereinafter ''Plaintiff') allegedly sustained injury on
September 8, 1997, when a plastic cap blew off a natural gas line and struck Plaintiff in the head.
The alleged incident took place on the site of a construction project known as Linkhorn Bay
Condominiums (hereinafter "the Project") in the City ofVrrginia Beach. The owner and general
contractor of the Project was, at all relevant times, an entity known as Linkhorn Bay Associates,
L.L. C. (hereinafter ''Linkhorn Bay''), which had been created specifically for the development
and construction of the Project.
Linkhorn Bay had previously entered into a written subcontract with Plaintiff's
An omeys at Law
440 Viking Drive, Suila 230
Virglnta Beach, VA 23452·7308
Tolephona (757) 498·7700
Facsimile (757) 498-7744
employer, Tidewater Applicator's Inc. (hereinafter "Tidewater"), on or about March 19, 1997,
wherein Tidewater agreed to furnish "all supervision, labor, material and equipment required to
-8-
complete Exterior Finish System for construction" of the Project. A copy of the aforesaid
contract is appended hereto as Exhibit "A" Plaintiff was working on the Project, within the
scope of his employment for Tidewater, at the time of his alleged injury.
Linkhom Bay had also previously entered into an oral subcontract with Vtrginia Natural
Gas (hereinafter "VNG") to install all systems and equipment necessary to provide natural gas
service to the Project. Vrrginia Natural Gas had, in turn, subcontracted its work on the Project
to Krauss in accordance with the terms of a written annual contract that had previously been
executed by VNG and Krauss. Employees ofKrauss were allegedly testing a natural gas line on
the site at the time of the subject incident.
ARGUMENT
The Vrrginia Worker's Compensation Act (hereinafter "the Act") provides that worker's
compensation is the exclusive remedy for an employee who suffers work related injuries. See
Va. Code § 65.2-307 (1950), as amended.
The injured worker's claim for worker's
compensation then acts as an assignment to the employer of any common law right the
employee may have to recover damages against any "other party." See Va. Code § 65.2-309
(1950), as amended.
The Vrrginia Supreme Court has descnbed "that 'other party' as 'one who is a stranger
to the employment and the work and who is thus not within the scope of the exclusion of §
65.1-40 (now§ 65.2-307)."' Evans v. Hook 239 Va 127, 131 (1990) (citing Smith v. Hom,
232 Va. 302 (1986)).
"[B]ecause he is not a 'stranger to the employment,' an allegedly
Attorneys at Law
440 Viking Drive. Suite 230
Telephone (7571498·7700
Fae#imila (7571 498·7744
negligent employee of one contractor, engaged in the same business or project of an owner as
2
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an injured employee of another contractor, is not an 'other party' amenable to suit under Code §
65.1-41 (now§ 65.2-309)." Id. at 131 (citations omitted)(emphasis supplied).
In the case at bar, there can be little doubt that both the Plaintiff and the employees of
Krauss were engaged in the "same business or project" of Linkhorn Bay at the time of the
alleged incident. Linkhom Bay was created to facilitate the development and construction of
the subject Project and even held a Class A Contractors License from the Commonwealth of
Vrrginia. Plaintiffs employer, Tidewater, had contracted with Linkhom Bay to perfonn a
substantial and essential portion of the Project. Likewise, Krauss, a sub-contractor of Vrrginia
Natural Gas, was installing and testing gas lines that were vital to the completion of the Project.
The case of Evans v. Hook, supra, is particularly instructive in considering Krauss'
Plea in Bar. In that case, four brothers had fonned a general partnership known as PageHolland Partnership for the purpose of developing a tract of land on Holland Road in
Virginia Beach. They had entered into a number of contracts to facilitate construction of a
~uilding
on the property. One contract was with a self-employed architect named Hook, to
design and supervise construction of the building.
Another contract was with Lasal
Construction Company to construct the building. Lasal then subcontracted the masonry
work to Commonwealth Masonry, Inc. The Page-Holland Partnership merely executed
contracts with the various subcontractors, having no actual employees who performed any
type of construction activities on the project.
Mr. Evans, who was employed by Lasal, was hurt on the job when a masonry wall
built by Commonwealth collapsed on him. He filed suit against Commonwealth and Hook.
NORRIS & ST. CLAIR. P.C.
Attorneys al Law
VIrginia Beach. VA 23452·7:l08
Te lephone (7571 498·7700
Facsimile (757) 498·7744
Judge Moore of the Virginia Beach Circuit Court sustained the Pleas of both
3
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Commonwealth and Hook, and the Plaintiff only appealed the case with respect to Hook.
The Virginia Supreme Court affinned the trial court's decision, finding that Evans was
indeed a statutory employee ofHook.
Also instructive is the case ofVess v. Davis Elec. Constructors. Inc. 613 F. Supp. 1047
(W.D. Va. 1985), wherein Vess' decedent, an employee of Daniel Construction Company
("Daniel"), was electrocuted at the construction site of a Vepco Pump Storage Project. Daniel
had contracted with Vepco to supervise and perform much ofthe construction on the project.
Davis Electrical Constructors, Inc. ("Davis") had contracted to perform all the electrical work
for the project.
The suit alleged that Davis' employees were negligent in installing and
maintaining the high voltage cable that had electrocuted the decedent.
Because the court concluded that it was in Vepco' s trade, occupation or business to
design, supervise and construct generating facilities for its own use, and that Davis, Daniel and
the decedent were all engaged in a portion of this work at the time of the accident, it held that
Vepco was the statutory employer of all those involved in the construction of the project. Id. at
1051.
Furthermore, the Court held that "even though Davis and Daniel are independent
· contractors, their employees were statutory employees of Vepco since both contractors were
engaged in the trade, occupation and business ofVepco. Thus, the employees of one cannot
be allowed to pursue a common law negligence action against the other." Id. at 1051 (see
also Anderson v. Thorington, 201 Va. 266 (1959).
It is irrelevant whether the specific work being performed by Plaintiff and Krauss was
"normally carried on through employees" of Linkhom Bay. Compare Shell Oil Companv v.
Altomeys al Law
440 Vikln g Onvo. Suilo 230
Telephone (757) 498·7700
Facoimilo (7571 498·7744
Leftwich, 212 Va 715, 722 (1972). ''The Shell test is ' only a corollary guide, sometimes useful
4
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but not indispensable, in applying the literal language of the statutes to the facts in a particular
case." Nichols, 241 Va. at 522 (citing Cinnamon v. IBM, 238 Va. 471 (1989)); see also
Carmody v. F.W. Woolworth, 234 Va. 198, 205 (1987)("the appropriate inquiry is not whether
Woolworth as owner was engaged in the portrait photography business or had ever been, but
whether Carmody's sale of portrait photographs was a part of Woolworth's business of
operating a department store.")
There can be no doubt that Plaintiff and the allegedly negligent employees of Krauss
were engaged in the "same business or project'' or the same "trade, business or occupation"
of the owner, Linkhorn Bay, which was, in fact, created to facilitate the development and
construction of the subject condominium project. Accordingly, Plaintiff cannot proceed with a
common-law action against Krauss, which was statutory fellow servant on the Project.
CONCLUSION
WHEREFORE the Defendant, Krauss Construction Company of Vrrgi.nia, Inc.,
respectfully moves this Court to sustain its Plea in Bar and dismiss this matter, with prejudice,
awarding it all taxable costs incurred herein.
KRAUSS CONSTRUCTION CO!vfi> ANY
OFVIRG
Allorneys al Law
440 Viking Drive. Suole 230
Virginia Beach. VA 23452·7308
Tolophono (757) 498·7700
Fac$1mile (757) 498·7744
JohnS. Norris, Jr., Esquire
:Michael R Davis, Esquire
Vrrginia Beach, VA 23452
(757) 498-7700
(757) 498-7744 (fax)
5
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CERTIFICATE OF SERVICE
JRRIS & ST. ClAIR, P.C.
Allornoys al Law
440 Viking Onve, Surte 230
lrginoa Beach. VA 23452·7308
Telephone (757) 498·7700
Facsimile (757) 498·7744
6
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VIRGINIA: IN THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
BRUCE R. PFEIFER,
Plaintiff,
AT LAW NO. CL99-3337
V.
KRAUSS CONSTRUCTION COMPANY
OF VIRGINIA, INC.,
Defendant.
MEMORANDUM OF LAW
IN OPPOSITION TO DEFENDANT'S PLEA IN BAR
Plaintiff, Bruce R. Pfeifer ("Pfeifer"), by counsel, for its Memorandum of Law in
Opposition to Krauss Construction Company of Virginia, Inc.'s ("Krauss") Plea in .Bar states as
follows:
Krauss contends Pfeifer's claim for personal injury damages against Krauss is
barred because Pfeifer's exclusive remedy falls under the Virginia Worker's Compensation Act.
The parties have entered into certain stipulations. The stipulations are as follows:
l.
The plaintiff s' alleged injury occurred on September 8, 1997, when a
plastic cap blew off a natural gas line and struck him in the head.
2.
The incident took place on the site of a construction project known as
Linkhorn Bay Condominiums (hereinafter the "Project") in the City of Virginia Beach.
3.
The owner and general contractor of the Project was, at all relevant times,
Linkhorn Bay Associates, L.P.C. (hereinafter "Linkhorn Bay"), an entity that had been created
specifically for the development and construction of the Project.
4.
Linkhorn Bay had a Class A contractors license from the Commonwealth
of V irginia at the time of the alleged incident.
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5.
Linkhorn Bay entered into a written subcontract with plaintiffs employer,
Tidewater Applicator's, Inc. (hereinafter "Tidewater"), on about March 19, 1997, wherein
Tidewater agreed to furnish "all supervision, labor, material and equipment required to complete
exterior finish system for construction" of the Project.
6.
Plaintiff was engaged in working on the Project, within the scope of his
employment for Tidewater, at the time of his alleged injury.
7.
Prior to the alleged incident, Linkhorn Bay had contacted Virginia Nahtral
Gas (hereinafter "VNG") to request the installation of gas utility lines for the Project.
8.
VNG had, in him, engaged the defendant, Krauss, pursuant to an existing
contract, to install the gas utility lines for the Project.
9.
Employees of Krauss were testing a natural gas line on the site at the time
of the alleged incident.
10.
The activities of both the plaintiff and Krauss, both generally a.nd at the
time of the alleged incident, were necessary to the development and/or completion of the Project.
ARGUMENT
Pfeifer is not barred by the Worker's Compensation Act from pursumg his
negligence claim against Krauss.
The statutory employee defense is based upon Virginia Code §65 .2-302.
Virginia Code §65.2-302(a) provides in pertinent part:
when any person (referred to in this section as
"Owner") undertakes to perform or execute any
work which is part of his trade, business or
occupation and contracts with any other person
(referred to in this section as "Subcontractor") for
the execution or performance by or under such
Subcontractor of the whole or any part of the work
undertaken by such Owner, the Owner shall be
.,
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liable to pay any worker employed in the work any
compensation under this title which he would have
been liable to pay if the worker had been
immediately employed by him.
In this case, the statute is not applicable because Krauss was a Subcontractor of
VNG and not performing the work of the Owner, Linkhorn Bay.
Further, VNG is not a
Subcontractor ofLinkhom Bay.
In determining whether the statutory employee defense applies, the court
examines the trade, business or occupation of the parties; however, the rule is only applicable
when one is engaged in the trade, business or occupation of another, as a subcontractor. There
was no subcontract between Linkhom Bay and VNG. As the stipulation provides, Linkhom Bay
contacted VNG to request the ins!allation of gas utility lines for the Project. There was no
contract.
If there is a Subcontract, the decision whether a contractor's employee who
suffered an on the job injury was the Owner's statutory employee turns on whether the employee
was engaged in work that was part of the Owner's trade, business or occupation.
The test to be applied:
is not one of whether the Subcontractor's activity is
useful, necessary or even absolutely indispensable
to the statutory employer's business ... but whether
the indispensable activity is, in that business,
normally carried on through employees rather than
independent contractors.
Johnson v. Jefferson
National Bank, 244 VA 482, 485 (1992); Carmody
v. F.W. Woolworth Company, 234 VA 198, 204
(1997).
An Owner by acting as its own general contractor does not become the statutory
employer of the work done by a Subcontractor unless the work performed is a normal part of the
Owner's business:
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the analysis of a project owner's trade, business and
occupation begins with identification of the nature
of the particular owner. A private entity has broad
discretion to choose its business activities. Many
activities may be important to the success of the
business, but would not necessarily constitute the
trade, business or occupation of the owner.
Therefore, if the owner is a private entity, we have
repeatedly focused on whether the activity is, in that
business, normally carried through employees rather
than independent contractors. Nichols v. VVK.R,
Inc., 241 VA 516,521 (1991) citing Shell Oil Co. v.
Leftwich, 212 VA 715,722 (1972).
In Nichols, a construction and rehabilitation project was designed to provide
public
mass
transportation facilities,
parking
facilities
and revitalization
and urban
redevelopment of a downtown commercial shopping district in the City of Norfolk. The Greater
Roanoke Transit Company ("GRTC") was designated as the Owner of the Project. GRTC hired
a constmction company to build parts of the Project.
During the work an employee of the
construction was injured while he was working on the retail space rehabilitation portion of the
Proj ect.
The Virginia Supreme Court held that while the· construction of retail space was
incidental and perhaps necessary to conduct business, the construction and rehabilitation of a
transportation and retail facility was not in itself the trade, business o~ occupation of the Owner.
Similary in Salih v. Lane, 244 VA 436, 1992. A nurse anesthetist brought an
action against a psychiatrist fo.r injuries received during administration of electric shock, therapy
(ECT).
The court explained even though a psychiatrist may always perform ECT with
anesthesia, the fact the service was useful, necessary, or even absolutely indispensable does not
make it a part of the psychiatrist's trade or business. The record showed the nurse was engaged
-17-
in the business of furnishing anesthesia services and the psychiatrist furnished psychiatric
services including ECT but did not include anesthesia services. They were independent and
separate work.
The same is true in the case at bar. Providing natural gas services while obviously
necessary for the completion of the project was not part of the trade, business or occupation of
Linkhorn Bay.
CONCLUSION
WHEREFORE, Bruce R. Pfeifer, respectfully asks the court to enter an Order
overruling the defendant's Plea in Bar in this cause.
~EIFER
Of~ ·
Robert L. Samuel, Jr. , Esquire
VA State Bar No. 18605
WILLIAMS, MULLEN, CLARK & DOBBINS, P.C.
Virginia Beach, VA 23462
(757) 499-8800
(757) 473-0395 (Facsimile)
CERTIFICATE OF SERVICE
On March 1' 2000, a copy of this Memorandt m of Law was mailed and faxed to
all counsel of record.
Robert L. Samuel, Jr.
74230001 memorandum oflow
00 HAR -2 AH 9: 50
J.
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~-
c~s~oLERt\
.
~~
n~
..
VIR.GlNIA:IN THE CIRcm COURT FOR THE CITY OF VIRGlNIA BEACH
BRUCE R PFEIFER,
Plaintiff,
v.
KRAUSS CONSTRUCTION
COM:PANY OF VIRGINIA, INC.,
Defendant.
STIPULATION OF FACTS FOR
CONSIDERATION OF PLEA IN BAR
COME NOW the parties, by counse~ and submit this Stipulation ofFacts to assist the
Court in its consideration ofDefendant' s Plea in Bar herein:
1.
The Plaintiff's alleged injury occurred on September 8, 1997, when a plastic cap
blew off a natural gas line and struck him in the head.
2.
The incident took place on the site of a construction project known as Linkhom
Bay Condominiums (hereinafter "the Project") in the City ofVrrginia Beach.
3.
The owner and general contractor of the Project was, at all relevant times,
Linkhom Bay Associates, L.L.C. (hereinafter ''Linkhom Bay").
If present
m Court,
a
representative of the owner would testify that it had been created specifically for the
development and construction of the Project.
4.
Linkhom Bay had a Class A Contractor's License from the Commonwealth of
Vrrginia at the time of the alleged incident.
IORRIS & ST. CLAIR . P.C.
Atlo rn oys al Law
440 Vlldl>g Onve. Sullo 230
V.9"'i.lo Beach. VA 2:1452·1"'..0S
Telephone (757) 498-7700
Facsimile (757) 498·7744
5.
Linkhom Bay entered into a written subcontract with Plaintiffs employer,
Tidewater Applicator's Inc. (hereinafter "Tidewater"), on or about March 19, 1997, wherein
Tidewater agreed to furnish "all supervision, labor, material and equipment required to complete
-19-
Exterior Finish System for construction" of the Project.
6.
Plaintiff was engaged in working on the Project, within the scope of his
employment for Tidewater, at the time of his alleged injwy.
7.
Prior to the alleged incident, Linkhom Bay had contacted VIrginia Natural Gas
(hereinafter "VNG") to request the installation of gas utility lines for the Project.
8.
Vrrginia Natural Gas agreed to install gas utility lines at the Project, without
charge to the owner, in exchange for the owner's agreement to install gas appliances in the
condominium units under construction.
9.
VNG had, in tum, engaged the Defendant, Krauss Construction Company of·
Vrrginia, Inc. (hereinafter "Krauss"), pursuant to an existing contract, to install the gas utility
lines for the Project.
10.
Employees ofK.rau~ were testing a natural gas line on the site at the time of the
alleged incident.
11.
If present in Court, a representative of the owner would testify that the activities
of both the Plaintiff and Krauss, both generally and at the time of the alleged incident, were
necessary to the development and/or completion of the Project.
Respectfully submitted:
STRUCTION CO:MPANY
BRUCE R PFEIFER
.un.....~C.·
B~~
.' !ORRIS &. ST. CLAIR, P.C.
Attorn eys at Law
""0 VIking Onvo. Su>IO 230
VIrginia Beach. VA 2~52·7J08
ToiOI)IIono 1757) J98·7700
Fao>molo 11sn <98·77• •
2
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.
·- ····
1
VIRGINIA:
CIRCUIT COURT OF THE CITY OF VI~~~~H
2
3
BRUCE R. PFEIFER,
Plaintiff,
RECORD
4
v
CL99-3337
5
6
KRAUSS CONSTRUCTION
COMPANY OF VIRGINIA,
Defendant.
7
8
9
10
Before Hon . A. Bonwill Shockley, Judge ·
11
Virginia Beach, Virginia
12
March 27, 2000
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14
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16
17
18
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APPEARANCES:
Williams, Mullen, Clark
and Dobbins (Mr. Robert L.
Samuel, Jr.), attorneys for
the plaintiff .
20
21
22
Norris and st. Clair
(Mr. JohnS. Norris, Jr.),
attorne y s for the defendant.
23
24
f iL ED
V f •. 8 C: .'. CH CIRC~j! T CG:J ~ T
25
...
-··
00 nAY -I
P~l
3: 35
RONALD GRAHAM AND ASSOCIATEt ,cUtJtJ. fR L:!T' Cl~R ;:(
Virginia _ ~=~~h~-~i:?~~ia
£
-21-
2
1
(The court reporter was sworn.)
2
THE COURT:
I have had an opportunity to
3
look over the file and the information that ' s here.
4
Actually some of this, since it came from Norfolk,
5
had been in the file for a little bit.
6
I believe Mr. Norris, we're on for your --
7
MR. NORRIS:
8
THE COURT:
-- plea in bar -- is the issue
MR. NORRIS:
Yes, Your Honor, I represent
9
Yes, Your Honor.
today?
10 .
11
the defendant, Krauss Construction Company; and I
12
heard the court say you've reviewed the file; so if I
13
start reciting facts that you are aware of, tell me;
14
and I'll move on.
THE COURT:
15
Okay.
It's a l ways good to have
16
your memory refreshed and my memory refreshed; and I
17
will say
18
but I've had my eyes dilated at the eye doctor this
19
morning. ·
20
pointing me to something on a page.
I don't know we need this on the record,
Don't feel ashamed of telling instead of
MR. NORRIS :
21
All right, Judge.
This is a
22
personal injury case that arises out of an accident
23
in a construction environment back in September
24
of '97 .
25
stipulation of facts, which is in the court ' s file;
The plaintiff -- and, Your Honor, we filed a
RONALD GRAHAM AND ASSOCIATES, INC.
-22-
3
1
so I'm basically reciting from that.
2
THE COURT:
3
MR. NORRIS:
Okay.
The plaintiff was employed by a
4
company called Tidewater Applicators, Inc.
5
working on a project owned by Linkhorn Bay
6
Associates.
7
Honor, on Laskin Road, where the White Heron used to
8
be; and the plaintiff's employer, Tidewater
9
Applicator, was installing the exterior insulation
He was
It's the Linkhorn Bay Condominiums, Your
10
finish system to the condominium units pursuant to a
11
written contract.
12
The owner of the project, which is an entity
13
that was formed specifically for the purpose of
14
developing this project, is also a general contractor
15
with a Class A contractor's license in the
16
Commonwealth of Virginia; and that company, Linkhorn
17
Bay Associates, entered into a verbal agreement with
18
Virginia Natural Gas to install gas lines for the
19
condominium project.
20
contract was that the owner of the project agreed to
21
install in all of the condominium units gas
22
appliances; and the incentive, obviously, for
23
Virginia
24
of the units.
25
~atural
The consideration for the
Gas is to have gas customers in all
Pursuant to a subcontract agreement with my
-23-
4
1
client, Krauss Construction Company, Virginia Natural
2
Gas had Krauss actually dig the lines to install the
3
gas lines.
4
it was during the performance of its work, installing
5
these gas lines, that Krauss negligently injured the
6
plaintiff; and what happened is while testing some of
7
the lines, a plastic cap that's inserted on the end
8
of a line so that the line can be pressurized flew
9
off the line and struck the plaintiff, I believe in
10
Now, the motion for judgment alleges that
the head, causing his injuries.
11
Now, I have filed a plea in bar under the
12
workmen's compensation statute; and the theory is
13
that the plaintiff and my client are co-employees of
14
the owner of the project; and if they are
15
co-employees, then the plaintiff's exclusive remedy
16
is under the Workmen's Compensation Act; and I
17
believe that the stipulation of facts adequately
18
presents for you sufficient facts to resolve that
19
issue.
20
Now, both parties have filed briefs; and I
21
believe the case is controlled by the Evans case.
22
Evans was a case arising out of Virginia Beach in
23
which a developer, members of the Page family, were
24
building a building that was going to be used to
25
house a car dealership, I believe.
The plaintiff was
RONALD GRkHAM AND ASSOCIATES, INC.
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5
1
an employee of the general contractor, and he was
2
injured when a wall that had been constructed by a
3
masonry subcontractor fell and injured him, so he
4
brought an action against the masonry subcontractor
5
and the architect.
6
case, the developer had no employees engaged in
7
construction work.
8
developer who subbed out the work to design and
9
construct the project.
10
Now, in that case, like in our
It was purely and simply a
The Supreme Court ruled that both the
11
plaintiff and the defendants were engaged in the same
12
business or project of the owner; and because of
13
that, they were not what is called an "other party''
14
under the Workmen's Compensation Act.
15
them were strangers to the employment or the project
16
of the developer.
17
frankly,
18
now.
19
Neither of
Now -- and I think that case,
is on all fours with the case before you
The plaintiff relies on two cases, both of
The first is
20
which, I believe, are distinguishable.
21
the Nichols case.
22
construction of some retail facilities and parking
23
facilities for the -- I believe it was the Roanoke
24
Transportation Authority.
25
Now, in Nichols, that involved the
The Supreme Court ruled that the owner of
-25-
6
1
the project, which was the transportation authority,
2
was not engaged in the business of retail facilities
3
or parking facilities.
4
transportation facilities, and so the Supreme Court
5
ruled that the building of the retail and parking
6
facilities was incidental to the business of the
7
transportation authority.
8
9
It was engaged in overseeing
Now, what I think is important, Your Honor,
is that the Nichols case actually cites the Evans
10
case to distinguish Evans from that case; and since
11
the court is having a hard time reading, I would like
12
to take a brief moment and read from that case.
Now, this is -- I'm reading from the case
13
That case says:
14
that the plaintiff relies upon.
15
"One bf the parties argues, however, that use of the
16
analysis set out in the Shell case" -THE COURT:
17
Can I just interrupt one second.
18
I do have a printout of it, and where are you
19
reading?
20
you on
I could at least try to follow along.
21
MR. NORRIS:
22
THE COURT:
23
24
25
Are
I'm on Page 5 of my printout.
Well, I've -- are you near a
headnote?
MR. NORRIS:
I'm at the end footnotes at the
bottom of the page.
.
RONALD GRAHAM AND ASSOCIATES,
. INC .
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7
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THE COURT:
2
MR. NORRIS:
3
Okay.
And it reads,
"VBKR" -- that's
an architect defendant --
4
THE COURT:
5
MR. NORRIS:
All right.
"argues, however, that use
6
of the analysis set out in Shell is also
7
inappropriate because it looks to the activities
8
normally undertaken by an owner's employee.
9
GRTC" -- that's the transportation authority -- "has
10
Here
no employees."
Now, I want to stop for a minute.
11
The owner
12
of the Linkhorn Bay project has no employees engaged,
13
per se, in the construction activities, although it
14
is the general contractor.
Now, let me continue.
15
"Like appellant's
16
arg~ment
17
the mark ·.
18
Woolworth, as owner, was engaged in the portrait
19
photography business or ever had been, but whether
20
Carmody's sale of portrait photographs was a part of
21
Woolworth's business of operating a department
22
store."
23
in the Carmody case, this argument misses
The appropriate inquiry is not whether
Stop again.
So the test is not whether
24
either the plaintiff's employer or my own client were
25
doing, per se, work that the owner of Linkhorn Bay
-27-
8
1
project does, but rather whether that work was part
2
of Linkhorn's business of developing this project.
3
The stipulation of facts we've given you
4
says that the owner of the project would say that the
5
work being undertaken by the plaintiff's employer and
6
by my client was essential to the development and
7
completion of this condominium project.
8
9
I want to go on just a little bit further:
"The Shell test"
and let me stop again.
The
10
plaintiff relies on the test in the Shell case, which
11
says that one is a statutory employee under the
1~
Workmen's Compensation Act only if you're doing work
13
that the owner normally does with its own employees.
14
That's the Shell test.
15
Now I'm going back now to Nichols.
Nichols
16
says, "The Shell test is only a corollary guide,
17
sometimes useful, but not indispensable in applying
18
the literal language of the statute to the facts in a
19
particular case.
20
construction and . rehabilitation of a transportation
21
and retail facility was part of the transportation
22
authority's business of providing mass transportation
23
services."
24
the building of this retail facility was incidental .
25
The key issue here is whether
The court ruled that was incidental --
Now, this is key.
This is where the court
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9
1
.distinguishes Evans.
It says, "For example, the
2
construction of physical plants for the production of
3
computers was not the trade, business, or occupation
4
of IBM in the IBM case, while the trade, business, or
5
occupation of a land development joint venture
6
included the construction of a brick wall on its
7
property.
8
9
See Evans."
So, Your Honor, what the Supreme Court was
doing in Nichols was -- it said, You got in one hand
10
the Evans case, where you got a land developer who
11
needs construction activities for the development of
12
its project; and you got cases like IBM and Shell on
13
the other hand, where the activities were considered
14
incidental to the main purpose of the owner; and our
15
case, like Evans and that Woolworth case -- the
16
photography case that Nichols sites -- you have to
17
have these construction activities to develop and
18
build this project.
19
purpose of the owner to build and sell these
20
condominium units.
21
employer and my client were engaged in essential
22
activities for that project, they're co-employees;
23
and the plaintiff's sole remedy is under the
24
Workmen's Compensat i on Act.
25
It's absolutely the essential
So because both the plaintiff's
One last point.
Plaintiff also cites a more
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10
1
recent case -- I believe the case is Salih.
2
that case was a case where a nurse was working for an
3
anesthesiologist's company, and she was injured when
4
a psychiatrist was giving electroshock therapy to a
5
patient.
6
psychiatrist raised as his defense, he was the
7
statutory employer of the nurse.
8
9
Now,
The
The nurse sued the psychiatrist.
That is not the defense in the case before
you.
I do not contend Krauss, my client, is the
10
statutory employer of the plaintiff.
11
the plaintiff and my client are statutory
12
co-employees of Linkhorn Bay Associates.
13
does not even address the co-employee issue.
14
I contend that
So Salih
The key in that case was that the nurse's
15
employer was working for the hospital; and the
16
psychiatrist was working for the patient; and so in
17
our case, we're both working -- the plaintiff and the
18
defendant are both working for the same owner.
19
Salih, they were not; but the defense was statutory
20 .
employer, not co-employee.
I -- next to me is Mr. McCutchen.
21
He's one
22
of the co-principals of the owner of the project
23
because Mr. Samuel requested me to bring him in case
24
he had questions beyond what's in the stipulation of
25
facts.
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THE COURT:
1
Okay.
Do you have questions
2
beyond what's in the stipulation of facts that I need
3
to deal with first, or do you want -MR. SAMUEL:
4
I think maybe I can make my
5
presentation and then if you
6
THE COURT:
7
MR. SAMUEL:
8
THE COURT:
9
MR. SAMUEL:
--
If there's a conflict?
Right.
All right.
Okay.
I'll start with the
10
Evans versus Hook case relied upon by the defendant
11
in this case.
12
the facts again because Mr. Norris went over the
13
facts.
14
In Evans v. Hook -- I won't go over
In Evans v. Hook -- this is on Page 132
15
the court said, "The defendant's business structure
16
and number of employees have never been
17
considerations in deciding whether he is entitled to
18
the act's
19
defendant's relation to the project on which the
20
plaintiff was entered."
21
relation to the project on which the -- on which the
22
plaintiff was entered.
23
immu~ity.
The issue turns on the
So it's the defendant's
Now, if we go on to the Nichols case, the
24
case that was referenced in my memorandum of law --
25
of course, in that case it dealt with the transit
"RONAT .n
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ANn
AF:F:Or.TA'l'RF:.
TNr..
12
1
company; and I'm pretty familiar with transit
2
companies, having defended TRT for years.
3
It was a construction rehabilitation
4
project; but what the court went into was the
5
difference between public and private entities; and
6
in talking about private entities, which this is --
7
this certainly was not a public construction
8
contract.
9
talking about the owner with the private entity, the
If the . owner -- if owner -- if we're
10
court focuses on whether the activity is normally
11
carried on through employees rather than independent
12
contractors.
13
Now, I understand what Mr. Norris is saying; -
14
and the court may be thinking, Well, obviously in a
15
case where you have a company similar to Evans v.
16
Hook that is formed as owner and general contractor,
17
it's never going to have any employees; so this test
18
really doesn't have -- make much sense in the
19
application to these kinds of cases; but I suggest
20
that it does, because just like in the Carmody versus
21
Woolworth case -- that's the case involving -- I
22
can't remember exactly, but whatever the task was, it
23
wasn't that Woolworth would have employees doing
24
think it was eye examinations or whatever -- but it
25
was invo1ved in retail sales, which is consistent
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I
13
1
with what the overall purpose of Woolworth is; so
2
when you're looking at these cases, you're looking at
3
whether it is the kind of business that is normally
4
carried on by the entity.
5
Now, in this case we're dealing with a
6
unique situation in the construction industry.
7
I understand the Class A contractor -- you know
8
that they were a Class A contractor; and that was put
9
in the stipulation, I believe; however, · the
Now,
10
installation of gas lines, such as was done here, is
11
not the normal business of general contractors.
12
never have their own employees do it.
13
have this situation where, with no exchange of money,
14
Virginia Power agrees to go in because they are going
15
to use gas at that particular location.
16
would be the same with other entities, and that's
17
where the difference is in this case.
18
They
They always
I imagine it
General contractor or not -- general
19
contractors do not engage in the business of
20
installation of this kind of activity.
21
unique, separate entity.
22
transportation industry, TRT doesn't involve itself
23
in certain activities, and so there's no -- there
24
would be no co-employee rule.
25
my argument.
It's a
It's just like in the
So that's the gist of
I've got some additional --
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14
1
THE COURT:
Does that become a factual
2
question, or is that at issue -- from my own limited
3
experience in a home situation, you call your own
4
contractor to run the gas lines from the street and
5
stub it; and the gas company only comes and puts in
6
the meter, which means -- if, for instance, you were
7
having a house built, it's the contractor's
8
responsibility to get the lines run up to the house.
9
The gas company comes out and puts the meter in.
10
In a -- in this type of a situation, is it
11
the common practice that the gas company, as you're
12
saying, runs the lines as consideration for putting
13
gas appliances in the apartments?
MR. SAMUEL:
14
I don't know.
I don't know.
15
My argument is that you don't -- you do not -- the
16
gas company
17
gas company does.
18
that's -- the gas company has hired this entity to
19
come in, Krauss construction Company; so it had
20
nothing to do with the business of the owner in this
21
case.
22
this kind of work, never intended to have employees
23
do this kind of work; and they just had an agreement
24
that they would use gas installation in exchange for
25
Virginia Natural Gas providing the work.
you never have employees do what the
The gas company -- I mean,
The owner was never going to have employees do
lUIN~
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-34-
So in this
AND ASSOCIATES, INC.
15
1
particular case, it wasn't part of their business.
2
You also -- the cases also say you look at
3
the bylaws as to what the -- what kind of work they
4
do; and in this case, I think Mr. Norris will tell
5
you, the articles of incorporation here don't say --
6
or the bylaws don't say anything about the type of
7
work they're going to do; so I think you go to the
8
general contractor's license.
9
general contractor's license has anything to do with
I don't think the
10
what Virginia Natural Gas was going to do in this
11
case.
12
THE COURT:
Well, would any subcontractors
13
be considered co-employees of other -- I mean,
14
traditionally, a general contractor hires
15
subcontractors.
16
the electrical work.
17
the plumbing.
18
those employees on site.
They hire the subcontractor to do
They hire subcontractors to do
Now, theoretically, they could have
They don't.
19
MR. SAMUEL:
Right.
20
THE COURT: · They subcontract out .
Is your
21
argument that the -- one subcontractor is not a
22
co-employee of another subcontractor?
23
MR. SAMUEL:
It depends on the type of work
24
that's going to be done.
25
involving a bank that has a small -- well, I'll even
__ ,,.,..,.._
,..T"\,,.T""''
-35-
As you know there's cases
"'"Tn
"CCI""\r"T1\ry"11;'1C:
TlJ,.,
16
1
use the example of the Vess case that was cited by
2
Mr. Norris.
3
In that case, VEPCO had a construction
4
engineering division that was involved in the design,
5
construction, maintenance of electrical contracting
6
facilities, generating facilities, but chose in that
7
particular situation to hire .it out; but they had the
8
capacity to do it.
9
do.
It's something that they could
They just chose not to -- but they had -- they
10
had this construction engineering division that was
11
available to do it.
12
reasons, a decision to outsource it, so to speak.
13
They just made, for economic
My point here is the work that Virginia
14
Natural Gas does is not something the general
15
contractor does.
16
by Virginia Natural Gas, and Virginia Natural Gas
17
takes care of it.
18
of people or group of employees that would do the
19
work -- or it's ever done.
20
that we take in the case .
It is something that is always done
It's not -- you don't have a group
21
THE COURT:
22
MR. SAMUEL:
So that's the position
Okay.
I'll read it again.
This is
"The analysis of a project
23
from the Nichols case:
24
owner's trade, business, and occupation begins with
25
the identification of the nature of the particular
n~U~Tn
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-36-
~vn
~~gnrT~~RS.
TNC.
17
1
owner.
A private entity has broad discretion to
2
choose its business activities .
3
be important to the success of the business but would
4
not necessary constitute the trade, business, or
5
occupation of the owner.
6
a private entity, we repeatedly focused on whether
7
the act i vity is, in that business, normally carried
8
on through employees rather than independent
9
contractors."
10
Many activities may
Therefore, if the owner is
In other words, just generally speaking,
11
usually carried on by employees rather than
12
independent contractors; and the test, as it's been
13
applied -- it doesn't mean that they have to use
14
their employees to do it, as I gave you the
15
The test is whether it is usually carried on through
16
employees rather than independent contractors.
17
example~
What I'm suggesting to this court is that in
18
this particular case, considering the entity ·
19
involved, this is not a situation where the business
20
is normally carried on through employees rather than
21
independent contractors.
22
the case.
23
independent contractors and not by employees of the
24
general contractor.
25
THE COURT:
In fact, the opposite is
It's business usually carried on by
~-~~Tn
And I guess my only question to
~n~u~u
-37-
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~ccn~T~~vc
TMr
18
1
both sides:
2
agree?
3
Is that a question of fact,
MR. NORRIS:
No, Your Honor.
or do we
I ' l l stipu late
4
for purposes of this motion that the installation of
5
gas lines is an activity not normally carried on by
6
Linkhorn Bay Associates' employees, so there's no
7
issue of fact before you.
8
THE COURT:
All right.
9
MR. NORRIS:
That's the Shell Oil test.
10
Shell Oil said:
11
doing work not normally carried on by the owner's
12
employees -- the owner of the project
13
are not a co-employee of the plaintiff.
14
If the defendant's employees are
then the y
I agree that that's the law for that case;
15
and Mr. Samuel argues that you should apply that case
16
to our case; and what I tried to point out to you is
17
the Evans decision and the Nichols decision say:
18
That's only one test .
19
all cases.
20
That's not the test you use in
In a case like this, where the owner of a
21
project is set up for one purpose and one purpose
22
only, to develop land, like in Evans and like in our
23
case, obviously, the developer doesn't have e mployees
24
who normally carry on the work of a particular
25
subcontractor.
That doesn't matter .
What Evans says
-38-
19
1
is:
2
strangers to the employment or whether they are
3
engaged in the same business or project as the owner.
4
You look to whether those subcontractors are
Now -- and in Nichols, it distinguished
5
Evans from IBM; and so what Mr. Samuel telling you is
6
true; and I agree with it; but it's only half the
7
law.
8
owner of a project is created for one purpose and one
9
purpose only, which is to develop this project.
That test is not to be applied when the common
Then
10
you look at not whether it would normally have its
11
employees install gas lines, because it wouldn't; but
12
if you remember, I read you the language from Nichols
13
that says, "The Shell test is only a corollary guide,
14
sometimes useful, but not indispensable."
15
In a case like this where you have a
16
one-time owner created for one purpose and one
17
purpose only, you don't use the Shell test.
18
at whether both of the subcbntractors were engaged in
19
the same project of the owner and whether that
20
activity was necessary for the owner's purpose.
21
You look
In Evans, the plaintiff was hurt when a wall
22
collapsed on him.
The owner didn't have employees
23
who normally built walls.
24
normally carried out by the owner's employees.
25
other defendant was an architect.
-39-
That wasn't an activity
The
The owner didn't
20
1
have employees who normally did design services.
2
So if you used Mr. Samuel's test, the Shell
3
test in Evans, the Supreme Court would have reached
4
an opposite result; but that's not the test in a
5
single-purpose owner case like you .have with land
6
development.
7
you have to apply the Evans test, not the Shell test.
8
9
So Evans is the exception to Shell, and
So we agree -- there's no question of
fact -- that this owner, Linkhorn Bay Associates,
10
didn't have employees who normally installed gas
11
utility lines.
12
matter.
13
important to the project as applying as the EIFS
14
exterior finish system, then employees of both of
15
those subs are co-employees because they are engaged
16
in the same project of the owner.
17
We agree to that.
That doesn't
As long as installing gas lines was equally
MR. SAMUEL:
Judge, citing Cinnamon versus
18
International Business Machines, 238 Va. 471, a 1989
19
case talking about the same thing that I have
20
referenced, in that case the court said that it was
21
unnecessary to apply either prong of the Shell Oil
22
test.
23
sometimes useful, but not indispensable in applying
24
the literal language of the st.atute."
25
"Indeed the test is only a corollary guide,
In the case at bar, we need to determine
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21
1
only whether IBM, as owner, engaged an independent
2
contractor to perform work which is part of IBM's
3
trade, business, or occupation within the
4
contemplation of that act.
5
me, it's a conceptual difficulty in these cases --
6
for myself.
7
case they said,
8
urges.
9
owners usually reserve to a discreet group of their
They talked -- I'm -- to
I'm not saying for the court.
11
In that
We decline to adopt the position IBM
In awarding construction contracts, business
10
employees authority to oversee the performance of
11
those contracts.
12
authority may be assigned to a group formally
13
organized as a construction division.
14
of any such group vested with such authority is
15
immaterial to the resolution of a statutory employer
16
question unless the owner has created and utilized
17
the group to perform its own construction work as a
18
part of its business operation.
19
If the owner is incorporated, such
The existence
11
The point I'm making is that this is a
20
unique aspect -- the Virginia Natural Gas.
21
you have -- the general contractor is contracting
22
with someone to construct the -- whatever is being
23
constructed.
24
exchange in consideration -- in payment, and they
25
supervise the work that's going to be done -- because
There's a written contract.
-41 -
Usually
There's an
22
1
· they could do it with their own employees; but they
2
choose, for whatever reason, to use an outside
3
source.
4
What the cases -- the case that I cited to
5
you and read to you was not just saying
6
saying that, as a general rule, do they have
7
employees, but that the test in these kinds of cases
8
is whether it's work generally done ·by employees as
9
opposed to independent · contractors.
was not
Do employees of
10
a general contractor normally do this kind of work,
11
or do they have the capacity?
12
I cited, they talked about having -- you actually
13
have a part of the corporation that does that kind of
14
work but for economic reasons decides not to.
15
In the particular case
This kind of work, the Virginia Natural Gas
16
work, is not done by general contractors.
17
always a situation where it's -- Virginia Natural Gas
18
is hired to do it; and they do it; and Virginia
19
Natural Gas's benefits are -- they are happy to do it
20
because they are going to have gas at this particular
21
subdivision; but it is not the kind of work normally
22
carried on by employees of the general contractor.
23
It's work that necessarily is carried on bj
24
independent contractors, and that's the difference.
25
It's
If we were talking about the situation in
- 42-
23
1
Evans -- if we were talking about someone that was
2
doing the drywall and then someone doing some other
3
aspect of the work, you have
4
and the cases I've cited -- the Nichols case and
5
particularly the Cinnamon versus IBM case -- they
6
indicated the same as Mr. Norris was saying.
7
don't use the Shell Oil test.
diff~rent
situation;
You
What you do consider again -- and now I'm
8
9
~
citing again the Evans case.
The issue turns on the
10
defendant's relation to the project on which the
11
plaintiff was entered, and here we have a unique
12
situation.
13
normally done by employees.
We don't have a situation where it's work
I understand the fiction -- or the legal
14
Well, this particular general contractor
15
fiction is:
16
doesn't do any work.
17
What I'm saying is in this type of construction
18
industry situation, you don't have employees
19
available to do it.
20
contractors, and that's what I think the test would
21
be in this case.
It subcontracts with everybody.
You always use independent
I think you're stretching it one step too
22
23
far when you get into the use of Virginia Natural
24
Gas.
25
employees of a general contractor; and there's no
It's not the work traditionally done by
-43-
24
1
evidence or indication that it is, which I think you
2
need to have before you can make a decision that that
3
would defeat the case on a plea of the Worker's
4
Compensation Act.
5
THE COURT:
Well, I think what the defense
6
is arguing is that we don't have an ongoing business
7
that came into this project.
8
was created for the mere purpose of completing this
9
project and that that skews -- that part of this
We have a business that
10
company's normal trade in business -- the only part
11
of it -- is to create this apartment building
12
finished, and that's an interesting distinction.
13
MR. NORRIS:
That's right, and that's why
IBM is an ongoing
14
IBM doesn't deal with that.
15
business, and IBM -- IBM actually had a construction
16
subpart; but what Mr. Samuel has not yet done for
17
you , Your Honor, in my opinion, is distinguish Evans
18
from this case.
19
Mr. Samuel relies on Shell.
He relies on
20
IBM; but none of those cases are a single-purpose .
21
owner, land-developer owner, which Evans is; and I
22
don't see how you can distinguish Evans -- the fact
23
that it's Virginia Natural Gas as a defendant, as
24
a -- not as a defendant, but as one of the
25
contractors, as opposed to a masonry contractor or an
-44-
25
1
architect, is not important.
2
I mean, the argument Mr. Samuel makes to you
3
is:
4
could there be a co-employee situation.
5
clearly not the law in Virginia.
6
Gas has no special exemption from the co-employee
7
provision .
In no case that involves Virginia Natural Gas
Virginia Natural
So --
THE COURT:
8
That's
I don't know how we get past
9
that language where they are talking about, "Created
10
for a specific purpose"; and if the defense concedes
11
that that's what they were created to do, I don't
12
know how
13
to track in one direction, and then this sort of is
14
an offshoot.
15
I agree with you.
The cases sort of seem
Now, I don't know whether they decided to
16
make this little offshoot because of the unique
17
situation that we find ourselves in here, but I don't
18
know how I get past the defense's point that this
19
was -- this · is an entity that was created for the
20
purpose of deve+oping · this building; and if everybody
21
agreed to that fact, it's not just any general
22
contractor that goes and hires himself out to Joe
23
Smith, who owns the property, to build him an
24
apartment building.
25
situation.
Now, that might be a different
The owner isn't the same entity that's
nnv~Tn
~n~u~u
-45-
~un
~~~n~T~~v~
TU~
26
1
been contracted to, but we've got the same entity
2
here.
I don't know how I just ignore that language.
MR. SAMUEL:
3
Well, Judge, if you read the
4
Evans v. Hook case, it doesn't give any expansive
5
reasoning in my estimation; but it does say that the
6
issue turns on the defendant's relation to the
7
project on which the plaintiff has entered; and the
8
other cases that I have cited say the Shell Oil test
9
doesn't apply either.
It's whether it's the work
10
that's normally done by employees or independent
11
contractors.
What I'm saying is under the facts of this
12
13
case, it's -- the work that's done by Virginia
14
Natura l Gas is not the work that's normally done by
15
employees of a general contractor.
16
that's normally done by an independent contractor,
17
and I don't hear any evidence that that's not the
18
case.
19
It is the work
I mean, you can have work that's done on a
20
construction site that is -- and the cases say the
21
fact that it's indispensable to the completion of a
22
project is not what the cases turn on.
23
that language before.
24
very material to the completion of the project.
25
issue is whether it's the kind of work that's
It could be something that is
'T"''o_,.,.,,.."'"" _.....,., y..,.,,, , , ...
-46-
I read you
?'II.
,
,...,...,....,..,..~rn"'":",...
..,.,.,.,...
The
27
1
normally done by employees, and I realize we get into
2
the legal fiction when it's -- a corporation is
3
created for the purpose of constructing, I guess,
4
these condominiums; but what I'm saying is that here
5
we don't have the normal subcontract situation where
6
it's involved in the building and construction of the
7
condominium.
8
You have Virginia Natural Ga s, with no
9
compensation, going in because they a re g oing to ha ve
10
gas units used in t he se bus1'nes s es,·
11
12
13
14
business; and I'm suggesting that b
evidence you h ave, you don't have
normally carried o n by
contractor.
16
d
18
J
ase d up on t he
~v i d ence it' s wo rk
employee s of a g enera l
us t b ecause they ha ve a
Cl ass A
oesn't indicat e that's the k '
lnd of Work they
THE COURT :
Do you h ave the·
.
1lcen
se
do.
- - I 've g 0 t
Do You h a v e the Ev
t he
ans case ?
MR. NORRIS :
Ye s I d
Nichols case.
19
20
THE COURT :
21
'
Can me b
MR . SAMUEL:
one.
I
23
think
o, Your
orrow
Ron or
th at f
r might h
.
or a
a\le an
THE COURT:
25
d ·
lt' s been
stipulated that th at 's not part of t he tra d e o r
15
17
an
MR.
lfo~IS:
THE c ouRT:
is i t?
.
~lnut e ,
extJ:a
MR.
1
SAMUET
thing, theT"
2
3
~
6
1
3 '
1
21
'\\\ .1
27
1
normally done by employees, and I realize we get into
2
the legal fiction when it's -- a corporation is
3
created for the purpose of constructing, I guess,
4
these condominiums; but what I'm saying is that here
5
we don't have the normal subcontract situation where
6
it's involved in the building and construction of the
7
condominium.
8
9
You have Virginia Natural Gas, with no
compensation, going in because they are going to have
10
gas units used in these businesses; and it's been
11
stipulated that that's not part of the trade or
12
business; and I'm suggesting that based upon the
13
evidence you have, you don't have
14
normally carried on by employees of a general
15
contractor.
16
doesn't indicate that's the kind of work they do.
17
18
~vidence
it's work
Just because they have a Class A license
THE COURT:
Nichols case.
Do you have the· -- I've got the
Do you have the Evans case?
19
MR. NORRIS:
20
THE COURT:
can me borrow that for a minute.
21
MR. SAMUEL:
I think I might have an extra
22
Yes, I do, Your Honor.
one.
23
THE COURT:
24
MR. NORRIS:
25
THE COURT:
unu~T.n
What volume is it?
239 Va 127.
I've got it.
~D~U~M
-47-
~hln
~~~nrT~~~~
Thlr
28
1
MR. SAMUEL:
2
thing, then I promise I'll be
3
Judge, can I say one more
quiet~
The case I was trying to think of was
4
Johnson versus Jefferson National Bank.
5
involve a company that was
6
purpose of constructing a unit -- condominium unit
7
but the language I wanted to mention to you --
8
THE COURT:
9
MR. SAMUEL:
cr~ated
It doesn't
for the sole
What was the cite?
Johnson versus Jefferson
10
National Bank, 244 Va. 482, 1992; and they say:
11
test to be applied in resqlving the issue is not
12
whether the activity is useful, necessary, or
13
absolutely indispensable to the business, but whether
14
the indispensable activity is normally carried on
15
through employees rather than independent
16
contractors.
17
That's my argument in a nutshell, and I'm
18
suggesting that it's not.
19
there's any evidence that it's not.
20
The
THE COURT:
At least I don't think ·
And I think the general rule is
Is
21
that that is correct, and the only issue is:
22
there a unique situation because the owner
23
contracted -- it was created to develop this, and the
24
defense is telling me that's the test, and you're
25
telling me the normal test is the test.
-48-
29
1
MR . SAMUEL:
We l l, I'm saying the cases that
2
I cited -- the Cinnamon versus I BM case says :
3
don't u se th e IBM tes t .
4
said -- I mean - - excuse me - - the Shell Oil test.
5
The issue is whether it's work that ' s normally done
6
on -- and it
7
entity has employees that do it.
THE COURT:
8
9
MR. SAMUEL :
have to be that this particular
It's in the trade or business ,
Right, and I don't think it is
here.
12
THE COURT :
13
MR. SAMUEL:
14
THE COURT :
15
You use the test I j u st
is that the normal course of business.
10
11
doesn~t
You
Evans.
Anything else from anybody?
No.
I don't know how I get past
I'm going to grant their
All right , Your Honor .
16
MR. SAMUEL:
17
THE COURT:
18
MR . NORRIS:
I'll prepare an order , Your
MR . SAMUEL:
John, I would suggest maybe --
19
20
--
motion to their plea.
Honor.
21
you do the order any way you want; but I would like
22
you to do it for the reasons stated in the record,
23
because then we don't have to worry about any
24
disagreement as to - -
25
MR . NORRIS:
PrH J?.T .n
That's fine.
f':P?.lt?.M
-49-
?.N'n
?.~~()('T?.'T''R~ .
TNt"' .
30
MR . SAMUEL:
1
2
3
Is that fine with you, Your
Honor?
THE COURT:
That's fine.
Everybo~y
4
arguments .
5
than enough case law in there.
6
decide I'm right, fine.
7
I'm wrong, fine; but I think everybody's got enough
8
in the record for you to do that.
9
10
The briefs are in the file.
has made
If somebody wants to
If somebody wants to decide ·
(The proceedings were concluded at
11:20 a.m.)
11
12
There's more
-----ooo------
13
14
15
16
17
18
19
20
21
22
23
24
25
- 50-
31
CLERK'S CERTIFICATE
1
2
3
I, J. Curtis Fruit, Clerk of the Circuit Court
4
of the City of Virginia Beach, Commonwealth o£
5
Virginia, do hereby certify that the foregoing is a
6
true and correct copy of the proceedings had in the
7
case of Bruce R. Pfeifer, plaintiff, versus Krauss
8
Construction Company of Virginia, defendant, and that
9
the same were lodged and filed with me as Clerk of
10
said Court on this
11
2000.
day of
12
13
14
Clerk of the Circuit court of the
City of Virginia Beach, Virginia
15
16
17
By .
18
Deputy Clerk
19
20
-----coo-----
21
22
23
24
25
Pnhl~T . n
~P~U~M
-51-
~Nn
~~~n~T~~~~
TN~
32
1
REPORTER'S CERTIFICATE
2
3
COMMONWEALTH OF VIRGINIA,
4
CITY OF VIRGINIA BEACH, to-wit:
5
6
I, Kristin
c.
Swanbeck, RPR, certify that the
7
foregoing is a correct transcript of the proceedings
8
had before the said court on the date aforementioned.
9
Given under my hand this 24 day of April, 2000.
10
11
~~---..,------..,.....
12
Court Reporter
13
14
15
16
17
18
-----ooo----19
20
21
22
23
24
25
'Q()lJ~T . n
r-"R~U~'M
- 52-
~Nn
~C:C:()f"'T~'T'"'Ii'C:
TN'f"'
VIRGINIA: IN THE CIRCUIT COURT FOR THE CITY OF VIRGINIA BEACH
BRUCE R PFEIFER,
Plaintiff,
v.
KRAUSS CONSTRUCTION
COMPANY OF VIRGINIA-, INC.,
Defendant.
ORDER
THE PARTIES appeared before the Court to present argument on the Plea in Bar filed
by Defendant, Krauss Construction Company of Virginia, Inc.
After considering legal
memoranda, and the agreed upon Stipulation ofFacts, filed by the parties, and oral argument
presented by counsel, and for the reasons stated by the Court from the b~nch, it is hereby
ORDERED that Defendant's Plea in Bar shall be, and hereby is, sustained and that the Motion
for Judgment be dismissed, with prejudice.
objections to the Court' s ruling.
ENTER this
Counsel for the Plaintiff has reserved his
'fP·/~
k·l-\" " ,.·..{_. :. . ·- ______,
·3
day of_...:..:..
Q_,_
.
2000.
i/
-iORRIS & ST. CLAIR. P.C.
AUorneys at Law
440 Vik1nq Onve, Su•t•· 230
Virgonoa Beacll. VA 234~·7J08
Talapr>one (7571 498 ·7700
Fa csunde (7571 498·7744
s~-
(. ) c:::-~
CER TIFIED TO" '
;
TRUE COP y
P tJuREC ORO IN H Y CUSTODY.
-R...!
o-be_rt_L::...
. S- a_m_u_e-1,-J-r., -E-sq_u_i-re----'~ .
•
R TIS FRUIT· Cl ERX
CI::ICU IT COURT. YIP.<.JHI :. 3U. CH. YA
/
-53-
./-:::~ ,,
. --... . , . .. ,
-
50
ASSIGm.-IENT OF ERROR
1.
The trial court erred in finding that Pfeifer and Krauss were fellow
statutory employees and that the Virginia Workers' Compensation Act, Code 65.2-1, et seq.,
precluded Pfeifer's common law tort claim.
-54-

Untitled

Transcription

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