Lee v. M & H Enterprises, Inc.
237 Ariz. 172
| Ariz. Ct. App. | 2015Background
- Plaintiff Timothy Lee, an Able Body Labor employee supplied to M&H (general contractor), was injured while cleaning freezer tops at a Sam’s Club under construction on Wal‑Mart property; he fell when fiberboard collapsed.
- Lee obtained workers’ compensation benefits from Able Body and then sued Wal‑Mart and M&H for negligence and for failure to provide a safe workplace.
- Wal‑Mart moved for summary judgment arguing it was not liable to an independent contractor’s employee under Restatement § 422 and it did not retain control (Restatement § 414). The trial court granted Wal‑Mart’s motion.
- M&H moved for judgment as a matter of law at trial, arguing the lent‑employee doctrine made Lee its (special) employee and his exclusive remedy was workers’ compensation; the court granted the motion.
- On appeal Lee challenged Wal‑Mart’s summary judgment and the judgment as a matter of law for M&H; the Court of Appeals affirmed both rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a landowner (Wal‑Mart) owes a non‑delegable duty under Restatement § 422 to an employee of an independent contractor | Lee: §422 imposes non‑delegable duty to business invitees, so Wal‑Mart liable | Wal‑Mart: Welker and Arizona precedent bars §422 liability to independent‑contractor employees; no retained control | Court: Wal‑Mart not liable under §422 to independent‑contractor employee; affirmed |
| Whether Wal‑Mart retained control over the work (Restatement § 414) so directly liable | Lee: Wal‑Mart requested freezer tops be cleaned during final walkthroughs, evidencing retained control | Wal‑Mart: contract reserved site and safety control to M&H; inspections do not equal control | Court: No genuine fact issue; contractual terms and conduct show no retained control; summary judgment proper |
| Whether M&H is immune from tort suit under the lent‑employee doctrine because Lee received workers’ compensation | Lee: He was only an Able Body employee, not M&H’s employee, so tort claim remains | M&H: Under Word test, Lee became special employer’s employee (implied hire; work was M&H’s; M&H had right to control), so exclusive remedy applies | Court: As matter of law, M&H was special employer; lent‑employee doctrine applies and workers’ compensation is exclusive remedy; judgment proper |
| Whether special employer must have had workers’ comp coverage to obtain tort immunity | Lee: Public policy requires special employer must be liable under workers’ comp to get immunity | M&H: Arizona law does not require special employer to have had insurance in place to be deemed special employer; liability for benefits can be imposed later | Court: No requirement that special employer previously carried coverage; immunity not contingent on prior insurance |
Key Cases Cited
- Welker v. Kennecott, 1 Ariz. App. 395 (Ariz. App. 1965) (landowner not liable under Restatement § 422 to employees of independent contractors)
- Ft. Lowell‑NSS Ltd. P’ship v. Kelly, 166 Ariz. 96 (Ariz. 1990) (exceptions to nonliability include retained control and non‑delegable duties)
- Lewis v. N.J. Riebe Enters., Inc., 170 Ariz. 384 (Ariz. 1992) (analysis of retained control and general duty to provide a safe workplace)
- Word v. Motorola, Inc., 135 Ariz. 517 (Ariz. 1983) (three‑part test for lent employee: contract of hire, work is special employer’s, right to control)
- Koepke v. Carter Hawley Hale Stores, Inc., 140 Ariz. 420 (Ariz. App. 1984) (inspections and contract terms may not establish retained control)