ANDY L. JAMES, Appellant, v. ALASKA FRONTIER CONSTRUCTORS, INC. and NANUQ, INC., Appellees.
Supreme Court No. S-17353
THE SUPREME COURT OF THE STATE OF ALASKA
July 31, 2020
7475
WINFREE, Justice.
Superior Court No. 2BA-16-00282 CI. OPINION. Appeal from the Superior Court of the State of Alaska, Second Judicial District, Utqiagvik, Romano D. DiBenedetto, Judge.
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER. Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email corrections@akcourts.us.
Appearances: Mark A. Sandberg, Law Office of Mark A. Sandberg, Anchorage, and Dennis Mestas, Law Office of Dennis Mestas, Anchorage, for Appellant. Susan Orlansky, Reeves Amodio LLC, Anchorage, for Appellees.
Before: Bolger, Chief Justice, Winfree, Maassen, and Carney, Justices. [Stowers, Justice, not
WINFREE, Justice.
I. INTRODUCTION
A worker was injured on the job and later filed personal injury lawsuits, which were consolidated, against two companies. The companies sought and obtained summary judgment rulings that they had statutory employer immunity from the injury claims under the Alaska Workers’ Compensation Act‘s exclusive liability provision. The worker appeals; because numerous issues of material fact make it impossible to determine whether the companies are entitled to judgment as a matter of law that they are immune from liability under the Act, we reverse the summary judgment decision, vacate the judgment against the worker, and remand for further proceedings.
A. Employment And Injury
In late 2014 Andy James was working in Deadhorse for Northern Construction & Maintenance, LLC, a company owned by John Ellsworth and members of his family. Ellsworth also owned Alaska Frontier Constructors, Inc. Alaska Frontier had some kind of business relationship with Nanuq, Inc.
In late December Northern Construction sent James from his usual work assignment to work in some capacity in connection with an ice road being constructed and maintained for Caelus Energy Alaska, LLC. James was instructed to work at the direction of Scott Pleas. Despite dangerous blizzard conditions, Pleas directed James to accompany another worker, Johann Willrich, to check fuel levels on equipment idling outside; James objected due to the weather, but was threatened with the loss of his job if he did not follow the direction. James complied; he climbed a large grader to fuel it, but a wind gust blew him off, resulting in shoulder and spinal injuries. James received workers’ compensation benefits from Northern Construction.
B. Lawsuits
Alleging that Alaska Frontier negligently and recklessly sent workers out in the dangerous weather conditions, James sued it for his personal injuries. Alaska Frontier responded that Pleas and Willrich were not Alaska Frontier employees. James then filed a separate lawsuit against Nanuq, alleging that Pleas and Willrich were employees either of Nanuq or of Nanuq and Alaska Frontier operating a “joint venture.” The lawsuits were consolidated.
Alaska Frontier and Nanuq jointly moved for summary judgment to dismiss James‘s lawsuit. They asserted that for project owner Caelus‘s ice road project Nanuq was a general contractor, Nanuq subcontracted with Northern Construction on the project, and, under the Act‘s exclusive liability provision,1 Nanuq was immune from the personal injury claim. They also asserted that, assuming Nanuq and Alaska Frontier were joint venturers on the project (as James had alleged in the alternative), Alaska Frontier had the same statutory immunity. Alaska Frontier separately filed another summary judgment motion to dismiss James‘s lawsuit, asserting that because it employed neither Pleas nor Willrich, James‘s claim against Alaska Frontier had to be dismissed.
James contested the summary judgment motions’ evidentiary underpinnings by pointing to alleged deficiencies in the supporting evidence and presenting evidence he contended contradicted the companies’ evidence. He also asserted that Alaska Frontier was a vendor and not a contractor who might be entitled to statutory employer immunity under the Act.2 Alaska Frontier and Nanuq replied to James‘s opposition, raising some new arguments and presenting new evidentiary submissions. They conceded that no written agreements documented the relevant relationships among Nanuq, Alaska Frontier, and Northern Construction, arguing instead that a contract could be implied from affidavit testimony about the “working relationship” between the companies. They contended that Alaska Frontier was not a vendor and that the implied contractual agreements
C. Superior Court‘s Orders Granting Summary Judgment
Although oral argument had been requested, the superior court granted summary judgment for the companies without it. The court denied James‘s reconsideration motions regarding both the failure to allow oral argument and the rulings’ merits. Judgment was entered against James for attorney‘s fees.
1. Alaska Frontier‘s summary judgment order
The superior court stated that it was taking all reasonable inferences from the evidentiary presentations in James‘s favor; for summary judgment purposes, the court assumed Pleas and Willrich were Alaska Frontier employees. But the court concluded as a legal matter that Alaska Frontier was immune from liability to James because either (1) Alaska Frontier and Northern Construction were joint venturers as a result of Ellsworth‘s common corporate ownership or (2) Alaska Frontier subcontracted work to Northern Construction.
2. Nanuq‘s summary judgment order
The superior court stated that it was taking all reasonable inferences from the evidentiary presentations in James‘s favor; for summary judgment purposes, the court assumed the following material facts: (1) Caelus hired companies for its ice road project; (2) Caelus and Nanuq entered into a Master Services Agreement in July 2014 for projects that might be awarded to Nanuq, agreeing that Nanuq was an independent contractor required to furnish and maintain its own equipment for projects; (3) in September 2014 Caelus awarded Nanuq the ice road project; (4) Northern Construction was an equipment repair and maintenance contractor but had no written agreement with or evidence of payments from Nanuq; (5) Alaska Frontier hired Northern Construction and billed Nanuq for Northern Construction‘s and Alaska Frontier‘s labor; (6) there was no proof of a joint venture between Nanuq and Alaska Frontier; (7) Northern Construction “was called to send a mechanic” to the project, James was sent and was working in the scope of his employment with Northern Construction when he was injured; and (8) James received workers’ compensation benefits from Northern Construction.
From these facts the court concluded that: (1) Caelus was the project owner; (2) Nanuq was the general contractor; (3) Nanuq subcontracted with Alaska Frontier and Alaska Frontier billed Nanuq for both Alaska Frontier‘s and Northern Construction‘s work; (4) Northern Construction had a “casual temporary labor agreement relationship” with Alaska Frontier and James was an employee of either Northern Construction or Alaska Frontier;5 (5) regardless of which entity employed James, statutory employer immunity protected Nanuq from James‘s injury claim because Nanuq was by law responsible for workers’ compensation for James if neither
James appeals both the refusal to allow oral argument and the summary judgment rulings’ merits. Because we agree that summary judgment was not warranted on the evidentiary presentation and relevant law and therefore reverse and remand, we do not need to address the superior court‘s erroneous failure to allow oral argument on the summary judgment motions.6
III. STANDARD OF REVIEW
“We review grants of summary judgment de novo.”7 Summary judgment is proper only when undisputed material facts lead to the conclusion that a party is entitled to judgment as a matter of law.8
IV. DISCUSSION
A. Summary Judgment Standard
Under our long-standing summary judgment framework, the moving party has the initial burden of proving, through admissible evidence, that there are no genuine issues of material fact and that the party is entitled to judgment as a matter of law.9 If that burden is met, the party seeking to avoid summary judgment must present specific facts showing there is “evidence reasonably tending to dispute or contradict” the moving party‘s evidence, thereby creating a genuine issue of material fact.10 The opposing party does not need to produce enough evidence to persuade the court that it would prevail at trial, only enough evidence to demonstrate a genuine issue of material fact.11 “[A] material fact is one upon which resolution of an issue turns.”12 “[B]ecause the existence of a dispute over a material fact issue is a question of law, the determination is objectively based and employs a reasonableness standard.”13
The “summary judgment standard does not allow trial courts . . . to make trial-like credibility determinations [or] conduct trial-like evidence weighing.”14 “[T]he only questions to be answered at the summary judgment stage are whether a reasonable person could believe the [opposing] party‘s assertions and whether a reasonable person could conclude those assertions create a genuine dispute as to a material fact.”15 The evidentiary threshold to preclude summary judgment is low, serving the important function of preserving the right to trial.16
B. Relevant Workers’ Compensation Legal Concepts
The Act makes workers’ compensation generally an employee‘s exclusive remedy against an employer;17 the term “employer” in
If the employer is a subcontractor and fails to secure the payment of compensation to
its employees, the contractor is liable for and shall secure the payment of the compensation to employees of the subcontractor. If the employer is a contractor and fails to secure the payment of the compensation to its employees or the employees of a subcontractor, the project owner is liable for and shall secure the payment of compensation to employees of the contractor and employees of a subcontractor, as applicable.
Alaska Statute 23.30.045(f)(2) defines “project owner” as someone “who in the course of the person‘s business, engages the services of a contractor and who enjoys the beneficial use of the work.” Alaska Statute 23.30.045(f)(1) defines “contractor” as someone “who undertakes by contract performance of certain work for another but does not include a vendor whose primary business is the sale or leasing of tools, equipment, other goods, or property.” Alaska Statute 23.30.045(f)(3) defines “subcontractor” as someone “to whom a contractor sublets all or part of the initial undertaking.”19
Because Northern Construction paid James‘s workers’ compensation claim, the Act‘s exclusive liability provision protects from civil liability for his injuries both Northern Construction and any entities who have the requisite contractual relationships with Northern Construction.20 There seems to be no dispute between the parties that Caelus is the project owner. For the exclusive liability provision to preclude James‘s injury claims against both Nanuq and Alaska Frontier, (1) Caelus would have to jointly contract with Nanuq and Alaska Frontier and they would have to subcontract with Northern Construction21 or (2) Caelus would have to contract with Nanuq, Nanuq would have to subcontract with Alaska Frontier, and Alaska Frontier would have to joint venture or subcontract with Northern Construction. The contractual relationships among Northern Construction, Nanuq, and Alaska Frontier thus are critical to a legal conclusion that the latter two companies are entitled to judgment as a matter of law that they have immunity under
If Alaska Frontier and Nanuq are not joint venturers, then Alaska Frontier might be either a vendor or a subcontractor to Nanuq. If Nanuq subcontracted with Alaska Frontier, then for statutory immunity in the
Finally, contractor-under immunity under
Actual contractual relationships thus are as important for a lent employee analysis as they are for the contractual chain analysis of project owners, joint venturers, contractors, and subcontractors.27
C. Factual And Legal Disputes Barring Summary Judgment
1. Joint venture between Alaska Frontier and Northern Construction
No party asserted or presented evidence during the summary judgment briefing that Alaska Frontier and Northern Construction were joint venturers.28 Indeed, the superior court noted that “neither party . . . has presented evidence of a[] joint venture.” (Emphasis in original.) The sole source of the court‘s contingent determination that the two companies might have been working under a joint venture agreement was that Ellsworth was an owner of both companies, as the only reference James made about the companies’ relationship was that they were “sister companies” Ellsworth owned.29 Sister corporations are not, based only on their common ownership, a joint venture as a matter of law.30 Absent any evidence about the factors necessary to determine that Alaska Frontier and Northern Construction were joint venturers, it was error to suggest or conclude that a joint venture could exist to provide Alaska Frontier with statutory immunity as a direct employer.31
2. James as Alaska Frontier‘s employee
In granting Nanuq summary judgment, the superior court explicitly stated that
No party argued or presented evidence during the summary judgment briefing to establish that James was a general or special employee of Alaska Frontier. And the court said in its statement of the facts underlying its grant of summary judgment that James was injured while working in the scope of his employment for Northern Construction and that Northern Construction paid workers’ compensation to James. The corporations assert on appeal that James was “in fact” employed by Northern Construction. Absent any evidence of or discussion about the factors necessary to determine that James was Alaska Frontier‘s special employee under the lent employee doctrine,32 it was error to suggest or conclude that James could be an Alaska Frontier employee such that (1) Alaska Frontier would have direct employer exclusive liability protection under the Act, and (2) assuming Nanuq subcontracted with Alaska Frontier, Nanuq would have been required by law to secure compensation payment for James if Alaska Frontier had not and Nanuq therefore had exclusive employer liability protection under the Act.
3. Alaska Frontier‘s status as a contractor or subcontractor
Alaska Frontier and Nanuq argue on appeal that both were contractors as defined in
The corporations alternatively asserted that Nanuq subcontracted with Alaska Frontier but presented scant evidence supporting their legal theory. They contended Nanuq could have an implied subcontract with Alaska Frontier, which depends on a factual evaluation to determine the parties’ intention.34 Evidence reflects that the vast majority of monies Nanuq paid to Alaska Frontier were for equipment rentals, suggesting Alaska Frontier may have been primarily a vendor on the ice road project and not a subcontractor to Nanuq.35 And to determine whether Alaska Frontier was a
Evidence was presented that (1) Nanuq‘s contract with Caelus required written notification to Caelus of any subcontractors so that Caelus could obtain appropriate indemnity agreements, but this did not happen with respect to Alaska Frontier; and (2) Nanuq had a union labor agreement for work on the ice road project and Alaska Frontier did not, even though Alaska Frontier had other labor agreements at the time of the ice road project. Nanuq and Alaska Frontier argue that failure to comply with third-party contractual requirements does not mean there was no contractor-subcontractor relationship, but they fail to recognize that at the summary judgment stage this evidence creates a reasonable inference that there was no such relationship. Nanuq and Alaska Frontier may attempt to establish their contractual relationships at trial.
Unless the superior court had sufficient evidence before it to determine exactly what portion of the main contract was subcontracted to Alaska Frontier, the court could not determine whether Alaska Frontier actually was a subcontractor rather than a vendor. The court did not have that evidence before it; it was error to speculate that a contractor-subcontractor relationship existed between Nanuq and Alaska Frontier, then rely on that to further speculate about the relationship between Alaska Frontier and Northern Construction.
4. Northern Construction‘s subcontractor status
The evidentiary presentations about Northern Construction‘s subcontractor status also are unclear. Without knowing what the putative subcontract between Nanuq and Alaska Frontier actually covered regarding Nanuq‘s contract with Caelus, it is impossible to determine what portions of Alaska Frontier‘s supposed subcontract could have been sub-subcontracted to Northern Construction. Other than some general observations that Northern Construction was hired to perform equipment maintenance, apparently on equipment Alaska Frontier leased to Nanuq; that Northern Construction‘s employees were at times called to work at locations away from Deadhorse to fill “gaps“; and that Nanuq paid Alaska Frontier and Alaska Frontier paid Northern Construction, the evidentiary presentations tell us nothing about the actual contractual arrangements between Alaska Frontier and Northern Construction. It was error to speculate that a putative subcontractor relationship existed between Alaska Frontier and Northern Construction.
V. CONCLUSION
We REVERSE the superior court‘s grants of summary judgment, VACATE the judgment entered against James, and REMAND for further proceedings.
Notes
See alsoThe liability of an employer prescribed in
AS 23.30.045 is exclusive and in place of all other liability of the employer and any fellow employee to the employee . . . on account of the injury or death. In this section, “employer” includes . . . a person who, underAS 23.30.045(a) , is liable for or potentially liable for securing payment of compensation.
9 P.3d at 1017 (quoting 3 ARTHUR LARSON & LEX K. LARSON, LARSON‘S WORKERS’ COMPENSATION LAW § 48.00, at 8-434 (1997)).When a general employer lends an employee to a special employer, the special employer becomes liable for workmen‘s compensation only if:
(a) the employee has made a contract of hire, express or implied, with the special employer;
(b) the work being done is essentially that of the special employer; and
(c) the special employer has the right to control the details of the work.