ERIC DOBRANSKY v. EQT PRODUCTION COMPANY AND HALLIBURTON ENERGY SERVICES, INC.
No. 900 WDA 2019
IN THE SUPERIOR COURT OF PENNSYLVANIA
APRIL 11, 2022
2022 PA Super 61
J-E02002-21; Appeal from the Order Entered May 22, 2019 In the Court of Common Pleas of Greene County Civil Division at No(s): AD 142-2014
OPINION BY BENDER, P.J.E.:
FILED: APRIL 11, 2022
Appellant, Eric Dobransky, appeals from the trial court‘s May 22, 2019 order granting summary judgment in favor of Appellees, EQT Production Company (“EQT“) and Halliburton Energy Services, Inc. (“HESI“) (referred to herein collectively as “Appellees“). After careful review, we vacate the trial court‘s order and remand. In addition, we deny Appellees’ application to strike and preclude argument.
The matter before us concerns whether HESI — and by extension, EQT — qualify as statutory employers under the Workers’ Compensation Act (“WCA” or “the Act“)1 and, as such, enjoy immunity from tort liability for injuries suffered by Mr. Dobransky. By way of background, under the WCA,
Pertinent to the issues before us, pursuant to Section 302(a) of the WCA, codified at
Facts
With that background in mind, we now turn to the facts before us. This case arises out of injuries sustained by Mr. Dobransky from his exposure to barite at Scott‘s Run, a natural-gas well site leased and operated by EQT, on June 19, 2012.23 In order to drill and produce natural gas at Scott‘s Run, EQT subcontracted with numerous companies, including HESI. See Maddox‘s Dep. at 12-13. Pursuant to a master services agreement (“MSA“), EQT contracted with HESI to perform various services for it related to both drilling and hydraulic fracturing. See Appellees’ Motion for Summary Judgment, 7/2/18, at Exhibit B (“MSA“); Appellees’ Brief at 5-6; Mr. Dobransky‘s Substituted Brief at 7. Notably, at the Scott‘s Run site, HESI provided EQT
[Mr. Dobransky‘s counsel:] [W]hat does providing mud services mean?
[Mr. Maddox:] So to drill a horizontal well, we have to have mud in the hole to keep the hole open and stable, and carry cutting out of the hole. And [HESI‘s] function in that role is to provide [EQT] a mud that will provide ... those qualities to be able to drill the well successfully and get casing in the ground.
***
[Mr. Dobransky‘s counsel:] And when you say mud, can you define mud for me?
[Mr. Maddox:] It is a water-based, semi[-]saturated, polymer-based fluid, that has a variety of products in it to give it the properties we need to drill the well.
[Mr. Dobransky‘s counsel:] Are you able to tell me what‘s in it?
[Mr. Maddox:] Barite is one of them. Xanthan gum is another one. Salt is another product. We have a polymer. There could be other products in there ... a pH pack ten, I think is another product in there. There‘s a lot of products in the mud that give it the consistency that we need, keep the pH in check and the other properties.
[Mr. Dobransky‘s counsel:] Why is barite necessary?
[Mr. Maddox:] It‘s a weighting material.
[Mr. Dobransky‘s counsel:] Meaning it has weight?
[Mr. Maddox:] Yes.
[Mr. Dobransky‘s counsel:] Why is that necessary?
[Mr. Maddox:] We need weight.... [W]hen drilling a horizontal well, the overburden of the formation that we are drilling, if we didn‘t have a fluid in there that had hydrostatic weight to push back against that formation, the hole would not remain open to get our drill bit through it and our casing in the ground.
In providing EQT with mud services, HESI was responsible for gathering the necessary raw materials to create the drilling mud, maintaining and inspecting the tanks that held the barite, and keeping track of inventory. Id. at 27; Mr. Dobransky‘s Substituted Brief at 15 (“[HESI] did not purchase the ‘mud’ from a third[-]party supplier, but instead collected the necessary raw materials to have the mud blended and stored at the EQT well site.“); Appellees’ Brief at 22 (noting that HESI required that barite be delivered in order to make the drilling mud).
In order to have the barite used in the drilling mud delivered to the Scott‘s Run well site, HESI executed a transportation agreement with Northwest Concrete Products, Inc., d/b/a Northwest Logistics (“Northwest“), under which Northwest agreed to “transport the goods or materials tendered to it by [HESI] or any supplier of [HESI] to and from the origin and/or destination points (and stop off points in between) as designated by [HESI]....” Appellees’ Motion for Summary Judgment at Exhibit C (“Transportation Agreement“) at ¶ 1; see also Mr. Dobransky‘s Substituted Brief at 15; Appellees’ Supplemental Brief at 16-17. Northwest also unloaded the goods and materials it transported. See Appellees’ Brief at 6; Appellees’ Supplemental Brief at 9, 16-17; Mr. Dobransky‘s Substituted Brief at 10.
Northwest employed Mr. Dobransky as a truck driver. TCO at 2. On the day in question, Mr. Dobransky was delivering barite to the Scott‘s Run site. When unloading the barite into HESI‘s storage tank, the cap blew off, releasing
Procedural History
Mr. Dobransky subsequently filed a negligence action against Appellees. On July 2, 2018, Appellees filed a motion for summary judgment, arguing that they were Mr. Dobransky‘s statutory employers under Section 302(a) of the WCA, and, therefore, immune from tort liability. Section 302(a) provides:
A contractor who subcontracts all or any part of a contract and his insurer shall be liable for the payment of compensation to the employes of the subcontractor unless the subcontractor primarily liable for the payment of such compensation has secured its payment as provided for in this act. Any contractor or his insurer who shall become liable hereunder for such compensation may recover the amount thereof paid and any necessary expenses from the subcontractor primarily liable therefor.
For purposes of this subsection, a person who contracts with another (1) to have work performed consisting of (i) the removal, excavation or drilling of soil, rock or minerals, or (ii) the cutting or removal of timber from lands, or (2) to have work performed of a kind which is a regular or recurrent part of the business, occupation, profession or trade of such person shall be deemed a contractor, and such other person a subcontractor. This subsection shall not apply, however, to an owner or lessee of land principally used for agriculture who is not a covered employer under this act and who contracts for the removal of timber from such land.
In their motion for summary judgment, Appellees — relying on
Thereafter, Mr. Dobransky filed a response in opposition to Appellees’ summary judgment motion. In his response, Mr. Dobransky asserted, inter alia, that he “was involved in the transporting and unloading of barite and sand used at well sites for his employer, Northwest.... Under the contract, Northwest was to provide bulk and vacuum transportation services.” Mr. Dobransky‘s Response in Opposition to Motion to Summary Judgment, 8/1/18,
On September 4, 2018, the trial court issued an order stating that it would consider the statutory employer defense raised in Appellees’ motion for summary judgment. Trial Court Order, 9/4/18, at 1 (unnumbered pages). The trial court permitted the parties to file briefs addressing Appellees’ statutory employer defense. Id. Moreover, the trial court stated that, pending its decision on the statutory employer issue, all other proceedings and motions were stayed (including consideration of the other grounds for summary judgment raised by Appellees in their motion). Id. at 2.4
On September 17, 2018, Appellees filed a brief in support of their statutory employer defense. Therein, they elaborated on their Section 302(a)(1)(i) argument, and additionally contended that HESI also qualified as Mr. Dobransky‘s statutory employer under
On October 5, 2018, Mr. Dobransky filed his brief in opposition. Specifically, regarding Appellees’ Section 302(a)(2) argument for immunity, Mr. Dobransky countered that the MSA does not require HESI to engage in the transportation of barite to well sites, and that HESI was “engaged in the ‘service’ of the well site, not in the business of transporting goods and materials to the well site.” Mr. Dobransky‘s Supplemental Brief in Opposition, 10/5/18, at 7. He claimed that Appellees were attempting to overextend the statutory employer doctrine, positing that Appellees’ Section 302(a)(2) argument “is akin to saying that a delivery driver who is supplying engine parts to an automotive repair shop and was injured during the process, when a negligently anchored shelving system fell on him, cannot recover against the shop under the statutory employer doctrine. That is an absurdity.” Id.
On May 22, 2019, the trial court issued an opinion and order, granting summary judgment in favor of Appellees based on their statutory employer defense under Section 302(a)(1)(i) and Doman. See TCO at 1-7. In doing
Mr. Dobransky subsequently filed a timely notice of appeal. The trial court directed Mr. Dobransky to file a concise statement of errors complained of on appeal pursuant to
On August 11, 2020, a divided three-judge panel of this Court vacated the trial court‘s order and remanded the case for further proceedings in a published opinion. The majority ascertained that Appellees did not qualify as Mr. Dobransky‘s statutory employers under Section 302(a)(1)(i), as HESI did not contract with Northwest to have work performed consisting of the removal, excavation or drilling of soil, rock or minerals, but instead contracted with Northwest for transportation and product-unloading services generally. In addition, the majority observed that Appellees had devoted a substantial portion of their appellate brief to arguing various alternative grounds for the
The dissenting opinion agreed with the majority that Appellees did not qualify as Mr. Dobransky‘s statutory employers under Section 302(a)(1)(i). However, the dissent advanced that it would nevertheless affirm the trial court‘s order awarding summary judgment to Appellees pursuant to their statutory employer defense under Section 302(a)(2). Specifically, the dissent agreed with Appellees that the uncontested evidence established that HESI regularly and recurrently required that barite be delivered to the well site, and that HESI subcontracted that responsibility to Northwest. In reaching this conclusion, the dissent determined that the text of Section 302(a)(2) contains no requirement of similarity between the overall business activities of the contractor and the subcontractor to trigger its application.
Thereafter, Appellees filed an application for reargument en banc, specifically asking this Court to address the Section 302(a)(2) issue and affirm the trial court‘s grant of summary judgment on that basis. We granted their request and withdrew the panel decisions originally issued in this matter. We now examine whether Appellees are entitled to summary judgment based on their statutory employer defense under either Section 302(a)(1)(i) or Section 302(a)(2).
Standard and Scope of Review
[S]ummary judgment is appropriate only in those cases where the record clearly demonstrates that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. When considering a motion for summary judgment, the trial court must take all facts of record and reasonable inferences therefrom in a light most favorable to the non-moving party. In so doing, the trial court must resolve all doubts as to the existence of a genuine issue of material fact against the moving party, and, thus, may only grant summary judgment where the right to such judgment is clear and free from all doubt. On appellate review, then,
an appellate court may reverse a grant of summary judgment if there has been an error of law or an abuse of discretion. But the issue as to whether there are no genuine issues as to any material fact presents a question of law, and therefore, on that question our standard of review is de novo. This means we need not defer to the determinations made by the lower tribunals.
To the extent that this Court must resolve a question of law, we shall review the grant of summary judgment in the context of the entire record.
Summers v. Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010) (cleaned up).
Analysis
Section 302(a)(1)(i)
We begin by reviewing the trial court‘s grant of summary judgment in favor of Appellees under Section 302(a)(1)(i), which provides that “a person who contracts with another ... to have work performed consisting of ... the removal, excavation or drilling of soil, rock or minerals ... shall be deemed a contractor, and such other person a subcontractor.”
We therefore direct our attention to Doman. In that case, the Doman Court recounted the facts before it as follows:
In September 2006, Atlas entered into an oil and gas lease with Frieda Springer (“Springer“), for the purpose of drilling, operating, producing, and removing oil and gas from her property in Greene County. Atlas subsequently entered into a Drilling Bid Proposal and Footage Drilling Contract (“Footage Drilling Contract“) with Gene D. Yost & Son, Inc. (“Yost“), a drilling contractor, to drill multiple wells in Fayette County and Greene County, including Well No. 13 on Springer‘s property (“the Springer Well“).2 Under the terms of the Footage Drilling Contract, Yost was required to provide the necessary equipment and labor, and to drill the wells to the contract footage depth, as specified by Atlas.
Yost began drilling at the Springer Well site in November 2007, and the well reached the contract footage depth on December 2, 2007. Yost personnel worked overnight to remove the drilling pipe from the Springer Well and “shut in” the well, leaving the gas in the well bore. The Tulsa Valve, which is situated on top of the well head and is used to contain the gas within the well, was closed at this time. Rock A. Doman (“Doman“) and another Yost employee began removing the blow-out preventer flange, which was attached to the Tulsa Valve, from beneath the rig platform. While the men unscrewed the flange from the Tulsa Valve assembly, they inadvertently loosened the pressurized piping below the Tulsa Valve. The Tulsa Valve and the blow-out preventer flange detached from the well head and struck Doman.
Doman was thrown approximately 60 feet above ground level before landing about 30 to 40 feet from the well rig, and was fatally injured.
Yost paid workers’ compensation benefits to Doman‘s fiancé, for the benefit of her minor child.
Doman, 150 A.3d at 104 (footnote omitted).
Doman‘s estate subsequently initiated a wrongful death and survival action against Atlas, asserting, inter alia, various theories of negligence. Id. at 105. Atlas filed a motion for summary judgment, alleging that it qualified as a statutory employer under Section 302(a)(1)(i) and, therefore, was immune from tort liability. Id. The trial court granted summary judgment in favor of Atlas, and the estate appealed. Id.
On appeal, the Doman Court noted that “[a] contractor may be deemed a statutory employer if the requirements of ... Section 302(a) ... have been satisfied.” Id. at 106 (citations omitted). The Court then observed that statutory employers enjoy immunity from tort liability, and acknowledged that “Section 302(a) does not require the primary contractor to occupy or control a worksite in order to be deemed the statutory employer of the subcontractor‘s employees.” Id. at 107 (citation omitted).6 It then discerned:
[B]ased upon the plain language of the statute, we conclude that the trial court correctly applied Section 302(a) to determine that Atlas is Doman‘s statutory employer. Because Doman was employed by Yost to perform work involving the “removal, excavation or drilling of ... minerals” (natural gas), the facts of this case implicate the specialized definition found in Section 302(a)[(1)(i)]. Atlas, as the primary contractor that subcontracted the drilling process at the Springer Well, is Doman‘s statutory employer as a matter of law. Consequently, Atlas is entitled to tort immunity ... regardless of the fact that Yost already had paid Doman‘s worker[s‘] compensation benefits. See Patton, 89 A.3d [at] 645 (holding that “[the Supreme] Court has previously determined that this immunity pertains by virtue of statutory[ ] employer status alone, such that it is accorded even where the statutory employer has not been required to make any actual benefit payments[]“); see also Fonner, 724 A.2d [at] 906-08 (stating that the 1974 amendments to the Act did not change a statutory employer‘s entitlement to tort immunity even if the direct employer paid benefits for a worker‘s injuries under the Act). Based upon the foregoing, we are constrained by the terms of the Act and the relevant case law to affirm the trial court‘s [o]rder granting summary judgment in favor of Atlas.
Id. at 109 (footnote and some internal citations omitted).
Despite granting summary judgment in favor of Atlas, the Doman Court went on to voice its dissatisfaction with the result it was constrained to reach, noting:
[T]here have been prior calls to the legislature to reconsider Pennsylvania‘s statutory scheme. See Patton, 89 A.3d at 650 (Baer, J., concurring) (urging the legislature “to eliminate the doctrine, so that it no longer serves as blanket immunity for general contractors, thwarting a victim‘s right to recover from a tortfeasor“); see also Fonner, 724 A.2d at 908 (Nigro, J., dissenting) (stating that “[c]ommon sense and logic dictate that the general contractor should not reap the benefits of civil liability [immunity] unless it undertakes responsibility of compensation
coverage[]“). We echo those calls and agree that, following the 1974 amendments to the Act, the statutory employer doctrine no longer serves the remedial purpose of the Act. Traditionally, the secondary liability imposed on statutory employers was meant to ensure that an injured worker will be afforded payment of benefits, even in the event of default by his primary employer. See Patton, 89 A.3d at 645; see also Six L‘s Packing, 44 A.3d at 1158-59 (stating that “the Legislature meant to require persons (including entities) contracting with others to assure that the employees of those others are covered by workers’ compensation insurance, on pain of assuming secondary liability for benefits payment upon a default[]“). The tort immunity associated with the imposition of secondary liability “reflects the historical quid pro quo between an employer and employee whereby the employer assumes liability without fault for a work-related injury....” Tooey v. AK Steel Corp., 81 A.3d 851, 860 (Pa. 2013) (citation omitted). However, the Act was amended in 1974 to require that all employers provide workers’ compensation coverage. See Fonner, 724 A.2d at 905 (noting that, prior to 1974, the Act contained “elective compensation” language). Notwithstanding, the 1974 amendments allowed general contractors to remain insulated from tort liability, despite never being required to provide workers’ compensation benefits to injured employees of subcontractors, and created a windfall immunity shield.7 Thus, “the mandatory nature of workers’ compensation has rendered the statutory employer doctrine obsolete[,] ... [and] adversely impact[s] worker safety by eliminating the traditional consequences (money damages) when a general contractor‘s negligence harms a subcontractor‘s employee.” See Patton, 89 A.3d at 650-51 (Baer, J., concurring); see also Travaglia v. C.H. Schwertner & Son, Inc., 570 A.2d 513, 518 (Pa. Super. 1989) (“Section 203 of the [ ] Act[, codified at 77 P.S. § 52 ], which was designed to extend benefits to workers, should not be casually converted into a shield behind which negligent employe[r]s may seek refuge.“).
Doman, 150 A.3d at 109-10 (some brackets added).
Turning to the case sub judice, the trial court — relying on Doman — reasoned:
[Mr.] Dobransky initially requests this [c]ourt to find that he was not involved in work related to the “removal, excavation or drilling of minerals.” The [c]ourt cannot find as such, instead finding that [Mr.] Dobransky‘s work was pursuant to a contract to have work performed consisting of the removal, excavation or drilling of minerals.
77 P.S. § 461 .[HESI] worked on the EQT well[]site pursuant to a[n MSA] which contracted [HESI] to perform tasks including drilling. Northwest was contracted through [HESI] to provide transportation services. Under the above[-]recited Doman analysis, Section 302(a)[(1)(i)] applies. [HESI] is accordingly [Mr. Dobransky‘s] statutory employer.
Vertical privity extends the statutory employer immunity to EQT since EQT had a contract with [HESI] and [HESI] had subcontracted services to Northwest..., the direct employer of [Mr.] Dobransky.
TCO at 6.
In response, Appellees maintain that,
Mr. Dobransky was involved in transporting and loading a product into tanks at the well[]site that was contemporaneously used in the ‘removal, excavation, or drilling’ for natural gas.8 HESI worked on the EQT well[]site pursuant to a[n MSA] between the two companies by which HESI performed a variety of tasks related to, among other things, drilling and removal of natural gas. HESI contracted with Mr. Dobransky‘s employer, Northwest, for transportation and product-unloading services generally, and that contract included the work Mr. Dobransky was performing when he alleges he was injured. Accordingly, HESI was “[a] contractor who subcontract[ed] all or any part of a contract” to Mr. Dobransky‘s employer. Thus, under Doman, Section 302(a)[(1)(i)] applies.
Appellees’ Brief at 18-19 (footnotes omitted).
Looking at the relevant language of Section 302(a)(1)(i), we determine that the trial court erred in granting summary judgment in favor of Appellees on this basis. Again, Section 302(a)(1)(i) sets forth that “a person who contracts with another ... to have work performed consisting of ... the removal, excavation or drilling of soil, rock or minerals ... shall be deemed a contractor, and such other person a subcontractor.”
Section 302(a)(2)
We next consider whether Appellees are entitled to summary judgment based on their statutory employer defense under Section 302(a)(2). Although the trial court did not reach this question, we will exercise our discretion to address it in the first instance, as the parties have both briefed this issue, and it would serve judicial economy for us to consider this controversy now. See Branton v. Nicholas Meat, LLC, 159 A.3d 540, 562 n.21 (Pa. Super. 2017) (noting that we can reach an issue not considered by the trial court, as we may affirm the trial court‘s decision on any basis); see also In re A.J.R.-H., 188 A.3d 1157, 1176 (Pa. 2018) (“It would be wasteful to send a case back to a lower court to reinstate a decision which it had already made but which the appellate court concluded should properly be based on another ground within the power of the appellate court to formulate.“) (quoting Sec. & Exch. Commʼn v. Chenery Corp., 318 U.S. 80, 88 (1943)). Further, we acknowledge that Appellees specifically sought en banc review for us to resolve this issue. See Appellees’ Application for Panel Reconsideration/Reargument, 8/14/20, at 8 (“EQT and HESI respectfully request that the Panel reconsider its decision and modify it to (1) consider the Section 302(a)(2) alternative basis for affirmance, (2) adopt [the dissent‘s] analysis and (3) affirm on that alternative basis.“).
Mr. Dobransky, on the other hand, asserts that HESI does not qualify as his statutory employer under
Consider the retail industry ... where there is a regular and recurring need to replenish inventory for sale. An opinion en banc from this Court that Mr. Dobransky was [HESI‘s] statutory employee because he delivered a material that [HESI] “needed” (in this instance, to be blended with other materials and then sold as drilling mud to EQT) could apply by simple extension to every retail business, because the “need” for more salable inventory is the sine qua non of the retail industry.
Id. at 19-20.
Our review of the relevant case law reveals that
Here, Appellees do not definitively demonstrate that the transportation and unloading of barite was an aspect of HESI‘s business or trade, and that HESI contractually delegated that aspect of its business or trade to Northwest. While Appellees point to Section 2.1.1 of the MSA and a sales order form to
Section 2.1.1 of the MSA states, in relevant part, the following:
The Parties acknowledge that from time to time, [EQT] may request that [HESI] perform work and services on one or more of its projects. [EQT] and [HESI] agree that, in the event [EQT] desires to engage [HESI] to perform work and services in connection with one or more such projects and desires to accept [HESI‘s] bid or price quotation for the scope of work, [EQT] shall issue a Purchase Order containing a scope of work to be performed at any identified Project....
MSA at § 2.1.1. Appellees purport that an EQT-HESI sales order form “indicates acceptance by HESI of EQT Purchase Order No. 110231OC for Baroid 41® and ‘Ba. Transportation.‘” Appellees’ Supplemental Brief at 8 n.11 (citation omitted). Yet, the sales order form Appellees rely on was issued by HESI — not EQT — and does not clearly demonstrate that EQT issued a purchase order for Baroid 41® and ‘Ba. Transportation.’ See Appellees’ Brief in Support of Statutory Employer Defense at Exhibit G. Further, Appellees point us to no purchase order issued by EQT in the record or any other evidence connecting this sales order form to Section 2.1.1 of the MSA. Thus, we cannot agree with Appellees that the MSA and the sales order form
Instead, viewing all facts and reasonable inferences in a light most favorable to Mr. Dobransky, the evidence shows that HESI was in the business of providing well site services, which included mud services. See Summers, supra; see also MSA; Maddox‘s Dep. at 16-17; Appellees’ Brief at 5-6; Mr. Dobransky‘s Substituted Brief at 7. In order to make drilling mud for EQT, HESI needed barite, among other items, and therefore contracted with Northwest to transport and deliver barite to it. See Maddox‘s Dep. at 16-19, 27; Transportation Agreement; Mr. Dobransky‘s Substituted Brief at 15; Appellees’ Brief at 22. Therefore, the evidence establishes, at most, that HESI needed barite for making the drilling mud and that it had Northwest transport and deliver barite to it at the well site.
However, the fact that an entity contracts with a subcontractor to have materials delivered to it in order to conduct its business or trade does not mean that a part of that entity‘s business or trade is the transporting and/or shipping of those materials from one place to another.14, 15 Otherwise, as Mr.
we decline to expand the scope of the oft-criticized
Conclusion
In sum, we conclude that HESI (and therefore EQT) have not indisputably demonstrated that they qualify as Mr. Dobransky‘s statutory employers under either
Order vacated. Case remanded. Appellees’ application to strike and preclude argument denied. Jurisdiction relinquished.
President Judge Panella and Judge Lazarus, Judge Kunselman and Judge McCaffery join this opinion.
Judge Bowes files a dissenting opinion in which Judge Olson, Judge Dubow and Judge Murray join.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/11/2022
Notes
Patton, 89 A.3d at 651 (Baer, J., concurring) (footnote omitted).“[I]n reality, application of [the 1974] amendments rarely, if ever, will result in the general contractor assuming responsibility for providing workers’ compensation insurance because in the modern construction workplace, general contractors will rarely, if ever, award a contract absent the subcontractor showing proof of workers’ compensation coverage.” Fonner..., 724 A.2d [at] 908 (Nigro, J., dissenting). Indeed, since 1974, the only way the statutory employer doctrine will operate to guarantee a workers’ compensation payment to an injured worker is if (1) the subcontractor violates the law (unlikely as noted by Justice Nigro); or (2) the religious exemption to the Act applies.... See
77 P.S. § 484 . Thus, the statutory employer doctrine serves one purpose: to provide immunity to a general contractor in tort, notwithstanding that it may have been a third party tortfeasor.
The Dissent claims that “[s]ince Zwick regularly solicited construction rehabilitation work from the claimant and other parties, the Commonwealth Court found that Zwick met the definition for a statutory employer under Section 302(a)(2) even though he was not directly engaged in carrying out construction work himself.” Dissenting Op. at 12 (citation omitted; emphasis added). We disagree with this interpretation. Initially, the evidence demonstrated that Zwick was not only in the business of selling houses but also in the business of conducting construction rehabilitation work on residential properties. Moreover, while there may not have been evidence of Zwick himself physically performing construction work at the property (i.e., Zwick‘s installing flooring, drywalling, etc.), we nevertheless consider him to be directly engaged in the business of construction, given that he “testified that construction rehabilitation work was a part of his business” and that he was “essentially the general contractor on the job.” Zwick, 106 A.3d at 255 (quotation marks and citations omitted).
8.5 Materials to Be Furnished. All materials furnished and used in connection with the Work shall be new, of good quality and approved by [EQT]. [HESI] shall cause all materials and other parts of the Work to be readily available as and when required or needed for or in connection with the construction, furnishing and equipping of the Project or the Work.
MSA at § 8.5; see also id. at § 1.2 (defining “Work” as the ”services required of [HESI] by the Purchase Order, whether completed or partially completed, and includes all other labor, materials, equipment and services provided or to be provided by [HESI] to fulfill [its] obligations“) (emphasis added). Relying on Section 8.5, the Dissent advances that “HESI was under a contractual obligation to ensure that barite was ‘readily available as and when required or needed for or in connection with the construction, furnishing and equipping of the Project or the Work.‘” Dissenting Op. at 10 (citing MSA at § 8.5). However, without a corresponding purchase order pursuant to Section 2.1.1 of the MSA, Section 8.5 fails to establish anything about HESI‘s contractual responsibilities at Scotts Run with respect to barite.