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Tyson v. Litwin Corp.

argued: April 27, 1987.


On Appeal from the District Court of the Virgin Islands Division of St. Croix, D.C. Civ. No. 84-0425.

Seitz, Higginbotham, and Rosenn, Circuit Judges. Rosenn, Circuit Judge, dissenting.

Author: Seitz


SEITZ, Circuit Judge.

Litwin Panamerican Corporation (Litwin) appeals from the August 4, 1986 order of the district court. We have jurisdiction under 28 U.S.C. § 1291 (1982).


Vernon Tyson is a permanent employee of Hess Oil V.I. Corporation (HOVIC). On April 6, 1984, Tyson was injured when a temporary drainpipe at the Hess refinery malfunctioned. It is undisputed that the drainpipe was installed by Type I Litwin employees supplied to HOVIC.

HOVIC has an agreement with Litwin whereby Litwin employees perform turnaround and maintenance work at the Hess refinery. This agreement divides the work into two classes. Type I work, according to the agreement,

is defined as that performed by [Litwin's] craftsmen, foremen and supervisors . . . where such employees have been loaned to HOVIC and are under HOVIC's direct supervision, direction and control, and [Litwin] has no general or turnaround superintendent assigned to the work. Upon having furnished such personnel to HOVIC, [Litwin] shall not be responsible to HOVIC or liable for the workmanship of such personnel or for any mistake, error or act of negligence of such personnel.

In another section, the agreement provides that HOVIC will defend, indemnify and hold Litwin harmless for all property and personal damages resulting from the performance of Type I work.

Type I employees are required to sign a "rehire form" supplied by Litwin. The form provides:

1. HOVIC personnel will control, direct and supervise all aspects of your work.

2. At no time should you receive, or act under instructions from Litwin Supervision.

Tyson and his wife brought this personal injury action against Litwin on the theory that Litwin was vicariously liable for the negligence of its employees, the Type I pipefitters. Litwin joined HOVIC as a third party defendant based on its indemnification agreement. Litwin relied on the borrowed employee doctrine for its defense to Tyson's action. It argued that it had surrendered all authority to control the pipefitter as to the installation of the temporary drainpipe to HOVIC and that the pipefitters were HOVIC's borrowed employees. Thus, said Litwin, it could not be held liable to the Tysons under the respondeat superior doctrine because the pipefitters were not acting as its employees.

Litwin moved for summary judgment, arguing that the negligent pipefitters were, as a matter of law, the borrowed employees of HOVIC. The district court denied the motion.

The case proceeded to a bifurcated jury trial. At the close of the Tysons' case on liability, Litwin unsuccessfully moved for a directed verdict. The jury returned a verdict holding Litwin liable. The jury marked "yes" in response to the special interrogatory "Were the persons who installed the temporary drainpipe on April 6, 1984, subject to the control or the right to control of Litwin Panamerican Corporation as to that specific act?" The jury next considered damages and returned a verdict of $1,150,000.

Litwin moved for judgment n.o.v., a new trial, or remittitur. By order dated June 2, 1986, the district court denied the motions for j.n.o.v. and a new trial on liability. However, the district court ruled that it would grant a new trial on damages unless the Tysons agreed to a reduction of damages to $550,000. The Tysons agreed, and, on June 27, 1986, the district court entered judgment in that amount. The size of the judgment is not an issue on appeal. The district court then certified its June 27, 1986 judgment as final pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. This appeal followed.



Litwin argues that the negligent pipefitters were, as a matter of law, the borrowed employees of HOVIC as to the negligent act, and Litwin could not be held vicariously liable for the consequences of their negligence. Our review of this legal issue is plenary. Alternatively, Litwin argues that the record evidence is insufficient to support the jury finding that the pipefitters were under Litwin's control. In reviewing a jury verdict, we view the evidence and all reasonable inferences therefrom in the light most favorable to the verdict winner and ascertain whether there is sufficient evidence to support that verdict. See Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265, 1273 (3d Cir. 1979) (in banc).


We turn first to Litwin's argument that the negligent borrowed pipefitters were, as a matter of law, exclusively Hovic employees as to the negligent acts. This contention is based primarily on the statement in Vanterpool v. Hess Oil V. I. Corp., 766 F.2d 117 (3d Cir. 1985), cert. denied, 474 U.S. 1059, 106 S. Ct. 801, 88 L. Ed. 2d 777 (1986) that "any assigned Type-I employee would necessarily work under the direct supervision and control of HOVIC."

Whatever the import of the quoted language from Vanterpool, it is clear that the court did not evaluate evidence of contemporaneous control by Litwin and HOVIC such as is present here. Our decision in Vanterpool is, therefore, not decisive because of proof here that both Litwin and HOVIC exercised some control over the borrowed employees. The control issue is not necessarily a matter of one or the other of two employers. Indeed, the district court here instructed the jury:

[A] person can be in the employ of two employers, not joint employees [sic], but at one time, as to one act, if the service to one does not involve him abandoning the service as to the other.

Vanterpool held that an injured borrowed employee who has made a contract with a borrowing employer is limited to a workers' compensation claim against the borrowing employer. Since Tyson was not a borrowed servant we are therefore not concerned with the contractual limitations applicable to the plaintiff in Vanterpool. In our case Tyson is suing the lending employer (Litwin) of the borrowed servants on the theory that Litwin retained sufficient control over them to permit a jury to find Litwin legally responsible, even though the borrowing employer could also be said to have been responsible. As Comment (b) to § 227 of the Restatement of Agency (Second) (Servant Lent to Another Master) notes:

b. Inference that original service continues. In the absence of evidence to the contrary, there is an inference that the actor remains in his general employment so long as, by the service rendered another, he is performing the business entrusted to him by the general employer. There is no inference that because ...

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