Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Salguero v. Ingersoll-Rand Co.


December 26, 2007


On appeal from Superior Court of New Jersey, Law Division, Bergen County, L-13590-04.

Per curiam.


Argued November 5, 2007

Before Judges Weissbard, Gilroy and Baxter.

Plaintiff Edwin Salguero appeals from a summary judgment dismissing his personal injury suit against defendant Holocraft Corp., d/b/a Flexcraft Industries (Flexcraft). We reverse.

On February 23, 2003, a factory owned by Air Molded Products Corporation (Air Molded) was destroyed by a fire. Consequently, the owner of Air Molded, Douglas Frank, entered into an agreement with Russ Smith, the owner of defendant Flexcraft, to use blow molding machines at defendant's factory. Frank sent workers to defendant's factory to continue producing products for Air Molded while Air Molded's factory was rebuilt.

Plaintiff was one of the employees that Air Molded sent to work at defendant's factory. On August 7, 2004, plaintiff was operating a blow molding machine (machine) that was missing an important safety piece, a plexi-glass barrier that prevented access to the inside of the machine. When plaintiff experienced difficulty operating the machine, he requested help from a supervisor employed by defendant. Defendant's supervisor adjusted the machine and, while doing so, noticed that the plexi-glass barrier was missing. The supervisor asked plaintiff if he knew where the piece was and plaintiff replied that he did not. The supervisor could not locate the missing piece. The supervisor then adjusted the machine and left plaintiff to continue his work. A few minutes later, plaintiff's arm and hand became trapped in between the molds of the machine, the area that the plexi-glass barrier would have been protecting. Plaintiff reached into the machine to fix a problem when the mold closed, crushing his hand and wrist. Plaintiff sustained extensive injuries to his arm and hand, resulting in numerous surgeries, including skin grafting and reconstructive surgery.

Sometime between the date of the accident, August 7, 2004, and October 2004, plaintiff filed a claim petition in Workers' Compensation Court (WCC) against his employer Air Molded.*fn1 On October 14, 2004, plaintiff filed either a separate or amended claim petition naming Flexcraft as his employer.*fn2 The insurance carrier for defendant was Selective Insurance Company of America (Selective); the carrier for Air Molded was New Jersey Manufacturer's Insurance (NJM).

Plaintiff explains the filing of the petitions against both companies as resulting from his urgent need for surgery and what he perceived as a likely dispute between the insurance carriers for Air Molded and defendant regarding coverage. The filing of both petitions was an effort to avoid "any delay in obtaining immediate care or possible loss of benefits if a dispute arose over which of the companies was his employer." Thus, according to plaintiff, the purpose of the WCC proceeding was to determine which employer was responsible for his workers' compensation benefits. Plaintiff alleges that he never claimed there was dual employment.

During the WCC hearing, which began in May 2005 and continued through July 2005, plaintiff testified on the issue of which of the two respondents was his employer on the date of the accident. Initially, defendant took the position during the WCC proceedings that it had no employment relationship with plaintiff.

Meanwhile, as the WCC hearing progressed, plaintiff filed a products liability action in the Law Division on November 16, 2004. The complaint named as defendants Ingersoll-Rand Company (the manufacturer of the machine), Stopol, Inc. (the alleged seller of the machine), and Graham Engineering Corporation (a successor corporation). On May 3, 2005, plaintiff amended his complaint to add Flexcraft as a defendant based on a negligence claim. By letter of May 17, 2005, plaintiff notified defendant's insurer, Selective, that he was so amending his complaint.

In a letter dated June 1, 2005 from NJM to Selective, NJM recommended that Selective and NJM share the responsibility equally for plaintiff's claims. The letter stated that if the insurance carriers accepted liability in the workers' compensation court as "dual employers," then both carriers would be protected against any civil action. The letter from NJM's attorney to Selective's attorney, stated:

I have reviewed the case law on the issue of dual employment situations, and I am satisfied that the two carriers should share responsibility for this case on a 50/50 basis. NJM will continue to pay the medical bills and control the treatment. We are also paying temporary disability benefits. At the conclusion of the case, we will provide you with a printout of what we have paid so that you can reimburse us for your share.

The cases Conway v. Mr. Softee, 51 N.J. 254 (1968) and Antheunisse v. Tiffany & Co., 229 N.J. Super. 399 (1988) appear to say that in dual employment situations the injured worker cannot recover compensation benefits against either of the dual employers in a civil action. Both Flexcraft and Air Molded Products should be protected against any civil action by the acknowledgment of dual employment.

Plaintiff alleges that the purpose of this agreement was to prevent his recovery in the Law Division because, under the Workers' Compensation statute, when the WCC finds dual employment liability for the employers, those employers cannot also be held liable for tort claims.

On June 30, 2005, plaintiff's WCC attorney wrote to the Judge of Compensation acknowledging the agreement between the two insurance carriers. The letter stated:

The above-referenced matters are listed as partial trial number 3 and 4 on your list for Wednesday, July 6, 2005. The issue that was being tried was with regard to which of the two Respondents was actually Petitioner's employer on his date of accident of August 7, 2004. After testimony was taken from Petitioner and additional investigation was conducted, the Respondents have agreed that this was a co-employment situation and that both Respondents will be sharing equally in the cost of payment of benefits to Mr. Salguero. Accordingly, this matter can be returned to the pre-trial list in six cycles as Petitioner is completing a course of authorized medical treatment and all parties will then need to schedule permanency evaluations.

Defendant argues that this letter is evidence that the issue of employer liability was "resolved to the satisfaction of the plaintiff." Plaintiff argues that the letter was no more than an acknowledgment of the insurance carriers' agreement.

On July 5, 2005, defendant filed an answer to plaintiff's amended complaint in the civil action. The answer included an affirmative defense that plaintiff was barred from recovery by the provisions of the Workers' Compensation Act.

Thereafter, defendant moved for summary judgment and plaintiff cross-moved for summary judgment. The return date of the summary judgment motions was October 10, 2006. Six days before the hearing, defendant obtained an order from the WCC. Plaintiff claims that defendant sought the order without notice to his attorneys. That assertion has not been refuted. The order stated that the parties were in agreement that the two insurance carriers shared 50/50 responsibility for this case because there was "dual employment." The order continued on as follows:

THIS MATTER having come before the Court on this 4th day of October 2006 and the parties being in agreement that the two carriers share responsibility for this case on a 50/50 basis, given the law on the issue of dual employment situations including Conway v. Mr. Softee, 51 N.J. 254 (1968) [and] Antheunisse v. Tiffany & Co., 229 N.J. Super. 399 (1988) it is found on this date that "dual employment" exists in this matter.

On October 10, 2006, the Law Division heard the parties' motions for summary judgment. The motion judge granted summary judgment in favor of defendant because it found that no genuine issue of fact existed, and as a matter of law the October 4, 2006 WCC order precluded plaintiff's claim under the doctrines of res judicata and judicial estoppel. The judge concluded that there was no genuine issue of material fact because the dual employment issue was already decided by the WCC. The judge did not address whether the validity of the WCC order was an issue of fact; rather, he concluded that plaintiff consented to the order and was thereby bound by it. The judge based his conclusion on three findings.

First, plaintiff claimed that defendant was responsible for the workers' compensation benefits, demonstrating "at least knowledge of, if not an admission or acquiescence [by plaintiff] in dual employer . . . status because there could be no other good faith basis to sue."

Second, the June 30, 2005 letter from plaintiff's WCC attorney to the WCC judge was evidence that "plaintiff was continuing, at least up until that time, to insist that there were two Respondents-even though the plaintiff was suing one of them in the Law Division by that point." The judge concluded that, based on the letter, "plaintiff got what he wished for . . . the Petitioner won . . . . He was successful on that claim."

Third, there was no evidence, until the summary judgment motion, that plaintiff complained about the order:

He didn't write or move before [the Judge of Compensation] for a different determination. He didn't seek a dismissal in the Workers' Compensation Court. He was happy to live with that. It was never reduced to a writing, however. But it was-it's painfully clear to me that the question of dual employment was off the table. It was conceded by everyone to the Petitioner's benefit.

There's no evidence to suggest that this Order was obtained surreptitiously or without notice to plaintiff's counsel in the Workers' Compensation case. There's no evidence that Judge Allen was misled in any way. There's not even any evidence of any application to [the] Workers' Compensation court for reconsideration.

So the idea that there's some private interest at stake here, and that's all that there is, I disagree with that, and I think that [the Judge of Compensation] would have to disagree with that as well, even if he wasn't fully conscious of it. And I don't know whether he was or wasn't. I'm certainly not accusing him of just blindly signing an Order. In fact, he might even have been more sensitive to it than even I when he signed the Order . . . .

. . . The Workers' Compensation Court in my view would not likely make a declaration of dual employment unless it was with consent, and it had to be with the consent of the plaintiff, Petitioner, that is a determination on the merits.

. . . [T]his is simply a case that the plaintiff had to be careful what he wished for because he got it. He wished for Flexcraft to be a dual employer and he received that which he wished for.

The judge concluded that, as a matter of law, the WCC order barred plaintiff's claim under both res judicata and judicial estoppel. Judicial estoppel, according to the judge, barred plaintiff's claim because: (1) plaintiff advanced a dual employment theory in WCC, as evidenced by the fact that he had the opportunity to object to the WCC order and never did; (2) plaintiff then argued against such theory in the Law Division; and (3) plaintiff succeeded on his position in WCC. According to the judge, this was "classic playing fast and loose with the Court."

The judge also concluded that res judicata applied because:

A Consent Order can be a determination on the merits for the preclusive effect of res judicata . . . .

Clearly, there was no full trial on the issue, contested witnesses, where [the Judge of Compensation] had to make the excruciatingly difficult question of dual employment, but he made a determination. And for this Court to eschew that, to ignore it, would violate principles of comity, as well as failing to give appropriate recognition to a Court with substantial expertise and experience relating to the liability of employers and dual employment, special employment, borrowed employment, situations.

Consequently, the judge entered an order granting summary judgment to defendant on October 10, 2006. As a result, the judge did not need to address plaintiff's cross-motion seeking adjudication that he was in fact an employee of Air Molded.

On appeal plaintiff presents the following arguments:







We first address the motion judge's determination that plaintiff's claim was barred by res judicata.

One of the elements of res judicata is that the issues in question have been "fairly litigated and determined" in the prior proceeding between the parties. First Union Nat'l Bank v. Penn Salem Marina, Inc., 190 N.J. 342, 352 (2007). The Court there continued, ibid., as follows:

Recently, in Hennessey v. Winslow Township, 183 N.J. 593 (2005), we outlined the requirements to foreclose relitigation of an issue. We explained that "the party asserting the bar" must show that:

(1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding. [Id. at 599 (quoting In re Estate of Dawson, 136 N.J., 20-21 (1994) (citations omitted).]

Contrary to the motion judge, we conclude that the issue of dual employment was not "actually litigated" in the WCC proceeding. To reach that conclusion we need not decide that a consent order could never reflect actual litigation. It suffices to hold that the circumstances under which the consent order was entered in this matter does not bespeak an actual adjudication of the issue based on evidence heard and weighed by a judge in light of applicable law. The argument between the two insurance carriers was clearly motivated by a desire to cut off plaintiff's tort remedies, not because they concluded, especially Flexcraft, that they were in fact dual employers of plaintiff. Also, the order was unquestionably motivated by the imminent hearing on the summary judgment motions. That order, while it recited a finding of fact and referred to case law, did not result from actual litigation of the employment issue, even if it had plaintiff's consent, which it did not. See Alessandra v. Gross, 187 N.J. Super. 96, 105-06 (App. Div. 1982) (quoting Restatement (Second) of Judgments § 27 (1982)). Not only did plaintiff not actually litigate the employment issue, id. at 105, but he had no incentive to do so in light of the agreement between the carriers. See Olivieri v. Y.M.F. Carpet, Inc., 186 N.J. 511, 523 (2006) (quoting Restatement (Second) of Judgments § 28 (1982)).

Even if it could be said that the WCC order constituted a determination of plaintiff's employment status, we would conclude that, as a matter of fundamental fairness, the circumstances warrant a new determination of the issue. Id. at 523. See also City of Plainfield v. Pub. Serv. Elec. & Gas Co., 82 N.J. 245, 258-59 (1980).


We also part company with the motion judge's determination that judicial estoppel applies to bar plaintiff's Law Division claim. We addressed judicial estoppel in Kimball Int'l, Inc. v. Northfield Metal Products, 334 N.J. Super. 596, 608 (App. Div. 2000), certif. denied, 167 N.J. 88 (2001):

It is also generally recognized that judicial estoppel is an "extraordinary remedy," which should be invoked only "when a party's inconsistent behavior will otherwise result in a miscarriage of justice." Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 365 (3d Cir. 1996) (quoting Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 424 (3d Cir.) (Stapleton, J. dissenting), cert. denied, 488 U.S. 967, 109 S.Ct. 495, 102 L.Ed. 2d 532 (1988)); see also Teledyne Indus., Inc., supra, 911 F.2d at 1218 ("Judicial Estoppel is applied with caution to avoid impinging on the truth-seeking function of the court because the doctrine precludes a contradictory position without examining the truth of either statement."). Thus, as with other claim and issue preclusion doctrines, judicial estoppel should be invoked only in those circumstances required to serve its stated purpose, which is to protect the integrity of the judicial process.

See also State v. Jenkins, 178 N.J. 347, 359 (2004); Ali v. Rutgers, 166 N.J. 280, 287-88 (2000) (quoting approvingly from Kimball, supra, 334 N.J. Super. at 608); Montrose Med. Group Participating Sav. Plan v. Bulger, 243 F.3d 773, 784 (3d Cir. 2001).

One of the elements of judicial estoppel is that the party sought to be precluded, here plaintiff, "'convinced the court to accept its position in the earlier litigation.'" State v. Jenkins, supra, 178 N.J. at 359 (quoting Kimball, supra, 334 N.J. Super. at 606-07). Here, plaintiff did not induce the WCC to make a finding of dual employment; instead, it was defendant and Air Molded that did so in order to insulate themselves from tort liability.

Contrary to the motion judge, we do not believe plaintiff played "fast and loose" with the courts. Rather, his filing of a petition against both companies was meant to guard against "finger pointing" that would delay his receipt of needed benefits, particularly medical treatment. At the outset, both companies apparently denied an employment relationship with plaintiff. A certification of February 18, 2005, by defendant's compensation attorney, filed in the WCC proceeding, affirmatively asserted that plaintiff worked for Air Molded. The purpose of the WCC claims against both carriers was to force a resolution of the issue, at least to the extent of responsibility for needed treatment.

Plaintiff had a good faith basis to take the action he did, and judicial estoppel is not appropriately invoked to penalize him for doing so.


Plaintiff would have us invoke our original jurisdiction to determine that he was employed by Air Molded, not defendant. While he presents a strong case, we decline to resolve the issue. Although the motion judge expressed the view that a jury question was presented on the employment issue, plaintiff is free to seek reconsideration of that question in light of our disposition.

Reversed and remanded for further proceedings.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.