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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 ...

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