October 30, 2009
SONNIA MONTALVO, AS ADMINISTRATRIX AD PROSEQUENDUM FOR THE HEIRS AT LAW OF OSCAR MONTALVO, DECEASED, AND ADMINISTRATRIX OF THE ESTATE OF OSCAR MONTALVO, DECEASED, AND SONNIA MONTALVO, INDIVIDUALLY, PLAINTIFFS-APPELLANTS,
LINCOLN AVENUE CORPORATION, INC., DEFENDANT-RESPONDENT,
CITY OF NEWARK,*FN1 THIRD-PARTY DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-2406-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 18, 2009
Before Judges Carchman, R. B. Coleman and Simonelli.
Plaintiff Sonnia Montalvo (plaintiff), individually and as administratrix ad prosequendum for the heirs at law of Oscar Montalvo, deceased, and administratrix of the estate of Oscar Montalvo, appeals from an order of the Law Division, dated August 1, 2008, which granted summary judgment in favor of defendant Lincoln Avenue Corporation, Inc. (Lincoln Avenue), and from another order dated October 7, 2008, which denied plaintiff's motion for reconsideration. Plaintiff's husband, Oscar Montalvo, was fatally shot while he was performing his duties as superintendent of residential properties owned by Lincoln Avenue. In response to plaintiff's action for wrongful death, Lincoln Avenue took the position, accepted by the Law Division, that it was a joint employer of Montalvo and therefore protected by the exclusive remedy provisions of the Workers' Compensation Act.
Based upon our review of the record and applicable law, we affirm the grant of summary judgment for substantially the reasons expressed by Judge Theodore Winard in his oral opinion rendered at the conclusion of oral argument on August 1, 2008. The determinative issue concerned Montalvo's relationship with T.R. Murnick, the management company by which he was officially employed, and Lincoln Avenue, the owner of the residential properties managed by T.R. Murnick. To state it differently, the issue was and is essentially whether the rental value of the decedent's apartment, which was part of the decedent's remuneration for his services as superintendent of apartments managed by T.R. Murnick and owned by Lincoln Avenue, constituted compensation only from T.R. Murnick or from Murnick and Lincoln Avenue jointly.
We briefly state the relevant facts. Lincoln Avenue is a New Jersey corporation whose purpose is to own property located at 161 Lincoln Avenue and 167 Lincoln Avenue, Newark, and at other locations. Theodore Murnick (Theodore) was the secretary of the corporate entity, and his wife, Maxine Murnick (Maxine) was the only other officer. The Murnicks were also sole partners of T.R. Murnick, a partnership whose purpose was to manage several properties, including the properties owned by Lincoln Avenue. The Murnicks are also the principals of a number of limited liability corporations that own different properties. The Murnicks informally refer to their business entities together as "Murnick Property Group."
In 1997, Montalvo became a superintendent for the Lincoln Avenue buildings, at 161 Lincoln Avenue and 167 Lincoln Avenue. Montalvo's gross pay was $975 biweekly, paid by checks issued by T.R. Murnick. He and his family lived rent-free in their apartment at 167 Lincoln Avenue, which Theodore assessed in his deposition to have a value of $650 per month, and which Maxine, in connection with a 2008 audit, assessed at a value of $500 per month.
According to Theodore, Montalvo's duties were to "live in the building and take care of maintenance," cleanliness, security and repairs of the building, "show apartments to tenants and give notice to tenants, generally oversee the property." As far as security was concerned, Theodore expected that Montalvo would call the police and him if there were any suspicious activities at the properties. On November 15, 2006, Montalvo was shot to death while a burglary was taking place at 161 Lincoln Avenue.
According to plaintiff, rent forgiveness was part of the compensation provided to Montalvo by T.R. Murnick. Defendant, on the other hand, contends that it was Lincoln Avenue which provided the rent-free apartment to Montalvo.
The court found that Montalvo was paid by both entities concurrently because he received $815 weekly from T.R. Murnick, and he lived at 167 Lincoln Avenue without paying rent. The court found irrelevant to its decision whether the monetary value of the rent-free apartment was included in the workers' compensation proceedings.
On an appeal from an order granting summary judgment, we review the case de novo, applying the same standard as that which applies to the motion judge. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). The judge's role is to determine whether any genuine issues for trial exist, not to weigh the evidence and decide on the truth of the matter. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). The inquiry is "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Ibid. "[W]hen the evidence is so one-sided that one party must prevail as a matter of law, the trial court should not hesitate to grant summary judgment." Ibid. (internal quotations and citations omitted).
The material facts are not in dispute. Montalvo was employed as the superintendent in a building owned by Lincoln Avenue and managed by T.R. Murnick. As part of his compensation, Montalvo and his family were permitted to occupy an apartment rent-free. What is in dispute is the effect of the relationship of the parties upon the right of Montalvo and his dependents to sue the owner of the property where he was shot.
Plaintiff contends that the trial court erred by piercing the corporate veil and ruling that Lincoln Avenue was not a separate legal entity and that it employed Oscar Montalvo. We, of course, acknowledge the fundamental propositions that a corporation is a separate entity from its shareholders and the remedy of piercing the corporate veil will not be employed unless the party seeking that remedy demonstrates it is necessary to "prevent an independent corporation from 'being used to defeat the ends of justice, to perpetuate fraud, to accomplish a crime or otherwise to evade the law[.]'" Richard A. Pulaski Constr. Co. v. Air Frame Hangars, Inc., 195 N.J. 457, 472 (2008) (quoting Dep't of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 500 (1983)). We do not perceive, however, that the motion judge pierced the veil of the entities involved.
The court merely noted, and it is not disputed, that the Murnicks controlled both Lincoln Avenue and the management partnership. It added that Montalvo "was paid by both entities concurrently for the performance of concurrent responsibilities." The court inferred, as we believe is permissible, if not inescapable, that "both had sufficient control over him to assure the accomplishment of their respective purposes, one as the management entity for Lincoln Avenue properties, and, two, as the owner of those particular properties."
Under the Workers' Compensation Act, an "employer" may be a natural person, a partnership or a corporation, and employer status is determined by "the basic concept of the employer as the master...." Kalnas v. Layne of N.Y. Co., 173 N.J. Super. 492, 497 (App. Div. 1980) (citing N.J.S.A. 34:15-36). "[W]henever there is a dispute as to whether there is in fact an employment relationship encompassed by the act,... the resolution of the question requires a factual analysis of all of the indicia of the relationship in order to determine if it is truly that of master-servant." Ibid. The factors that characterize a master-servant relationship include: "the employer's supervisory power, [the employer's] right to control the activities of the employee, [the employer's] right to terminate the relationship, [the employer's] payment to the employee of regular wages for services, and [the employer's] provision of tools and equipment and facilities." Ibid. (citing generally Marcus v. E. Agric. Ass'n, Inc., 32 N.J. 460 (1960), rev'g on dissent 58 N.J. Super. 584, 596 (App. Div. 1959)). Here, the court found that although T.R. Murnick was Montalvo's official employer, Lincoln Avenue was also a joint employer.
In their consideration of the concept of joint employment, both parties rely upon Hall v. Fanticone, 322 N.J. Super. 302 (App. Div.), certif. denied, 162 N.J. 487 (1999), to support their respective positions. In Hall, we determined that two separate corporations were joint employers of the plaintiff where both corporations paid the plaintiff's salary and, although each "pursu[ed] its own business purpose, their shared business premises, equipment, and chief operating officer, enabled each to exercise sufficient control over the other's sphere of interest." Id. at 308. We are satisfied that similar manifestations of business purposes, shared premise and independent control exist in this case.
In Hall, the plaintiff, claiming he worked solely for the corporation CTI as a tractor trailer driver, filed a tort claim against the corporation D & P for a slip and fall accident while at work. Id. at 304-05. CTI had leased from D & P the trucks driven by the plaintiff. Id. at 306. The court found that
D & P and CTI were related corporations and that "plaintiff's salary was paid by CTI and D & P in 1991, in 1993 and 1994, and more specifically at the time of the accident, plaintiff's salary was paid exclusively by D & P." Id. at 305. In addition, a Donald J. Martorana "was in charge of CTI's operations," and was also the "overseer and general manager of D & P." Ibid. Martorana "controlled, regulated and issued [the plaintiff's] daily work assignments" and "was the only one who could fire him." Ibid.
On those facts in Hall, we found the relationship to be "a classic 'joint employment' case brought about by a 'joint business arrangement.'" Id. at 307 (citations omitted). We observed that "[a] 'joint employment occurs when a single employee, under contract with two employers, and under the simultaneous control of both, simultaneously performs services for both employers, and when the service for each employer is the same as, or is closely related to, that for the other.'" Ibid. (quoting 1C Arthur Larson, The Law of Workmen's Compensation § 48.41 (1990)).
Similarly, joint employment was found to have been established where "the injured employee worked simultaneously for an individual and also a corporation run by the same individual" and was paid a weekly salary of $65, $40 of which was paid by the individual and $25 was paid by the corporation. Knight v. Cohen, 56 N.J. Super. 516, 520 (App. Div. 1959) (citing Cser v. Silverman, 46 N.J. Super. 599, 601 (Cty. Ct. 1957), aff'd per curiam o.b., modified on different grounds, 50 N.J. Super. 125, 126 (App. Div. 1958)). In Knight, in its reference to Cser, the panel observed there was "a unity of control and authority in the two employments, with a corresponding intermingling of the employer's duties on both jobs to a point where it was impossible to separate them." Ibid. The same such unity of control and authority are obvious in this case.
We acknowledge that unity of control alone does not determine joint employment. Significantly, separate business entities affiliated by common ownership or management with a worker's employer are not, by dint of such affiliation, entitled to the tort immunity specifically accorded by statue to the employer only. Volb v. G.E. Capital Corp., 139 N.J. 110, 126 (1995). However, where other factors evidence common control, authority and purpose, joint employment may be found.
In Volb, the same four principals owned three corporations, one of which, J.H. Reid, employed the plaintiff and another of which, T.D.E., plaintiff sued for alleged negligence. Id. at 114. T.D.E.'s function was to employ workers to perform work for J.H. Reid. Ibid. The Court held, however, that statutory immunity did not extend to T.D.E. Id. at 118. The Court noted that T.D.E. did not pay "workers' compensation benefits to [the plaintiff]'s estate, because T.D.E. did not employ [the plaintiff]." Ibid. The Court further noted that its decision would not "undermine T.D.E.'s right to choose workers' compensation as an exclusive remedy for its employees' work-related injuries, again because [the plaintiff] was never an employee of T.D.E." Id. at 119.
Plaintiff directs our attention to Lyon v. Barrett, 89 N.J. 294 (1982), which plaintiff urges is factually on point with this case. In Lyon, the defendant owned a building and rented office space to his professional law corporation and other tenants. Id. at 298. Plaintiff sustained injuries in the building while employed as a legal secretary of defendant's law corporation. Ibid. Plaintiff sued defendant in his capacity as the landlord of the building. Ibid. The Court framed the issue as "whether an employee who has recovered a workers' compensation award against a corporate employer may maintain such a negligence action for the same injuries against the individual who is the sole shareholder of the corporation," ibid., and it answered in the affirmative. The Court held that "[a] professional corporation and its sole owner are separate entities and the immunity of the workers' compensation laws that shields the corporation from tort liability to employees does not extend to the owner of the corporation." Id. at 304.
Two significant facts distinguish this case from Lyon. The first is that, unlike the secretary in Lyon, the work performed by Montalvo applied directly to the common interests and purposes of both entities that are the putative joint employers. The second is that both entities contributed to Montalvo's compensation, whereas there was no indication in Lyon that the plaintiff received any compensation from the defendant in his capacity as the owner/landlord. Although both Lincoln Avenue and T.R. Murnick are entities independent from the Murnicks and from each other, there is no reason they could not be joint employers of Montalvo, and we agree with Judge Winard's determination of that issue as a matter of law. In light of that determination, we decline to discuss other issues raised by plaintiff, none of which has sufficient merit to warrant relief.