December 15, 2010
RUTH ESTHER GUERRERO PARADES, PLAINTIFF-APPELLANT,
PASH APPAREL, INC., AND AVAK PASHALIAN, DEFENDANTS, AND YERVANT PASHALIAN, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3408-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 6, 2010 - Decided Before Judges Kestin and Coburn.
Plaintiff, Ruth Esther Guerrero Parades, appeals from a summary judgment dismissal of her claim and a denial of her motion for reconsideration. The complaint, in four counts, alleged a workplace injury from inherently dangerous machinery on which plaintiff was required to work by defendants, Pash Apparel, Inc., and its alleged principals, Yervant Pashalian and Avak Pashalian. Plaintiff asserted that defendants' conduct was "careless, reckless and negligent" as well as "grossly negligent," causing her severe and disabling personal injuries, disfigurement, and pain and suffering.
Defendants Pash Apparel, Inc. and Avak Pashalian defaulted. Only defendant Yervant Pashalian filed an answer consisting of general denials and four affirmative defenses: that he possessed no ownership interest in the corporate defendant at the time of the alleged incident; that plaintiff's injuries were caused by her own sole negligence; that plaintiff had assumed the risk of her conduct; and that the injuries "arose out of risks of which plaintiff had full knowledge and which plaintiff assumed."
Yervant Pashalian moved for summary judgment. The trial court granted that motion and dismissed the complaint. The motion judge expressed his reasons for the order in a handwritten addendum to the form of order: because Court finds that plaintiff was employed by defendant corporation on [the] date of accident . . . . The facts in plaintiff's . . . certification are not sufficient to create a genuine issue of material fact as to whether defendant Yervant Pashalian individually owned the business or corporate stock on the date of accident. Further, no facts are alleged that would warrant piercing of corporate veil consideration.
In a single point on appeal, plaintiff contends that "in granting summary judgment, the trial court incorrectly resolved a credibility issue on a disputed material fact which should have been resolved by the trier of fact, i.e., the jury." Among the arguments made is a reference to plaintiff's assertions in the trial court regarding the "grossly negligent" conduct or "intentional negligence" of Yervant Pashalian individually.
For the purposes of summary judgment, it is undisputed that plaintiff, while employed by Pash Apparel as a presser, was injured when operating a pressing/ironing machine that malfunctioned, causing her severe burn injuries that required three skin-graft surgeries with extensive hospitalization, aftercare, and rehabilitative therapy. The sequelae of the injuries include considerable scarring and other disfiguration; pain, itching and numbness; a limited range of motion in plaintiff's left arm, wrist and hand; and the possibility of future reconstructive and cosmetic surgeries.
Plaintiff alleges that, on repeated occasions including shortly before the day she was injured, July 12, 2005, she complained to her superiors about the malfunctioning of her pressing machine but was nevertheless required to continue operating it. She alleges further that the business, Pash Apparel, Inc., was owned and operated by father and son, Avak and Yervant Pashalian; that both supervised her in the performance of her work; that her complaints about problems with the machine were made to both of them; and that both had directed her to continue working on it notwithstanding the malfunctions.
Among the defenses asserted by Yervant Pashalian, the only non-defaulting defendant, has been that he became disassociated from the business on January 2, 2005. He proffered a letter of resignation with that date, a stock transfer certificate, and a copy of his 2005 tax return naming other employers.
Plaintiff alleged that Yervant was present at the business at around the time of her injuries, that he knew of the machine malfunctions, and that he, as well as his father, nevertheless directed plaintiff to continue her work on the malfunctioning machine. Plaintiff had no documentary evidence of her own to dispute Yervant's assertion of disengagement from the business more than six months earlier. Her efforts to depose the business's accountant, who, Yervant alleged, had prepared the paperwork effecting his disassociation from the company, were unavailing, despite subpoenas and an eventual contempt citation.
On February 9, 2009, the trial court granted Yervant's motion for summary judgment, dismissing the complaint as to him, even though plaintiff had not yet succeeded in her efforts to test Yervant's assertion of disengagement from the business with discovery from the accountant. The court also denied plaintiff's motion for reconsideration seeking time and further opportunity to remedy the accountant's discovery avoidance efforts. A proof hearing regarding the defaulting defendants was scheduled, postponed, and rescheduled; and a contempt order with an arrest provision issued against the accountant. The proof hearing that was eventually held resulted in a July 6, 2009 judgment against Pash Apparel, Inc. and Avak Pashalian for $850,000, consisting of $308,963.45 in medical costs and other compensatory damages, and $541,036.55 in damages for pain and suffering. The judgment contained a provision noting the court's "determination that a willful and intentional tort [had] been committed by the employer Pash Apparel, Inc. and principals of the employer, Avak Pashalian, and in further excepting the loss from the worker's compensation statute."
Apparently, the summary judgment motion and the motion for reconsideration that are the subjects of this appeal were decided on the papers; and we have not been furnished with a transcript of the proof hearing, which might have cast helpful light on the positions of the parties. On the basis of these limitations in the record on appeal, we are constrained to reverse the grant of summary judgment in favor of Yervant Pashalian.
We do not predicate our decision to reverse on the perception that the motion judge incorrectly resolved a credibility issue on a disputed issue of fact. The phrasing of his disposition appears to follow the requirement that, on summary judgment, the court may determine only whether the allegations of the non-moving party are sufficient to create a genuine issue of material fact, and not decide any such issue that may exist. See Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995). Rather, we hold that, in the face of the parties' positions, what was available to support their respective assertions, and related circumstances, the court had no adequate ground upon which to apply the summary judgment standard to the question of Yervant's connection or non-connection with the business; and the court lacked sufficient basis to evaluate the effect of that question on the ultimate issues in the case.
On the one hand, the court had Yervant's assertion of disengagement from the business. On the other hand, plaintiff had asserted clearly that, at the time she was injured, Yervant was sharing day-to-day supervision of and control over the workplace with his father.
To the extent the question of Yervant's ownership status was material, that issue, in the circumstances, needed to be addressed by something more than an assertion and a few documents that purported to support it. The discovery avoidance efforts of the accountant for the business and the principals suggests possible problems in proving Yervant's disengagement. Moreover, the question of Yervant's personal liability for conduct that might satisfy ordinary tort standards remained entirely unaddressed.
Although not clearly established in the record before us, it is possible--given how the matter proceeded, and the absence of an affirmative defense or a motion for dismissal based on the Workers' Compensation Act, N.J.S.A. 34:15-1 to -142 (the Act)--that the business had not acquired any workers' compensation insurance as required by N.J.S.A. 34:15-71, exposing it and its principals to ordinary tort liability. See N.J.S.A. 34:15-79a; Macysyn v. Hensler, 329 N.J. Super. 476 (App. Div. 2000); Boehm v. Witte, 95 N.J. Super. 359, 361 (Law Div. 1967). Apart from that, each of the managing principals might be individually liable, irrespective of the extent or nature of his ownership interest, for the torts he, himself, committed. See, e.g., Saltiel v. GSI Consultants, 170 N.J. 297 (2001).
Even if the claim was nominally cognizable under the Act, conduct on the part of those in management and control positions satisfying the "intentional wrong" standard of N.J.S.A. 34:15-8, see, e.g., Laidlow v. Hariton Machine Co., 170 N.J. 602 (2002), and Millison v. E.I. Du Pont de Nemours & Co., 101 N.J. 161 (1985), might well result in relinquishment of the liability limitation underpinnings of the Act.*fn1
Reversed and remanded.