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Edwin Conk and Kimberly Conk, His Wife v. Friendly Village

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 15, 2011

EDWIN CONK AND KIMBERLY CONK, HIS WIFE, PLAINTIFFS-APPELLANTS,
v.
FRIENDLY VILLAGE, LLC, DEFENDANT-RESPONDENT, AND PCI, INC., DEFENDANT.

On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-0760-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 24, 2011

Before Judges Carchman, Graves, and Waugh.

Plaintiff Edwin Conk appeals the order of the Law Division dismissing his personal injury action against defendant Friendly Village, LLC (FV), on the ground that the claim is barred by the exclusive remedy provision contained in N.J.S.A. 34:15-8. We reverse.

I.

We discern the following facts and procedural history from the record on appeal. Because Conk's complaint was dismissed on a motion for summary judgment, we outline the facts in the light most favorable to him. Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445 (2007).

FV owns and operates a mobile home park known as Friendly Village of Riverview (Friendly Village), which is located in Toms River. It was acquired by FV in October 2001. FV is a limited liability company, the managing member of which is PCI Redhen Corporation (PCI).*fn1 PCI owns one hundred percent of the stock of Advanced Horizons Enterprises, Inc. (AHE), which manages FV's financial affairs and Friendly Village. According to its president, William Murphy, AHE is "a management company" that "oversees real estate investments" owned through various LLCs.

Conk had been a resident of Friendly Village from 1994 through 2000, prior to its purchase by FV. During that period, he was employed full-time by a car dealership, but he sometimes cut the grass at Friendly Village for the then-owners. In 2002, after FV purchased Friendly Village, Conk resumed part-time employment there. He started living there again in 2004.

In April 2005, several months after the closure of the car dealership for which he had previously worked, Conk became a full-time employee of AHE. He received his paychecks from AHE and was enrolled in its 401(k) plan. He was hired by Murphy, who described himself during his deposition as an employee of AHE.

Conk's hiring by AHE was memorialized in a memorandum from Murphy to Conk's then-wife, who was known as Kimberly Conk at the time but is now known as Kimberly Montgomery (Montgomery). She was the manager at Friendly Village, but was an employee of AHE. The memorandum was on the letterhead of Friendly Village of Riverview, with an address in West Caldwell, which is the location of the corporate offices of the affiliated AHI entities.

The memorandum provides, in relevant part, as follows:

It has been agreed that Advanced Horizons Enterprises, Inc will hire your husband, Ed Conk, as our maintenance foreman at our Friendly Village of Riverwood location for all grounds, building and common area maintenance. It is further understood, Advanced Horizons may require, at certain times, that Ed perform tasks at other projects owned or managed by Advanced Horizons in the Ocean County area. I assume the majority of Ed's work will be at Friendly Village of Riverwood; however, we will work together with regard to his schedule. Friendly Village of Riverwood will be reimbursed for labor costs should Ed be required to work at our other facilities.

It is my understanding Ed's formal employment began on Monday, April 11, 2005 and that essentially he will decline medical benefits because he is currently covered under your family benefits option. It is further my understanding[] you will supervise Ed so that his workday is devoted to maintaining our assets at Friendly Village of Riverwood. If you can forecast that Ed will have available hours you should contact this office to determine how we are going to redeploy this resource so that he is kept productive and the entire organization benefits.

In conformity with the memorandum, Conk's primary assignment was at Friendly Village, although he performed work at another AHI location for approximately three weeks.

On August 10, 2007, Conk was injured while working at Friendly Village. He filed a workers' compensation claim, which was adjusted by AHE's compensation carrier. FV had no workers' compensation policy of its own, presumably because it had no employees of its own.

On January 26, 2009, Conk filed a complaint against FV and PCI,*fn2 seeking damages for the injuries he sustained in the August 2007 accident. The defendants answered and discovery ensued. FV and PCI filed motions for summary judgment in July and August 2010, respectively. Although Conk did not oppose PCI's motion, he opposed FV's motion and disputed its argument that he was a "special employee" of FV such that his tort claim was barred by N.J.S.A. 34:15-8. Following oral argument on September 16, 2010, the motion judge delivered a brief oral decision granting the motions. Implementing orders were entered the same day.

This appeal followed.

II.

On appeal, Conk argues that the motion judge erred in granting FV's motion for summary judgment because there were genuine issues of material facts as to whether he was a "special employee" that should have been resolved by a jury. FV argues that the motion judge correctly determined that Conk was its special employee as a matter of law.

It is well-established that our review of a trial judge's conclusions of law is de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference."). Consequently, we review a grant of summary judgment de novo, applying the same standard governing the trial court under Rule 4:46-2(c). Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 539-40 (1995); Chance v. McCann, 405 N.J. Super. 547, 563 (App. Div. 2009) (citing Liberty Surplus, supra, 189 N.J. at 445-46). In addressing a motion for summary judgment, a court must "consider 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." Brill, supra, 142 N.J. at 540; see also R. 4:46-2(c).

The Workers' Compensation Act (Act), N.J.S.A. 34:15-1 to -69.3, provides an employee with an "exclusive remedy" against the employer for injuries arising out of and in the course of employment. Sloan v. Luyando, 305 N.J. Super. 140, 147 (App. Div. 1997); N.J.S.A. 34:15-8. "In exchange for receiving workers' compensation benefits, which are awarded without regard to fault, the employee surrenders common law tort remedies against his or her employer . . . except for intentional wrongs." Walrond v. Cnty. of Somerset, 382 N.J. Super. 227, 234 (App. Div. 2006).

As we observed in Walrond, our courts "have developed a doctrine that recognizes that under workers' compensation, an employee can 'have two employers, both of whom may be liable in compensation. However, recovery against one bars the employee from making a tort action against the other for the same injury.'" Ibid. (quoting Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989)). The "special employee" doctrine developed primarily from situations in which a temporary employment agency lends one of its employees to a client of the agency. See id. at 234-35.

To determine whether a special employment relationship exists, thereby precluding the employee from maintaining a tort action against the special employer, we apply a five-prong test:

(1) the employee has made a contract of hire, express or implied, with the special employer;

(2) the work being done by the employee is essentially that of the special employer;

(3) the special employer has the right to control the details of the work;

(4) the special employer pays the employee's wages; and

(5) the special employer has the power to hire, discharge or recall the employee.

[Kelly v. Geriatric & Med. Servs., Inc., 287 N.J. Super. 567, 571-72 (App. Div.), aff'd o.b., 147 N.J. 42 (1996).]

See also Walrond, supra, 382 N.J. Super. at 235-36.

The case before us, however, is not one involving a temporary employment agency or an employee leasing company. In those situations, the special employer typically has its own employees who are frequently involved in selecting the special employees and are responsible for directing their work. Here, as far as we can determine from the record, FV has no employees of its own.

For that reason, an application of the five-prong test outlined in Kelly largely begs the question. Conk applied to work at Friendly Village, but his employment agreement was with AHE because FV has no employees. Conk worked primarily at Friendly Village to maintain FV's asset, but his work there was also the work of AHE as the property manager of Friendly Village. Conk was subject to operational control by Montgomery, who was the manager of Friendly Village and Conk's supervisor there, but she performed those duties as an employee of AHE rather than FV. Conk was paid by AHE, but the costs were ultimately charged to FV through a series of intercorporate adjustments. Finally, Conk was arguably subject to termination by, or on the recommendation of, his supervisor Montgomery, as the manager of Friendly Village, but only in her capacity as an employee of AHE. Consequently, we conclude that, if this case is governed by the law of special employment at all, that determination cannot be made on a motion for summary judgment when Conk must be given the benefit of all reasonable inferences of fact.

In Morris v. Krauszer's Food Stores, Inc., 300 N.J. Super. 529, 539 (App. Div.), certif. denied, 151 N.J. 77 (1997), we assumed that N.J.S.A. 34:15-8 immunity was not available to the corporate owner of premises at which the employee of an affiliated company was killed during a robbery. Although we found that the issue had been waived because it was not raised in the trial court, we nevertheless observed, quoting Volb v. G.E. Capital Corp., 139 N.J. 110, 126 (1995), that "New Jersey has adopted the majority view that 'corporations affiliated by stock ownership and common management with a worker's employer are not entitled to the tort immunity specifically accorded by statute to the employer only.'" Morris, supra, 300 N.J. Super. at 539.

In Volb, supra, the Court held that "in suits brought by an injured employee against corporations that are parents, subsidiaries, or affiliates of the plaintiff's employer, the general rule consistently applied by federal and state courts has been to deny workers' compensation immunity on the ground that the separate corporate identity of affiliated corporations should not be disregarded." 139 N.J. at 122. It also observed:

The clear weight of authority throughout the country supports the view that corporations affiliated by stock ownership and common management with a worker's employer are not entitled to the tort immunity specifically accorded by statute to the employer only. Intuition might suggest that a broader immunity would be consistent with the underlying objectives of workers' compensation legislation, and the Legislature is at liberty to enact a more comprehensive, enterprise-based immunity. Nevertheless, we have no doubt that companies that elect for sound business considerations to operate their enterprise by using multiple affiliated corporations anticipate the risk of intra-corporate tort liability and therefore purchase liability insurance to offset that risk. Presumably, the decision to operate through interlocking corporations reflects the pragmatic determination that the specific advantages derived from the multi-corporate enterprise outweigh the risk of tort liability that that form of enterprise entails. Neither legislative history, precedent, nor public policy suggests that this Court should second-guess the reasonableness of such a business decision. [Id. at 126.]

Consequently, we hold that Conk's suit against FV is not necessarily barred by the immunity provided by N.J.S.A. 34:15-8. If the actual facts are essentially as we have outlined them in this opinion, we are of the opinion that Conk was not a "special employee" of FV because the facts do not establish a special employment relationship.

However, we note the following allegation in Conk's complaint:

3. The attic of the clubhouse of [Friendly Village] was an unsafe working environment with weak and rotten plywood floors. [Conk] placed [FV] on notice of the dangerous condition by informing the manager that the floors in the attic were rotten. Despite such knowledge, the manager insisted that [Conk] was to proceed up to the attic in order to install plumbing despite the known dangers.

Assuming FV was not Conk's special employer, Conk may have a viable claim against FV as owner of the property where he was injured. Nevertheless, we seriously question whether he can premise that liability on the negligent conduct of his AHE co-workers, including the "manager" referred to in the quoted language of his complaint. That issue, however, was not explored or decided in the Law Division, and we decline to address it further.

Consequently, we reverse the order granting summary judgment and remand to the Law Division for further proceedings consistent with this opinion.

Reversed.


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