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Theresa Clayton, Individually, and As Administratrix Ad Prosequendum v. United States of America

May 16, 2012

THERESA CLAYTON, INDIVIDUALLY, AND AS ADMINISTRATRIX AD PROSEQUENDUM OF THE ESTATE OF STEVEN CLAYTON, DECEASED, PLAINTIFF,
v.
UNITED STATES OF AMERICA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Simandle, Chief Judge:

OPINION

I. INTRODUCTION

This case involves the tragic death of Steven Clayton, who was working at the Fort Hamilton military facility in Brooklyn, New York. Theresa Clayton, as the wife of the deceased and administrator of his estate, seeks compensation from the United States, NorthStar Technology Corporation, Eastern Construction & Electric, Inc., and Meridian Management Corporation for their respective roles in the accident. Defendants NorthStar and Eastern have moved for partial summary judgment on the question of whether Clayton was acting as an employee for one or both entities under the relevant workers' compensation laws. [Docket Items 31 & 32.] A finding that Clayton was an employee may provide a defense to Plaintiff's claims because the relevant statutes foreclose employer tort liability for most workplace accidents. See N.J. Stat. Ann. § 34:15-8; N.Y. Workers' Comp. Law § 11. Eastern's motion is unopposed, and there is good cause to grant it.*fn1 Therefore, the principal issue on these motions is whether the undisputed facts show that Clayton was an employee of NorthStar. As explained in today's Opinion, NorthStar is not entitled to partial summary judgment on that issue.

II. BACKGROUND

On June 21, 2008, an accident on a project to replace electrical power poles caused the electrocution death of Steven Clayton. Two companies with whom Clayton was involved in the project -- NorthStar Technology Corporation and Eastern Construction & Electric, Inc. -- both claim him as an employee. It is undisputed that Clayton was an employee of the subcontractor, Eastern, but less clear whether Clayton was also an employee of the prime contractor, NorthStar.

In 2006, NorthStar entered into a service contract with the United States Government. Pursuant to the contract, the Government ordered the replacement of a number of electrical power poles at the Fort Hamilton military facility in Brooklyn, New York. NorthStar's employees had no ability to perform electrical work, so on November 30, 2007, NorthStar subcontracted with Eastern to have Eastern replace the poles. Pl.'s Ex. D ("Subcontract Agreement").

The individuals employed by Eastern for the project in many ways had an ordinary independent contractor relationship with NorthStar. Eastern selected the workers who would be assigned to the project from the ranks of its employees. Clayton was assigned to supervise the project, and he was joined by another electrician, John Deitz, and a laborer, Charles Miller. No other personnel were regularly present at the project. The Subcontract Agreement states that "This Subcontract shall not constitute a joint venture, partnership or other form of business arrangement and each party shall act as an independent contractor without authority to bind the other party." Id. at 4.

NorthStar, as the prime contractor, ensured that the end results of the work were achieved to the satisfaction of its client, the federal government. Eastern was responsible for controlling the worksite and actually directing the manner of the work being performed, including overseeing Clayton. Bolanos Dep. at 46:5-47:20, 229:10-230:21; Silverthorne Dep. at 54:1-21.*fn2 No one at NorthStar gave any of the workers instruction, direction, or supervision. If there was a some problem related to the quality of the work being done, such issues would be handled by Eastern. Silverthorne Dep. 134:19-23. Eastern paid for the travel and lodging expenses of the workers and for the trailer on the jobsite. Eastern also provided all of the materials and equipment used.

In the wake of the accident, NorthStar disclaimed any responsibility as an employer. Sharon McLaughlin, attorney for NorthStar, wrote to the Occupational Safety and Health Administration that: "NorthStar is not the employer in this case, and does not have control over the jobsite at Fort Hamilton."

Pl.'s Ex. F. McLaughlin prepared affidavits from Norendra Mohan, the Proposal Manager and Business Manager of NorthStar, and Frances Chiang, President and CEO of NorthStar, swearing that NorthStar had no involvement with the project beyond paying the labor costs directly to the subcontractors. Def. Eastern's Ex. M ¶¶ 8-12 & Ex. N ¶¶ 7-10 ("NorthStar's only involvement in the project was covering the labor costs, as specified in the contract with Eastern . . . All direction of the employees came from Luis Bolanos, the president of Eastern.").

Nevertheless, Clayton's arrangement with NorthStar has some indicia of an employment relationship. Principally, although the reason for the agreement is disputed, NorthStar and Eastern agreed that NorthStar would pay Eastern's workers directly.*fn3

NorthStar sent Clayton's checks to Eastern's office and Eastern personnel then distributed the checks to Clayton.*fn4 Clayton completed a NorthStar Application for Employment and a Form W-4 for NorthStar. He certified to NorthStar's Human Resource department that he was not subject to an income withholding Court Order requiring NorthStar to withhold wages for the payment of child support, was in NorthStar's accounting system as an employee, and was sent other employee-related paperwork, including a W-9 Form.

NorthStar may also have had the power to terminate Clayton, though it is unclear. Nothing in the subcontract specifies this power. Frances Chiang, President and CEO of NorthStar testified that NorthStar had the ability to terminate Clayton if he was not doing the job correctly, and Silverthorne made similar comments. Chiang Dep. at 146:4-18; Silverthorne Dep. at 55:10-20. But Chiang went on to qualify that statement by stating that NorthStar had the ability to demand that Eastern provide another worker to fill the role. Chiang Dep. at 146:4-18.

Plaintiff filed suit in this Court claiming among other things that NorthStar and Eastern are liable for negligence, reckless and intentional conduct, and wrongful death. On these motions for partial summary judgment, Defendants NorthStar and Eastern move for summary judgment that Steven Clayton was their employee under the applicable worker compensation statutes of New York and New Jersey. See N.J. Stat. Ann. § 34:15-8; N.Y. Workers' Comp. Law § 11. Plaintiff does not oppose ...


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