Blew v. Horner

Opinion

Plaintiff Monte Blew brought a personal injury action against defendant Earl Horner, individually and doing business as Horner’s Construction Company. The trial court granted defendant’s motion for summary

At issue in this case is section 2750.5, which appears in division 3, titled “Employment Relations.” Section 2750.5 provides in part: “There is a rebuttable presumption affecting the burden of proof that a worker performing services for which a license is required pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, or who is performing such services for a person who is required to obtain such a license is an employee rather than an independent contractor. Proof of independent contractor status includes satisfactory proof of these factors: . . .’’In subdivisions (a), (b), and (c), the statute then enumerates several factors which may prove independent contractor status. The penultimate paragraph of section 2750.5 states: “In addition to the factors contained in subdivisions (a), (b), and (c), any person performing any function or activity for which a license is required pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code shall hold a valid contractors’ license as a condition of having independent contractor status.”

Plaintiff does not dispute that both he and Symons were hired to perform a kind of work for which a contractor’s license is required, i.e., roofing. (Bus. & Prof. Code, §§ 7058, 7059; Cal. Admin. Code, tit. 16, § 832.39.) Instead, plaintiff argues that section 2750.5 does not create a conclusive presumption; he urges that the presumption that an unlicensed person performing contracting services is an employee should be rebuttable by the criteria set forth in subdivisions (a), (b), and (c).

Plaintiff’s argument is unavailing. In State Compensation Ins. Fund v. Workers’ Comp. Appeals Bd. (1985) 40 Cal.3d 5 [ 219 Cal.Rptr. 13 , 706 P.2d 1146 ], in which the Supreme Court held that section 2750.5 applies to workers’ compensation cases, it also flatly stated that the section makes a required license a condition of having independent contractor status. (40 Cal.3d at p. 12.) “[B]y stating that a license is a condition of [independent contractor] status, the Legislature has unequivocally stated that the person lacking the requisite license may not be an independent contractor.” (Id., at p. 15.)

“The fundamental policy underlying the workers’ compensation laws is that those hiring others to perform services should bear the risk of injuries incurred in the undertakings. When the person seeks to hire the services through a licensed independent contractor, it is reasonable to anticipate that the independent contractor will insure against the risk and that the cost of the insurance will be passed on as part of the price of the contract. Thus it is reasonable to exonerate the hirer of the independent contractor. However, when the person performing services for which a license is required is unlicensed, the likelihood that he will insure against the risk of injury and has included the insurance cost in the price of his contract is greatly reduced.

“It is not unreasonable for the Legislature to conclude that effective implementation of a system of providing for workers’ injuries requires liability on the part of the ultimate hirer and that he should not be able to avoid liability on the ground that he dealt with a contractor when the contractor lacked a required license. Whether or not the hirer of the unlicensed contractor must be viewed as negligent in engaging in the hiring, it is apparent that the hirer has'little expectation that the contractor will have compensation and liability insurance. While it may seem anomalous to hold that the hirer is liable for compensation only if the contractor lacks the required license, and that he would not be liable if the contractor were licensed, the justification is apparent in that the Legislature has sought to assure that both licensed and unlicensed contractors and their employees will have compensation should they be injured on the job.” (Id., at pp. 12-13; accord Travelers Ins. Co. v. Workers’ Comp. Appeals Bd. (1983) 147 Cal.App.3d 1033 , 1037 [ 195 Cal.Rptr. 564 ]; see also Foss v. Anthony Industries (1983) 139 Cal.App.3d 794 , 797-798 [ 189 Cal.Rptr. 31 ] [holding that section 2750.5 applies in tort cases as well as in workers’ compensation, and describing the paragraph at issue as “absolutely den[ying] independent contractor status to a person required to have such a license who is not licensed].)

Ill

Plaintiff’s next argument presents a more difficult question, which was not directly addressed by the Supreme Court in State Compensation Ins. Fund v. Workers Comp. Appeals Bd., supra, 40 Cal.3d 5 . Plaintiff and

Nevertheless, absent any statute imposing liability, California courts have consistently held that an owner or general contractor is not liable under workers’ compensation for injury to the employee of an independent contractor hired by the general contractor. (State Comp. Ins. F. v. Ind. Acc. Com. (1941) 46 Cal.App.2d 526 , 528-530 [ 116 Cal.Rptr. 173 ]; Coleman v. Silverberg Plumbing Co., supra, 263 Cal.App.2d at p. 81.) On the other hand, if the person hired by an owner or general contractor is an employee rather than an independent contractor, the general contractor may be liable under workers’ compensation for injuries to persons hired by the employee, on the theory that such persons are also the general contractor’s employees.

For example, in S. A. Gerrard Co. v. Industrial Acc. Com. (1941) 17 Cal.2d 411 [ 110 P.2d 377 ], Hanaoka, a melon grower, leased land from Gerrard Company. In addition, Gerrard contracted with Hanaoka to supervise the picking and to market the melons, among other tasks. Hanaoka hired Valdez as a picker, and Valdez was injured. The Industrial Accident Commission found that Valdez was Gerrard’s employee, and the Supreme Court affirmed. The decisive question, the court explained, was the relationship between Gerrard and Hanaoka. If Hanaoka was an employee of Gerrard, then Valdez was also (id., at p. 413); if Hanaoka was an independent contractor, then Valdez as his employee had no rights against Gerrard. Substantial evidence supported the commission’s finding. Although in form Hanaoka was an independent contractor, in effect he was Gerrard’s employee, and its right to control his operations extended to all who worked for him in picking the crop, including Valdez. (Id., at p. 414.)

In Brietigam v. Industrial Acc. Com. (1951) 37 Cal.2d 849 [ 236 P.2d 582 ], the injured party was a “swamper” hired to load trucks by a trucker who was transporting barley for Brietigam. The Industrial Accident Commission found that Brietigam was the swamper’s employer, and the Supreme Court affirmed. Relying on S. A. Gerrard Co: v. Industrial Acc. Com., supra, 17 Cal.2d 411 , the court declared that the decisive question was the relationship between the truckers and Brietigam. If the truckers were Brietigam’s employees, then the swamper was as well. Although the evidence was in conflict, it was sufficient to support a finding that Brietigam had the

With that background, we turn to the question in this case. Defendant relies on the foregoing cases to argue that since section 2750.5 requires that Symons must be considered an employee of defendant, it necessarily follows that plaintiff, as Symons’ employee, must also be considered defendant’s employee. Plaintiff contends that whether he is defendant’s employee should be a question of fact. Plaintiff points out that both Brietigam and S. A. Gerrard Co. were decided prior to the enactment of section 2750.5. He argues that in each case, the court’s conclusion was based on evidence that the employer had the right to control the person who hired the injured individual, and that it logically followed from that evidence that the employer had the right to control the latter individual as well. A similar conclusion is not logical or reasonable in this case, plaintiff argues, because Symons’ status as an employee of defendant is based solely on his lack of a license, and not on a factual finding of defendant’s right to control and direct the activities of Symons and his helpers. Amicus the State Compensation Insurance Fund urges that the Legislature did not intend to extend the “fiction” of the employment relationship established by section 2750.5 to create an employment relationship between the general contractor and the employees of the unlicensed subcontractor.

The fundamental rule of statutory construction is that a court must ascertain the intent of the Legislature in order to effectuate the purpose of the law. In determining that intent, the court must begin with the statutory language. (Palos Verdes Faculty Assn. v. Palos Verdes Peninsula Unified Sch. Dist. (1978) 21 Cal.3d 650 , 658 [ 147 Cal.Rptr. 359 , 580 P.2d 1155 ].) Here, however, that language provides no insight into the Legislature’s views with respect to the relationship between the employees of the unlicensed contractors and the hirers of those contractors. Nevertheless, we must also presume that the Legislature is familiar with its own previous enactments when legislating on a particular subject, with judicial decisions construing its previous acts, and with common law rules. (Bailey v. Superior Court (1977) 19 Cal.3d 970 , 977-978, fn. 10 [ 140 Cal.Rptr. 669 , 568 P.2d 394 ]; Rosenthal v. Cory (1977) 69 Cal.App.3d 950 , 953 [ 138 Cal.Rptr. 442 ]; People v. Welch (1971) 20 Cal.App.3d 997 , 1002 [ 98 Cal.Rptr. 113 ].) We must also assume that in enacting legislation, the Legislature knew what it was saying and meant what it said. (Educational & Recreational Services, Inc. v. Pasadena Unified Sch. Dist. (1977) 65 Cal.App.3d 775 , 782 [ 135 Cal.Rptr. 594 ].) Furthermore, “whatever is necessarily implied in a statute is as much a part of it as that which is expressed.” (Sondeno v. Union Commerce Bank (1977) 71 Cal.App.3d 391 , 395 [ 139 Cal.Rptr. 229 ].)

Plaintiff argues that in effect he is being punished for Symons’ failure to obtain a license. He states that under the facts of this case he gains no advantage from being defendant’s employee, because despite Symons’ failure to carry workers’ compensation insurance, plaintiff has already received compensation from the Uninsured Employers Fund. (See generally, Flores v. Workmen’s Comp. Appeals Bd. (1974) 11 Cal.3d 171 [ 113 Cal.Rptr. 217 , 520 P.2d 1033 ].) Accordingjto plaintiff the sole result of a determination that he was also defendant’s employee is that he is unable to sue defendant for negligence.

Plaintiff’s argument ignores the purpose underlying workers’ compensation. “[T]he whole theory of the Workmen’s Compensation Act is to put a burden in limited amounts upon employers for all industrially caused injuries and deaths regardless of fault, and concomitantly to take from employees . . . the right of recovering any greater amounts even though the injury ... is tortiously caused by the employer. It is inherent in this system that the statutory recovery, whatever it may be, shall be allowed in every case to which the statute makes it applicable, and apparent hardship in individual cases to either employer, employee or dependents . . . must be disregarded in view of the social desirability of the system as a whole. ” (Pacific Gas & Elec. Co. v. Ind. Acc. Com. (1961) 56 Cal.2d 219 , 223 [ 14 Cal.Rptr. 548 , 363 P.2d 596 ], italics added.) ‘“Though it may be more opportunistic for a particular plaintiff to seek to circumscribe the purview of compensation coverage because of his immediate interest and advantage, the courts must be vigilant to preserve the spirit of the act and to prevent a distortion of its purposes. . . .’” (Eckis v. Sea World Corp. (1976) 64 Cal.App.3d 1 , 7 [ 134 Cal.Rptr. 183 ].)

However, this doctrine is applicable only if it can be demonstrated both that the defendant does manufacture the product for sale to the public, and that the risk thereby created is the same as the one to which the plaintiff was exposed. In other words, the injured employee must be using a product manufactured by the employer for sale to the general public, in a manner in which the general public could be expected to use it. (Shields v. County of San Diego (1984) 155 Cal.App.3d 103 , 110 [ 202 Cal.Rptr. 30 ]; NiceWarner v. Kaiser Steel Corp. (1983) 143 Cal.App.3d 31 , 40 [ 191 Cal.Rptr. 522 ].) Furthermore, if the product in question is in an unfinished state or requires further processing before becoming available for sale, the dual capacity doctrine is inapplicable. (Bibby v. Central Industrial Engineering Co., Inc. (1984) 153 Cal.App.3d 871 , 875-877 [ 200 Cal.Rptr. 412 ].)

Plaintiff urges that defendant is liable as a manufacturer or builder of a defective condominium, but the argument is unpersuasive. It is undisputed that when plaintiff was injured, the condominiums were under construction. Plaintiff was not using the condominium as would an ultimate user of the product, and his risk was obviously not the same as that to which the public would be exposed in the case of a completed product.

Next, plaintiff argues that defendant was also the owner and developer of the condominium project, and as such owed a duty to others to manage the property in a way to avoid harm to others. However, the dual capacity doctrine was not applicable to a defendant employer’s concurrent role as an owner or occupier of land. (Royster v. Montanez, supra, 134 Cal.App.3d at p. 368.) Creating dual capacity liability based on an employer’s ownership of the premises would not impose any greater obligation to provide a safe place of work than already exists because of his or her role as employer.

In an effort to avoid the unambiguous holding of Royster, plaintiff points to deposition testimony by defendant Horner stating that he owned the land and the condominium project with another individual, T. A. Peroli, in a partnership, Crystal Investments, and that the deed to the land was either in the name of the partnership or in both their names. Plaintiff reasons: (1) he was not an employee of the partnership, and could have sued the partnership for negligence; (2) therefore he should also be able to sue Horner in his “dual capacity” as a Crystal Investments partner, because a partner can be sued individually for the partnership’s actions.

Plaintiff relies on Dorado v. Knudsen Corp. (1980) 103 Cal.App.3d 605 [ 163 Cal.Rptr. 477 ], in support of this theory, but his reliance is misplaced. In that case, the injured plaintiff was an employee of Todds Food Company, a limited partnership, of which Knudsen Corporation was general and managing partner. In plaintiff’s personal injury action, summary judgment was granted for defendant Knudsen on the ground that as a member of the partnership, Knudsen was plaintiff’s employer and workers’ compensation his sole remedy. (Id., at pp. 607-609.) Tjie reviewing court reversed, holding that there were triable issues of fact as to whether plaintiff was injured by Knudsen’s activities in its dual capacity as seller and supplier of dairy products in defective crates to Todds. (Id., at pp. 610-614.)

Dorado does support the general proposition that one partner can have dual capacities in relationship to partnership employees, i.e., as employer and manufacturer or supplier. The case is of no help to plaintiff in the instant case, however, as it does not alter the rule that the dual capacity doctrine is inapplicable to an employer’s concurrent role as owner or occupier of land. (See Royster v. Montanez, supra, 134 Cal.App.3d at p. 368.)

In effect, plaintiff’s argument is that Horner the partner is a separate legal entity from Horner the employer. The imposition of tort liability on an employer based on the dual capacity doctrine is to be distinguished from its imposition on a legal entity separate and distinct from the employer. (See, e.g.,Lyon v. Barrett(1982) 89 N.J. 294 [ 445 A.2d 1153 , 30 A.L.R.4th

The trial court correctly concluded that the dual capacity doctrine was inapplicable to the undisputed facts of this case.

Judgment is affirmed.

White, P. J., and Merrill, J., concurred.

Appellant’s petition for review by the Supreme Court was denied March 5, 1987.