General Contractor Liable for Both Workers Compensation Benefits and Tort Claims
December 17, 2012
The legal representative of a subcontractor's employee who had been killed in an explosion at the general contractor's worksite brought a wrongful death action against the general contractor. This was after the general contractor had paid workers compensation benefits since the subcontractor did not have workers comp coverage. This case is Wentworth v. Henry C. Becker Custom Building, Ltd., 947 N.E.2d 571 (2011).
Becker Custom Building was the general contractor at a residential construction site and it hired a subcontractor, Great Green Barrier Company, to perform waterproofing work. An explosion at the site resulted in the death of Wentworth and serious injuries to another Great Green employee.
Great Green did not carry workers compensation insurance so the insurer if Becker Custom Building agreed to lump-sum settlements in accordance with state law. However, the legal representative of Wentworth later filed a complaint against Becker alleging that the contractor's negligence, gross negligence, and/or willful, wanton, or reckless conduct resulted in Wentworth's death. Becker filed for summary judgment, arguing that by the acceptance of the lump-sum settlements, the legal representative was barred from filing her lawsuit for common law claims. The Superior Court Department ruled in favor of Becker and this appeal followed.
The legal representative argued that, under the plain language of the statute, Becker is not an insured, Wentworth was not Becker's employee, and so Becker is not entitled to immunity from common law claims. The Supreme Judicial Court agreed. The court noted that immunity under the act applies to the insured, an employer who provides workers compensation insurance to his employees. Here, it was undisputed that Wentworth was not an employee of Becker. Therefore, the plain language of the statute does not release a general contractor that pays workers comp benefits to its uninsured subcontractor's employee.
The court said that the views of Becker were inconsistent with the objectives of the law which is to prevent a general contractor from escaping its obligations under the workers compensation act by hiring uninsured subcontractors. Under Becker's interpretation, although the insurer of a general contractor that willfully or negligently hires an uninsured subcontractor is required to pay the uninsured subcontractor's compensation obligation, the contractor would obtain the benefit of being released from the significantly greater damages it would likely face in a common law action. This would violate the purpose of the statute and the court would not accept this.
The ruling of the Superior Court Department was vacated and the case was remanded.
Editor's Note: This ruling by the Supreme Judicial Court gives a general contractor a strong incentive to retain subcontractors that have workers compensation insurance because it otherwise would have to pay the workers comp benefits and would be liable for any common law damages. The court upheld the intentions of the state legislature to fully protect workers by allowing recovery from third parties, including general contractors that are not the injured worker's direct employer. The purpose of the statute was to prevent an insured entity, such as a general contractor, from escaping the obligation of the compensation act by letting out part of its work to irresponsible subcontractors. This ruling by the court reaffirmed that purpose.