Canty v. A. Bottacchi, S.A. de Navegacion

Citations: 849 F. Supp. 1552; 1994 A.M.C. 2152; 1994 U.S. Dist. LEXIS 5250; 1994 WL 143767Docket: Nos. 91-0308-CIV, 91-1625-CIV

Court: District Court, S.D. Florida; April 13, 1994; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Defendant Seaport Crane Service, Inc. filed a Motion for Summary Judgment on August 26, 1993, in a consolidated action for damages under the Longshore and Harbor Workers’ Compensation Act, concerning injuries suffered by two longshoremen during an accident on a vessel. The plaintiffs, along with their spouses, have sued vessel owner A. Bottacchi, S.A. de Navegación, and Seaport, the crane's owner, alleging negligence in the unloading of pipes which resulted in injuries when a sling from Seaport's crane broke, causing the pipes to fall. Seaport contends that it is not liable because the crane operators are borrowed servants of the plaintiffs' employer, thereby sharing in the employer's workers' compensation immunity.

The Court outlines the standard for summary judgment as per Fed. R. Civ. P. 56(c), stating that judgment should be granted if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. The burden is on the party requesting summary judgment to demonstrate the absence of genuine issues. Once this burden is met, the non-moving party must present specific facts indicating a genuine issue for trial, beyond merely relying on pleadings. The Court emphasizes that mere evidence in support of the non-movant’s claims is not sufficient; the evidence must be substantial enough for a reasonable jury to find in favor of the non-movant. The summary judgment motion by Seaport is ultimately denied.

The undisputed material facts relevant to Seaport’s motion for summary judgment include the following key points: 

1. The plaintiffs, longshoremen employed by S.E.L. Maduro Florida, Inc., were engaged to unload pipes from the vessel Puenta Malvinas at the Port of Miami, under Maduro’s direction as a stevedore company.
2. Seaport is an independent contractor that provides cranes and operators to stevedoring companies, having been contracted by Maduro to supply a crane and two operators for the unloading process, with Maduro paying a flat hourly rate.
3. Seaport directed its crane operators regarding work reporting times, while Maduro determined operational hours and had control over the crane’s use on-site.
4. Maduro exclusively managed the vessel unloading operations, including crane positioning, equipment selection, and the coordination of flagmen to communicate with crane operators.
5. Maduro was responsible for inspecting the cable used during unloading and ensuring it was safe for use, with no responsibilities assigned to the crane operators concerning the cables' condition or selection.
6. The crane’s cab contained a scale for measuring load weight, but crane operators could only assess sling adequacy after lifting loads, which was problematic since the load weight had not registered when an accident occurred.
7. On February 1, 1990, the plaintiffs were injured when a sling owned by Maduro broke during the lifting operation. Maduro was tasked with investigating the incident; however, the broken sling was misplaced, preventing a determination of the cause. An investigator concluded that crane operations did not contribute to the accident, and operations were reported to be smooth prior to the incident.
8. Maduro held responsibility for ensuring a safe work environment and secure unloading practices for its employees.
9. Seaport’s crane operators’ supervisor occasionally visited job sites to monitor progress and was informed of the accident verbally by the operators on-site.
10. The plaintiffs received workers' compensation benefits from Maduro under the Longshore and Harbor Workers Compensation Act.

The Longshore and Harbor Workers Compensation Act (LHWCA) mandates that employers subject to its provisions are liable to their employees for workers compensation, which is exclusive and replaces all other liabilities, including those towards fellow employees. If a third party is also liable for damages, claimants can receive workers compensation from their employer while simultaneously pursuing a claim against the third party. A key issue for the Court is whether crane operators supplied by Seaport were considered "borrowed servants" of Maduro during the unloading operation, a determination that is typically a legal question. Additionally, as this issue pertains to LHWCA coverage, federal law governs the analysis.

The borrowed servant doctrine holds that an employer may be liable for the negligence of an employee they have 'borrowed' if that employee works under the employer’s supervision and control. This doctrine was established in Standard Oil v. Anderson, where the Supreme Court examined the relationship between a winchman (employed by the shipper) and a longshoreman (employed by a stevedore) during a cargo-loading operation. The Court determined that the issue of whether the winchman was a borrowed servant hinged on who had the power to direct him in his work. For the original employer to be relieved of liability, it must be shown that their relationship with the employee had been suspended and a new relationship formed with the borrowing entity.

In Standard Oil, the Court found that since the winchman was hired, paid, and could be fired by the shipper, and because the shipper provided the equipment and labor, the relationship with the winchman had not changed despite the stevedore's involvement. The stevedore's control was limited to adjusting the winchman's work hours and providing hand signals, which were deemed as cooperation rather than orders. Thus, the Court concluded that the facts did not support a finding that the winchman had become the servant of the stevedore, maintaining the shipper's liability for the winchman’s negligence.

The Court reaffirmed that the winchman remained the servant of the shipper following the Supreme Court's ruling in Standard Oil. Under the Longshore and Harbor Workers' Compensation Act (LHWCA), the Fifth Circuit established a nine-factor test to determine borrowed servant status, which includes control over the employee, the nature of the work performed, agreements between employers, employee acquiescence, termination of the original employment relationship, provision of tools and workspace, duration of new employment, rights to discharge, and payment obligations. While no single factor is decisive, control is emphasized. 

In applying these factors to the case involving crane operators at Seaport, the Court found that control was ambiguous. Although Seaport directed when and where the operators reported, Maduro determined operational hours and used hand signals for coordination, which was deemed insufficient for establishing control. The unloading work was attributed solely to Maduro, and there was no evidence of an agreement between Seaport and Maduro regarding the crane operators' status, rendering this factor neutral. Overall, the Court aligned its analysis with the principles from Standard Oil and the Ruiz factors, leading to a conclusion against finding borrowed servant status.

Seaport hires out cranes and crane operators to stevedoring companies, with operators presumed to accept the working conditions associated with this arrangement. The court referenced Capps v. N.L. Baroid-NL Indus. Inc., where it was determined that an employee's acquiescence to being sent into new work situations by a lending employer indicated acceptance of those circumstances. Regarding the termination of employment, the court found that Seaport's restrictions on crane operators' work with Maduro indicated that their relationship was not terminated. 

Maduro provided the work environment and tools for unloading, while Seaport supplied the crane, rendering the factor of who furnished equipment neutral concerning borrowed servant status. The short duration of the unloading job (three days) also resulted in a neutral finding for the length of employment factor. The right to discharge was ambiguous, leading to a neutral conclusion as well. 

Seaport's obligation to pay its operators, as Maduro only paid a rental fee for the crane, distinguished this case from others where the borrowing employer was more involved in wage verification. Ultimately, the court determined that the primary Ruiz factor of control did not support a borrowed servant relationship, with most other factors either weighing against it or being neutral. The few factors favoring borrowed servant status were significantly outweighed by those against it.

The Court concluded that the crane operators are not considered borrowed servants of Maduro, which means Seaport is not shielded from litigation. Consequently, Seaport Crane Service, Inc.'s motion for summary judgment is denied. Despite differing testimonies regarding the height of the load when the sling broke, it is generally acknowledged that the load remained within the cargo hold. The Court determined that reliance on Florida law is inappropriate in this context. The borrowed servant doctrine, as established in the Supreme Court case Standard Oil prior to the LHWCA's enactment, is still applicable to this case. While the Eleventh Circuit has not ruled on this doctrine under the LHWCA, both the Third and Fourth Circuits have recognized the Ruiz factors relevant to the borrowed servant analysis. Previous cases, including Peter v. Hess Oil Virgin Islands Corp. and Huff v. Marine Tank Testing Corp., have applied similar factors, and the District Court for the Canal Zone used the Ruiz nine-factor test in Pinto v. The Vessel “Santa Isabel.” Additionally, past rulings have overturned directed verdicts based on findings of borrowed servant status. Seaport's invoice to Maduro included payment details based on "crane hours" and listed the names of the crane operators involved.