ASA Advocates for Subcontractors in the Courts Through Its Subcontractors Legal Defense Fund

In Risk Management
May 28, 2019
76 Views

April/May 2019 Edition

By Courtney Little, President, ACE Glass Construction, and 2018-19 President, ASA

It is well known that the American Subcontractors Association represents commercial construction subcontractors, specialty trade contractors, and suppliers before the executive and legislative branches of federal government. It is equally important to know that ASA represents them in the judicial branch as well. ASA was particularly busy this year, hard at work in the courts making sure that the interests of subcontractors were represented. These cases are likely to set legal precedent on issues important to our members and all subcontractors.

Most recently, ASA asked the Supreme Court of Texas to reconsider its underlying decision in an important case about employers with employees whose normal duties do not include transportation to and from the workplace. ASA’s legal work was financed by its Subcontractors Legal Defense Fund, which is funded through voluntary contributions by ASA members and is the only advocacy effort in the courts by a national subcontractor association.

In the Texas case, ASA submitted an amicus, or friend-of-the-court, brief in support of respondent Amerimex’s motion for rehearing in the case of Steven Painter; Tonya Wright, Individually and as Representative of the Estate of Earl A. Wright, III, Deceased; Virginia Weaver, Individually and as Next Friend of A.A.C., a Minor; and Tabitha R. Rosello, Individually and as Representative of the Estate of Albert Carillo, Deceased, (Petitioners) v. Amerimex Drilling I, Ltd., (Respondent).

In the underlying case, Steven Painter, J.C. Burchett, Earl Wright, and Albert Carillo were working the night shift for Amerimex Drilling, drilling a well for Sandridge Energy on an oil and gas drilling rig in Pecos County. The prime contract between Sandridge and Amerimex provided that Amerimex was to perform the drilling and provide the drilling crews. Due to some Sandridge restrictions, the bunkhouse for the Amerimex crew was not as close as they normally would have been, located about 30 miles from the remote drilling site. The prime contract provided that the driller for each crew would receive $50 per day for transporting the crew between the bunkhouse and the drilling site. On July 28, 2007, after the Amerimex crew’s shift ended, Burchett, the driller, was driving the crew back to the bunkhouse when he fell asleep behind the wheel. The truck carrying the crew rolled over and ejected all four members, injuring Painter and Burchett and killing Wright and Carillo.

Burchett received workers’ compensation for his injuries after the Texas Department of Insurance determined that his injuries were covered because Burchett, “was paid to transport his crew to and from the worksite and the company bunkhouse.” The trial court granted Amerimex’s motion for summary judgment, dismissing the claims because “Amerimex is not vicariously liable for the negligence of JC Burchett.” The Eighth Court of Appeals, El Paso, Texas, denied the appeal.

However, in an April 13, 2018 opinion, the Texas Supreme Court reversed and remanded the case to the trial court, relying on workers’ compensation precedent holding that where an employee transports others to and from the place of employment, as either part of the contract of employment or for payment by the employer, the work is within the scope of employment for purposes of the coverage and protections of the workers’ compensation statute. Citing that case law, the Texas high court reversed and remanded the lower courts for a determination whether Burchett was acting in the course and scope of his employment at the time of the accident.

In the brief, ASA explained that Amerimex is not vicariously liable for the actions of Burchett because even if Burchett was considered to be an employee at the time of the accident, he was outside the course and scope of employment. “An employer will only be held vicariously liable for the actions of its worker if: (1) the worker was an employee; and (2) was acting in the course and scope of employment. Neither requirement is satisfied in this case. If a worker is determined to be an employee, the question is whether the employee was within the course and scope of his employment. Even if Burchett was an employee at the time of the accident, he was not within the course and scope of his employment when driving crew back to the bunkhouse. This Court has stated ‘vicarious liability arises only if the tortious act falls ‘within the scope of employee’s general authority in furtherance of the employer’s business and for the accomplishment of the object for which the employee was hired.’ Traveling to and from work, even though arguably for the employer’s benefit, has been consistently held to be outside the course and scope of employment.”

ASA adds that travel reimbursement does not create an exception to the “coming and going” rule. “The contractual $50 per day Driver’s Bonus paid to the driller of each crew was a travel reimbursement,” ASA wrote. “Travel reimbursements create no exception to the ‘coming and going’ rule, which states travel to and from a job location is not within the course and scope of employment. The Driver’s Bonus was to reimburse workers for the costs associated with a remote drill site, similar to the $50 per day Subsistence Bonus that compensated crew for daily expenses and the $50 per day Bottom Hole Bonus available to crew who remained employed from the well’s spud date through its completion.”

“The lower courts,” ASA continues, “correctly applied the principle from Pilgrim [Pilgrim v. Fortune Drilling Co., Inc., 653 F.2d 982, 987 (5th Cir. 1981)] that an employer compensating travel does not create an exception to the coming and going rule. Similar to Pilgrim, Amerimex exercised no control and had no right of control over Burchett once he completed his shift. The remote location of the drill site does not affect the coming and going rule, and in fact lends support to the argument that Amerimex is simply trying to reimburse crew members for their added personal costs due to the remote well location. The Court made an unnecessary and incorrect distinction between: (i) a contract requiring Amerimex to hire drivers to provide transportation, and Amerimex deciding to offer that extra work to Burchett; and (ii) the actual contract contemplating that Amerimex would assign the driving task to specific individuals, the drillers.”

This case is a good reminder why ASA, in 1997, established its Subcontractors Legal Defense Fund, and, later, the Foundation of ASA established its Legal Research Fund. Both funds finance ASA’s friend-of-the-court briefs in courts around the country.

Let me be clear: These funds do not pay the legal bills of individual subcontractors. Instead, they allow ASA to file briefs to advise federal and state courts that may be dealing with a factual situation or a legal issue impacting subcontractors. ASA uses its briefs to inform courts about public policy considerations, practices in the construction industry, as well as how courts in other jurisdictions have addressed the issue under consideration.

ASA has filed friend-of-the-court briefs on a myriad of issues over the years, including prompt pay, pay-if-paid, retainage, damages for delays, mechanics lien and payment bond rights, bid shopping, indemnity, additional insured, coverage under CGL policies, and more. ASA recognizes that positive results in one state can benefit subcontractors in other states. ASA’s goal is to add to the decisions that can serve as useful precedents and guidance to courts and legislators addressing the same or similar issues.

If you want more information on ASA’s advocacy program in the courts, visit the ASA Web site at www.asaonline.com.

Courtney Little is president of ACE Glass Construction in Little Rock, Ark., and serves as the 2018-19 president of the American Subcontractors Association. Founded in 1966, ASA amplifies the voice of, and leads, trade contractors to improve the business environment for the construction industry and to serve as a steward for the community. The ideals and beliefs of ASA are ethical and equitable business practices, quality construction, a safe and healthy work environment, and integrity and membership diversity. For more information, visit the ASA Web site at www.asaonline.com.