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May 2011

Atlanta Team Obtains Summary Judgment in Multi-Million Dollar Negligence/Vicarious Liability Suit

Atlanta attorneys Cecily McLeod and Carl Gebo obtained summary judgment on behalf of 84 Lumber, a national construction materials supplier and services provider, in a personal injury negligence/vicarious liability suit for $4 million in damages, not including a punitive damages claim, in the U.S. District Court for the Southern District of Georgia - Savannah Division. 
The Plaintiff was an employee of a hauling company that 84 Lumber contracted to deliver construction materials to its customers.  The Plaintiff claimed, and 84 Lumber admitted, that 84 Lumber's employee ran over the Plaintiff with a forklift causing injuries to the Plaintiff that required multiple surgeries. The store at which the injury occurred closed 6 months after the injury.  84 Lumber was unable to locate documents from that store related to the injury or the store's operations on that day, except for the incident report.

The summary judgment motion centered on the application of Georgia's Statutory Employer Defense, which provides immunity to a company whose contractor obtains and pays out Workers Compensation benefits to employees of the contractor for injuries occurring while that employee was engaged in the performance of the work of the contract.  The immunity that the Workers Compensation statute provides to the contractor flows up to the company that hired and required the contractor to maintain Workers Compensation coverage.  For that defense to apply, 84 Lumber had to prove that the Plaintiff was on the premises as part of his duties as an employee of the contractor and that the Plaintiff was engaged in the work of the contract at the time of the injury.
Opposing counsel contended that the Statutory Employer Defense was meant to apply to injuries arising out of construction projects on construction sites and not in a materials delivery situation.  Because 84 Lumber could not produce documents establishing which particular load of materials the Plaintiff was to have delivered, opposing counsel also contended that a disputed material fact existed regarding whether or not the Plaintiff was performing work in furtherance of a contract 84 Lumber had with a customer.  Opposing counsel also argued that under the Georgia UCC the commercial credit agreements between 84 Lumber and its customers did not become "contracts" for the purposes of the Statutory Employer Defense until a purchase order was created and filled by 84 Lumber.
Without specific controlling precedent, Judge Moore ruled that the commercial credit agreements were contracts, that the hauling agreement explained that the Plaintiff's presence on 84 Lumber's property at the time of the injury qualified as "work in furtherance" of those contracts, and that 84 Lumber was a statutory employer and entitled to immunity from all of the Plaintiff's claims and ordered the case closed.  Opposing counsel has challenged the court's jurisdiction to decide the case and has moved for the case to be remanded to Georgia State Court.


Cecily J. McLeod