Dobransky, E. v. EQT Production

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2022 PA Super 61

ERIC DOBRANSKY : IN THE SUPERIOR COURT OF

: PENNSYLVANIA

Appellant :

:

:

v. :

:

:

EQT PRODUCTION COMPANY AND : No. 900 WDA 2019

HALLIBURTON ENERGY SERVICES, :

INC. :

Appeal from the Order Entered May 22, 2019

In the Court of Common Pleas of Greene County Civil Division at No(s):

AD 142-2014

BEFORE: PANELLA, P.J., BENDER, P.J.E., BOWES, J., LAZARUS, J., OLSON,

J., DUBOW, J., KUNSELMAN, J., MURRAY, J., and McCAFFERY, J.

DISSENTING OPINION BY BOWES, J.: FILED: APRIL 11, 2022

I respectfully dissent. Although I concur with the learned Majority’s

conclusion that the trial court erred in granting summary judgment in favor of

EQT Production Company (“EQT”) and Halliburton Energy Services, Inc.

(“HESI”) (collectively, “Appellees”) pursuant to 77 P.S. § 461(1)(i) (“Section

302(a)(1)”), I would nonetheless find that Appellees were Eric Dobransky’s

statutory employers pursuant to 77 P.S. § 461(2) (“Section 302(a)(2)”) and,

consequently, entitled to tort immunity. Thus, I would affirm the trial court’s

order on that basis.

Summary judgment is “appropriate only in those cases where the record

clearly demonstrates that there is no genuine issue of material fact and that

the moving party is entitled to judgment as a matter of law.” Summers v.

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Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010). Our scope and

standard of review in this specific context is well-established:

When considering a motion for summary judgment, the trial court

must take all facts of record and reasonable inferences therefrom

in a light most favorable to the non-moving party. In so doing,

the trial court must resolve all doubts as to the existence of a

genuine issue of material fact against the moving party, and, thus,

may only grant summary judgment where the right to such

judgment is clear and free from all doubt. On appellate review,

then, an appellate court may reverse a grant of summary

judgment if there has been an error of law or an abuse of

discretion. But the issue as to whether there are genuine issues

as to any material fact presents a question of law, and therefore,

on that question our standard of review is de novo. This means

we need not defer to the determinations made by the lower

tribunals.

Id. (cleaned up). Additionally, “[t]o the extent that this Court must resolve a

question of law, we shall review the grant of summary judgment in the context

of the entire record.” Id.

Section 302(a)(2) is part of the Pennsylvania Workers Compensation

Act (“the WCA”), under which employers are “liable for compensation for

personal injury” that an employee sustains “in the course of his employment

. . . without regard to negligence[.]” 77 P.S. § 431. In consideration of this

mandated liability, the WCA immunizes employers from additional civil claims

for damages. See 77 P.S. § 481(a) (“The liability of an employer under this

act shall be exclusive and in place of any and all other liability . . . in any

action at law or otherwise on account of any injury or death.”). Our Supreme

Court has described this trade-off in clear terms:

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By virtue of the [WCA], an employee’s common law right to

damages for injuries suffered in the course of his employment as

a result of his employer’s negligence is completely surrendered in

exchange for the exclusive statutory right of the employee to

compensation for all such injuries, regardless of negligence, and

the employer’s liability as a tortfeasor under the law of negligence

for injuries to his employee is abrogated.

Kohler v. McCrory Stores, 615 A.2d 27, 30 (Pa. 1992) (cleaned up). Thus,

the WCA provides the exclusive remedy for an aggrieved employee. Bigley

v. Unity Auto Parts, Inc., 436 A.2d 1172, 1178 (Pa. 1981).

Section 302(a) pertains to the duties owed under the WCA by

contractors with respect to the employees of its subcontractors, and it

provides as follows:

A contractor who subcontracts all or any part of a contract and his

insurer shall be liable for the payment of compensation to the

employees of the subcontractor unless the subcontractor primarily

liable for the payment of such compensation has secured its

payment as provided for in this act. Any contractor or his insurer

who shall become liable hereunder for such compensation may

recover the amount thereof paid and any necessary expenses

from the subcontractor primarily liable therefor.

For purposes of this subsection, a person who contracts with

another (1) to have work performed consisting of (i) the removal,

excavation or drilling of soil, rock or minerals, or (ii) the cutting

or removal of timber from lands, or (2) to have work performed

of a kind which is a regular or recurrent part of the business,

occupation, profession or trade of such person shall be deemed a

contractor, and such other person a subcontractor.

77 P.S. § 461. Thus, a contractor may be deemed the statutory employer of

an employee of its subcontractor if this “specialized definition” is satisfied.

See Doman v. Atlas America, Inc., 150 A.3d 103, 106-08 (Pa.Super.

2016). If a contractor is deemed a statutory employer, the contractor is

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secondarily liable for worker’s compensation claims to the subcontractor’s

employees but immunizes such entity from tort liability in the same manner

as a “direct employer.” Id. at 107 (citing 77 P.S. § 52). Thus, Section 302(a)

provides a liability backstop against direct employers who are unable to pay

WCA compensation to their employees.

With these basic legal principles in mind, I briefly review the basic and

undisputed facts of this case. On June 19, 2012, several corporate entities

were involved in work to prepare a Marcellus shale drilling site in Greene

County (“Scotts Run”) for natural gas production. EQT owned the mineral

rights on the property and contracted with HESI to assist its efforts pursuant

to a Master Service Agreement (“MSA”). The MSA broadly provides for a wide

range of potential responsibilities that could be delegated to HESI by EQT. Of

particular note, HESI has a contractual obligation to “cause all materials and

other parts of the Work to be readily available as and when required or needed

for or in connection with the construction, furnishing and equipping of the

Project or the Work.” MSA at § 8.5. Indeed, the MSA defines the “Work” to

include all “labor, materials, equipment and services” needed under the

particular circumstances. Id. at § 1.1-1.2.

Although the specific scope of HESI’s duties at Scotts Run is not evident

from the contractual documents, it is well-established in the certified record.

Bradley Maddox, who was EQT’s drilling manager at the time of the accident,

testified in a deposition HESI was providing “mud services” at all of EQT’s well

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sites, which included responsibility for the ”inventory” of barite. See

Dobransky’s Omnibus Brief in Opposition to Summary Judgment, 8/1/18, at

Exhibit 21 at 16-19, 27; see also Dobransky’s Omnibus Brief in Opposition to

Summary Judgment, 8/1/18, at Exhibit 19 at 44 (same). In HESI’s

interrogatory responses, it described itself as providing “barite and other bulk

items such as sand and cement” at Scotts Run. Dobransky’s Omnibus Brief in

Opposition to Summary Judgment, 8/1/18, at Exhibit 16 at ¶ 22.

While HESI took on the ultimate responsibility for ensuring a regular and

steady supply of barite at Scotts Run, it elected to subcontract the

transportation of the materials to the well site into the care of Northwest

Concrete Products, Inc. d/b/a Northwest Logistics (“Northwest”) under a

separate agreement (“Transportation Agreement”). Pursuant to this contract,

Northwest was engaged “to transport the goods or materials tendered to it”

by HESI. Transportation Agreement at § 1.

The record confirms that Northwest was responsible for shipping and

unloading, inter alia, barite on behalf of HESI at Scotts Run. Jeremy Johnson,

operations manager for Northwest’s dry bulk division in Greensburg,

Pennsylvania at the time of Dobransky’s accident, testified in a sworn

deposition that Northwest regularly transported barite, cement, and sand in

connection with HESI’s work at such drilling operations. See Dobransky’s

Omnibus Brief in Opposition to Summary Judgment, 8/1/18, at Exhibit 20 at

49; see also Appellees’ Brief in Support of Summary Judgment, 9/17/18, at

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Exhibit I at 34 (“My understanding is that [Northwest] provided transportation

services for [HESI], transporting and unloading things like barite and sand

that [HESI] would use as part of its business activities at the well site[.]”).

Finally, a sales order form issued by HESI to EQT on June 20, 2012, confirms

that Northwest was responsible for shipping barite purchased by HESI to the

Scotts Run well site. Id. at Exhibit G at 1.

Of particular importance, the record also indicates that HESI was

subcontracting a substantial amount of well site shipments to Northwest in

2012. As noted above, Mr. Maddox testified that he administered a program

under which HESI was responsible for providing similar mud services at all of

EQT’s well sites. See Dobransky’s Omnibus Brief in Opposition to Summary

Judgment, 8/1/18, at Exhibit 21 at 16-19. Mr. Johnson confirmed that HESI

was Northwest’s “primary customer” in 2012, accounting for at least “99

percent” of the company’s business. Dobransky’s Omnibus Brief in Opposition

to Summary Judgment, 8/1/18, at Exhibit 20 at 9. Furthermore, testimony

from other Northwest personnel stated HESI’s well site support business was

so extensive that it had retained multiple transportation subcontractors like

Northwest. See Dobransky’s Omnibus Brief in Opposition to Summary

Judgment, 8/1/18, at Exhibit 14 at 15.

With these facts in mind, I turn to the merits of this case. As noted

above, I agree with the Majority’s apt analysis as to Section 302(a)(1).

Accordingly, I need not discuss that section further. However, I note that it

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is well-settled that this Court may affirm on an alternate basis in the context

of summary judgment where that basis was raised by the moving party in the

trial court, such that the non-moving party had an opportunity to respond.

Hassel v. Franzi, 207 A.3d 939, 957 n.6 (Pa.Super. 2019); see also, e.g.,

Branton v. Nicholas Meat, LLC, 159 A.3d 540, 562 n.21 (Pa.Super. 2017).

Turning to Section 302(a)(2), our Supreme Court has described the

application of this statutory provision, as follows:

[E]mploying the principle of liberal construction in furtherance of

the Act’s remedial purposes, . . . we find it to be plain enough that

the Legislature meant to require persons (including entities)

contracting with others to perform work which is a regular or

recurrent part of their businesses to assure that the employees of

those others are covered by workers’ compensation insurance, on

pain of assuming secondary liability for benefits payment upon a

default.

Six L’s Packing Co v. W.C.A.B. (Williamson), 44 A.3d 1148, 1151 (Pa.

2012) (“Six L’s”). Thus, coverage under Section 302(a)(2) is drawn broadly:

[T]he statute extends to any scenario in which “a contractor . . .

subcontracts all or any part of a contract,” within the scope of the

work delineated in Section 302(a)’s specialized definition of

“contractor” (including work of a kind which is a ‘regular or

recurrent part of the business’ of the putative statutory employer).

Id. (quoting 77 P.S. § 461) (emphasis added).

A survey of binding and persuasive precedent applying Section

302(a)(2) reveals it to be a factually intensive undertaking. Of particular note,

however, Pennsylvania courts confronting this issue in cases involving truck

drivers have tended to conclude that Section 302(a)(2) applies and, thereby,

renders the hiring entity both secondarily liable for WCA compensation and

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immune from further tort litigation. See Six L’s, supra at 1150-51

(concluding a company that “grows, harvests, processes, and distributes

tomatoes” was the statutory employer of a subcontractor truck driver who

suffered a vehicular accident while “transporting tomatoes between a

warehouse . . . and a processing facility”); Six L’s Packing Co. v. W.C.A.B.

(Williamson), 2 A.3d 1268, 1280-81 (Pa.Cmwlth. 2010), affirmed, 44 A.3d

1148 (Pa. 2012) (“Williamson”) (same); Cargill Meats v. W.C.A.B.

(Heffner), 164 A.3d 651 (Pa.Cmwlth. 2016) (non-precedential memorandum

at 5-6) (holding that a company who subcontracted transportation of a

“finished meat product” was the statutory employer of an injured truck

driver); Garlick v. Trans Tech Logistics, Inc., 636 F. App’x 108, 112 (3d

Cir. 2015) (finding company providing water deliveries to drilling sites was the

statutory employer of a subcontractor’s trucker killed during delivery because

“[t]ransporting bulk liquids was a regular and recurrent part” of the company’s

business).1

Applying this case law to the instant circumstances, I reject the

Majority’s conclusion that HESI was not in the business of supplying and

transporting barite. While there is no “purchase order” in the record as

contemplated by § 2.1.1 of the MSA, I find the Majority’s analysis places

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1 As the Majority notes in its writing, while these cases from the

Commonwealth Court and the U.S. Court of Appeals for the Third Circuit are

not binding upon this Court, we may rely upon them as persuasive authority.

See Majority Opinion at 25 n.10.

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outsized importance upon the absence of this document. See Majority Opinion

at 26-27 (“Further, Appellees point us to no purchase order issued by EQT in

the record . . . . Thus, we cannot agree with Appellees that the MSA and the

sales order form indisputably establish that HESI was in the business of

supplying and transporting barite.”) As noted above, our Supreme Court has

observed that we must “review the grant of summary judgment in the context

of the entire record.” Summers, supra at 1159 (emphasis added). The

contractual documents referenced by the Majority are merely silent on the

issue of the scope of HESI’s specific duties at Scotts Run, as opposed to

contradictory. Yet, there is sufficient documentary evidence to confirm the

existence of contractual relationships amongst the parties at the time of the

underlying incident in this case. To my mind, whatever silence remains is

sufficiently dispelled by the testimony and discovery responses noted above.

Indeed, despite the absence of these documents, the Majority seems to

have no difficulty in specifically characterizing HESI’s duties at Scotts Run as

follows: “[T]he evidence establishes, at most, that HESI needed barite for

making the drilling mud and that it had Northwest transport and deliver barite

to it at the well site.” Majority Opinion at 28. Having narrowly construed

HESI’s duties, the Majority concludes that “the fact that an entity contracts

with a subcontractor to have materials delivered to it in order to conduct its

business or trade does not mean that a part of that entity’s business or trade

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is the transporting and/or shipping of those materials from one place to

another.” Id. at 28. I cannot join this analysis.

To briefly summarize the relevant facts, all parties agree that the

contractual relationships amongst EQT, HESI, and Northwest were in force on

the date of this incident. The certified record clearly indicates that at Scotts

Run HESI was responsible for “mud services” which included, inter alia,

maintaining an inventory of barite. HESI was under a contractual obligation

to ensure that barite was “readily available as and when required or needed

for or in connection with the construction, furnishing and equipping of the

Project or the Work.” MSA at § 8.5. Rather than assume direct responsibility

for the necessity of transporting barite to Scotts Run, HESI “tendered” these

materials to Northwest pursuant to the Transportation Agreement. These

deliveries of barite by Northwest were not isolated or infrequent. To the

contrary, the record shows that HESI accounted for virtually all of Northwest’s

business in 2012. This information also underscores the breadth of HESI’s

business of supporting EQT’s development of natural gas wells by providing

barite, which required the assistance of multiple transportation subcontractors

in addition to Northwest. With these facts in mind, it seems beyond cavil

HESI’s “business” encompassed these activities.2

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2 The second requirement of Section 302(a)(2) mandates that the business

activity must also be a “regular or recurrent” undertaking. See 77 P.S. § 461.

The Majority has not discussed this factor. Briefly, I note that the evidence

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These circumstances do not implicate the unrelated and delivery drivers

referenced in the Majority’s writing. The delivery of materials in this case was

not merely incidental to HESI’s contractual obligations but was one of its

explicit duties, i.e., ensuring access to and inventory of barite. Rather, the

record indicates Northwest was essentially operating as HESI’s transportation

and distribution network in June 2012, with these activities accounting for at

least ninety-nine percent of Northwest’s business that year. Indeed, HESI

made use of multiple such transportation subcontractors as part of its well

support business. Accordingly, the transportation and delivery of barite by

Northwest was a critical and extensive part of HESI’s well support business at

the time of the accident. Dobransky’s own testimony confirms as much. See

Dobransky’s Omnibus Brief in Opposition to Summary Judgment, 8/1/18, at

Exhibit 1 at 52, 101 (“[A] lot of times when they needed barite, they needed

it, like, now. Like, when they called you for barite, it was almost ASAP.”).3

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detailed throughout this writing readily establishes the frequency of the barite

deliveries directed by HESI and carried out by Northwest.

3 Under these facts, the parade of horribles raised by the Majority lacks teeth.

See Majority Opinion at 28 n.14, 29 n.16. If a delivery company’s entire

operation consisted of providing transportation and delivery services on behalf

of a single entity, e.g., the same chain of grocery stores or bakeries, it may

make sense to construe the drivers as statutory employees of the contracting

company pursuant to Section 302(a)(2). Moreover, if a mining operation’s

only task was to provide barite to a single company, its miners might fairly be

considered statutory employees under the same. I speak conditionally here

only because, ideally, this Court should not traffic in hypotheticals based on

facts not squarely before us. See Phila. Entertainment and Dev. Partners,

L.P. v. City of Philadelphia, 937 A.2d 385, 392 (Pa. 2007).

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I also find the Commonwealth Court’s holding in Zwick v. W.C.A.B.,

106 A.3d 251 (Pa.Cmwlth. 2014) instructive on this issue. In that case, Marco

Popchocoj (“the claimant”) was a subcontractor who was injured while

performing construction and rehabilitation work at a property for a licensed

realtor named Mark Zwick. Zwick was determined to be the claimant’s

statutory employer under Section 302(a)(2). On appeal, Zwick argued that

the dissimilarity between his and the claimant’s respective occupations should

preclude the application of Section 302(a)(2). The Commonwealth Court

disagreed, and offered the following rationale:

Zwick asserts that Section 302(a) is inapplicable because he is a

licensed realtor, so the work the claimant performed at the time

of his injury was not a regular part of Zwick’s business. The record

belies this claim. Zwick testified that construction rehabilitation

work was a part of his business. Zwick further testified that he

hired [the claimant’s employer] to do construction work at the

[p]roperty to prepare it for resale and that Zwick was ‘essentially’

the general contractor on the job. Zwick also testified that [the

claimant’s employer] had previously done construction work for

him at another property. . . . The credited evidence supports the

WCAB’s conclusion that Zwick was in the business of rehabilitating

properties for resale and that he hired [the claimant’s employer]

to perform work that was a regular part of his business.

Therefore, Zwick met the definition of a “contractor” under Section

302(a) of the Act.

Zwick, supra at 255. Since Zwick regularly solicited construction

rehabilitation work from the claimant and other parties, the Commonwealth

Court found that Zwick met the definition for a statutory employer under

Section 302(a)(2) even though he was not directly engaged in carrying out

construction work himself. Id. at 255 (“‘[S]ection 302(a), on its terms, also

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pertains to contractual delegations of aspects of an employer's regular or

recurrent business activities.’” (quoting Six L’s, supra at 1158)).

Applying Zwick to the instant circumstances, it matters not at all that

HESI was not directly involved in transporting and delivering barite. By its

very nature, subcontracting involves a delegation of responsibility to another

party. HESI took on a responsibility to, inter alia, ensure the availability and

inventory of barite at EQT well sites, including Scotts Run. HESI relied upon

Northwest to fulfill that obligation by effectuating deliveries of the material to

the sites. The record uniformly reflects the frequency and volume of barite

deliveries required pursuant to HESI’s well support business with EQT and

Northwest, which monopolized Northwest’s business activities in 2012.

On this point, I find that the Majority has taken a too-monolithic view of

business activities that risks creating an unnecessary bright-line rule

concerning the coverage of transportation contractors under the WCA. Where

part of an entity’s business activities includes some regular or recurrent

activity relying upon the assistance of subcontractors, Section 302(a)(2)

applies.4 Furthermore, the party contesting that his injuries are “not work-

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4 The learned Majority has quoted opinions from both this Court and our

Supreme Court expressing concern with the application of Section 302(a)(2)

and discussing the alleged rarity of secondary liability under the WCA. See

Patton v. Worthington Associates, Inc., 89 A.3d 643, 652 (Pa. 2014)

(Baer, J., concurring); Doman v. Atlas America, Inc., 150 A.3d 103, 110

(Pa.Super. 2016). I do not find this issue as clearcut as the Majority, which

seems focused on the potential evils worked by the litigation immunity

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related” under the WCA bears the burden of rebutting the presumption that

he is covered. Kohler v. McCrory Stores, 615 A.2d 27, 32 (Pa. 1992). Here,

“it is the plaintiff who asserts he is not covered by the [WCA] and he must

allege facts to show that he is not.” Id. at 32 n.5 (cleaned up).

Although this Court must view the record in the light most favorable to

Dobransky as the non-moving party, he has a concomitant obligation under

Pennsylvania law to adduce evidence in support of his position, i.e., that

Appellees are not his statutory employers. See Finder v. Crawford, 167

A.3d 40, 44 (Pa.Super. 2017) (“Failure of a non-moving party to adduce

sufficient evidence on an issue essential to his case and on which he bears the

burden of proof establishes the entitlement of the moving party to judgment

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afforded to statutory employers by Section 302(a)(2). Concomitantly, this

statute also makes statutory employers potentially liable without regard for

negligence. Thus, “[t]he tort immunity associated with the imposition of

secondary liability ‘reflects the historical quid pro quo between an employer

and employee whereby the employer assumes liability without fault for a

work-related injury[.]’” Doman, supra at 110 (quoting Tooey v. AK Steel

Corp., 81 A.3d 851, 860 (Pa. 2013)). While the WCA requires employers to

provide workers’ compensation coverage to their employees, this mandate

does not dispel the possibility that a direct employer will be unable to pay

when the time comes. See Six L’s, supra at 1150 (“[I]t was determined

during the course of the ensuing litigation that [the truck driver’s direct

employer] did not maintain workers’ compensation insurance.”).

Furthermore, I note that the concerns raised in both Patton and Doman

acknowledged that this Court is bound to apply the WCA as currently drafted

by the General Assembly. See Patton, supra at 651 (“I would advocate to

the General Assembly that it revise the statutory employer doctrine[.]”);

Doman, supra at 109 (“[W]e note that there have been prior calls to the

legislature to reconsider Pennsylvania’s statutory scheme.”). Since those

holdings, no legislation has been adopted amending Section 302(a)(2).

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as a matter of law.”). Instantly, Dobransky has produced no affirmative

evidence or testimony to dispute the basic facts set forth above concerning

the applicability of Section 302(a)(2). Since he bears the burden of proof on

this specific aspect of the case, HESI is entitled to summary judgment as a

matter of law based upon the undisputed facts of record. Thus, I would affirm

the trial court’s grant of summary judgment in favor of HESI.

Although this issue is understandably absent from the Majority’s writing,

I will also briefly address whether EQT should also be considered Dobransky’s

statutory employer due to “vertical privity.” This Court has concluded that

“no statutory employee status exists where no vertical contractual privity

exists.” Emery v. Leavesly McCollum, 725 A.2d 807, 811 (Pa.Super. 1999)

(en banc) (holding that statutory employer immunity extends to all

contractors and subcontractors in vertical contractual privity). However, “an

immediate contractual relationship is not required for statutory employer

immunity.” Id. (emphasis added). Rather, “the determining factor in these

cases is whether or not there is a vertical ‘chain’ of contracts,” wherein “all of

the contracts proceed downwards from the owner, i.e., owner contracts with

general contractor, general contract contracts with subcontractor,

subcontractor contracts with sub-subcontractor, and so on.” Id. at 812.

Here, EQT functioned as both the owner and the general contractor at

Scotts Run with the overall intent of preparing the site for natural gas

production. As detailed above, EQT contracted with HESI. In turn, HESI

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subcontracted a portion of its duties under that agreement to Northwest.

Thus, vertical contractual privity is present in this case. Accordingly, EQT is

similarly entitled to statutory employer immunity under Section 302(a)(2).

See Emery, supra at 811-12 (holding that a “subcontractor is [the] statutory

employer of [a] sub-subcontractor’s employee because of vertical relationship

between general contractor, subcontractor and sub-subcontractor.”). Thus, I

would also affirm the trial court’s grant of summary judgment in favor of EQT.

Based on the foregoing, I respectfully dissent.

Judge Olson, Judge Dubow, and Judge Murray join this Dissenting

Opinion.

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