Jeras v. East Manufacturing Corp.

Judgment reversed on the law without costs and complaint dismissed. Memorandum: The trial court should have dismissed the complaint in this wrongful death action as against defendant Newco Waste Systems (Newco) because the proof shows that decedent’s death was caused while he was acting in the course of his special employment with Newco. Although American Stevedoring paid decedent, furnished him with health insurance, and retained the right to hire and fire him, the facts established as a matter of law that decedent was a special employee of Newco (see, Cameli v Pace Univ., 131 AD2d 419, 420). "[I]n determining whether a special employment relationship exists, the key factor is the right to direct the work and the degree of control exercised over the employee” (Cameli v Pace Univ., supra, at 420). Here, decedent applied for employment at the Newco office and was employed at the instance of Newco. Although American Stevedoring had the right to discipline and to fire employees assigned to Newco, it would do so only on the recommendation of Newco. The proof is undisputed that all of decedent’s work assign [890] ments and day-to-day activities were directed and controlled by Newco and not by American Stevedoring. Moreover, the contract between the general employer and Newco expressly provided that it was Newco’s responsibility to direct and supervise the day-to-day activities of the employees, to provide the employees with work assignments, and to exercise control over them. Having found that the complaint must be dismissed as against Newco because decedent was its special employee, we need not decide whether the evidence was sufficient to prove that Newco was guilty of any negligence contributing to the death of plaintiffs decedent. The complaint should have been dismissed as against defendant Browning-Ferris Industries (BFI) as well. When the case was submitted to the jury, the court charged that plaintiff claimed that BFI, along with the others, was negligent in failing to warn decedent of the correct use of the trailer, in assisting to establish the route driven by decedent, in allowing the trailer to be filled over the recommended capacity and in failing to guide decedent safely through the route in question. There is no showing of any negligence on the part of BFI that contributed to decedent’s death. There was no evidence presented that BFI assumed day-to-day control and supervision of the drivers concerning the method of driving or the route taken, or day-to-day supervision of the loading and weight of the loads on the trailers, or that it directed or encouraged that the trailers be overloaded. Not only was there no showing that defendant BFI was guilty of any independent negligence that caused the accident, but there is insufficient evidence to hold BFI liable upon the principle of piercing the corporate veil. "[A] party seeking to pierce the corporate veil must plead and prove (1) complete domination and control of the subsidiary by the parent, not only generally, but with respect to the transaction at issue, (2) that this control was used to commit a fraud or other wrong, in contravention of the plaintiffs rights, and (3) that the control and its misuse caused the loss (Musman v Modern Deb, 50 AD2d 761, 762).” (Eastern States Elec. Contrs. v Crow Constr. Co., 153 AD2d 522, 523.) Here, not only did plaintiff fail to prove "complete domination and control of the subsidiary by the parent”, but, most significantly, plaintiff failed to prove that such control and its misuse caused the wrong. There was no showing that anything BFI did by way of controlling its subsidiary was a contributing cause of the death of decedent. [891] All concur, except Dillon, P. J., and Lawton, J., who dissent in part and vote to reverse and grant a new trial as against defendant Newco Waste Systems, in the following memorandum.