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Holt v. Walsh Group

United States District Court, District of Columbia

July 10, 2018

CECIL HOLT, Plaintiff,
WALSH GROUP, et al., Defendants.


          G. Michael Harvey, United States Magistrate Judge

         Before the Court is Third-Party Defendants' motion to dismiss Third-Party Plaintiff's claims for contractual and equitable indemnification and contribution on the grounds that they are barred by the District of Columbia's Workers' Compensation Act (“WCA”), D.C. Code § 32-1504. Upon consideration of the entire record, [1] and for the reasons set forth below, Third-Party Defendants' motion to dismiss will be GRANTED IN PART and DENIED IN PART.

         I. BACKGROUND

         On April 21, 2014, Plaintiff Cecil Holt (“Holt”) was injured while working on a construction site at 402 Tingey Street SE, Washington, D.C. when he fell through a hole in the roof he alleges was improperly covered. Holt is an employee of Tradesmen International, LLC (“Tradesmen”), a corporation that provides temporary, unskilled labor to its clients. In April 2014, Tradesmen entered into a Client Services Agreement with Third-Party Defendant AES Clean Technology, Inc. (“AES”), in which Tradesmen agreed to assign Holt to AES on a permanent basis. AES, in turn, assigned Holt to work for Third-Party Defendant Unified Building Systems, Inc. (“UBS”), a division of AES. UBS, through AES, was a subcontractor of Third-Party Plaintiff Walsh Construction Company II, LLC (“Walsh”), the general contractor of the construction project at 402 Tingey Street SE. UBS and Walsh have a signed Subcontract Agreement (“Subcontract”) dated August 15, 2012, that governed the nearly $3, 000, 000 of work UBS completed for Walsh on the project, namely, installing metal wall panels and louvers.

         Holt originally filed his action in the D.C. Superior Court, naming Walsh (among others) as a Defendant, alleging that Walsh's negligent control of the construction premises and project contributed to his injury. The action was subsequently removed to this Court on diversity jurisdiction. Holt had also named AES as a Defendant in the original action, but that claim was dismissed with Plaintiff's consent. Minute Order on July 27, 2017 granting Dkt. 19. On January 31, 2018, Walsh filed a Third-Party Complaint against AES and UBS (among others), seeking, in the event Walsh is found liable to Holt, (1) contractual indemnification (Counts VII and X), (2) equitable indemnification (Counts VIII and XI), and (3) contribution (Counts IX and XII[2]) pursuant to the Subcontract, in which Walsh contends that UBS agreed to defend, indemnify, and hold harmless Walsh in and against all claims or actions arising out of work performed under the Subcontract. [Dkt. 37 at 13-17].

         In the pending motion to dismiss, Third-Party Defendants AES and UBS (“AES/UBS”) argue that Walsh's claims for indemnification and contribution are barred by the WCA, D.C. Code §§ 32-1501 et seq., specifically, section 32-1504, which provides that an employee's exclusive remedy against an employer for accidental injuries on the job is through the WCA.[3] [Dkt. 52-1 at 9]. Walsh counters that its contractual indemnification claim falls within an exception to section 32-1504, which allows for express indemnification provisions. [Dkt. 55 at 7]. Walsh also contends that the Subcontract contains an express waiver of section 32-1504, which should operate to allow its indemnification and contribution claims to proceed. Id.


         A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of a complaint on the basis that it fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A court reviewing a 12(b)(6) motion must accept as true the well-pleaded factual allegations contained in the complaint. Atherton v. D.C. Office of Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009). While the plaintiff need not make “detailed factual allegations” to avoid dismissal, he must provide “more than labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Rather, the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). To meet this standard, the plaintiff must “plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.


         The purpose of the WCA is to establish a quick and efficient system by which an employee may recover damages from his employer for accidental injuries “arising out of and in the course of employment.” D.C. Code § 32-1501(12); see also Ferreira v. D.C. Dep't of Emp't Servs. (Workers' Comp.), 531 A.2d 651, 656 (D.C. 1987). If an employee is injured on the job and wants compensation from his employer, he must bring suit under the WCA in accordance with section 32-1504, an exclusivity provision that limits both the scope of an employer's liability and the compensation available to an employee. It states:

The liability of an employer prescribed in [the section regarding coverage] shall be exclusive and in place of all liability of such employer to the employee, his legal representative, spouse or domestic partner, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law on account of such injury or death.
The compensation to which an employee is entitled under this chapter shall constitute the employee's exclusive remedy against the employer, or any collective-bargaining agent of the employer's employees and any employee, officer, director, or agent of such employer, insurer, or collective-bargaining agent (while acting within the scope of his employment) for any illness, injury, or death arising out of and in the course of his employment.

D.C. Code § 32-1504(a)-(b). The WCA's exclusivity provision seeks to strike a balance between employee and employer: the employee gets “faster and virtually guaranteed compensation for accidental job-related injury, ” even where the employee was negligent, and the employer's assumption of a degree of no-fault liability relieves it “of its previously unlimited common law tort liability.” Myco, Inc. v. Super Concrete Co., Inc., 565 A.2d 293, 296 (D.C. 1989). Awards under the WCA “often fall far short of those potential [tort] awards, ” id., due to compensation guidelines and a statutory maximum cap on the compensation amount, see D.C. Code §§ 32-1505 to 1511. Although an employer is protected from tort liability under the WCA, an employee is not precluded from suing a third party that he asserts is partially or wholly at fault for his injury. Myco, 565 A.2d at 296. However, a goal of the WCA's exclusivity provision is to limit an employer's financial liability when an employee is injured, and if a third party in turn seeks recovery from the employer, that claim “runs head-on” into the exclusivity provision. Id. at 297.

         Before confronting the merits of AES/UBS's motion to dismiss, which seeks application of the WCA's bar to Walsh's claims, the Court must first address a threshold issue: whether AES/UBS are Holt's employer and, therefore, covered by the WCA. If AES/UBS are not Holt's employer, the WCA does not apply and it would not limit the types of claims Walsh may bring against AES/UBS. AES/UBS argue that they are Holt's employer under the “lent employee” doctrine and are thereby protected by the WCA's exclusivity provision. [Dkt. 52-1 at 4]. Walsh fails to contest AES/UBS's “lent employee” argument in its opposition. [Dkt. 55 at 5]. The argument is therefore conceded. See Lockhart v. Coastal Int'l Sec., 905 F.Supp.2d 105, 118 (D.D.C. 2012) (“[W]hen a [litigant] files a response to a motion to dismiss but fails to address certain arguments made by the defendant, ...

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