UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Samantha Young, et al.

v. Case No. 17-cv-016-AJ Opinion No.

Michael Doucette, et al.

MEMORANDUM ORDER

On January 20, 2014, Brian S. Young was killed while

helping to install snow chains on the tires of a tractor-trailer

truck. Invoking this court’s diversity jurisdiction, Young’s

widow 1 and adult daughter allege state-law claims against the

truck’s owner, Kelley Trucking, Inc., and its operator, Michael

Doucette. Specifically, the plaintiffs bring claims for

wrongful death against Doucette (Count 1), vicarious liability

and negligent entrustment against Kelley Trucking (Counts 2 and

3), and loss of spousal consortium and parental consortium

against both defendants (Counts 4 and 5). The case was assigned

to the undersigned magistrate judge, to whose jurisdiction the

parties consented. Doc. no. 5.

The court, in its scheduling order, approved the parties’

proposal to bifurcate this case into two phases. See doc. no.

12. In the first phase, the parties were to address whether the

1Young’s widow, Samantha Young, brings this action individually, on behalf of Young’s estate, and as mother and next friend of her minor child, E.Y. plaintiffs’ claims are barred by New Hampshire Revised Statutes

Annotated § 281-A:8. That statute, as a general matter, bars

“any claim based upon negligence by an employer or co-employee

for personal injuries arising out of or in the course of

employment . . . .” Gascard v. Franklin Pierce University,

(Laplante, J.) (quotation marks omitted) (quoting

Karch v. BayBank FSB,

(2002)).

With discovery on this issue now closed, the defendants

move for summary judgment, arguing that RSA 281-A:8 bars all

five counts. Doc. no. 14. The plaintiffs object. Doc. no. 15.

The court heard oral argument in February 2018. For the reasons

that follow, the court denies the defendants’ motion.

I. STANDARD OF REVIEW

Summary judgment is appropriate where “there is no genuine

dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also

Xiaoyan Tang v. Citizens Bank, N.A.,

(1st Cir.

2016). “An issue is ‘genuine’ if it can be resolved in favor of

either party, and a fact is ‘material’ if it has the potential

of affecting the outcome of the case.” Xiaoyan Tang,

(internal quotation marks and citations omitted). At the

summary judgment stage, the court “view[s] the facts in the

light most favorable to the non-moving party” and “draw[s] all

2 reasonable inferences in the nonmovant's favor . . . .” Garmon

v. Nat’l R.R. Passenger Corp.,

(1st Cir. 2016)

(citation and quotation marks omitted). The court will not,

however, credit “conclusory allegations, improbable inferences,

and unsupported speculation.” Fanning v. Fed. Trade Comm’n,

(1st Cir. 2016) (citation and quotation marks

omitted) cert. denied,

(2017).

“A party moving for summary judgment must identify for the

district court the portions of the record that show the absence

of any genuine issue of material fact.” Flovac, Inc. v. Airvac,

Inc.,

(1st Cir. 2016). Once the moving party

makes the required showing, “the burden shifts to the nonmoving

party, who must, with respect to each issue on which [it] would

bear the burden of proof at trial, demonstrate that a trier of

fact could reasonably resolve that issue in [its] favor.”

(citation omitted). “This demonstration must be accomplished by

reference to materials of evidentiary quality, and that evidence

must be more than ‘merely colorable.'”

(citations omitted).

The nonmoving party’s failure to make the requisite showing

“entitles the moving party to summary judgment.”

II. BACKGROUND

There are two corporate entities relevant to the present

dispute: Kelley Trucking and Kel-Log, Inc. Michael P. Kelley is

the sole owner of both companies. See doc. no. 14-2 ¶ 1. Kel-

3 Log harvests and sells raw forest products. Id. ¶ 2. Kelley

Trucking provides trucking and delivery services. See id. ¶ 3;

doc. no. 15-3 at 29-30. Kelley Trucking is a defendant in this

action; Michael Kelley and Kel-Log are not.

At the time Michael Kelley first incorporated Kel-Log,

workers’ compensation rules did not allow a company to rate

lumbermen and truck drivers as different classifications under

the same policy. Doc. no. 14-2 ¶ 4. Michael Kelley accordingly

decided to incorporate Kelley Trucking separately, so that his

truck drivers could be classified at a lower rate. Id. ¶ 5.

Though these rules have since changed, Michael Kelley has not

consolidated or merged the two companies. See doc. no. 15-3 at

22-23. The companies do share the same business location,

utilities, administrative staff, retirement plan, safety

handbook, and health and workers’ compensation insurance

policies. See doc. no. 14-2 ¶¶ 6, 7, 8, 9, 10, 14, 15. At the

same time, they have separate employer identification numbers,

own separate equipment and machinery, transact at arm’s length,

hold separate bank accounts without commingling funds, and

maintain separate financial statements, bookkeeping practices,

accounting and payroll records, and employment structures. See

doc. no. 15-3 at 19, 27, 33, 34, 35, 39, 53, 54. The companies

also separately pay rent for their office spaces. Id. at 35.

4 In January 2014, Brian Young was operating a feller buncher

— a machine that mechanically fells trees — at a work site in

Grafton, Maine. Doc. no. 14-2 ¶ 19; doc. no. 20 at 3. When

Young completed this work, Michael Kelley asked that he and

Michael Doucette move the feller buncher to a work site in

Errol, New Hampshire. Doc. no. 14-2 ¶ 20. Michael Kelley

directed that Doucette move the feller buncher using a tractor-

trailer truck owned by Kelley Trucking. Doc. no. 20 at 3.

Doucette drove the truck, and Young followed Doucette in his

personal vehicle. Doc. no. 16 at 2.

As they neared their destination, Young was killed while

helping Doucette install snow chains on the tires of the

tractor-trailer truck. Doc. no. 15-3 at 50; doc. no. 16 at 3;

doc. no. 18 at 1. Michael Kelley had previously trained

Doucette on the safe installation of winter chains. Doc. no.

15-3 at 51-52. Michael Kelley provides this training to all

Kelley Trucking employees. Doc. no. 15-3 at 50-5. Both Young

and Doucette were W-2 employees of Kel-Log when the accident

occurred. Doc. no. 14-2 ¶¶ 11, 12.

The plaintiffs recovered workers’ compensation benefits

under Kel-Log’s workers’ compensation policy. Doc. no. 14-2 ¶

23. They bring this action against Doucette and Kelley

Trucking, alleging negligence.

5 III. DISCUSSION

At the outset it is worth noting three principles of law on

which the parties agree. First, the parties agree that RSA 281-

A:8 generally bars an injured employee from bringing a

negligence action against his employer or co-employee for an

injury that is covered by his employer’s workers’ compensation

insurance. See

-A:8, I. Next, the

parties agree that this bar typically extends to anyone who may

recover damages on that injured employee’s behalf, including an

employee’s widow and children. See

§ 281-A:8, II. Finally,

the parties agree that if two corporations are in fact alter

egos as a matter of law, RSA 281-A:8’s protections generally

extend to both corporations. See Leeman v. Boylan,

, 233–34 (1991).

The defendants contend that when applied to the facts in

the record, these principles entitle them to summary judgment.

Though raised in a different order in the briefing, the

defendants’ arguments are twofold. First, the defendants

contend that RSA 281-A:8 bars all of the plaintiffs’ claims

because the undisputed facts in the record demonstrate that

Kelley Trucking and Kel-Log were alter egos at the time Young

was killed. Alternatively, the defendants contend that RSA 281-

A:8 precludes the plaintiffs’ claims, as Young and Doucette were

both W-2 employees of Kel-Log on the day in question.

6 The plaintiffs dispute both contentions. As to the first,

the plaintiffs counter that there is ample evidence that Kelley

Trucking and Kel-Log were separate corporate entities at the

time of the accident for the alter-ego question to be put to a

jury. 2 Similarly, the plaintiffs contend that there is a genuine

dispute in the record as to whether Doucette was a borrowed

servant of Kelley Trucking on the day in question, and therefore

not a co-employee of Young at that time. For these reasons, the

plaintiffs argue that summary judgment is inappropriate in this

case.

A. Alter Ego

As noted above, the parties agree, and it is well-

established under New Hampshire law, that entities that are

alter egos of one another may share employer immunity under RSA

281-A:8. See Leeman,

; Tanguay v. Marston,

(1986). There are few decisions, however,

addressing the specific factors a court should consider when

2In their objection, the plaintiffs request that the court enter summary judgment in their favor on this issue. See doc. no. 15-1 at 13. Per the Local Rules for this District, “[o]bjections to pending motions and affirmative motions for relief shall not be combined in one filing.” See LR 7.1(a)(1); see also Jan. 9, 2018 Notice of ECF Filing Error (citing this rule and noting that the plaintiffs must file a separate motion for summary judgment). As the plaintiffs have not filed a separate motion for summary judgment, the court declines to reach this request.

7 determining whether two corporations are alter egos for workers’

compensation purposes. 3 The parties accordingly turn to Section

112.01 of Larson’s Workers’ Compensation Law for guidance. See

doc. no. 14-1 at 10; doc. no. 15-1 at 8. As both parties rely

on that section, and there does not appear to be any contrary

controlling authority, the court will do the same. 4

“Generally, common ownership, identity of management, and

the presence of a common insurer are not enough to create

identity between [corporations] for [workers’] compensation

purposes.” 6 Larson’s Workers’ Compensation Law, § 112.01 at

112-3 (2004). “Probably the most significant factor is actual

control, and if [a corporation] is in practice not only

3 New Hampshire courts have primarily addressed the alter- ego doctrine in the context of corporate veil-piercing. Those cases are not particularly helpful, however, as they predominantly focus on whether the corporate identity has been used “to promote an injustice or fraud upon the plaintiff . . . .” Mbahaba v. Morgan,

(2012) (citation omitted). Unsurprisingly, the defendants make no such suggestion here.

4 Section 112.01 focuses in large part on a parent- subsidiary relationship. The plaintiffs assert that Kel-Log and Kelley Trucking do not share such a relationship, and argue that this is further reason to reject the defendants’ alter-ego argument. At the hearing, the defendants suggested that Kelley Trucking is in fact a subsidiary of Kel-Log. The court need not resolve this issue, because even assuming Kelley Trucking is Kel-Log’s subsidiary, the court cannot conclude that they are alter egos as a matter of law for the reasons stated infra. The court accordingly leaves for another day how Kelley Trucking and Kel-Log are affiliated, and what impact (if any) this has on the alter-ego analysis.

8 completely owned but completely controlled by [another

corporation], identity may well be found and immunity

conferred.”

“Conversely, a showing of absence of control

is perhaps the most effective single way to disprove the unity

of [corporations].” Id. at 112-4.

In arguing that Kelley Trucking and Kel-Log are alter egos,

the defendants unsurprisingly focus on what both companies have

in common. The defendants emphasize that Michael Kelley owns

both companies and that both share the same business location,

utilities, administrative staff, retirement plan, safety

handbook, and health and worker’s compensation insurance

policies. In the defendants’ view, these undisputed facts are

sufficient for the court to rule now that Kelley Trucking and

Kel-Log are alter egos as a matter of law.

In response, the plaintiffs point to evidence that they

contend demonstrates that Kel-Log and Kelley Trucking are

distinct corporate entities. The plaintiffs note that Kel-Log

and Kelley Trucking: have separate employer identification

numbers; own separate equipment and machinery; transact at arm’s

length; maintain separate bank accounts without commingling

funds; maintain separate financial statements, bookkeeping

practices, accounting and payroll records, and employment

structures; and separately pay rent for their office spaces.

The plaintiffs also note that Michael Kelley initially

9 established Kelley Trucking and Kel-Log as separate corporations

in order to secure lower workers’ compensation rates, and

continued to maintain the companies separately at the time of

the accident. In light of this evidence, the plaintiffs contend

that the alter-ego question should be put to the jury.

The plaintiffs have the stronger argument at this juncture.

The competing evidence in the record, when taken in its

totality, fails to demonstrate that Kel-Log has the requisite

level of control over Kelley Trucking for the court to hold that

they are alter egos as a matter of law. This question must

therefore be put to a jury. See Tanguay,

(noting that the alter ego determination “is a question for the

jury, unless the evidence would support only one finding as a

matter of law”). The court accordingly denies the defendants’

motion to the extent it is based on an alter-ego theory.

B. Borrowed Servant

The defendants contend that RSA 281-A:8 bars the

plaintiffs’ claims regardless of whether Kelley Trucking and

Kel-Log are alter egos because Young and Doucette were both W-2

employees of Kel-Log on the day of the accident. Because the

plaintiffs do not dispute this fact, they bear the burden of

demonstrating that their claims nonetheless survive summary

judgment. See Flovac,

. The plaintiffs attempt

10 to do so by arguing that there is evidence in the record

demonstrating that Doucette was a borrowed servant of Kelley

Trucking, and thus not Young’s co-employee, when Young was

killed. The defendants respond that Doucette was not a borrowed

servant of Kelley Trucking as a matter of law.

There are two lines of New Hampshire cases that potentially

inform the court’s analysis. The first, which the plaintiffs’

rely upon, addresses when one employer (typically referred to as

a “special employer”) can be held liable for the conduct of an

employee borrowed from another employer. See Wilson v. Nooter

Corp.,

(1975); Continental Ins. Co. v. N.H. Ins.

Co.,

(1980); Currier v. Abbott,

(1962). Under this line of cases, the “fundamental test” for

determining if an employee is a borrowed servant is whether the

special employer “exercised the right of control over the

performance” of the work in question. See Wilson,

-501 (citing Currier,

). See

(citing

Currier

). There are various factors relevant to

this inquiry, see Currier,

, and it is

typically up to a jury “to weigh the[se] factors and determine

which employer exercised the right to control,” see Wilson,

; see also Indemnity Ins. Co. of N. Am. v. Cannon,

(1947) (noting that the borrowed-servant question

11 is “a question of fact . . . upon which the finding of the Trial

Court cannot be disturbed if there is evidence to sustain it”).

The other line of cases, not cited by either side,

addresses whether the employee of one employer is a borrowed

servant of a special employer such that he falls under the

special employer’s workers’ compensation policy and is therefore

barred by RSA 281-A:8 from suing the special employer or its

employees for injuries covered by that policy. See Appeal of

Longchamps Elec., Inc.,

(1993); LaVallie v. Simplex

Wire and Cable Co.,

(1992); see also 9 Richard B.

McNamara, New Hampshire Practice: Personal Injury — Tort and

Insurance Practice § 9.35 (4th ed. 2015). For the purposes of

this analysis, the New Hampshire Supreme Court applies the

definition of “servant” supplied in Section 220 of the Second

Restatement of Agency. See LaVallie,

. Under

that section, “a servant is a person employed to perform

services in the affairs of another and who with respect to the

physical conduct in the performance of the services is subject

to the other’s control or right to control.” Restatement

(Second) of Agency § 220(1). Analyzing this issue requires

consideration of a non-exhaustive list of ten factors. See id.

§ 220(2); see also LaVallie,

(applying these

factors, as spelled out in a New Hampshire Department of Labor

regulation). Whether an employee is a borrowed servant under

12 these factors “depends on the facts of the case.” Petition of

City Cab of Manchester, Inc.,

(1994)

At the outset, it is not clear to the court that these two

lines of cases are analytically distinct. Both lines of cases

cite the same Restatement sections, and, as a result, address

many of the same factors. Compare LaVallie, 135 N.H at 695-96

with Currier,

. That said, it is unclear

whether this is because both lines of cases apply the same

analysis or because the first line of cases approvingly cites

Restatement Section 227, comment c, which states that “[m]any of

the factors stated in Section 220 which determine that a person

is a servant are also useful in determining whether the lent

servant has come the servant of the borrowing employer.”

Moreover, beyond one parenthetical citation in a string cite,

see LaVallie,

(citing Currier,

),

none of the above cases cites to, let alone relies upon, a

decision from the other line of cases. In light of this, the

court cannot say with certainty whether these lines of

precedents reflect related but ultimately distinct inquiries, or

two versions of the same analysis. 5

5 Even assuming these lines of cases are analytically distinct, neither neatly applies to the present circumstances. On the one hand, the plaintiffs invoke the borrowed-servant doctrine in an attempt to hold Kelley Trucking liable for Doucette’s conduct. Yet the plaintiffs do so at least in part for strategic purposes, as there is no dispute that RSA 281-A:8

13 The court need not resolve this issue now. As the

parties’ papers and arguments only address the first line of

cases, the court assumes without deciding that those cases

control. Thus, for the defendants to be entitled to summary

judgment, the record must demonstrate that Kel-Log exercised

sufficient control over Doucette’s performance on the day in

question as a matter of law.

The plaintiffs marshal sufficient evidence for this

question to be put to a jury. In their objection to the motion

for summary judgment, the plaintiffs point to record evidence

demonstrating or supporting a reasonable inference that: (1)

Michael Kelley owns and operates both Kelley Trucking and Kel-

Log; (2) Kelley Trucking and Kel-Log were incorporated to serve

distinct purposes; (3) Kelley Trucking was incorporated for the

purpose of trucking and delivery; (4) Michael Kelley trains

Kelley Trucking employees on how to install winter tires on

Kelley Trucking vehicles; (5) Michael Kelley recalls giving

Doucette that training; (6) Michael Kelley directed Doucette to

transport the fell buncher on the day in question; and (7)

Michael Kelley directed that Doucette do so using a Kelley

Trucking tractor-trailer truck. See doc. no. 15-1 at 3-5, 14-

would bar their claims if Doucette was a Kel-Log employee at the time of the accident.

14 18. 6 When viewed in the light most favorable to the plaintiffs,

these facts support a reasonable inference that Kelley Trucking

exercised some measure of control over Doucette at the time of

the accident. Whether this control was sufficient, in light of

the relevant factors, for Doucette to be a borrowed servant of

Kelley Trucking is a quintessential jury question. 7 See Wilson,

.

IV. CONCLUSION

For the reasons set forth above, the court denies the

defendants’ motion for summary judgment (doc. no. 14). The

Clerk’s Office shall schedule a case-management conference at

which the court will establish a schedule for the merits phase

6 The plaintiffs cite additional favorable evidence in their surreply. See, e.g., doc. no. 28 at 2-3. The defendants argue that the court should not consider this evidence, as it was not properly cited in the plaintiffs’ objection. As the evidence actually cited in the objection is sufficient to defeat summary judgment, the court need not, and does not, consider this additional evidence now.

7 The defendants contend that that the plaintiffs have it backwards, and that Kelley Trucking in fact lent Kel-Log the tractor-trailer truck on the day in question. Thus, according to the defendants, Doucette remained a Kel-Log employee when the accident occurred. While there is certainly evidence in the record to support this conclusion, it is not the only reasonable conclusion that can be drawn from the evidence. As such, summary judgment is inappropriate.

15 of this litigation. The parties shall submit a proposed

discovery plan at least five days prior to this conference.

SO ORDERED.

______________________________ Andrea K. Johnstone United States Magistrate Judge

July 3, 2018

cc: Sandra L. Cabrera, Esq. Philip R. Waystack, Jr., Esq. Doreen F. Connor, Esq.

16