Holt v. Walsh Grp.
Holt v. Walsh Grp.
Opinion of the Court
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"),
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 *277(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
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,
II. LEGAL STANDARD
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 ,
III. DISCUSSION
The purpose of the WCA is to establish a quick and efficient system by which an employee may recover damages *278from his employer for accidental injuries "arising out of and in the course of employment."
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.
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. ,
Even had it not been conceded, the Court would find in favor of AES/UBS on this issue. The "lent employee" doctrine *279holds that when a "general employer" lends an employee to a "special employer," the "special employer" also becomes liable for workers' compensation if: "(a) the employee has made a contract of hire, express or implied, with the special employer; (b) the work being done is essentially that of the special employer; and (c) the special employer has the right to control the details of the work." USA Waste of Maryland, Inc. v. Love ,
As a "lent employee," Holt is thus barred by the WCA's exclusivity provision from bringing a tort action against AES/UBS. See Love ,
A. Express Indemnification
Indemnification is a form of restitution that generally involves shifting the entire burden of liability from the indemnitee to the indemnitor. See District of Columbia v. Wash. Hosp. Ctr. ,
As the D.C. Court of Appeals observed in Myco , it is "well-settled in most jurisdictions" that an employer's agreement to indemnify a third party pursuant to an express contract is an exception to the exclusivity provision of a workers' compensation statute.
The indemnification provision of UBS's Subcontract with Walsh
To the fullest extent permitted by law, Subcontractor [UBS] shall indemnify, defend (with counsel reasonably satisfactory to Contractor), and save harmless ... Contractor [Walsh] ... from and against any and all suits, actions, legal or administrative proceedings, claims, debts, demands, damages, consequential damages, liabilities, judgments, fines, penalties, interest, actual attorney's fees, costs and expenses of whatever kind or nature (hereafter "Indemnified Claims") and whether they may arise before, during, or after performance of Subcontractor's Work which are in any manner directly or indirectly caused [or claimed to be caused], occasioned, or contributed to, in whole or in part, through any act, omission, fault or negligence whether active or passive of Subcontractor, or anyone acting under its direction, control, or on its behalf or for which it is legally responsible, in connection with or incident to the Subcontractor's Work or arising out of any failure of Subcontractor to perform any of the terms and conditions of this Subcontract ....
[Dkt. 52-3, ¶ 9.1].
Use of the language "indemnify" and "save harmless" expressly and unambiguously created an indemnitor-indemnitee relationship between the contracting parties. See, e.g., N.P.P. Contractors, Inc. v. John Canning & Co. ,
*281Lest there be any doubt, the Subcontract also contains a provision that directly addresses the interplay between AES/UBS's indemnification obligation and the limitations otherwise imposed by workers' compensation acts. It states:
In any and all claims against the Indemnified Parties, by any employees of the Subcontractor, anyone directly or indirectly employed by the Subcontractor or anyone for whose acts the Subcontractor may be liable, the Subcontractor's indemnification obligations under this Agreement shall not be diminished or limited in any way by any limitation on the amount or type of costs, damages, compensation or benefits payable by or for the Subcontractor or any of its subcontractors under worker's compensation acts, disability benefit acts or other employee benefit acts.
[Dkt. 52-3, ¶ 9.2].
AES/UBS counter that despite the express indemnification provision in the Subcontract, because the language in the Subcontract requires some kind of fault or negligence on AES/UBS's part, and because an "employer cannot be liable to its employee under a negligence or fault theory," Walsh's contractual indemnification claims are barred by the WCA's exclusivity provision. [Dkt. 52-1 at 11]. AES/UBS have it backwards. Under District of Columbia law it is the express indemnification language in the Subcontract-including the provision encompassing negligent acts of AES/UBS-that operates to trump the WCA's exclusivity provision.
B. Equitable Indemnification
AES/UBS also seek to dismiss Counts VIII and XI, Walsh's equitable indemnification claims. [Dkt. 37 at 14-17]. Equitable indemnification is appropriate in situations where the third party and employer "stand in a special legal relationship that carries with it the obligation ... to indemnify the third party." Myco ,
Here, the issue is whether the presence of Walsh's express indemnification provision with AES/UBS precludes it from additionally asserting a claim for equitable indemnification. Indeed, many states have held that where an express, written indemnification provision exists, the agreed upon terms of that provision-and not principles of implied or equitable indemnification-control the duties and respective liability of the contracting parties. See, e.g., *282Commercial Ins. Co. v. Pac.-Peru Constr. Corp. ,
However, several courts in the District of Columbia have allowed a plaintiff to plead an equitable indemnification claim in the alternative. See Truesdale v. Mountain Productions, Inc. ,
Given the relatively low bar a plaintiff must meet at the pleading stage, see Fed. R. Civ. P. 8(a), that the court must "construe the complaint in a light most favorable to the plaintiff," Wada v. United States Secret Serv. ,
*283do not argue in their motion to dismiss that these claims are insufficiently pleaded. [Dkt. 52-1]. Accordingly, AES/UBS's motion to dismiss Counts VIII and XI will be denied.
C. Contribution
In Counts IX and XII, Walsh also seeks contribution from AES/UBS, "jointly and severally, as to any and all damages" in the event it is held liable either in whole or in part to Holt. [Dkt. 37 at 15, 17]. However, it is well-settled that a contribution claim, which "sounds primarily in tort," Eagle-Picher Indus., Inc. v. United States ,
Though Walsh contends that AES/UBS waived the WCA's exclusivity provision in the Subcontract [Dkt. 55 at 8], the alleged waiver expressly applies only to "the Subcontractor's indemnification obligations" [Dkt. 52-3, ¶ 9.2]. No provision of the Subcontract provides for contribution or purports to waive the WCA's exclusivity provision with regard to it. [Dkt. 52-3]. Again, agreements to limit the scope of the WCA's exclusivity provision, such as the one AES/UBS entered with Walsh, are to be "narrowly construed by the courts 'so as not to read into [them] any obligations the parties never intended to assume.' " Rivers & Bryan ,
Walsh further argues, without citing authority, that its contribution claim should be permitted, arguing fairness and equity require that Holt's losses be distributed among all wrongdoers. [Dkt. 55 at 9]. But the need for fairness and equity is satisfied by the WCA's exclusivity provision, which "roughly balance[s] the sacrifices of and benefits to both employer and employee," by ensuring that the employee gets "faster and virtually guaranteed compensation" for job-related injuries and the employer "is relieved of its previously unlimited common law tort liability." Myco ,
IV. CONCLUSION
For the foregoing reasons Third-Party Defendants' motion to dismiss [Dkt. 52] is GRANTED IN PART and DENIED IN PART . Specifically, the motion to dismiss is granted as to Counts IX and XII, and denied as to Counts VII, VIII, X, and XI.
The docket entries relevant to this memorandum opinion are: (1) Walsh's Complaint [Dkt. 37]; (2) Parties' Subcontract Agreement [Dkt. 37-5]; (3) Tradesmen's Client Services Agreement [Dkt. 37-6]; (4) AES/UBS's Motion to Dismiss [Dkt. 52; Dkt. 52-1]; (5) Walsh's Opposition [Dkt. 55]; and (6) AES/UBS's Reply [Dkt. 60]. All citations to page numbers within a particular document will be to the ECF docket page numbers assigned to the document.
Due to a typographical error, there are two Count IXs in the Third-Party Complaint. The first asserts a contribution claim against UBS. [Dkt. 37 at 15]. The second asserts a contribution claim against AES. Id. at 17. But for the typographical error, the second Count IX would be Count XII of the Complaint. Accordingly, the second Count IX will be referred to in this opinion as "Count XII."
The parties do not dispute that the law of the District of Columbia is applicable to their action. See Dkt. 37; Dkt. 57. Indeed, the Subcontract directs that its terms be governed by District of Columbia law or the law of the state or territory in which the construction project is situated, here, the District of Columbia. [Dkt. 52, Ex. 2, ¶ 11.1].
Myco did not in fact involve an express indemnification contract. Nevertheless, this Court has cited this observation in Myco as illuminating District of Columbia law concerning the interplay between an express indemnification agreement and the WCA's exclusivity provision. See, e.g., Truesdale v. Mountain Productions, Inc. ,
Walsh hinges both of its contractual indemnification claims (Counts VII and X) on the Subcontract. [Dkt. 37 at 13, 15]. The only parties to the Subcontract are UBS and Walsh. [Dkt. 52-2]. Nonetheless, AES does not contest that it is bound by UBS' Subcontract with Walsh, see Dkt. 60 at 2 ("in the Subcontract Agreement with AES/UBS..."), apparently because of its corporate relationship to UBS. [Dkt. 52 at 1; Dkt. 52-1 at 1 (describing UBS as an "affiliate" or "division" of AES) ].
AES/UBS's reliance on Myco in support of their argument to the contrary is misplaced. [Dkt. 52-1 at 11]. The language they quotes from Myco relates to the Court of Appeals' discussion of the interplay between the WCA and claims of implied indemnification. See Myco ,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.