Employee Of Property Management Company Can Sue Affiliated Mobile Home Park Where He Worked

Edwin Conk applied to work for Friendly Village (FV), a mobile home park in Toms River, N.J.  FV is a limited liability company, the managing member of which is PCI Redhen Corporation (PCI).  PCI owns 100% of the stock of Advanced Horizons Enterprises, Inc., (AHE).   AHE managed FV’s financial affairs andFriendlyVillage. 

Conk’s employment contract was with AHE.  He worked mainly at FV doing work in property management.  His paychecks came from AHE and he was enrolled in the 401k plan of AHE.  His employment costs were charged back through corporate transfers to FV.  Conk could be terminated by his then-wife, who worked for AHE and was the manager of FV. 

On August 10, 2007, Conk was injured while working at FriendlyVillage. He alleged that the manager, his then wife, insisted that he install plumbing in a decrepit attic in spite of the fact that the attic area was known to be unsafe due to rotten plywood floors.  He received workers’ compensation from AHE and brought a civil suit against FriendlyVillage.  FV argued that his claim against the company was barred by the exclusive remedy provision of N.J.S.A. 34:15-8.

The court identified the issue in this case as whether FV was the special employer of Mr. Conk.  The court cited Volb v. G.E. Capital Corp., 139 N.J. 110 (1995):  “In Volb, supra, the court held that ‘in suits brought by an injured employee against corporations that are parents, subsidiaries, or affiliates of the plaintiff’s employer, the general rule consistently applied by federal and state courts has been to deny workers’ compensation immunity on the ground that the separate corporate identity of affiliated corporations should not be disregarded.’”

The Appellate Division reversed an order granting summary judgment to FV, holding that Conk’s suit against FV is not necessarily barred by the immunity provision of the New Jersey Workers’ Compensation Act.  The court examined five factors to determine whether FV was Conk’s special employer and, therefore, precluding his civil suit against FV. 

(1) the employee has made a contract of hire, express or implied, with the special employer;

(2) the work being done by the employee is essentially that of the special employer;

(3) the special employer has the right to control the details of the work;

(4) the special employer pays the employee’s wages; and

(5) the special employer has the power to hire, discharge or recall the employee.

In the last analysis, the court said that it did not think FV was Conk’s special employer and that he might, therefore, proceed in his civil suit against FV.  “Nevertheless, we seriously question whether he can premise that liability on the negligent conduct of his AHE co-workers, including the ‘manager’ referred to in the quoted language of his complaint.”