Metropolitan News-Enterprise


Thursday, April 12, 2007


Page 1


Property Manager Liable to Unlicensed Contractor’s Worker—C.A.




A professional property manager is jointly and severally liable for payment of workers’ compensation benefits owed the employee of an  unlicensed and uninsured contractor for injuries sustained while working on a condominium building, the Court of Appeal for this district has ruled.

Div. Three yesterday certified for publication its March 13 opinion holding Pegasus Properties, Mark Hruby of Rube’s Rain Gutter Service, and  Montana Villas Homeowners Association jointly and severally liable for benefits due Freddy Aguilera. Aguilera was injured in 1997, on his first day of work at Montana Villas, where Hruby hired him to help install new rain gutters for $65 a day.

Hruby had been hired by Robert Heiman, the owner of Pegasus, which at the time managed Montana Villas, a condo complex in Brentwood. The hiring occurred after the association board authorized the installation, recommended by Pegasus, at a cost of $1,050.

Aguilera was injured when a rain gutter contacted a high voltage electrical wire. He named Hruby, Pegasus, the Uninsured Employers Benefits Trust Fund, the association, and the individual unit owners as parties potentially liable for payment of workers’ compensation benefits.

Appeals Board Ruling

Following a trial, the workers’ compensation judge ruled that Aguilera was 90 percent disabled as a result of the injury, that Hruby was liable for benefits as Aguilera’s employer and that Pegasus, the association, and the individual owners were not liable. On reconsideration, however, the Workers’ Compensation Appeals Board held that Pegasus was the sole employer for workers’ compensation purposes.

On petition for writ of review to the Court of Appeal, Pegasus argued that as the agent for the association and/or the unit owners, who were held not liable as a matter of law, it could not be held liable. Alternatively, it argued that the association was liable because it chose Hruby from among three bidders and paid for the installation.

But Justice Walter Croskey, writing for the panel, explained that under workers’ compensation statutes, the owner or occupant of a residence cannot be treated as an “employer’ unless the injured worker earned at least $100 from the owner or occupant during the preceding 90 days. 

The WCAB, the justice said, was correct in holding Pegasus liable but should have held Hruby and the association liable as well.

The contractor “was a dual employer,” Croskey explained, because it hired Aguilera to install rain gutters, which is the business the company was in, and controlled his work and hours. That Pegasus is also an employer within the meaning of the statutes does not negate Hruby’s liability, the justice said.

Under the evidence presented to the WCJ, Croskey went on to say, Pegasus qualifies as an employer but the unit owners do not. It was Pegasus, he said, that reached the agreement with Hruby and that is deemed an employer under Labor Code Sec. 2750.5, which has been construed as conferring such status on the party that hires an unlicensed contractor whose worker is injured on the job.

Immunity Not Shared

Pegasus does not share the owners’ immunity, Croskey said, because as a matter of law, an agent incurs liability for acts done on the principal’s behalf but does not necessarily share any defenses the principal may have. “Moreover, Pegasus was the agent of the Association, not the owners, as determined by the WCAB,” the justice wrote.

The association, however, is a separate legal entity from the owners and does not share the owners’ defense under the statute, Croskey explained, and is thus liable as the principal of Pegasus.

The case was argued on appeal by Susan Kaplan of Graiwer & Kaplan for Pegasus and by Terrance O’Malley of the Department of Industrial Relations for the respondents.

The case is Heiman v. Workers’ Compensation Appeals Board, B187206.


Copyright 2007, Metropolitan News Company