Court of Appeals of Texas, Houston (14th Dist.).

Steven C. HUGHES, Appellant

v.

COMPAQ COMPUTER CORPORATION, Appellee

No. 14-96-00225-CV.

|

Dec. 12, 1996.

Panel consists of Justices YATES, HUDSON and FOWLER.

OPINION

FOWLER, Justice.

*1 This appeal is from a summary judgment granted in favor of appellee, Compaq Computer Corporation (“Compaq”), on the ground that appellant, Steven Hughes (“Hughes”), may not recover on his common law claims against Compaq because the workers’ compensation benefits he received are his exclusive remedy for his injuries. See Tex.Rev.Civ. Stat. Ann. art. 8308-4.01 (repealed).¹ Hughes raises three points of error contending the trial court erred in granting Compaq’s motion for summary judgment because genuine issues of material fact exist as to whether (1) Hughes was acting as Compaq’s borrowed servant at the time of his injury, (2) Compaq had workers’ compensation coverage in force on the date of Hughes’s injury, and (3) Compaq was Hughes’s special employer. We reverse and remand.

Hughes was employed by Superior Temporaries, Inc. (“Superior”). In the summer of 1992, Superior assigned Hughes to work for Compaq as a temporary employee pursuant to a contract between Compaq and Superior. On December 9, 1992, Hughes was injured while working at Compaq’s premises. He claimed he tripped and fell over a bolt protruding from the floor. After his injury, Hughes received worker’s compensation benefits from Superior’s carrier. On January 12, 1994, Hughes sued Compaq to recover for his injuries. Compaq moved for summary judgment based on the affirmative defense that Hughes was its borrowed servant and that the worker’s compensation benefits Hughes received were his exclusive remedy. The trial court granted Compaq’s motion for summary judgment, and Hughes now brings this appeal.²

Our standards for reviewing summary judgments are well established. The movant for summary judgment has the burden to establish that there is no genuine issue of material fact and it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). Evidence favorable to the non-movant will be taken as true in deciding whether there is a disputed material fact precluding summary judgment. Id.

We must indulge every reasonable inference in favor of the non-movant and must resolve any doubts in his favor. Id.; Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984).

A summary judgment for the defendant disposing of the entire case is proper only if, as a matter of law, the plaintiff could not succeed upon any theories pleaded. Dodson v. Kung, 717 S.W.2d 385, 390 (Tex.App.-Houston [14th Dist.] 1986, writ ref’d n.r.e.). If a defendant moves for summary judgment based on an affirmative defense, the defendant has the burden to prove conclusively all the elements of the affirmative defense as a matter of law. Montgomery, 669 S.W.2d at 310-11.

Because they mirror one another, we address Hughes’s first and third points of error together. The central issue we must resolve is whether Compaq established, as a matter of law, that it had the right to control Hughes’s work at the time of his injury so as to make Hughes Compaq’s borrowed servant, or conversely, to make Compaq Hughes’s special employer.

*2 Texas courts have long recognized that a general employee of one employer may become the borrowed servant of another. Carr v. Carroll Co., 646 S.W.2d 561, 563 (Tex.App.-Dallas 1982, writ ref’d n.r.e.). This borrowed servant doctrine protects the employer who had the right of control from common law liability. Id.

The critical consideration in determining whether a general employee has become a special employee or borrowed servant is which employer had the right to control the details of the employee’s work. Dodd v. Twin City Fire Ins. Co., 545 S.W.2d 766, 768 (Tex.1977). The employer with the right to control the employee at the time of the accident is the “employer” for worker’s compensation purposes. Archem Co. v. Austin Indus., Inc., 804 S.W.2d 268, 269 (Tex.App.-Houston [1st Dist.] 1991, no writ).

Which employer had the right of control is ordinarily a question of fact. Sparger v. Worley Hosp., Inc., 547 S.W.2d 582, 583 (Tex.1977). Applicability of the borrowed servant doctrine must be reviewed on a case-by-case basis. J.A. Robinson Sons, Inc. v. Wigart, 431 S.W.2d 327, 332 (Tex.1968), overruled on other grounds by Sanchez v. Schindler, 651 S.W.2d 249 (Tex.1983). We cannot infer that the general employer has surrendered control merely because it permitted a division of control. Cantrell v. Markham & Brown Co. & Assocs., 452 S.W.2d 940, 948 (Tex.Civ.App.-Dallas 1970, writ ref’d n.r.e.).

When there is no written agreement or the agreement between two employers contains no provision for right of control, the right to control is determined from such facts and circumstances as the nature of the project, the nature of the work to be performed, the length of the special employment, the type of machinery furnished, and acts representing an exercise of actual control. Producers Chem. Co. v. McKay, 366 S.W.2d 220, 226 (Tex.1963). Other relevant factors tending to establish borrowed servant status include the right to hire and discharge the worker and the payment of wages. Alaniz v. Galena Park ISD, 833 S.W.2d 204, 207 (Tex.App.-Houston [14th Dist.] 1992, no writ).

Even where the parties are operating under a contract expressly assigning the right of control, if the right of control retained over an employee is a controverted issue, the factfinder should consider what the contract contemplated and whether the contract was enforced. Exxon v. Perez, 842 S.W.2d 629, 630 (Tex.1992). A contract between two employers providing that one shall have the right of control is a factor to be considered, but is not determinative, when there is evidence of the right of control from which the factfinder could conclude that the employee is a borrowed servant. Id.

Compaq contends the contract in this case is silent as to the right of control, but Hughes argues that the contract provides that he is only Superior’s employee and Superior had the right to control his activities while he worked at Compaq. The relevant provisions are as follows:

*3 16.2 SUPPLIER [Superior] is an independent CONTRACTOR and shall be free to exercise its discretion and judgment as to the method and means of performance of the services contracted by the COMPANY [Compaq].

16.8 SUPPLIER nor SUPPLIER’s employees, shall in no way be deemed employees of COMPANY. SUPPLIER shall pay all compensation of every character of SUPPLIER’s employees, and shall pay all taxes, charges, benefits, claims, and liabilities of every kind which may arise by virtue of their employment by SUPPLIER and their acts and duties hereunder. It is understood that there is no obligations [sic], written or implied, on the part of the COMPANY to hire SUPPLIER or SUPPLIER’s employees now or at any time in the future.

These sections do not expressly provide which company has the right to control Hughes’s work. Likewise, section 4.3, which Compaq cites, does not expressly assign the right of control. Section 4.3 concerns Superior’s reimbursable expenses. It states that Superior may be reimbursed for employees’ travel and lodging expenses, if authorized by a Compaq Manager “who shall be responsible on behalf of the COMPANY for monitoring the work performed by such SUPPLIER employee.” When considered in context, section 4.3 does not expressly grant Compaq the right to control the details of the employees’ work. Therefore, we review the summary judgment evidence to determine whether Compaq established from the facts and circumstances that it had the right of control as a matter of law.

To establish that Hughes was its borrowed servant, Compaq provided summary judgment proof in the form of affidavits from one of its supervisors and a Superior employee, Hughes’s answers to interrogatories, and deposition excerpts.³ Hughes testified at his deposition that Compaq was the only company he had done work for during his six months of employment by Superior before the accident. His work consisted of “moving boxes, driving a forklift, things like that.” In answers to interrogatories, Hughes stated that when the accident occurred, he was on his way to see “Bobby, to see if there was anything I needed to do before lunch.”⁴

Maria Darleen Arisco, a supervisor in Compaq’s inventory operations department, provided an affidavit stating she was Hughes’s supervisor at the time of the accident. Hughes’s position was that of “materials associate,” and his responsibilities included moving inventory or boxes. She stated, “I instructed Steve Hughes what he should do and how he should do it while he was at Compaq. I provided Mr. Hughes with whatever instruction was necessary for him to do his job while he was in my department. I controlled the number of hours that he worked and approved any breaks from work that he wanted. If tools or machinery were needed to do his work, I was the person who directed him to use them.” In Compaq’s Reply to Hughes’s Response, it also included excerpts from Arisco’s deposition, which contained the same information.

*4 Kevin Baer, vice-president and general manager for Superior, also provided an affidavit. He stated in relevant part as follows:

4. While Stephen Hughes was on assignment to Compaq and on the premises of Compaq, Compaq had the right to control his work, to supervise his work, to direct the manner in which he performed his work, to set the number of hours he worked and to determine when he could take his breaks, and to direct him to use tools or machinery for his work as needed.

5. At the time he was injured on December 9, 1992, Mr. Hughes was under the supervision of Compaq employees. He was not under the supervision of Superior. It was not Superior’s responsibility to supervise Mr. Hughes job responsibilities or the manner in which he performed his job while he was on assignment to Compaq. Temporary employees such as Mr. Hughes are told to report to the customer contact on-site and to follow their directions.

6. Under Superior’s agreement with Compaq, Superior was required to maintain workers’ compensation coverage for temporary employees, including coverage for Mr. Hughes.

7. The fee that Superior charges to Compaq for providing it with temporary employees includes the cost of providing insurance for temporary employees supplied to it, including workers’ compensation insurance coverage with its carrier.

8. Mr. Hughes was made aware that he was entitled to workers’ compensation benefits and he elected to avail himself of those benefits.

In his Response to Compaq’s motion, Hughes provided excerpts from his own deposition to controvert Compaq’s proof. Relevant portions include:

Q: And what were they paying you?

A: They were paying me $6 an hour.

Q: This is Superior was paying you?

A: Superior Temporaries.

Q: And who was your, I guess, boss, supervisor, pusher, whatever?

A: I don’t remember my supervisor’s name at Superior Temporaries.

Q: At Superior?

A: Yes.

Q: Did you have a, I guess a boss or foreman or whatever, supervisor, that was a Compaq employee?

A: It wasn’t a supervisor over at Compaq. It was just basically the other temporary agents told me what to do.

​

Q: Is there any person that you reported to when you came to work?

A: No. I just reported to my supervisor at Superior Temporaries.

Q: Who was that?

A: I don’t remember what her name was.

Q: Did they keep time records or-

A: I kept my own time records.

Q: You did?

A: Yes.

Q: Would you have a clock for that or would you send it in or how would that work?

A: I’d just send it in to her. I think I brought it to her once a week.

​

Q: Did you have a supervisor while you were at Compaq?

A: Just-I can’t remember her name. It was a lady at Superior Temporaries. I can’t remember her name.

Q: Did she come over with you?

A: Well, I’d just call and check in with her.

Q: While you worked at Compaq, you didn’t have anybody that you reported to or a supervisor?

*5 A: Just the guys that work there, just-they showed us what to do, other temporaries. They just pretty much just went in there and showed us what to do.

Q: Who showed you?

A: I don’t remember their names. It was several different people.

Q: Were they Compaq employees and also temporary employees?

A: Mostly temporary employees.

Q: Is there a way to distinguish between a temporary employee and a Compaq employee?

A: The different badges that they wear.

Q: Do you remember who gave you your training at Compaq?

A: I never had any training at Compaq.

Q: I mean, somebody had to show you what to do?

A: I don’t remember who showed me what to do.

​

Q: How did you learn to drive a forklift?

A: They just told me to start, just get on there.

Q: Get on and go?

A: Yeah. No classes on it or anything.

This testimony indicates that Hughes was supervised by a Superior employee, turned in time records to Superior, and took what few instructions were given from Superior employees. When the evidence favoring Hughes, the non-movant, is taken as true and all inferences are indulged in his favor, Hughes’s testimony raises a fact question as to the right of control. In addition, the testimony of an interested witness generally creates a fact issue as to his credibility. Winker v. Kirkwood Atrium Office Park, 816 S.W.2d 111, 114 (Tex.App.-Houston [14th Dist.] 1991, writ denied). When, as here, the credibility of a witness may be a dispositive factor in the resolution of the case, summary judgment is inappropriate. Casso v. Brand, 776 S.W.2d 551, 558 (Tex.1989). Although the controverting evidence is slight, we cannot say Compaq established Hughes was a borrowed servant as a matter of law. Therefore, we hold that a material fact question exists as to which employer had the right to control Hughes’s work. We sustain points of error one and three.

In Hughes’s second point of error, he argues that the trial court erred in entering a judgment for Compaq because Compaq provided no proof that it had workers’ compensation coverage. The contract between Compaq and Superior provided that Superior was to provide workers’ compensation coverage to its employees, and Compaq was to reimburse Superior for this cost out of the fees paid for temporary employees. Kevin Baer’s affidavit, cited above, also substantiates this contract provision. The manner in which the workers’ compensation insurance is paid is immaterial as long as there is a policy in force. Marshall v. Toys-R-Us Nytex, Inc., 825 S.W.2d 193, 197 (Tex.App.-Houston [14th Dist.] 1992, writ denied); see also Gibson v. Grocers Supply Co., 866 S.W.2d 757, 759 (Tex.App.-Houston [14th Dist.] 1993, no writ).

Moreover, under the version of the Workers’ Compensation Act in effect when Hughes was injured, as well as under the current version, “employer” is defined only as “a person that makes a contract of hire, that employs one or more employees, and that has workers’ compensation insurance coverage.” Tex.Rev.Civ. Stat. Ann. art. 8308-1.03(19)(repealed and current version at Tex. Lab.Code Ann. § 401.011(18) (Vernon 1996)). The exclusive remedy provision applies to an employee who receives workers’ compensation benefits as a result of her work-related injury when the employer arranged for workers’ compensation coverage, even if it did not pay the premiums. Pederson v. Apple Corrugated Packaging, Inc., 874 S.W.2d 135, 138 (Tex.App.-Eastland 1994, writ denied); see also Brown v. Aztec Rig Equip., Inc., 921 S.W.2d 835, 842 (Tex.App.-Houston [14th Dist.] 1996, writ requested) (company leasing employees from temporary agency held to be an employer where the companies’ contract provided the temporary agency was required to purchase workers’ compensation insurance, which was purchased with service fees paid by the leasing company). Therefore, Compaq’s summary judgment proof sufficiently established it provided workers’ compensation insurance for purposes of the exclusive remedy provisions of the Act. We overrule point of error two.

*6 In conclusion, we reverse the summary judgment entered below and remand the cause to the trial court for further proceedings.

	Footnotes
1		We refer to the version of the Texas Workers’ Compensation Act in effect at the time of Hughes’s injury. The statute, repealed on September 1, 1993, provided in relevant part as follows: [A] recovery of workers’ compensation benefits under this Act is the exclusive remedy of an employee or legal beneficiary against an employer or an agent, servant, or employee of the employer for the death of or a work-related injury sustained by a covered employee. Act of Dec. 13, 1989, 71st Leg., 2d C.S., ch. 1 § 4.01, 1989 Tex. Gen. Laws 1, 32-33, eff. Jan. 1, 1991 (current version at Tex. Lab.Code Ann. § 408.001(a) (Vernon 1996)).
2		As a preliminary matter, Compaq asserts in its first reply point that we must affirm the summary judgment because Hughes failed to include his Second Amended Original Petition in our appellate record. Hughes asserts, supported by a sworn statement, that this Second Amended Petition was never filed and that the First Amended Original Petition included in our transcript is the live pleading on which summary judgment was granted. Accordingly, our record is sufficient.
3		Hughes has not preserved his objections made below to Compaq’s affidavits. Hughes waived his complaints by failing to assign error as to his objections to the affidavits in a point of error. See Tex.R.App. P. 74(d), (f); Barbouti v. Munden, 866 S.W.2d 288, 298 (Tex.App.-Houston [14th Dist.] 1993, writ denied).
4		Compaq identified “Bobby” as Bobby Smith, a Compaq employee, although there is no evidence to support this assertion.