Schilling v. Chatham Five Star LLC et al

Filing 56

Judge Nathaniel M. Gorton: ENDORSED MEMORANDUM & ORDER entered Plaintiffs motion for partial summary judgment (Docket No. 29 ) is ALLOWED, and defendants motion for summary judgment (Docket No. 28) is DENIED. (Caruso, Stephanie)

United States District Court
District of Massachusetts

BENJAMIN A. SCHILLING,
Plaintiff,
v.
CHATHAM FIVE STAR LLC and
RICHARD D. COHEN,
Defendants.

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Civil Action No.
14-14262-NMG

MEMORANDUM & ORDER
GORTON, J.
I.

Background
Plaintiff Benjamin Schilling (“Schilling”) filed this

action against defendants Chatham Five Star LLC (“Five Star”)
and Richard Cohen (“Cohen”) alleging negligence against both
defendants resulting in personal injury.

According to

plaintiff, on August 10, 2013 Schilling was attending to the
Five Star, a 55-foot vessel (“the vessel”), for the purpose of
untying a line before the vessel’s departure from the Chatham
Bars Inn in Chatham, Massachusetts.

Schilling was employed as

the Marine Operations Manager of CBI Operations LLC
(“Operations”), one of the entities that managed the Chatham
Bars Inn.

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At the time of the accident defendant Cohen, an owner of
the Chatham Bars Inn, was at the helm of the vessel.
owned by Five Star.

It was

Cohen was the sole shareholder and

president of Capital Properties Management, Inc., the sole
member of Five Star.

Plaintiff claims that Cohen negligently

engaged the engine of the vessel as Schilling was untying the
line, causing it to snap and recoil, striking and injuring
Schilling’s right hand.
Cohen was aboard the vessel with his girlfriend, her two
minor sons and their babysitter.

He testified during his

deposition that he did not remember why he was departing, how
long he was to be gone or where he was going on the boat.

In

his responses to plaintiff’s interrogatories he stated he
thought he was either traveling to Nantucket or Martha’s
Vineyard or going whale watching.
After the accident Schilling received workers’ compensation
benefits under state law, including the payment for his medical
treatment, and entered into a settlement to receive a lump sum
amount for his workers’ compensation claim against Capital
Property Services LLC a/k/a Chatham Bars Inn, an entity related
to Operations.
II. Motions for Summary Judgment
On March 15, 2016, defendants filed a motion for summary
judgment on both negligence counts of the complaint.
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The same

day, plaintiff moved for summary judgment with respect to
Cohen’s affirmative defense of co-employee immunity under the
Massachusetts Workers’ Compensation Act, M.G.L. ch. 152.
A. Legal Standard for Summary Judgment
The role of summary judgment is Ato pierce the pleadings and
to assess the proof in order to see whether there is a genuine
need for trial.@ Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822
(1st Cir. 1991).

The burden is on the moving party to show,

through the pleadings, discovery and affidavits, “that there is
no genuine dispute as to any material fact and that the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a).

A fact is material if it “might affect the outcome of

the suit under the governing law.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).

A genuine issue of material

fact exists where the evidence with respect to the material fact
in dispute “is such that a reasonable jury could return a
verdict for the nonmoving party.” Id.
If the moving party has satisfied its burden, the burden
shifts to the non-moving party to set forth specific facts
showing that there is a genuine, triable issue. Celotex Corp. v.
Catrett, 477 U.S. 317, 324 (1986).

The Court must view the

entire record in the light most favorable to the non-moving
party and indulge all reasonable inferences in that party=s
favor. O=Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993).
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Summary judgment is appropriate if, after viewing the record in
the non-moving party=s favor, the Court determines that no
genuine issue of material fact exists and that the moving party
is entitled to judgment as a matter of law.
B. Analysis
1. Plaintiff’s Motion for Partial Summary Judgment
Plaintiff moves for partial summary judgment on Cohen’s
affirmative defense that recovery in this case is barred under
the Massachusetts workers’ compensation statute, M.G.L. ch. 152
§ 23 and 24, because Cohen was acting as Schilling’s co-employee
at the time he allegedly caused Schilling’s injury.

That

statute, in essence, ensures that workers injured during the
course of their employment will be compensated by their
employers.

In exchange for providing for such compensation the

statute creates a presumptive waiver of employees’ common law
right to recover damages for their injuries from both their
employer and any co-employee who may have caused such injuries.
Estate of Moulton v. Puopolo, 5 N.E.2d 908, 914 (Mass. 2014).
The statute preserves, however, the right of an employee to
bring claims against other entities that may have been
responsible for the accident. See M.G.L. ch. 152 § 15.
Schilling first argues that he is entitled to summary
judgment because there is no genuine dispute that Cohen was not
a co-employee.

He points out that Cohen testified at his
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deposition that he was unaware of ever receiving any
compensation or documentation of compensation from Operations,
such as a W2, 1099 or K1 form.
was not a salaried employee.

Cohen further concedes that he
Kelli Bryant, Director of Finance

for Operations, also testified that Cohen had never been a
salaried employee of that LLC during the relevant time period.
As defendant points out, however, under M.G.L. ch. 152 an
individual’s status as an employee is not necessarily defined by
his receipt of compensation. See Tracy v. Cambridge Junior
College, 304 N.E.2d 921, 923 (1973).
Instead, the workers’ compensation statute defines an
employee as a
person in the service of another under any contract of
hire, express or implied, oral or written.
Id. § 1(4).

Cohen claims that he meets the statutory definition

of an employee because he had a “contract for hire” as the
President of Operations, as shown by a form titled “Designation
by Manager of Officers of CBI Operations, LCC,” dated January,
2009, which designates Cohen as “President” of the company
“until otherwise changed by the undersigned.”

The form is not

countersigned by the designated officers and accordingly
manifests no intention by the officers to accept their
designations, and for that reason, among others, cannot

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constitute a contract for hire.

It may, however, be evidence of

a separate oral contract for Cohen’s hire.
Cohen further contends that he worked “in the service of”
Operations because he communicated “criticisms and directions”
to Operations employees such as Schilling, including
instructions related to “[b]each and boat cleanliness.”

The

fact that Cohen gave such instructions does not, however,
determine that he was an employee.

Given that a non-employee

part owner would still have an interest in ensuring that the
resort maintained adequate standards of appearance and
cleanliness, Cohen’s instructions may have simply reflected his
self-described status as “an involved owner.”

On the other

hand, Schilling himself testified that Cohen appeared, at times,
to have taken “a management role in the operations” of the
resort.

Accordingly, a material question of fact exists as to

whether Cohen had an employment relationship with Operations.
Schilling also declares that even if Cohen were an
employee, he was not acting within the course of his employment
when he caused Schilling’s injury.

Co-employees are immune from

personal suit when they injure a fellow employee while acting
“within the course of their employment and in furtherance of the
employer's interest.” Fredette v. Simpson, 797 N.E.2d 899, 902
(Mass. 2003) (quoting Brown v. Nutter, McClennen & Fish, 696

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N.E.2d 953, 956 (Mass. App. Ct. 1998)).

A co-employee acts

within the course of his employment
whenever he has, on the employer's premises, engaged
in conduct consistent with his contract of hire and
pertinent or incidental to his employment.
Id. at 903.

The co-employee must act with at least “one

significant purpose . . . related to the employment,” though he
may have more than one purpose. Mendes v. Tin Kee Ng, 507 N.E.2d
1048, 1051 (Mass. 1987).

To assess the co-employee’s purpose,

the Court employs an “objective test.” Mulford v. Mangano, 636
N.E.2d 272, 276 (Mass. 1994).
Neither party disputes that the accident occurred on the
premises of Schilling’s employer.

The circumstances indicate,

however, and Cohen offers no objective facts to rebut, that
Cohen was not acting with any significant purpose related to his
employment when he allegedly caused the accident.
At the time of the accident Cohen was aboard the vessel
with his girlfriend, her two minor sons and their babysitter.
Cohen admits that he was on the boat for the purpose of either
traveling to Nantucket or Martha’s Vineyard or going whale
watching.

He argues, however, that he was acting within the

course of his employment because he was departing from work.
In Mendes, the Massachusetts Supreme Judicial Court (“the
SJC”) held that an employee who was driving to work acted with a
significant employment-related purpose. 507 N.E.2d at 1051.
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The

Court later hinted that the same analysis would apply to
transportation for the purpose of leaving work. Fredette, 797
N.E.2d at 903.

In both cases, however, the Court emphasized

that the relevant inquiry was whether the travel was motivated
by at least one significant purpose related to the defendant’s
employment. Id.; Mendes, 507 N.E.2d at 1051.
Cohen correctly asserts that he need not show that the trip
on which he was embarking was a business trip as long as his
actions at the time of the accident furthered a significant
work-related purpose.

The only evidence he has offered of such

a purpose, however, is his subjective deposition testimony that
“I’m never on vacation when I’m at the hotel. I’m working.”
In Mulford, the SJC rejected a test which would have held
the employee's testimony . . . controlling as to
whether a particular purpose was or was not a
significant reason for his action.
636 N.E.2d at 276.

The Court instead adopted an objective

standard to determine whether an employee acted within the
course of his employment.

Under this objective test, Cohen’s

self-serving testimony falls short of creating a genuine dispute
of material fact.

Cohen offers no explanation of any work he

may have been doing at the time of the accident or which he may
have done at the Inn before boarding the boat to leave.

He

provides, therefore, no basis for finding that he was leaving
work at the time of the accident rather than that he was simply
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embarking on a personal trip. 1

His testimony provides no

objective, factual basis upon which a jury could find that he
was acting with a business-related purpose when he allegedly
caused the accident.

Accordingly, Schilling is entitled to

summary judgment on Cohen’s co-employee immunity defense.
2. Defendants’ Motion for Summary Judgment
Defendants move for summary judgment on two grounds.
First, Cohen argues that he is immune from liability because he
was acting as a co-employee at the time of the accident.
Second, Cohen and Five Star both contend that they are immune
from liability because they are Schilling’s employers.
a.

Co-Employee Immunity

As explained above in the discussion of plaintiff’s motion
for partial summary judgment, Schilling is entitled to summary
judgment on the co-employee immunity defense.

Accordingly,

summary judgment in Cohen’s favor based on that defense will be
denied.
b.

Employer Immunity

Cohen and Five Star also move for summary judgment on the
ground that they are immune from liability because they were
both Schilling’s employer at the time of the accident.

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Thus

Cohen owned a private residence adjacent to the Inn and would,
therefore, have had reason to be in the area even if he were not
working.
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Schilling’s sole remedy against them would purportedly be his
workers’ compensation claim.

Under Massachusetts law, a two-

part test applies for determining employer immunity:
[t]o be immune, (1) a direct employment relationship
must exist between the injured party and the person
claiming immunity, and (2) the employer must be an
insured person liable for the payment of compensation.
Roberts v. Delta Air Lines, Inc., 599 F.3d 73, 77 (1st Cir.
2010) (quoting Fleming v. Shaheen Bros., Inc., 881 N.E.2d 1143,
1146 (Mass. App. Ct. 2008)).

A person or entity has a direct

employment relationship if it “has direction and control of the
employee” and the employee “owes obedience in respect of the
performance of his work” to the person or entity. Id.
i. Cohen
The subject dispute relates to the first prong of the test.
Cohen argues that he exercised direction and control of
Schilling because Schilling was told by his supervisors to
“listen” to Cohen and because Schilling would implement
directions that Cohen gave him with respect to beach and boat
cleanliness.

Furthermore, as discussed above, Cohen had been

designated the “President” of Operations in at least one
document.

Schilling also testified at his deposition that

occasionally he had observed Cohen take “a management role in
the operations” of the Inn.

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Cohen further argues that because Schilling followed
Cohen’s directions Cohen must have been Schilling’s employer.
Schilling responds that he was only doing what any prudent
employee would do if an owner or person in authority asked for
help with a personal task.

Moreover, Schilling notes that

Cohen’s position is undercut by his own testimony.

During his

deposition, Cohen testified that he was not involved in “the
day-to-day operation of the hotel.”

Cohen has also failed to

present evidence that he exercised any direction or control over
Schilling’s performance of his primary duties, such as the
scheduling of boat charters and the assignment of employees to
operate boats.

Taken as a whole, the evidence raises a genuine

issue of material fact as to whether Cohen was Schilling’s
employer.

Summary judgment in favor of Cohen is, therefore,

precluded.
ii. Chatham Five Star LLC
Five Star proffers three theories in support of its
contention that it, too, was Schilling’s employer at the time of
the accident.

Acknowledging that Operations was the entity

which formally employed Schilling, Five Star first avers that it
was engaged in a “joint enterprise” with Operations as to the
operation of the vessel during the summer of 2013.

Such joint

enterprises are specifically contemplated in the definition of
an “employer” in the Massachusetts workers’ compensation
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statute. M.G.L. ch. 152 § 1(5).

A joint enterprise involves a

“single transaction” in which two entities have “an intent to
associate.” Gurry v. Cumberland Farms, Inc., 550 N.E.2d 127, 133
(Mass. 1990).
The SJC has set out several factors to look for when
determining whether the necessary intent to associate exists:
1) an agreement jointly to share profits and losses,
2) contributions from each party of “money, assets, talents,
etc., to a common undertaking,” 3) a joint property interest in
the object of the joint enterprise and 4) retained rights by
both parties to participate in the control of the enterprise.
Id.
Five Star claims that it was engaged in a joint enterprise
with Operations with respect to the maintenance and use of the
vessel, rendering the two entities a single employer in the
context of Schilling’s work involving the boat.

In exchange for

Operations maintaining the boat during the summer, Five Star
permitted Operations to use the boat on occasion as an “amenity”
for important guests and permitted the boat to be associated
with the Inn.

In this respect, Five Star contributed its asset,

the vessel, while Operations provided boat maintenance by its
staff.
With respect to the other Gurry factors, Five Star argues
that the two entities shared profits and losses because during
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the summer Operations paid for expenses incurred from the boat’s
maintenance and both entities “mutually profited” from their
arrangement.

It further avers that both entities had an

ownership interest in the vessel and that Five Star retained
some control over it by dictating that the boat would be used
only by important guests rather than as a general charter
vessel.
Schilling has several responses.

First, he argues that

Five Star has failed to proffer any evidence of an agreement for
or actual sharing of tangible profits and losses outside of some
intangible promotional benefit that Operations may have gained
from associating the vessel with the Inn.

Second and more

importantly, the only evidence cited by Five Star of joint
ownership of the vessel is a U.S. Coast Guard Certificate of
Documentation which lists its Managing Owner as:
Chatham Five Star LLC
Chatham Bars Inn
297 Shore Road
Chatham, MA 02633
While defendant avers that “Chatham Bars Inn” refers to
Operations, Schilling points out that there is no corporate
entity named “Chatham Bars Inn.”

Instead, a more logical

explanation for this designation is that it describes the Inn as
the mailing address for Five Star.

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That explanation is

supported by Cohen’s answer to an interrogatory that Five Star
is the sole owner of the vessel.
Schilling also correctly notes that where, as here, there
is no written agreement memorializing a joint enterprise and
the issue of a party's intent constitutes the
essential element of . . . [the] defense, the granting
of summary judgment is disfavored.
Id.

Accordingly, summary judgment based on a joint enterprise

theory will be denied.
The second theory advanced by Five Star directly
contradicts its first.

In lieu of its joint enterprise

argument, Five Star next contends that it completely
relinquished control and possession of the vessel, creating a
demise charter which rendered Operations the boat’s owner pro
hac vice. Brophy v. Lavigne, 801 F.2d 521, 523 (1st Cir. 1986).
Defendant notes that during the relevant time period, Operations
paid for the maintenance and fueling of the vessel, provided
staff to care for and navigate it, and that the boat was moored
with other boats belonging to the Inn.

Five Star adds that

Cohen’s use of the boat occurred in his capacity as President of
Operations.

Schilling purportedly cannot, therefore, maintain a

cause of action against Five Star because it had relinquished
possession and control of the vessel to Operations.
Given Five Star’s earlier contention that it retained
control over whether the boat would be used as a charter vessel,
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defendant’s own contradictory assertion creates a genuine issue
of material fact as to whether Five Star had “completely and
exclusively” relinquished control over the vessel. Id.

Summary

judgment may not, therefore, be awarded based on defendant’s
second theory.
Finally, with respect to Five Star’s third theory that it
was Schilling’s “special employer,” it has presented no evidence
that it exercised direction and control over Schilling
separately from Operations, or that Operations relinquished its
control over Schilling. Roberts v. Delta Air Lines, No. 07-cv12154-DPW, 2008 WL 5156654 at *12; Gurry, 550 N.E.2d at 132.
Accordingly, summary judgment based on defendant’s third theory
is also unwarranted.
ORDER
For the forgoing reasons, plaintiff’s motion for partial
summary judgment (Docket No. 29) is ALLOWED and defendants’
motion for summary judgment (Docket No. 28) is DENIED.

So ordered.

/s/ Nathaniel M. Gorton_____
Nathaniel M. Gorton
United States District Judge
Dated May 10, 2016

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