Workers' Compensation When Defendant and Third-Party Are Separate Legal Entities

In DiRie v. Automotive Realty Corp., 199 A.D.2d 98, 605 N.Y.S.2d 60 (1st Dept. 1993), both the defendant and the third-party defendant were separate legal entities owner and controlled by one individual. The First Department held that, notwithstanding that defendant and third-party defendant were separate legal entities, it was not a basis for not limiting plaintiff to Workers' Compensation. The Court stated that, defendant, which had no employees, was controlled by the individual that controlled plaintiff's employer. The fact that two legal entities existed was an insufficient basis to deny summary judgment and the complaint was dismissed. Moreover, in Heritage v. Van Patten, 59 N.Y.2d 1017, 453 N.E.2d 1247, 466 N.Y.S.2d 958 (1983), the Court of Appeals refused to impose liability upon a defendant landowner, finding Van Patten, the property owner, was a co-employee of the plaintiff. The Court of Appeals further held that the statute imposing a nondelegable duty upon a property owner to protect against injuries to person employed in construction work on the premises did not apply to the landowner who was a co-employee of the injured plaintiff in light of the exclusivity provision of the Workers' Compensation Law making that compensation the exclusive remedy of the employee plaintiff who was injured by the negligence of another in the same employ. The Court of Appeals held in Caceras v. Zorbas, 74 N.Y.2d 884, 547 N.E.2d 89, 547 N.Y.S.2d 834 (1989) that the plaintiff's complaint was properly dismissed because the defendant building owner and the president and sole stockholder of plaintiff's corporate employer were one and the same person. The failure of defendant to include Workers' Compensation as a defense in its answer was neither prejudicial to, nor a surprise to the plaintiff who was aware of his employment status from the outset and received Workers' Compensation benefits. The Appellate Division, First Department also modified the Order of the Court below, and dismissed plaintiff's claims against the defendant property owner who was also president and chief executive officer of plaintiff's employer, finding that both were in the same employ for which Workers' Compensation was the sole remedy. Johnson v. Eaton Corp., 178 A.D.2d 101, 577 N.Y.S.2d 1 (1st Dept. 1991).