BROWN, Judge:
¶ 1 Timothy Lee suffered serious injuries while performing cleanup duties during the final stages of construction at a Sam's Club store located on property owned by Wal-Mart Stores, Inc. ("Wal-Mart"). Lee was employed at the time by Able Body Labor ("Able Body")
¶ 2 On appeal, Lee challenges the trial court's orders granting summary judgment in favor of Wal-Mart and granting judgment as a matter of law in favor of M & H. The issues we address are: (1) whether Lee, as an employee of an independent contractor, could properly assert a vicarious liability negligence claim against Wal-Mart; (2) whether Lee presented evidence creating a material factual dispute as to whether Wal-Mart retained some control over his work and was therefore directly negligent; and (3) whether the lent employee doctrine relieves M & H from liability because Lee elected to pursue a workers' compensation award for his injuries. For the following reasons, we affirm.
¶ 3 At the request of M & H, Able Body provided workers to perform clean-up work at the Sam's Club construction site. Lee, who began employment with Able Body in 2007, had been regularly assigned such work over the course of several months. In January 2009, shortly before the planned opening date of the store, Able Body directed Lee to report for work at the construction site. An M & H representative instructed Lee to clean the tops of various freezers, which were roughly ten feet high. Lee used an onsite scissor-lift to access the portion that needed cleaning, and proceeded to remove debris. Next to the ten-foot freezers, separated by a small section of fiberboard, were taller freezers, roughly sixteen feet high. Rather than use the scissor-lift to reach the taller freezers, Lee attempted to access them by stepping on the fiberboard. While doing so, the fiberboard collapsed and Lee was seriously injured when he fell to the floor.
¶ 4 Lee sued Wal-Mart and M & H, alleging they each acted negligently by failing to maintain a safe place to work, free of hidden dangers. Lee also alleged that both Wal-Mart and M & H were in control of the property and therefore owed him a "non-delegable duty to ... provide a safe place to work, free of hidden dangers." Although he acknowledged receipt of an award for workers' compensation benefits (based on his claim against Able Body), Lee asserted the
¶ 5 M & H moved for summary judgment, asserting that the lent employee doctrine barred Lee's cause of action because he had elected to pursue his statutory right to obtain a workers' compensation award for his injuries. The trial court denied the motion. After reassignment of the case to a different judge, M & H filed a second motion for summary judgment. M & H argued that if it had a duty to control Lee's actions, then his only remedy was workers' compensation; but if M & H had no duty to control, then as a matter of law it could not have breached any duty to Lee.
¶ 6 Wal-Mart also filed a motion for summary judgment, arguing that as a landowner, it did not owe a non-delegable duty to Lee because his injury occurred while he was working as an employee of an independent contractor. Wal-Mart also asserted it did not contractually assume responsibility or exercise actual control over the work of M & H, Able Body, or Lee. Lee countered that, notwithstanding his status as an employee of a subcontractor and the terms of Wal-Mart's contract with M & H, a landowner has a non-delegable duty to provide a reasonably safe place for business invitees and there was evidence that Wal-Mart and M & H exercised shared control over the premises at the time of the accident.
¶ 7 The trial court denied M & H's motion but granted Wal-Mart's, finding that Wal-Mart had hired M & H to build the Sam's Club and thereby "effectively relinquished control of (and liability for), the project to [M & H]" through its contract. The court explained that although the project was nearing completion and Wal-Mart possibly had "taken possession" of part of the site, there was "nothing in the record suggesting that Wal-Mart had taken possession or control of the area in which Lee was working, nor that it controlled Lee's work." The court denied Lee's subsequent motion for reconsideration and/or new trial, and entered judgment in favor of Wal-Mart.
¶ 8 A jury trial ensued on Lee's claim against M & H. At the close of Lee's presentation of evidence, M & H moved for judgment as a matter of law, reasserting its argument that Lee's claims were barred based on the lent employee doctrine. The court granted the motion, explaining that a contract for hire was implied from the circumstances and finding that M & H exercised control over Lee and no reasonable jury could conclude otherwise. Therefore, applying the lent employee doctrine, the court found that the exclusive remedy of workers' compensation barred Lee from pursuing civil damages.
¶ 9 The court entered a final judgment in favor of M & H. Lee timely appealed and M & H cross-appealed the denial of its second motion for partial summary judgment.
¶ 10 Summary judgment is proper when "there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Ariz. R. Civ. P. 56(a). We review de novo the grant of summary judgment and view the evidence in the light most favorable to the non-moving party. Read v. Keyfauver, 233 Ariz. 32, 35, 308 P.3d 1183, 1186 (App.2013).
¶ 11 Lee argues the trial court erred in granting summary judgment because, pursuant to Restatement (Second) of Torts ("Restatement") § 422 (1965), Wal-Mart necessarily retained a non-delegable duty, as the landowner, to keep its premises reasonably safe for business invitees. Lee further asserts the court erred because Wal-Mart retained control over his work and is therefore directly liable for his injuries.
¶ 12 Arizona courts have consistently recognized that a landowner is not liable for the negligent conduct of an independent contractor unless the landowner has been independently negligent. See Welker v. Kennecott, 1 Ariz.App. 395, 401-04, 403 P.2d 330, 336-39 (1965) (citing Restatement (First) of Torts § 409 (1934) ("Except as stated in §§ 410 to
¶ 13 As our supreme court has noted, however, "many exceptions to the rule of nonliability have now been recognized so that even where the employer has not been personally negligent, he may be vicariously liable for the contractor's negligence." Ft. Lowell-NSS Ltd. P'ship v. Kelly, 166 Ariz. 96, 101, 800 P.2d 962, 967 (1990).
Restatement § 409 cmt. b.
¶ 14 According to Lee, Wal-Mart had a non-delegable duty to keep the premises safe and is therefore vicariously liable under Restatement § 422, which describes an employer's general scope of liability for injuries resulting from work performed on land and structures:
¶ 15 Lee argues he was a business invitee when his injury occurred on Wal-Mart's property, and that under Restatement § 422, possessors of land have a non-delegable duty to provide such invitees a safe place to work. In Welker, however, this court rejected the argument that a landowner owes a non-delegable duty under Restatement § 422 to an employee of an independent contractor. 1 Ariz.App. at 404, 403 P.2d at 339. Thus, under Welker, Wal-Mart did not have a non-delegable duty to provide Lee a safe place to work because Lee was working as an employee of an independent contractor at the time he was injured.
¶ 17 After Welker, this court continued to recognize that landowners are not liable under Restatement § 422 for injuries suffered by employees of independent contractors engaged in construction activities. See Allison Steel Mfg. Co. v. Superior Court for the County of Pima, 22 Ariz.App. 76, 81, 523 P.2d 803, 808 (1974) (citing Welker and noting that if landowner had no control or active role in bringing about the dangerous condition that caused the plaintiff's injury, it could not be held liable under a theory of non-delegable duty); Parks v. Atkinson, 19 Ariz.App. 111, 114-15, 505 P.2d 279, 282-83 (1973) (upholding summary judgment in favor of the landowner by relying on Welker for the proposition that Restatement § 422 did not apply to an employee of an independent contractor who fell from a scaffold at the site); see also Mason v. Arizona Pub. Serv. Co., 127 Ariz. 546, 551, 622 P.2d 493, 498 (App. 1980) (citing Welker and recognizing that "in the absence of retained control, the duties owed by a landowner to third persons are not owed to the employees of an independent contractor"). Lee has not cited, nor has our research revealed, any Arizona reported decision that has overruled or otherwise questioned the validity of Welker as it pertains to Restatement § 422.
¶ 18 Lee argues that our supreme court's decision in Ft. Lowell impliedly overruled Welker. In Ft. Lowell, the supreme court explained that if an exception applies, a landowner may be vicariously liable for a contractor's negligence in failing to maintain a safe workplace. 166 Ariz. at 101, 800 P.2d at 967. But, unlike this case, Ft. Lowell did not involve a claim brought by an employee of an independent contractor. 166 Ariz. at 98, 800 P.2d at 964. Thus, Ft. Lowell cannot be said to have overruled Welker. Moreover, referencing this court's decision in Koepke v. Carter Hawley Hale Stores, Inc., 140 Ariz. 420, 423, 682 P.2d 425, 428 (App.1984), the supreme court in Ft. Lowell noted:
Ft. Lowell, 166 Ariz. at 102 n. 6, 800 P.2d at 968 n. 6 (emphasis added.)
¶ 19 In Rause, the federal district court analyzed Welker and Ft. Lowell in concluding
¶ 20 In sum, this court's holding in Welker — that Restatement § 422 does not constitute an exception to the general rule that a landowner is not liable for injuries suffered by an employee of an independent contractor performing work on the property, 1 Ariz.App. at 404, 403 P.2d at 339 — remains the law in Arizona. For that reason, Wal-Mart, as the landowner, did not owe Lee a non-delegable duty of care under Restatement § 422 because he was working as an employee of an independent contractor at the time he sustained injuries.
¶ 21 Lee argues that Wal-Mart "retained some control" over his work and is therefore directly liable for his injuries under Restatement § 414. Specifically, Lee notes that during a final walk-through inspection of the construction site, a Wal-Mart representative requested that the tops of the freezers be cleaned, and thus contends his fall while cleaning those freezers was a result of Wal-Mart's direct orders.
¶ 22 Restatement § 414 addresses the direct liability of a landowner based on a theory of retained control:
Thus, to trigger liability under Restatement § 414, a landowner "must have retained some measure of control not over the premises of the work site, but over the actual work performed." See Lewis, 170 Ariz. at 390, 825 P.2d at 11. The scope of the landowner's duty, if any, "is determined by the amount of control" the landowner retained over the construction work performed by a contractor. Id. at 389, 825 P.2d at 10 (determining the parameters of a general contractor's duty based on the control it retained over the subcontractor's work). Both the governing contractual provisions and the actual exercise of control over work are "relevant considerations" in determining whether a landowner retained control. Id. at 390, 825 P.2d at 11.
¶ 23 Generally, the existence of a duty is a question of law for the court. See Lewis, 170 Ariz. at 387, 825 P.2d at 8. Because the issue of a breach of duty is inextricably linked with the scope of retained control, however, "the issue of retained control is also a question of fact which ordinarily should be left to the fact finder." Id. at 389, 825 P.2d at 10 (emphasis omitted). Nonetheless, a trial court may properly grant summary judgment in favor of a landowner if no reasonable jury could conclude the landowner retained control over the work at issue. Id. (citing Orme School v. Reeves, 166 Ariz. 301, 802 P.2d 1000 (1990)).
(Emphasis added). Under the contract's plain language, M & H controlled both the construction personnel and the implementation of onsite safety measures.
¶ 25 Moreover, even assuming Wal-Mart instructed M & H to clean the tops of the freezer units where Lee's accident occurred, that conduct would be insufficient to constitute the exercise of actual control as contemplated by Restatement § 414. Wal-Mart's exercise of its right to inspect the area in connection with final walkthroughs to ensure compliance with its contract with M & H did not amount to taking direct control of M & H such that it retained "a right of supervision that [M & H was] not entirely free to do the work in [its] own way." Restatement § 414 cmt. c. Wal-Mart had reserved and exercised "only the right to inspect the construction work to see that the contract specifications are met while [M & H] control[ed] how and when the work [was] to be done[.]" Lewis, 170 Ariz. at 391, 825 P.2d at 12 (emphasis added); see also Koepke, 140 Ariz. at 426, 682 P.2d at 431 (finding lack of actual control because "there [was] no evidence indicating that [the landowner] had any authority to direct the manner in which the contractors worked").
¶ 26 We conclude no genuine dispute of material fact exists regarding Wal-Mart's lack of control over Lee's work for purposes of Restatement § 414, either by the terms of its contract with M & H or by its actions. As such, summary judgment in favor of Wal-Mart was appropriate.
¶ 27 We review a trial court's decision on a motion granting judgment as a matter of law de novo. Sec. Title Agency, Inc. v. Pope, 219 Ariz. 480, 492, ¶ 51, 200 P.3d 977, 989 (App.2008). The trial court properly grants judgment as a matter of law if "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue[.]" Ariz. R. Civ. P. 50(a)(1).
¶ 28 As a threshold issue, Lee contends that M & H has waived its argument that Lee was its employee by making several binding admissions to the court that Lee was an employee of Able Body. An employee may have two employers, however, both of which are immune to tort liability. See Lindsey v. Bucyrus-Erie, 161 Ariz. 457, 458, 778 P.2d 1353, 1354 (App.1989); Nation v. Weiner, 145 Ariz. 414, 417-18, 701 P.2d 1222, 1225-26 (App.1985) (explaining the admission that one party is the employee's employer does not "prevent" another party from being the employee's employer). Lee has not cited, and our review of the record has not revealed, any admission by M & H that it was not Lee's employer. We therefore find no waiver.
¶ 30 Under Arizona's workers' compensation system, an employee seeking compensation for an injury must choose between pursuing a statutory claim with the Industrial Commission and filing a common law tort action. Anderson v. Indus. Comm'n, 147 Ariz. 456, 457, 711 P.2d 595, 596 (1985). The choice to sue in tort is made by a written rejection of the compensation system filed with the employer before injury. Ariz.Rev. Stat. ("A.R.S.") § 23-906(B), (C). If an employee fails to file a rejection, the compensation system is the employee's "exclusive remedy against the employer or any co-employee acting in the scope of his employment[.]" A.R.S. § 23-1022(A). Thus, an injured employee who has failed, before injury, to reject the workers' compensation system may not maintain a tort action against his or her employer. Anderson, 147 Ariz. at 457, 711 P.2d at 596. Because Lee never opted out of the workers' compensation system prior to his injury, his sole remedy against any of his employers for injuries he sustained is under that system.
¶ 31 Lee argues nonetheless that the trial court erred in granting judgment as a matter of law in favor of M & H because he was not an employee of M & H, thereby placing him outside the law that prohibits employees from pursuing a tort claim when they have received compensation through the workers' compensation system. "When a labor contractor ... supplies or `lends' its employee to another employer, the result may be an arrangement in which one employee has two employers." Araiza v. U.S. W. Bus. Res., Inc., 183 Ariz. 448, 452, 904 P.2d 1272, 1276 (App.1995). In this kind of situation the lending employer, Able Body, is known as the "general employer" and the borrowing employer, M & H, is the "special employer." 5 Arthur Larson and Lex K. Larson, Larson's Workers' Compensation Law § 67.01 (2014). "The significance of this arrangement is that both employers are liable for workers' compensation and both are immune from tort liability for injuries received by the employee on the job pursuant to A.R.S. § 23-1022(A)." Araiza, 183 Ariz. at 452, 904 P.2d at 1276; see also Wiseman v. DynAir Tech of Ariz., Inc., 192 Ariz. 413, 416, ¶ 10, 966 P.2d 1017, 1020 (App.1998).
¶ 32 Three elements must be proven to establish that a "lent employee" has become the employee of the "special employer":
Word v. Motorola, Inc., 135 Ariz. 517, 520, 662 P.2d 1024, 1027 (1983). "When all three of [these] conditions are satisfied in relation to both employers, both employers are liable for work[ers'] compensation." Id. In cases involving labor contractors, "employers obtaining workers from [a labor service provider] have usually, but not invariably, been held to assume the status of special employer." Id. at 520 n. 5, 662 P.2d at 1027 n. 5 (internal quotation omitted).
¶ 33 Lee asserts there is no evidence that M & H exercised sufficient control over Lee to render him an M & H employee under the lent employee doctrine. Because Lee does not dispute the existence of the first two elements, only the third factor — whether M & H had the right to control the details of Lee's work — is relevant here. In deciding whether an employer has the right to supervise and control, we consider the totality of the circumstances, including, but not limited to:
Avila v. Northrup King Co., 179 Ariz. 497, 501, 880 P.2d 717, 721 (App.1994). The key for this analysis is whether the special employer has "the right to supervise and control [the work], not the exercise of that right." Nation, 145 Ariz. at 418, 701 P.2d at 1226 (emphasis added).
¶ 34 On this record, we conclude that M & H had the right to supervise and control the work Lee was performing at the Sam's Club construction site. Of the 100-150 subcontractor employees actively involved in the construction project, Able Body was the only subcontractor that did not have an onsite foreman supervising its workers. As the trial court noted, "[u]nlike every other subcontractor out there, there were no [] foremen or anyone else supervising [Lee] and his [co-worker]. They were on their own. It wasn't like the electricians who'd have people telling them how to do their job." Indeed, by Lee's own testimony, M & H was his "boss" and he was required to follow its instructions each day. Furthermore, Lee's construction safety expert admitted that M & H had control of the work site and Lee's work.
¶ 35 Finally, the record shows that M & H exercised actual control over Lee when he was at the construction site. For example, when he arrived each morning, Lee would locate the M & H superintendents and receive his instructions for the day. On the morning of the accident, Lee followed this same procedure and was directed by a superintendent for M & H to clean the tops of the freezers. Therefore, Lee was an employee of M & H under the lent employee doctrine.
¶ 36 Lee argues that M & H did not exercise control over him because Able Body's safety rules controlled his conduct at the worksite. Under these rules, Able Body was responsible for compensating its workers, maintaining workers' compensation insurance, and providing safety equipment and tools. However, as noted above, Able Body's status as Lee's general employer does not exclude the possibility that M & H also had control over Lee, and therefore was his special employer. See Araiza, 183 Ariz. at 452, 904 P.2d at 1276. Whether Able Body maintained some element of control over Lee through its safety work rules does not affect whether M & H exercised control over Lee under the lent employee doctrine. See Word, 135 Ariz. at 520, 662 P.2d at 1027.
¶ 37 Lee also argues that public policy does not support granting tort immunity unless the employer is liable for workers' compensation benefits. Lee relies on Tarron v. Bowen Machine & Fabricating, Inc., 225 Ariz. 147, 235 P.3d 1030 (2010), and Inmon v. Crane Rental Servs., Inc., 205 Ariz. 130, 67 P.3d 726 (App.2003), to support this contention. However, neither Tarron nor Inmon support Lee's position because those cases did not involve a temporary worker seeking to hold the special employer liable for the employee's work-related injuries. See Tarron, 225 Ariz. at 150, ¶ 14, 235 P.3d at 1033 (noting that the plaintiff employee sustained injuries due to the negligence of borrowed employees loaned to the special employer by the defendant general employer), Inmon, 205 Ariz. at 131-32, ¶ 2, 67 P.3d at 727-28 (explaining that plaintiffs, who were steel company employees, sustained injuries due to the negligence of borrowed employees provided by the defendant general employer, a crane rental service company).
¶ 38 Finally, no case in Arizona applying the lent employee doctrine mandates that a special employer must have had workers' compensation coverage in place to receive tort immunity. Instead, the special employer is liable to an injured employee for workers' compensation regardless of whether the special employer had coverage in place at the time of the employee's injury. See Nation, 145 Ariz. at 420, 701 P.2d at 1228 (concluding that the plaintiff had the right to recover workers' compensation benefits from the defendant special employer if she applied for such benefits); see also Porteadores Del Noroeste S.A. De C.V. v. Indus. Comm'n, 234 Ariz. 53, 59-60, ¶ 21, 316 P.3d 1241, 1247-48 (App.2014) (recognizing that a foreign company, as a special employer under the lent employee doctrine, was subject to Arizona's workers' compensation statutes for injuries
¶ 39 In sum, we agree with the trial court's determination that as a matter of law, M & H was Lee's special employer under the lent employee doctrine. Thus, we need not address M & H's cross-appeal on vicarious liability.
¶ 40 Based on the foregoing, we hold that the trial court properly determined Lee could not prevail, as a matter of law, on his liability theories against Wal-Mart under Restatement §§ 422 and 414. We also hold that the court correctly decided Lee was a lent employee of M & H, which limited his ability to recover against M & H to workers' compensation benefits. We therefore affirm the court's judgment.