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Lundstrom v. Maguire Tank, Inc.: WORKERS COMPENSATION | EMPLOYMENT LAW - Minnesota loaned servant law

United States Court of Appeals
No. 07-1294
John Lundstrom; Cori Lundstrom, *
Appellants, *
* Appeal from the United States
v. * District Court for the
* District of Minnesota.
Maguire Tank, Inc., *
Appellee. *
Submitted: October 5, 2007
Filed: December 4, 2007
Before WOLLMAN, BYE, and SHEPHERD, Circuit Judges.
WOLLMAN, Circuit Judge.
John Lundstrom, an employee of Truck Crane Service Company (Truck Crane),
was injured on a job site operated by Maguire Tank, Inc. Lundstrom collected
workers compensation from Truck Crane. He then sued Maguire Tank, asserting that
its negligence had caused his injury. Maguire Tank asserted that under the loaned
servant doctrine it was Lundstroms special employer. Under that doctrine, Maguire
Tank was liable to Lundstrom under workers compensation statutes, but was also
protected by those statutes from any further liability. The district court granted
Maguire Tanks motion for summary judgment after concluding as a matter of law
that Lundstrom was a loaned servant of Maguire Tank. Lundstrom appeals that
decision, and we reverse.
Truck Crane rents cranes to construction contractors, transports its cranes to and
from job sites, and operates the crane while on-site. Maguire Tank, a general
contractor, employed Truck Crane to lift into place various parts of a water tower.
Lundstrom had no set job description, but filled various roles as required by
Truck Crane, which included operating, maintaining, and transporting cranes.
Lundstrom began working at the Maguire Tank job on September 8, 2003, acting as
an oiler, whose responsibilities included ensuring that the 300-ton crane functioned
properly and that the rigging was sufficient on all the lifts, as well as generally being
the crane operators eyes and ears on the ground. He was also responsible for
preparing the crane for transport and for transporting it. Truck Cranes crane operator
on the site was Mark Tollefson. Randy Smith was Maguire Tanks foreman in charge
of the site. Smith briefly discussed with Tollefson where the crane would be located
on the site and at what time they would begin lifting, but did not tell Tollefson how
to operate the crane. Smith did not give any special directions to Lundstrom about
how he should perform his job functions as an oiler. Smith did not recall even
speaking with Lundstrom at the job site. The lifting was finished sometime between
4:00 p.m. and 7:30 p.m. The next morning, September 9, the Truck Crane employees,
including Lundstrom, packed the crane for transport without direction from Smith or
any other Maguire Tank employee. Smith then discussed the time sheets for the job
with Tollefson and signed them. At this point, both Smith and Tollefson believed that
Truck Cranes work for Maguire Tank was completed.
While Truck Crane employees were packing the crane for transport, a Maguire
Tank worker began cutting the lifting lugs from the water tower. Lifting lugs are
heavy metal objects that, when welded onto pieces that must be lifted by a crane,
allow the cranes lifting ropes or cables to be attached to the piece. After the pieces
are lifted into place, the lifting lugs are cut off. Shortly after Smith had signed the
time sheets with Tollefson, Lundstrom was either getting some drinking water or
smoking a cigarette and saying goodbye to some Maguire Tank workers when a lifting
lug fell some 140 feet and struck Lundstroms left arm, causing severe injuries.
We review de novo a district courts grant of summary judgment. Gretillat v.
Care Initiatives, 481 F.3d 649, 652 (8th Cir. 2007). We view the facts in the light
most favorable to the nonmoving party, and we will affirm if there is no genuine issue
of material fact and the moving party is entitled to judgment as a matter of law. Fed.
R. Civ. P. 56(c); Gretillat, 481 F.3d at 652.
The loaned servant doctrine provides that if an employer lends an employee
to another for the performance of some special service, then that employee, with
respect to that special service, may become the employee of the person to whom his
services have been lent. Newland v. Overland Express, Inc., 295 N.W.2d 615, 618
(Minn. 1980). This doctrine applies so long as: (1) the employee has made a
contract for hire, express or implied, with the special employer; (2) the work being
done is essentially that of the special employer; and (3) the special employer has the
right to control the details of the work. Id.
Maguire Tank is not entitled to judgment as a matter of law that Lundstrom
made an implied contract for hire with Maguire Tank. A contract for hire is made
only if the employee consents to the alleged special employment relationship.
Newland, 295 N.W.2d at 618. The burden of proving such consent is on the party
invoking the doctrine. Id. For the purpose of this appeal, there is no express contract
between Lundstrom and Maguire Tank.
The basis for implying consent is the employees unequivocal acceptance of the
detailed control of his work by the special employer, which has been held to exist as
a matter of law in only two or three situations in Minnesota. See id. at 635 n.1; Danek
v. Meldrum Mfg. and Engg Co., Inc., 252 N.W.2d 255, 259-60 (Minn. 1977). The
first is when a labor broker is the general employer, e.g., Danek, 252 N.W.2d at 259-
60, but Maguire Tank concedes that Truck Crane is not a labor broker. The second
is when the general employer effectively functioned as a labor broker, e.g., Miller v.
Federated Mut. Ins. Co., 264 N.W.2d 631, 634 (Minn. 1978), but that is not the case
here, either.
As a third possible situation, Maguire Tank argues that acceptance of detailed
control has been held to exist as a matter of law in cases involving the operation of
cranes. The two cases Maguire Tank offers as examples are Nepstad v. Lambert, 50
N.W.2d 614 (Minn. 1951), and Teska v. Potlatch Corp., 184 F. Supp. 2d 913 (D.
Minn. 2002). Nepstad is not controlling because it applied Wisconsin law. See
Nepstad, 50 N.W.2d at 620. Teska was a federal district court decision that relied
heavily on Nepstad and that made no reference to Rademaker v. Archer Daniels
Midland Co., 247 N.W.2d 28 (Minn. 1976), which emphasized the importance of
consent. See Teska, 184 F. Supp. 2d at 927-929. Although Nepstad and Teska
discuss, and are cited for, the second and third elements of the loaned servant doctrine,
neither case discussed the consent requirement. Even if they can be read as consistent
with Minnesota law by assuming that their silence regarding the element of consent
indicates that they implied the employees consent to the special employment
relationship as a matter of law, these cases do not aid Maguire Tank. They are
unavailing because the level of control exercised in Nepstad and Teska is substantially
dissimilar to any control that may have been exercised in this case. See Nepstad, 50
N.W.2d at 622-23 (Detailed authoritative control must be distinguished from mere
designation of work or suggestions made incident to encouraging cooperation . . . .);
Teska, 184 F. Supp. 2d at 929. In both of those cases, the crane operators were loaned
servants as a matter of law while they made blind lifts, during which they moved
the crane exactly and only as instructed by the special employer. See Teska, 184 F.
Supp. 2d at 929; see also Nepstad, 50 N.W.2d at 617. Maguire Tank has not alleged
that it actually controlled or directed Lundstroms actions as an oiler, much less that
any actual control was similar enough in degree to that exercised in Nepstad and
Teska to warrant applying those cases here.
The importance of actual indicia of consent is shown in Rademaker, 247
N.W.2d 28, in which the Supreme Court of Minnesota remanded for a determination
whether Rademakers work as a steamfitter on a construction project under the
exclusive control of another employer for about a year and a half demonstrated
consent to a special employment relationship. Id. at 29, 32. Even on those facts, the
court refused to imply consent as a matter of law because that is not warranted when
the general employer, as here, is a contractor offering a service. In cases such as this
one, there must be actual indicia of consent. Id. Lundstrom worked for little more
than one day and, more importantly, took no instructions from any Maguire Tank
employee regarding how to do his job. As noted earlier, Smith does not recall even
talking to Lundstrom during the job. If Rademaker did not impliedly consent as a
matter of law to a special employment relationship, neither did Lundstrom.
When the facts are viewed in the light most favorable to Lundstrom, they do not
entitle Maguire Tank to a judgment as a matter of law that Lundstrom was essentially
doing the work of Maguire Tank at the time he was injured. See Newland, 295
N.W.2d at 618. Viewed in that light, Lundstrom either was not working or had
completed all his work for Maguire Tank at the time of the injury. Both Smith and
Tollefson believed that once the papers were signed, the job was completed. Beyond
this formality, all the lifting had been finished the day before the injury, and all the
preparation of the crane for transport had been completed that morning before the
injury. All that was left for Lundstrom, or any other Truck Crane employee, to do was
get into the truck and drive away. To the extent that driving away is work, and
provided that we ignore the fact that Lundstrom had not actually begun driving at the
time he was injured, returning the crane to Truck Crane so that it could be rented to
other customers could well be considered Truck Cranes work and not Maguire
Tanks. Accordingly, it was error to find as a matter of law that Lundstrom was doing
Maguire Tanks work.
Maguire Tanks conclusion that it had the right to exercise detailed control of
the work being done is not justified by the facts when they are viewed in the light
most favorable to Lundstrom. See Newland, 295 N.W.2d at 618. As a preliminary
matter, the object of this inquiry is to discover whether Maguire Tank had the right to
control the details of Lundstroms work at the time of the injury. Logically, if the goal
of the test is to determine Lundstroms employment status, then the test must focus
on who could control his actions, not on whether Maguire Tank had the right to
control the work done by anyone else. See, e.g., Danek, 252 N.W.2d at 258-59.
As discussed above, Maguire Tank did not actually exercise detailed control
over Lundstrom. The only evidence that Maguire Tank possessed an unexercised
right to control the details of Lundstroms work is that: (1) Lundstrom recognized that
Smith was in charge of the job site and that he, Lundstrom, was there to provide a
service to Maguire Tank; (2) Lundstrom acknowledged that he would have moved his
truck if Smith had asked him to; and (3) Lundstrom may have asked permission to get
some water from Maguire Tanks water cooler immediately before the injury
occurred. Viewed in the light most favorable to Lundstrom, these facts do not appear
to go beyond the general deference that any subcontractor would give a general
contractor. Lundstroms job duties were to set up, maintain, pack up, and move the
crane, as well as to check the rigging on lifts and serve as the eyes and ears for the
crane operator. There is no indication that Smith ever spoke to Lundstrom, much less
that anyone from Maguire Tank ever actually directed Lundstrom on how to perform
any of his duties. Nor is there any proffered or readily apparent reason why Maguire
Tank would give, or believe that it had the right to give, such directions in light of the
expertise that Truck Cranes employees have in transporting and maintaining cranes.
Accordingly, there is no basis on the present record to find as a matter of law that
Maguire Tank had the right to control the details of Lundstroms work, and thus
summary judgment should not have been entered to that effect.
The grant of summary judgment is reversed, and the case is remanded to the
district court for further proceedings.


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