Yoder v. McCarthy Construction, Inc.

Summary

The Pennsylvania Supreme Court considers whether a general contractor qualifies as an injured subcontractor employee’s statutory employer under the Workers’ Compensation Act and is therefore immune from tort liability. The appeal challenges longstanding precedent concerning the effect of workers’ compensation benefit payments, waiver of the statutory-employer defense, and application of the five-part McDonald test. The underlying case involved Jason Yoder’s $5 million negligence verdict against McCarthy Construction, Inc., which the Superior Court vacated and remanded for entry of judgment in McCarthy’s favor.

Holdings

1. A general contractor that qualifies as a statutory employer under the Workers' Compensation Act remains entitled to immunity from common-law negligence liability even when the subcontractor that directly employed the injured worker carried workers' compensation insurance and paid the worker's benefits.
2. The statutory-employer defense is jurisdictional in nature and is not waived by failure to plead it timely; lack of subject-matter jurisdiction may be raised at any time, including sua sponte.
3. The Superior Court abused its discretion by exceeding its scope of review and scouring the entire pretrial and post-trial record to establish disputed elements of McCarthy's statutory-employer status after the trial court had precluded McCarthy from presenting that defense at trial.

Questions Presented

1. Whether the Pennsylvania Supreme Court should overrule Fonner v. Shandon, Inc. and require a general contractor to have actually paid workers' compensation benefits before receiving statutory-employer immunity under Sections 203 and 302(b) of the Workers' Compensation Act.
2. Whether the Pennsylvania Supreme Court should overrule LeFlar v. Gulf Creek Industrial Park #2 and hold that the statutory-employer defense is waivable when the general contractor did not pay workers' compensation benefits.
3. Whether the Superior Court improperly exceeded its scope of review by relying on the entire pretrial and post-trial record to determine disputed elements of McCarthy's statutory-employer status after the trial court had precluded McCarthy from presenting that defense at trial.
4. Whether the trial court must determine, before resolving the negligence claim, whether McCarthy satisfies the disputed first, second, and fourth elements of the McDonald statutory-employer test.

Disposition

reversed_and_remanded