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Joyce, Mary and Joyce v. Super Fresh Food Markets Inc.

filed as amended may 5 1987.: April 9, 1987.


On Appeal from the United States District Court for the Eastern District of Pennsylvania

Author: Hunter

Before: WEIS, BECKER, and HUNTER, Circuit Judges.


HUNTER, Circuit Judge

1. Appellants, Mary and Michael Joyce, appeal from an order of the United States District Court for the Eastern District of Pennsylvania granting summary judgment to appellee. super Fresh Food Markets, Inc ["Super Fresh"]. This negligence action originated in the Court of Common Pleas for the County of Philadelphia, Pennsylvania, and was removed on Super Fresh's motion to federal district court on the basis of diversity of citizenship. The district court held that Mary Joyce was an employee of Super Fresh at the time the relevant events transpired, and, therefore, the Pennsylvania Workmen's Compensation Act, 77 Pa. Stat. Ann. §§ 1 et seq. (Purdon 1952) provided Joyce with her exclusive remedy. Joyce v. Super Fresh Food Markets, Inc., 640 F. Supp. 721, 725 (E.D. Pa. 1986). Because we believe that there are genuine issues of material fact concerning the relationship between Joyce and Super Fresh, we will reverse the order of the district court and remand the case for trial.

2. In August 1982, super Market Services, Inc. ("SMS") hired Mary Joyce to work in the Super Fresh market located in Levittown, Pennsylvania.*fn1 Super Fresh and SMS are both wholly owned subsidiaries of the Great Atlantic & Pacific Tea Company ("A&P"), SMS supplies health and beauty products as well as other merchandise to Super Fresh, A&P, and other stores incorporated under the A&P banner. A&P created SMS for labor and tax reasons. Joyce and other SMS employees are non-union; whereas, wage-earners employed by Super Fresh are covered by a collective bargaining agreement with the United Food and Commercial Workers International Union.

3. Though Joyce was hired by SMS, she worked exclusively in the Super Fresh Levittown store. However, at work she wore an SMS uniform and badge, and her duties were confined to shelving and creating displays for SMS products.

4. On October 6, 1983, Joyce was performing her duties in the Levittown store. While she was transferring merchandise from shipping boxes to a cart, a large wooden pallet fell and struck Joyce on the leg and foot. As a result, she sustained serious injury, and this lawsuit ensued.

5. On the day of the trial, the district judge held a pre-trial conference during which the attorneys for Super Fresh submitted a motion for summary judgment. Joyce's attorney objected to any consideration of the motion until he had an opportunity to study it and reply. The trial judge did not rule on the motion at that time and apparently represented to the parties that he would treat the motion and supporting brief as a trial brief. Indeed, there is no entry on the docket sheet indicating that a motion for summary judgment was filed.

6. The judge also stated at the pre-trial conference that he would trifurcate the trial, and that the first issue to be tried would be whether Joyce was an employee of Super Fresh. Despite the fact that Joyce's attorney made a jury demand, the judge went on to rule that the first issue would be tried without a jury.

7. A few days after testimony was taken on the issue of Joyce's employment status, the trial judge, to the surprise of Joyce's attorney, entered an opinion and order granting summary judgment to Super Fresh on the ground that the suit was barred by the Pennsylvania Workmen's Compensation Act. It is from this order that the present appeal was taken. We have jurisdiction under 28 U.S.C. § 1291 (1982).

8. Appellant attacks the district court's order on two grounds. first, she claims that summary judgment was entered in violation of Fed. R. Civ. P. 56(c) which required summary judgment motions to "be served at least 10 days before the time fixed for the hearing." Second, appellant argues that there remains various genuine issues of material fact, and therefore he case is not ripe for summary judgment. Because we agree with appellant's second assertion, we need not and will not address the first.

9. The district court found two bases for concluding that the Workmen's Compensation Act bars the appellants from recovering in negligence. First, the district court found that Super Fresh was Joyce's actual employer and therefore was immune from suit under the exclusivity provision of the Act. See 77 Pa. Stat. Ann. § 481 (Purdon 1952) and 77 Pa. Stat. Ann. § 21 (Purdon 1952). Second, the court noted that A&P had incurred all the costs of Joyce's workmen's compensation benefits; thus, even if SMS was Joyce's actual employer, it would be appropriate to "Pierce the corporate veil" and grant immunity to all subsidiaries of A&P. WE will examine the latter basis first.

10. The district court cited no authority for its conclusion that sibling corporations should be treated as a single employer for purposes of workmen's compensation, and Pennsylvania authority indicates that such unitary treatment is disfavored. In Mohan v. Publicker Industries, Inc., 422 Pa. 588, 222 A.2d 876 (1966), for instance, the Pennsylvania Supreme Court clearly stated that a parent corporation and its wholly owned subsidiary are separate entities for purposes of workmen's compensation. Similarly, in Butera v. Western Ice & Utilities Co., 140 Pa. Sup. 329, 14 A.2d 219, 227 (1940), the Superior Court said of two corporations with common stockholders and common management, "As to their relations to an employee under the compensation law each corporation must be regarded as a separate entity and the labor performed by a workman for one of them cannot be cumulated with an agreement to perform services for the other . . ." while neither Mohan nor Butera involved two wholly owned subsidiaries of a parent corporation, we can think of no reason why the logic of these cases should not apply with full force here. The district court's rationale for piercing the corporate veil was that A&P would otherwise ultimately bear the double burden of a workmen's compensation award and of any adverse tort judgment. However, under Mohan, this would not seem to provide a sufficient reason for piercing the corporate veil. Nor can we say that leaving the corporate veil intact would work any injustice. A&P chose to construct a complex corporate family structure. Super Fresh and SMS were incorporated under different charters in different states. They have separate management and are held out to the public and their employees as separate entities. This structure has afforded A&P family various tax and labor advantages. Notably, this corporate configuration has allowed the family to keep part of its work-force -- the part of which appellant was a ...

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