subcontractor

A fire caused structural damage to a building owned by J.H. Shaw Realty (Shaw) and occupied by steel manufacturer Blue Blade Steel Corp. (Blue Blade) in October, 2020. Blue Blade hired a roofing contractor to repair the roof. After an insurance investigation identified asbestos in the damaged roof, Blue Blade hired United Safety for the asbestos remediation. As the project neared completion in April, 2021, Plaintiff Kemal Beciragic, an employee of United Safety, fell through the roof and landed on the concrete floor below, sustaining severe injuries. Plaintiff sued Shaw and Blue Blade for his injuries; because it was his employer and solely liable for his injuries under the Workers’ Compensation Act, United Safety was only a party for discovery. The issue in Beciragic v. Blue Blade Steel Corp., 2026 N.J. Super. Unpub. LEXIS 1834 (App. Div. Aug. 6, 2026) was whether the defendants had a duty to Plaintiff to ensure his safety during his work on the roof.

Prior to their work, United Safety’s supervisor inspected the roof on Shaw’s building and found it in poor condition. Due to the danger, the supervisor instructed his workers, including Plaintiff, to use safety harnesses. However, Plaintiff was not wearing his harness at the time of his fall because it interfered with his freedom of movement. Further, because Blue Blade continued operations while United Safety performed their work, the two coordinated with each other on work scheduling, Blue Blade did not control United Safety’s work methods,  give them instructions on remediation, or manage their employees’ safety or equipment.

Shaw and Blue Blade each filed summary judgment motions arguing that they had no duty for Plaintiff’s injuries because they did not manage or instruct United Safety on its work and that Plaintiff was aware of the damage to the building and he chose not to use fall-protection gear provided by United Safety. Plaintiff opposed, arguing Blue Blade was responsible for oversight and coordination of the project and violated various OSHA regulations in not assuring any subcontractor complied with those requirements.

The trial court granted summary judgment, finding that the defendants owed no duty to Plaintiff because they disclosed the defect and foreseeable danger to United Safety, Plaintiff’s employer, who oversaw the means and methods of Plaintiff’s work. The trial court explained that because Plaintiff was injured doing the very work he was contracted to perform, the defendants had the right to assume United Safety’s  employees had sufficient skill to recognize the danger involved and adjust their methods accordingly. Further, the court found OSHA’s regulations were only a factor in the analysis of whether the defendants had a duty and did not dispositively establish a duty. Plaintiff appealed.

In its appeal, Plaintiff claimed that a genuine issue of material fact existed as to the duty each defendant owed to Plaintiff while working on their property and that all of the defendants were contractors who controlled some element of Plaintiff’s work.

The Appellate Division conducted its review by looking at the general law of negligence, then at the element of duty, establishing that Plaintiff was a business invitee to whom the defendants owed a duty to guard against dangerous conditions they know of or should have discovered. The Court then specifically focused on the duty a general contractor has for the injuries of its subcontractor’s employees, noting that a general contractor can assume a subcontractor and its employees are sufficiently skilled to recognize the dangers in their job and adjust their work accordingly. When the subcontractor is hired to work on a specific hazard itself, the owner or general contractor is not required to eliminate those hazards which are obvious and visible to the subcontractor and what the subcontractor was hired to  work on in the first place. Similarly, OSHA regulations intended to make a job site safe for contactors are only one factor in a negligence analysis, not the sole basis for a general contractor’s duty. The Appellate Division ultimately held that a landowner or general contractor is under no duty to protect the employee of a subcontractor from the very hazard created by the doing of the contract work when they do not retain control of the means and methods of the work itself.

Here, though the defendants all knew of the latent defects to the roof caused by the fire, they communicated those to United Safety; indeed, that was the specific reason United Safety had been hired. Plaintiff’s supervisor knew of the roof damage, had inspected it, and found it to be in bad shape. As a result, United Safety implemented safety measures, measures that Plaintiff intentionally chose to avoid. Further, to the extent Plaintiff argued each defendant was a general contractor, the same law applies – they are not liable for his injuries because they arose from the roof damage he knew existed and was hired to perform. As for Plaintiff’s claim that the defendants’ OSHA violations created an issue of material fact, the Court stated without more to support a claim for liability, an OSHA violation alone does not support a negligence claim. The Court affirmed the trial court’s grant of the defendants’ summary judgment motions, dismissing the complaint.

The key takeaways here include the reinforcement of a landowner’s duty to warn of a dangerous condition, and how that duty may be discharged to a subcontractor hired to perform repairs on that same open and obvious condition. Also, the critical fact here was the defendants’ lack of control over United Safety’s employees’ means and methods of work, which include the use (or lack of use) of safety equipment. Finally, while many plaintiffs may point at OSHA regulations as sacrosanct, this case makes it clear that those regulations do not create a per se legal duty, but are only factors to consider in a broader negligence analysis. 

Coverage Issues in Workers’ Compensation

A common issue arises where an employee works for an employer who does not maintain proper workers’ compensation coverage and alleges that there is a general contractor with coverage from whom they will seek benefits. As noted in our recent article, https://njworkerscompblog.com/how-to-properly-cancel-a-workers-compensation-policy/, claims that are denied for lack of coverage based on a cancelled policy often result in ongoing litigation regarding issues related to whether the policy was cancelled effectively. In these cases, the claimant’s counsel will often seek to bring any potential entity with whom the petitioner’s employer worked with and argue that they are liable for benefits as a “general contractor.” Therefore, an issue that can be simultaneously tried in connection with whether a policy was appropriately cancelled is whether there is a liable entity pursuant to Section 79.

Section 79 of the Workers’ Compensation Statute provides for penalties to employers who fail to carry workers’ compensation insurance but also provides a pathway for liability to a general contractor when a subcontractor they work with does not have coverage. The language of Section 79 provides:

Any contractor placing work with a subcontractor shall, in the event of the subcontractor’s failing to carry workers’ compensation insurance as required by this article, become liable for any compensation which may be due an employee or the dependents of a deceased employee of a subcontractor. The contractor shall then have a right of action against the subcontractor for reimbursement.

N.J.S.A. 34:15-79. The purpose of the foregoing is to protect the employee by permitting him to recover from a general contractor who gets direct benefit of the employee’s work.

In order for Section 79 to apply, three essential elements must be met: “(1) a contractor, (2) a subcontractor, and (3) failure by the subcontractor to carry workman’s compensation insurance.” Gaydos v. Packanack Woods Development Co., 64 N.J. Super. 395, 399 (Cty. Ct. 1960). “A contractor is ‘[o]ne who formally undertakes to do anything for another; specifically, one who contracts to perform work, or supply articles.” Jordan v. Lindeman & Co., Inc., 23 N.J. Misc. 194, 196 (Cty. Ct. 1945). A subcontractor is noted to be “one who enters into a contract with a person for the performance of work which such person has already contracted with another to perform. In other words, subcontracting is merely ‘farming out’ to others all or part of work contracted to be performed by the original contractor.” Brygidyr v. Rieman, 31 N.J. Super. 450, 454 (App. Div. 1954).

The foregoing criteria are highly fact sensitive and will often result in a number of fact witnesses testifying as to the issue of whether there was a general contractor/subcontractor relationship. As a result, some of the following examples provide guidance to litigants.

In Pollack v. Pino’s Formal Wear & Tailoring, 253 N.J. Super. 397 (App. Div. 1992), Pino’s Formal Wear decided to expand their business and have an extension put on their building to add dry cleaning services. Pino’s Formal Wear arranged for the co-respondent, Ernest Polgardy, to purchase the dry-cleaning machinery and to have the machinery installed. The decedent-employee was hired by Ernest Polgardy to install burners and to hook up the machines. The decedent-employee fell from a ladder and was injured. He ultimately passed away shortly thereafter from a number of conditions related to alcohol withdrawal and liver failure. The petitioner-dependent argued that that due to the decedent-employee’s fall, he was not able to drink which resulted in liver failure and death.

The petitioner-dependent filed claim petitions against Pino’s Formal Wear alleging that Pino’s Formal Wear was liable for benefits as the general contractor and that Ernest Polgardy, his direct employer, was an uninsured subcontractor.  The Appellate Division found that Pino’s Formal Wear was not a general contractor within the meaning of N.J.S.A. 34:15-79. It noted that Pino’s Formal Wear relied upon Ernest Polgardy’s skill and knowledge to purchase and install the dry-cleaning machinery with no restrictions placed on Ernest Polgardy. The relationship between Pino’s Formal Wear and Ernest Polgardy was that of owner and contractor, not general contractor and subcontractor. Therefore petitioner’s claim was dismissed.

In Brygidyr v. Rieman, 31 N.J. Super. 450 (App. Div. 1954), the petitioner was injured while washing windows for a building that was owned by Respondent Schwaben Halle. The petitioner filed claim petitions against Schwaben Halle and Federal Window Cleaning Company as an alleged uninsured subcontractor. The petitioner testified that he was regularly employed by another company but that in his free time he worked for Federal Window Cleaning Company and that on their instructions he was washing the windows of Schwaben Halle. Schwaben Halle, however, asserted that it was a cultural and singing society which owned and operated the building. The Appellate Division found that under these circumstances, Schwaben Halle could not have been a contractor and that “the washing of windows was not in the line of Schwaben’s regular business, and the contention that it had contracted to keep the windows clean is without merit… To hold otherwise would mean that any property owner who contracted for services would be liable for injuries sustained by the contractor’s employees.” Id. at 453-54.

In a more recent matter involving an action in the Superior Court filed by the carrier asserting that an employer withheld material information about its operations and use of subcontractors and thereby underpaid its workers’ compensation premiums, the Appellate Division affirmed the trial court’s order of the policyholder to pay the carrier additional unpaid premiums, plus interest, costs, and counsel fees in the amount of $145,231.00. In Fournier Trucking, Inc. v. New Jersey Manufacturers Ins. Co., No. A-1353-18T2, 2020 WL 1802840 (App. Div. Apr. 9, 2020), certif. denied, 244 N.J. 161 (2020), the trial court found that the employer-policyholder, a freight company that facilitated the transport of goods, was liable under N.J.S.A. 34:15-79 to provide workers’ compensation coverage for the employees of uninsured motor carriers it used for hauling of shipments to its customers. The Appellate Division noted that customers hired the employer-policyholder “to consolidate and transport goods; Fournier Trucking consolidates the goods itself, and then subcontracts with the carriers to perform the transportation. Therefore, Fournier Trucking is a contractor, and the carriers it uses to fulfill part of its contracts with shippers are subcontractors.” Id. at *12.

The policyholder-employer attempted to argue that the carriers it contracted with are independent contractors and therefore are not liable for workers’ compensation benefits. However, “to the extent that the carriers maintain employees, those carriers are statutorily obligated to maintain workers’ compensation coverage, as is any other employer within the state. By operation of N.J.S.A. 34:15-79(a), to the extent those carriers fail to satisfy their statutory obligation, Fournier Trucking, as the general contractor, is obliged to provide benefits to any carrier employee who suffers an injury while providing services under Fournier Trucking’s general contract. Ibid. In discussing the argument that the carriers were independent contractors, the Appellate Division stated that “a company can choose to use its own workers to carry out its responsibilities, or it can retain independent companies who may also qualify as subcontractors to discharge some of those tasks. When it does the latter, the law of our State requires the contracting company to assure that the subcontractor’s employees have adequate workers’ compensation insurance.” Id. at *14.

The issue of Section 79 liability for alleged general contractor/subcontractor disputes involve the various parties exchanging information regarding the petitioner’s work, the work site or assignment wherein the petitioner was injured, and investigation into any and all entities who were involved in the business which was related to the petitioner’s work. Carriers should perform initial investigation with their insureds regarding any possible subcontractors that they work with and claimant’s counsel should investigate with their client any information they may have regarding their work. Readers with questions regarding issues related to coverage and potential general contractor liability can reach the undersigned at knagy@capehart.com.

The post Coverage Issues and General Contractor/Subcontractor Allegations appeared first on NJ Workers' Comp Blog.

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