Dakin v. OSI Rest. Partners, LLC

100 Mass.App.Ct. 92

175 N.E.3d 412

James Z. DAKIN

v.OSI RESTAURANT PARTNERS, LLC, & others ¹ .

No. 20-P-819

Appeals Court of Massachusetts, Plymouth.

Argued May 12, 2021

Decided August 2, 2021

Scott E. Charnas, for the plaintiff.

Christopher A. Callanan, Boston, for OSI Restaurant Partners, LLC, & another.

Present: Green, C.J., Blake, & Kinder, JJ.

BLAKE, J.

The Massachusetts Workers’ Compensation Act (act) provides that the acceptance of workers’ compensation benefits by an injured worker is deemed a release of any and all claims the employee might have against the employer. See G. L. c. 152, §§ 1, 23. This, however, does not prohibit an injured worker from bringing a claim against other persons or entities who may be legally liable for the injury. See G. L. c. 152, § 15. The question presented is whether the judge properly denied the plaintiff's motion for judgment notwithstanding the verdict (judgment n.o.v.) where, as here, there was sufficient evidence for the jury to find that certain entities were engaged in a joint enterprise or joint venture rendering them a single employer for purposes of the act. See G. L. c. 152, § 1 (5). We conclude that a reasonable jury could have found that they were and therefore affirm the denial of the plaintiff's motion for judgment n.o.v. or in the alternative new trial, and the judgment entered in favor of the defendants.

Background. The corporate structure. Bloomin’ Brands, Inc. (Bloomin’ Brands), is an umbrella entity that operates four restaurant concepts, including Outback Steakhouse.² At issue here are three entities within Bloomin’ Brands: OSI Restaurant Partners, LLC (OSI), Outback Steakhouse of Florida, LLC (Outback), and OS Restaurant Services, LLC (OS Restaurant). These entities operate pursuant to operating agreements which establish that OSI owns, manages, and controls Outback, which in turn owns, manages, and controls OS Restaurant. The operating agreements were signed by the chief legal officer of Bloomin’ Brands, on behalf of each entity.

OSI is the main operating company of Bloomin’ Brands. It holds the ownership interest in all of the Bloomin’ Brands operating concept entities (the restaurants). As relevant here, Outback owns the majority of the domestic Outback restaurants, including the intellectual property (such as trademarks and recipes), and the restaurant equipment. It is also the tenant in the commercial leases for each restaurant property.

Pursuant to the operating agreement between OSI and Outback, OSI is the sole member of Outback. The management, operation, and policy of Outback is exclusively vested in OSI. In other words, OSI has the power to make executive decisions for Outback. Additionally, OSI provided the initial capital contribution to Outback and may, but is not required to, infuse additional capital. This operating agreement also allocates any profits and losses of Outback to OSI. Finally, OSI exclusively determines when and if distributions are made to it.³

OS Restaurant is an in-house payroll processing company that handles all administrative functions for the nonmanagement employees of the restaurants.⁴ Pursuant to the operating agreement between OS Restaurant and Outback, Outback is the sole member of OS Restaurant and the management, operation, and policy of OS Restaurant is vested exclusively in Outback. Outback provided the initial capital contribution for OS Restaurant and may, but is not required to, contribute additional capital. The operating agreement allocates any profits and losses of OS Restaurant to Outback.

Pursuant to the amended and restated master employment services agreement (services agreement) between OS Restaurant, Outback, and other entities owned by OSI, OS Restaurant is obligated to serve as the sole provider of nonmanagement restaurant personnel to OSI restaurants, including the Hanover Outback Steakhouse where the plaintiff worked.⁵ OS Restaurant agreed "not to hold itself out to the public as an employee leasing organization, personnel service, or contract labor firm." In exchange, the restaurants agreed to pay OS Restaurant fees for its services. The services agreement, like the operating agreements, was signed by the chief legal officer of the entire enterprise, on behalf of all the OSI entities.

The plaintiff's complaint. The plaintiff, James Z. Dakin, was injured while working as a prep cook at an Outback Steakhouse restaurant in Hanover, Massachusetts. He filed a claim for and received workers’ compensation benefits, paid from an insurance policy that listed OSI, Outback, and OS Restaurant, among others, as the insureds. As relevant here, the plaintiff filed a complaint in the Superior Court against OSI and Outback alleging negligence. The defendants answered contending, inter alia, that the plaintiff's claims were barred by the act. The jury, in response to special questions, found that OSI and Outback were both engaged in a joint enterprise or joint venture with OS Restaurant.⁶ As a result, the plaintiff's claims were barred by the act and judgment entered for the defendants. The plaintiff filed a motion for judgment n.o.v. or in the alternative a new trial (motion). The judge denied the motion and this appeal followed.

Discussion. Motion for judgment n.o.v. The denial of a motion for judgment n.o.v. presents a question of law reviewed under the same standard used by the trial judge. See O'Brien v. Pearson, 449 Mass. 377, 383, 868 N.E.2d 118 (2007). We view the evidence in the light most favorable to the nonmoving party, "without weighing the credibility of the witnesses or otherwise considering the weight of the evidence." DeSantis v. Commonwealth Energy Sys., 68 Mass. App. Ct. 759, 762, 864 N.E.2d 1211 (2007), quoting Tosti v. Ayik, 394 Mass. 482, 494, 476 N.E.2d 928 (1985). "The verdict will be upheld if it may be determined that ‘anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the [nonmovant].’ " Sullivan v. Five Acres Realty Trust, 487 Mass. 64, 68, 166 N.E.3d 463 (2021), quoting McAvoy v. Shufrin, 401 Mass. 593, 596, 518 N.E.2d 513 (1988). A reasonable inference, however, "must be based on probabilities rather than possibilities and cannot be the result of mere speculation and conjecture" (citation omitted). Reading Co-Op. Bank v. Suffolk Constr. Co., 464 Mass. 543, 556, 984 N.E.2d 776 (2013).⁷

The plaintiff contends that the jury's verdict was not supported by sufficient evidence, was against the weight of the evidence, and reflected a misunderstanding of the law. He argues that the evidence merely established a "run-of-the-mill" parent-subsidiary corporate relationship and did not establish that Outback and OSI had an intent to associate as and were engaged in a joint venture with OS Restaurant. Therefore, he claims that the judge erred in denying his motion.

The defendants counter that they met their burden to prove that the entities were engaged in a joint venture and thus are a single employer for purposes of the act. See Gurry v. Cumberland Farms, Inc., 406 Mass. 615, 623-625, 550 N.E.2d 127 (1990). See also Whitman's Case, 80 Mass. App. Ct. 348, 355 n.6, 952 N.E.2d 983 (2011) ("[J]oint employment may come about simply because of the joint character of the business arrangement between two employers. The most obvious illustration is that of a classic joint venture" [citation omitted]). For the reasons that follow, we agree with the defendants.

The act. Originally enacted in 1911, the act guarantees workers certain benefits as the exclusive remedy for injuries they suffer in the course of employment, regardless of the wrongfulness of the employer's conduct. See Estate of Moulton v. Puopolo, 467 Mass. 478, 482-483, 5 N.E.3d 908 (2014), citing St. 1911, c. 751, pt. 1, § 5, and pt. 5, § 1. See also Camargo's Case, 479 Mass. 492, 494, 96 N.E.3d 673 (2018) ("General Laws c. 152 requires employers to provide workers’ compensation to employees who are injured within the scope of their employment"). The act "was intended to guarantee that workers would receive payment for any workplace injuries they suffered, regardless of fault; in exchange for accepting the statutory remedies, the worker waives any common-law right to compensation for tort injuries." Estate of Moulton, supra at 483, 5 N.E.3d 908. Put another way, an injured employee's acceptance of workers’ compensation benefits "shall constitute a release to the insured [employer] of all claims" thereby prohibiting the employee from bringing suit against the employer for their injuries. G. L. c. 152, § 23. See, e.g., Saab v. Massachusetts CVS Pharmacy, LLC, 452 Mass. 564, 567, 896 N.E.2d 615 (2008), quoting Barrett v. Rodgers, 408 Mass. 614, 616, 562 N.E.2d 480 (1990) ("employees [who accept workers’ compensation benefits] get ‘guaranteed right of recovery,’ but they are in turn barred from ‘recovering against their employers for injuries received on the job’ ").

Acceptance of benefits, however, does not prohibit the employee from bringing a claim against other persons or entities "other than the insured" who are legally liable for the injury. G. L. c. 152, § 15. The "insured" is defined as "an employer who has provided by insurance for the payment to his employees by an insurer of the compensation provided for by [the act]." G. L. c. 152, § 1 (6). "Under the act, ‘employers’ may be individuals, corporations, or some combination of those in a joint enterprise." Estate of Moulton, 467 Mass. at 486, 5 N.E.3d 908. See G. L. c. 152, § 1 (5). The act does not define the term joint enterprise. See G. L. c. 152, § 1.

Joint venture/joint enterprise. Whether the act's exclusivity remedy precludes the plaintiff's claims turns on whether the entities engaged in a joint venture or joint enterprise such that they constitute a single employer under the act. Although not defined in the act, the term joint enterprise has been interpreted as synonymous...