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GOLDBERGER v. GOLDBERGER
Factual and Procedural Background
The claimant, Louis Goldberger, was injured while operating a Ford automobile truck to procure painting materials for a building located at 887 East One Hundred and Seventy-sixth Street, New York City. This building was the residence of the employer, B.M. Goldberger, and his family, including the claimant. The employer was president and treasurer of three corporations, including the Salsbury Thomas Needle Factory Corporation, which owned the property. The claimant’s injury occurred during the use or manipulation of the truck in connection with painting work on the building. The State Industrial Board held that the employer was engaged in the hazardous business of construction, repair, and demolition of buildings, and that the claimant’s employment was hazardous under the Workmen’s Compensation Law. The appellant, Ætna Life Insurance Company, challenges this determination.
Legal Issues Presented
- Whether the employment of the claimant was hazardous within the meaning of the Workmen's Compensation Law, specifically under the category of "construction, repair and demolition of buildings."
- Whether the employment was carried on by the employer for pecuniary gain, as required by the statute.
- Whether the corporate form and ownership structure could be disregarded to ascertain the true nature of the employer’s business and the employment relationship.
Arguments of the Parties
Claimant's Arguments
- The employer had a contract for the renovation of the building in question, which implied that the work was performed for pecuniary gain.
- The claimant’s employment involved hazardous work related to construction and repair under the Workmen’s Compensation Law.
Appellant's Arguments
- The work performed was analogous to ordinary household maintenance rather than hazardous employment conducted for pecuniary gain.
- The corporate structure was used to obscure the true nature of the transaction, which was essentially family maintenance rather than a business enterprise.
- The burden was on the claimant to prove that the work was for pecuniary gain and hazardous, which was not met.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Hungerford v. Bonn, 183 App. Div. 818 | Clarification that ordinary household repairs are not considered hazardous employment carried on for pecuniary gain under the Workmen's Compensation Law. | The court applied this precedent to determine that the painting work was similar to ordinary household maintenance and not a hazardous business activity conducted for profit. |
Court's Reasoning and Analysis
The court examined the factual context of the claimant’s injury and the nature of the employer’s business and property ownership. Although the employer held corporate positions and there was a contract for renovation between related corporations, the court looked beyond the corporate formalities to the substance of the transaction. The building was the family residence, and the painting work was akin to ordinary household maintenance rather than a hazardous business activity for pecuniary gain. The court emphasized that the claimant bore the burden of proving that the work was hazardous and conducted for profit, which was not established. The court relied on the precedent set in Hungerford v. Bonn, which held that similar household repairs did not constitute hazardous employment under the statute. Therefore, the court concluded that the State Industrial Board erred in its determination.
Holding and Implications
The court’s final decision was to REVERSE the award of the State Industrial Board and remit the matter back to the Board for further proceedings consistent with this opinion.
The direct effect of this decision is to deny compensation under the Workmen’s Compensation Law to the claimant on the grounds that the employment was not hazardous and not carried on for pecuniary gain. The court did not establish new precedent but reaffirmed existing principles regarding the interpretation of hazardous employment and the importance of examining the substance over corporate form.
COCHRANE, P.J.:
The employer does not appeal. He is the father of the claimant. He was president and treasurer of three corporations known as Goldberger Manufacturing Corporation, Salsbury Thomas Needle Factory Corporation, and Double Century Needle Factory Corporation. All of the stock of all of those corporations not owned by himself was owned by his wife, son and daughter. He was the only employee of the Salsbury Thomas Needle Factory Corporation. This latter corporation owned the property at 887 East One Hundred and Seventy-sixth street, New York city. It was the residence of the employer and his family including this claimant. Two other families occupied apartments in the same building. At the time of the accident the claimant was proceeding with a Ford automobile truck to procure some painting material to be used in or about said building. The truck did not work properly and in connection with its operation or manipulation by the claimant and another whom he summoned to his assistance, the claimant received the injuries in question. Only one painter was engaged in the work of painting the building and his work did not exceed two days' duration.
The State Industrial Board has held that the employer was engaged in the business of construction, repair and demolition of buildings and that the employment of the claimant was, therefore, hazardous. (Workmen's Compensation Law, § 2, group 42.) It is not sufficient that the employment be hazardous but it should also appear that the employment was "carried on by the employer for pecuniary gain." (§ 3, subd. 5.)
In Hungerford v. Bonn ( 183 App. Div. 818) the claimant was engaged in making some minor repairs in the apartment of the employer in a three-family house owned by the wife of the employer. It was said by this court: "It cannot be said that the appellant, with reference to this house, was engaged in `construction, repair and demolition of buildings,' or in any other employment declared hazardous by the Workmen's Compensation Law. * * * The work did not differ from the ordinary work done periodically by all householders of kalsomining certain rooms in the house. The evidence is undisputed. It was error of law to say that the alleged employer was carrying on a hazardous employment at this time and place for profit."
It is contended in behalf of the claimant that the employer had a contract for the renovation of this house. The record discloses a contract "between the Goldberger Manufacturing Company and the Salsbury Needle Corporation or any other corporation that may be a subsidiary corporation of the Goldberger Manufacturing Corporation, with B.M. Goldberger of the Borough of the Bronx, City of New York, as follows: That Benjamin Goldberger shall renovate and keep in order any buildings of the above named corporation on the following terms: For the term of one year, receiving a bonus of 10% of the costs of the entire costs for renovating any of the buildings present in the face of the contracts and schedules." It is signed by this employer as president and treasurer of both corporations. There is not a word as to the nature of the repairs to the building in question or any other building. It appears, therefore, that this building was owned by a corporation all of the stock of which was owned by the employer and his family; that he with his family including the claimant resided there. The painting in question was such as was being done to the residence of both the employer and the employee. No contract for the painting appears to have been made. The real nature of the transaction or the relations of the parties to each other or to the property cannot be covered up or obscured by corporate forms or methods. The court will look beneath the form of the transaction to ascertain the real substance. We think the reasoning of the Hungerford case applies here. There as here title to the property was not in the employer but it was the residence of his family. The claimant has not established facts from which it appears that the work which was being done differed "from the ordinary work done periodically by all householders." The burden was on the claimant to establish with reference to this particular house that his father was engaged in "construction, repair and demolition of buildings" for pecuniary gain. If the repairs were for the convenience, enjoyment or comfort of the family they were not for pecuniary gain within the meaning of the statute. If they were not for the convenience, enjoyment or comfort of the family the claimant should have so demonstrated.
The award should be reversed and the matter remitted to the State Industrial Board, with costs to the appellant to abide the event.
All concur.
Award reversed and matter remitted to the State Industrial Board, with costs to the appellant to abide event.
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