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Lechuga v. O & J Enterprises, LLC

Court of Appeals of Iowa

June 19, 2019

ANDRES LECHUGA, Plaintiff-Appellant,
v.
O & J ENTERPRISES, LLC, Defendant-Appellee, and MANZANO GRAIN BIN SERVICES, LLC, and GARCIA GRAIN STRUCTURE, LLC, Defendants.

          Appeal from the Iowa District Court for Fremont County, Mark J. Eveloff, Judge.

         In an interlocutory appeal, a plaintiff challenges the district court decision granting summary judgment to O & J Enterprises, LLC, in his tort action.

          Randall J. Shanks of Shanks Law Firm, Council Bluffs, for appellant.

          Joseph E. Jones and Elizabeth A. Culhane of Fraser Stryker, PC LLO, Omaha, Nebraska, for appellee.

          Heard by Doyle, P.J., and Mullins and Bower, JJ.

          BOWER, JUDGE.

         In an interlocutory appeal, Andres Lechuga challenges the district court decision granting summary judgment to O & J Enterprises, LLC (O & J) in his tort action. We find there are genuine issues of material fact on the questions of whether O & J had a subcontractor agreement with Garcia Grain Structures, LLC (Garcia Grain), whether Ezekiel Garcia was O & J's employee, and whether O & J and Garcia or Garcia Grain had a principal-agent relationship. On these issues we reverse the district court's decision granting summary judgment to O & J and remand for further proceedings. We find the district court properly granted summary judgment to O & J on the issue of whether O & J was in a joint venture with Mid-States Millwright & Builders, Inc. (MMB) and Garcia or Garcia Grain, and we affirm on this issue. We affirm in part, reverse in part, and remand for further proceedings.

         I. Background Facts & Proceedings

         The following facts are found in the affidavits, depositions, and documents submitted by O & J in support of its motion for summary judgment. In the past, MMB, a general contractor, used companies owned by Juan Manzano-Huerta (Manzano) as subcontractors to erect grain bins. Manzano first operated as Manzano Grain Bin Services, LLC (Manzano Grain), and then he dissolved the company and began operating as O & J.

         In prior instances when MMB hired Manzano Grain or O & J as a subcontractor, Manzano and MMB signed a subcontractor agreement, which required all subcontractors to provide a certificate showing the subcontractor had workers' compensation insurance. The agreement also provided Manzano Grain or O & J could not hire a subcontractor without prior written permission from MMB. Despite this provision, Manzano stated he almost always used a subcontractor to perform the work in erecting grain bins for MMB. The owner of MMB, Kevin Vier, and the sales manager, Brian Ryerson, stated they were unaware of this practice and had not given Manzano permission to hire subcontractors. Vier and Ryerson stated they believed they had been working with Manzano directly, either through Manzano Grain or O & J.

         In 2013, Manzano and Manzano Grain came under investigation by the federal government for knowingly hiring undocumented workers.[1] See United States v. Manzano-Huerta, 809 F.3d 440, 442-43 (8th Cir. 2016). Manzano claimed he paid the workers as subcontractors and therefore believed they were subcontractors. Id. at 444. The Eighth Circuit found "Manzano's relationship with his workers was much more involved than the typical relationship between a contractor and his subcontractors." Id. Manzano pleaded guilty to harboring aliens and conspiring to harbor aliens. Id. at 442. He was sentenced to thirty-three months in prison. Id. Manzano was given an enhanced sentence based on a finding he had attempted to obstruct justice by encouraging an employee, Ramon Perez, to state Perez was a subcontractor who had hired the undocumented workers rather than Manzano. Id. at 446.

         We turn now to the facts concerning the incident giving rise to this action. In 2014, Heartland Coop hired MMB as a general contractor to build grain bins on Heartland's property near Randolph, Iowa. MMB entered into a subcontractor agreement with L & D Construction to build the grain bins, but L & D was unable to complete the work. Time was of the essence in finishing the construction of the grain bins before the fall harvest in 2014.

         In late August 2014, Ryerson, MMB's sales manager, contacted Manzano to ask O & J to complete the project. This was between the time Manzano pleaded guilty to the federal charges and the time he reported to prison. According to Manzano, he told Ryerson he would get a crew to complete the job but he could not do it himself because he could not go to Randolph due to travel restrictions as a result of his criminal proceedings. Ryerson stated he believed O & J was going to do the job. Ryerson stated there was no discussion about O & J hiring a subcontractor to put up the grain bins in Randolph. Ryerson told other MMB employees "Juan's crew" was going to put up the grain bins.

         Ryerson created a subcontractor agreement between MMB and O & J, dated September 2, 2014, for the Randolph job, similar to contracts the parties had for other projects. Ryerson stated he left the contract at the MMB office for Manzano to sign and Manzano picked up the contract and took it with him. Manzano stated he was not presented with a subcontractor agreement before the accident. No parties have produced a signed copy of a subcontractor agreement between MMB and O & J for the Randolph job.

         O & J states it entered into a written subcontractor agreement with Garcia Grain, owned by Garcia, to perform work at the Randolph job site. Lechuga raises concerns about the validity of the written subcontractor agreement between O & J and Garcia Grain because there are two copies of the agreement; Lechuga claims Garcia's signatures on the two documents do not match. Lechuga claims the written subcontractor agreement may have been signed and dated at a later time in an effort to protect O & J and Manzano from liability in this action. The contract provided, "The Subcontractor shall make all decisions associated with how they wish to perform the terms of the Contract and shall be responsible to determine who, where and the length of the employment of any people hired by the Subcontractor."

         O & J did not inform MMB it was using Garcia Grain as a subcontractor. MMB required all of its subcontractors to submit a certificate showing they had workers' compensation insurance. Ryerson stated because MMB was unaware of a subcontractor agreement between O & J and Garcia Grain, it did not obtain an insurance certificate ...


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