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Galhofo v. Matinho

A-2952-02T3 (N.J. Super. App. Div. 2004) (Unpublished)

CORPORATIONS; SHAREHOLDERS; WORKERS COMPENSATION—An injured employee being paid by his or her employer while working on a personal project for a shareholder may collect workers compensation benefits and still sue the shareholder for personal negligence on the part of the shareholder.

A handyman performed maintenance, cleaning, and other jobs for a publishing facility. As an employee of that company, he also performed chores for one of the shareholders at the shareholder’s residence. The company had no ownership interest in the residence. According to the handyman, he was injured “when he fell from a ladder while installing insulation material at [the shareholder’s] home.” According to him, the shareholder provided the ladder. There as no question that the handyman was being paid by the company at the time of the accident. Also, the handyman received workers’ compensation benefits by reason of the accident. This gave rise to the question as to “whether an employee, who has recovered a workers; compensation award against a corporate employer, may maintain a negligence cause of action for the same injuries against one of the shareholders of that corporation for his independent act of negligence.” Under the law, there is no legal bar to pursuing a third-party claim. A statute expressly provides “that any payments made by the third-party tortfeasor operate as an offset against the employer’s liability.” While it is true that “[a] corporation is a legal entity separate from its shareholders, and courts will not pierce the corporate veil absent the showing of fraud or injustice,” here, the individual shareholders “had a non-delegable duty to ensure the safety of the premises where the work was performed.” The work was being done by a private homeowner at the request of the handyman’s employer. Payment of workers’ compensation benefits by the employer did not serve to relieve the shareholder from his own responsibility when he was acting as a homeowner.


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