Moore v. Virginia International Terminals ( 2012 )

PRESENT: All the Justices
VIRGIL L. MOORE,
ADMINISTRATOR OF THE ESTATE OF
HUGH BRITT, JR., DECEASED
OPINION BY
v. Record No. 101408 JUSTICE CLEO E. POWELL
January 13, 2012
VIRGINIA INTERNATIONAL TERMINALS,
INC., ET AL.
FROM THE CIRCUIT COURT OF THE CITY OF PORTSMOUTH
James A. Cales, Jr., Judge
Virgil L. Moore (“Moore”) appeals the judgment of the
Circuit Court of the City of Portsmouth sustaining the plea in
bar filed by defendants Virginia International Terminals, Inc.
(“VIT”) and Orion L. Parker (“Parker”). Determining that the
circuit court erred in its ruling that the parties were
statutory employees of the Virginia Port Authority (“VPA”) and
therefore subject to the exclusivity provisions of the Virginia
Workers’ Compensation Act, we will reverse.
BACKGROUND
The Norfolk International Terminals (“NIT”) are owned by
the VPA, a political subdivision of the Commonwealth. In order
to effectively operate and manage the marine terminal, the VPA
created VIT as a nonprofit, nonstock corporation. As part of
the contractual relationship between VPA and VIT, VIT was
required to prepare a schedule of rates (“SOR”) applicable to
all users of VPA’s terminals. The SOR sets forth the terms and
conditions for use of the terminals. VIT also offers its
services as a stevedore at the marine terminals it operates.
Hugh Britt, Jr. (“Britt”), was employed by CP&O, L.L.C.
(“CP&O”), a private stevedore company, to load and unload cargo
at NIT. On May 28, 2008, Britt was operating a yard tractor,
also known as a hustler, to assist with the loading and
unloading of the M/V President Adams. Parker, a stevedore
employed by VIT, was operating a straddle carrier to assist with
the loading and unloading of another ship, the M/V Manhattan
Bridge. Both Britt and Parker were working in the South Berth
area of NIT. At the same time Britt was hauling a container to
be loaded onto the M/V President Adams, Parker was carrying a
container that had been unloaded off the M/V Manhattan Bridge.
The straddle carrier Parker was operating ran into the side of
the container being pulled by the hustler operated by Britt,
fatally injuring Britt.
On April 13, 2009, Moore, as administrator of Britt’s
estate, filed a wrongful death action against Parker and VIT,
asserting negligence and premises liability claims. VIT and
Parker filed a plea in bar seeking the dismissal of the action
on the basis that the VPA serves as the statutory employer of
the CP&O and VIT employees loading and unloading vessels at NIT,
and, therefore, Moore’s claims are barred by the exclusivity
provisions of the Virginia Workers’ Compensation Act.
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The circuit court determined that the parties were
statutory employees of the VPA and sustained the plea in bar
from which Moore appeals. According to the circuit court:
Britt, Parker, and VIT’s duties on May 28,
2008 fall squarely within VPA’s legislatively
mandated responsibilities and are therefore,
within VPA’s scope of employment. VPA is the
statutory employer of all parties. In addition
to finding that the parties are fellow statutory
employees, the Court finds that there is a
contractual basis for the employment relationship
between VPA and VIT as well as between VPA and
CP&O.
ANALYSIS
The sole issue before this Court is whether the circuit
court erred in determining that Britt and CP&O were statutory
employees of the VPA. “The rights and remedies provided in the
Virginia Workers’ Compensation Act (the Act) are exclusive of
all other rights and remedies for employees who fall within the
scope of the Act.” Burch v. Hechinger Co., 264 Va. 165, 168,
563 S.E.2d 745, 747 (2002). Thus, “[t]he issue whether a
particular person or entity is the statutory employer of an
injured employee is a jurisdictional matter presenting a mixed
question of law and fact that must be determined under the facts
of each case.” Bosley v. Shepherd, 262 Va. 641, 648, 554 S.E.2d
77, 81 (2001).
The definition of a statutory employer is found in Code
§ 65.2-302(A), which states:
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When any person (referred to in this section as
"owner") undertakes to perform or execute any
work which is a part of his trade, business or
occupation and contracts with any other person
(referred to in this section as "subcontractor")
for the execution or performance by or under such
subcontractor of the whole or any part of the
work undertaken by such owner, the owner shall be
liable to pay to any worker employed in the work
any compensation under this title which he would
have been liable to pay if the worker had been
immediately employed by him.
Recognizing that not every statutory employer/employee
relationship fits neatly within the parameters of the Code, this
Court has developed a number of tests as guides to aid with the
proper application of Code § 65.2-302(A). See, e.g., Cinnamon
v. IBM Corp., 238 Va. 471, 478, 384 S.E.2d 618, 621 (1989)
(recognizing that the normal work test “is only a corollary
guide, sometimes useful but not indispensable, in applying the
literal language of the statutes to the facts in a particular
case”). Two of these tests, the normal work test 1 and the
1
The normal work test was recognized by this Court in Shell
Oil Co. v. Leftwich, 212 Va. 715, 187 S.E.2d 162 (1972).
“[The] test is not one of whether the
subcontractor’s activity is useful, necessary, or
even absolutely indispensable to the statutory
employer’s business, since, after all, this could
be said of practically any repair, construction
or transportation service. The test (except in
cases where the work is obviously a subcontracted
fraction of a main contract) is whether this
indispensable activity is, in that business,
normally carried on through employees rather than
independent contractors.”
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governmental entity test 2 are discussed at great length by the
parties in this case. Moore, however, contends that neither the
normal work test nor the governmental entity test is dispositive
as there was no contract between Britt or CP&O and the VPA. We
agree.
The plain language of Code § 65.2-302(A), establishes that
two discrete elements must be present for a statutory
employer/employee relationship to exist: (1) the work must be
part of the owner/contractor’s trade, business or occupation,
and (2) the owner/contractor must have contracted with another
to have work performed.
As we explained in Henderson v. Central Telephone Company
of Virginia, 233 Va. 377, 383, 355 S.E.2d 596, 599 (1987) “[t]he
[normal work] test is merely an approach that is useful in
Id. at 722, 187 S.E.2d at 167 (quoting 1A Arthur Larson, The Law
of Workmen's Compensation § 49.12).
2
Recognizing the limitations of applying the normal work
test to governmental entities, this Court established the
governmental entity test in Henderson v. Central Telephone
Company of Virginia, 233 Va. 377, 355 S.E.2d 596 (1987).
It is not simply what [governmental entities] do
that defines their trade, business, or
occupation. What they are supposed to do is also
a determinant. Whereas a private business entity
is essentially self-defining in terms of its
trade, business, or occupation, a public utility
has duties, obligations, and responsibilities
imposed upon it by statute, regulation, or other
means.
Id. at 383, 355 S.E.2d at 599-600.
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determining an entity's trade, business, or occupation.” It is
axiomatic then that the governmental entity test, as a
counterpart to the normal work test, is a similarly useful
approach for determining a governmental entities’ trade,
business, or occupation.
VIT notes that our “application of the governmental entity
test has never turned on contractual interpretation.” While
technically correct, this assertion is misleading, as our
application of the governmental entity test presumes that the
owner/contractor has in fact contracted with another to have
work performed. Indeed, in each of the cases cited by VIT in
support of its argument, the existence of a contract is either
expressly stated or inherently implied. Jones v. Commonwealth,
267 Va. 218, 220, 591 S.E.2d 72, 73 (2004) ("[plaintiff] was
employed by . . . an independent contractor employed by the
University") (emphasis added); Roberts v. City of Alexandria,
246 Va. 17, 18, 431 S.E.2d 275, 275 (1993) ("the Sheriff of the
City of Alexandria executed a contract with [plaintiff's
employer]") (emphasis added); Henderson, 233 Va. at 378, 355
S.E.2d at 597 (“At the time he was injured, Henderson, was
acting pursuant to the contract”) (emphasis added); Williams v.
E. T. Gresham Co., 201 Va. 457, 458, 111 S.E.2d 498, 499 (1959)
("[defendant] was engaged in driving piles . . . for Chesapeake
Bay Ferry District") (emphasis added). Thus, contrary to VIT’s
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assertions, nothing in our jurisprudence indicates that a
governmental entity is exempt from the contract requirement of
Code § 65.2-302(A) by virtue of its status as a governmental
entity.
In the present case, it is undisputed that the stevedore
work performed by Britt, Parker, CP&O and VIT was part of the
trade, business or occupation of the VPA. The only remaining
question is whether the VPA contracted with CP&O to perform
stevedore work at NIT. 3 The circuit court determined that a
contractual relationship existed between CP&O and the VPA based
on CP&O’s implicit agreement “to abide by conditions in the
[SOR].” We disagree with the circuit court and the undisputed
facts of this case demonstrate that no such contractual
relationship exists.
In Hudson v. Jarrett, 269 Va. 24, 609 S.E.2d 827 (2005), we
examined whether two privately owned stevedore companies
operating at the NIT were statutory co-employees by virtue of
the fact that both were operating under the SOR. There, the
trial court determined that the stevedore companies were co-
employees because they were “engaged in the execution or
performance of the trade or business of VIT” (i.e. moving cargo
from ship to shore and shore to ship) and because the conduct of
3
It is undisputed that such a contractual relationship
exists between the VPA and VIT.
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the stevedore companies was governed by the SOR. Id. at 30-31,
606 S.E.2d at 830. We reversed, stating:
The Schedule of Rates prescribes certain
conditions that must be met by those doing
business at any VIT facility. By using the
facility, [the stevedore companies] agreed to
those conditions. However, the Schedule of Rates
is not a contract to perform the actual loading
and unloading of any particular vessel. The
contracts to perform those services are the
contracts between the ship owners and the
stevedore companies.
Id. at 31, 606 S.E.2d at 830 (emphasis added).
Here, as in Hudson, the circuit court determined that a
contractual relationship existed between CP&O and the VPA,
stating:
When stevedoring companies, such as CP&O, elect
to do business at a VIT facility like NIT, the
action of loading and unloading vessels at such a
facility creates a contractual bind. By virtue
of their actions, CP&O’s stevedores implicitly
agreed to abide by conditions in the Schedule of
Rates.
As we stated in Hudson, however, the SOR is not a contract
that creates a statutory employer relationship under Code
§ 65.2-302(A), and therefore, the necessary contractual
relationship between CP&O and the VPA did not exist in the
present case. Accordingly, the circuit court erred in
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determining that the VPA was the statutory employer of CP&O at
the time of the accident. 4
CONCLUSION
For the foregoing reasons, we will reverse the decision of
the circuit court and remand the matter for further proceedings
in accordance with this opinion.
Reversed and remanded.
JUSTICE McCLANAHAN, concurring.
4
Having determined that the SOR does not create the
necessary contractual relationship required under Code § 65.2-
302(A), we need not consider Moore’s remaining arguments
regarding whether the VPA was a valid party to the SOR or the
applicability of the Shipping Act of 1984, 46 U.S.C. § 40101 et
seq. to the present case.
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I agree with the majority’s holding that the circuit court
erred in finding that the VPA was the statutory employer of
CP&O. I write separately, though, to underscore the broader
point that the VPA did not hire CP&O to perform any services,
specifically including the stevedore services being performed by
Britt at the time of the accident. CP&O entered into a contract
with the operator of the M/V President Adams to provide the
stevedore services in which Britt was engaged at the time of the
accident. Therefore, CP&O was performing work for the operator
of the ship, not the VPA.
Moore asserts in his first assignment of error that “[t]he
[circuit] court erred in finding [the] Virginia Port Authority
(VPA) was the statutory employer of [Britt’s] employer CP&O,
because there was no evidence in the record that the VPA
employed CP&O by contract to perform work which . . . Britt was
performing when he was injured, as required by Virginia Code
§ 65.2-302.” The Court need go no further than the language of
Code § 65.2-302 to hold that the trial court erred in finding
that the VPA was the statutory employer of CP&O for the very
reason asserted by Moore in his assignment of error.
Pursuant to Code § 65.2-302(A), a statutory employer is
any person (referred to in this section as
“owner”) [who] undertakes to perform or execute
any work which is a part of his trade, business
or occupation and contracts with any other person
(referred to in this section as “subcontractor”)
for the execution or performance by or under such
subcontractor of the whole or any part of the
work undertaken by such owner.
(Emphasis added.) Because the VPA did not contract with CP&O
for the execution or performance of any work that was undertaken
by the VPA, there was no owner/subcontractor relationship
between the VPA and CP&O. Therefore, VPA was not the statutory
employer of CP&O.
The majority is correct in concluding that the SOR did not
create a statutory employment relationship between the VPA and
CP&O. See Hudson v. Jarrett, 269 Va. 24, 31, 606 S.E.2d 827,
830 (2005) (the SOR “is not a contract to perform the actual
loading and unloading of any particular vessel"). But, I would
make that finding in the broader context of a holding, in the
first instance, that there was no owner/subcontractor
relationship between the VPA and CP&O. Because, under the plain
language of the statute, there was no such relationship, no
discussion of the normal work and governmental entity tests “to
aid with the proper application of Code § 65.2-302(A)” was
necessary. *
*
Although the majority states that neither the normal work
test nor the governmental entity test is dispositive, the
majority, nevertheless, applies the governmental entity test to
determine that the work CP&O and Britt were performing was part
of the trade, business or occupation of the VPA. However, the
governmental entity test, like the normal work test, is applied
to determine whether the owner is performing part of its trade,
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business or occupation through the use of its subcontractor.
See Henderson v. Central Tel. Co., 233 Va. 377, 383-85, 355
S.E.2d 596, 600-01 (1987). Because the VPA did not contract
with CP&O for the performance of any stevedore work, it
necessarily follows that the VPA was not performing part of its
stevedore work through the use of CP&O.
In determining, initially, whether CP&O and Britt were
performing part of the VPA’s trade, business or occupation, the
majority has allowed the circuit court’s flawed approach to
frame its analysis. Instead of determining whether the VPA
hired CP&O to perform the stevedore services so as to invoke the
provisions of the Act, the circuit court first concluded that
Britt, Parker, and VIT were all performing duties that fell
within VPA’s legislatively mandated responsibilities and were,
thus, VPA’s statutory employees. Having made this finding, the
circuit court then concluded that because CP&O “implicitly
agreed to abide by [the] conditions in the Schedule of Rates,” a
contractual relationship existed between the VPA and CP&O.
Adopting this faulty framework, the majority likewise concludes,
at the outset, that the stevedore work performed by Britt,
Parker, CP&O and VIT was part of the trade, business or
occupation of the VPA. However, this determination cannot, and
should not, be made outside the context of an
owner/subcontractor relationship since the owner cannot be found
to have performed part of its work through the use of another
person with whom it has not contracted for execution of that
work.
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