James E. Berger v. Dalton Lumber Corp ( 2002 )

COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Fitzpatrick, Judges Elder and Agee
Argued at Salem, Virginia
JAMES E. BERGER
MEMORANDUM OPINION * BY
v. Record No. 2293-01-3 CHIEF JUDGE JOHANNA L. FITZPATRICK
APRIL 2, 2002
DALTON LUMBER CORPORATION AND
WOOD PRODUCTS OF VIRGINIA GROUP
SELF-INSURANCE ASSOCIATION
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
Robert E. Evans for appellant.
Richard D. Lucas (Lucas & Associates, on
brief), for appellees.
James E. Berger (claimant) contends the Workers'
Compensation Commission (commission) erred in finding that
Dalton Lumber Corporation (Dalton) was not his statutory
employer pursuant to Code § 65.2-302(A). 1 Finding no error, we
affirm the commission's decision.
* Pursuant to Code § 17.1-413 this opinion is not
designated for publication.
1
Code § 65.2-302(A) provides:
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
I.
We view the evidence in the light most favorable to the
employer, who prevailed below. See Westmoreland Coal v.
Russell, 31 Va. App. 16, 20, 520 S.E.2d 839, 841 (1999). The
commission's factual findings are conclusive and binding on this
Court when those findings are based on credible evidence. See
Code § 65.2-706; James v. Capitol Steel Constr. Co., 8 Va. App.
512, 515, 382 S.E.2d 487, 488 (1989). "The fact that there is
contrary evidence in the record is of no consequence." Wagner
Enters., Inc. v. Brooks, 12 Va. App. 890, 894, 407 S.E.2d 32, 35
(1991).
So viewed, claimant sustained a compensable left eye injury
on March 29, 2000 while working for Fred Robinson who built
utility sheds on Dalton's property.
Dalton is a "planer mill" that purchases logs and rough cut
lumber to plane into finished lumber for resale. After the logs
and rough cut lumber are planed into finished lumber they are
graded for resale. A certain amount of the planed rough cut
lumber is not finished lumber quality and is graded below resale
finished lumber. Dalton found that this waste lumber could be
used to build utility sheds for its customers and the profit
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.
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from the sale of the utility sheds would offset the cost of the
waste lumber. Dalton contracted with an individual to build
this type of shed on its property with the waste lumber. When
this individual ceased to build the sheds, Robinson undertook
this work. Neither shed builder was an employee of Dalton.
Claimant worked full-time for another employer in an
unrelated business and worked part-time for Robinson building
utility sheds for a few hours in the morning. The utility sheds
were built in an open work shed on Dalton's property. Robinson
provided the tools and the knowledge of how to build the sheds.
Dalton provided the materials and paid Robinson a certain amount
per completed shed depending on size. Robinson paid claimant
$40 per completed shed. Dalton posted orders for sheds of
certain sizes and specifications on a board in the work shed.
Once a utility shed was completed, Dalton would remove it,
deliver it to the customer or place it for sale on its property.
It is undisputed that claimant was an employee of Robinson
and that Robinson was not required by statute to provide
workers' compensation insurance for him. The deputy
commissioner found that Dalton was not claimant's statutory
employer. The commission affirmed that finding and stated:
In reaching this conclusion, we note the
evidence establishes that Dalton Lumber,
with the exception of one occasion after the
claimant's injury, has not engaged in the
trade, business or occupation of building
sheds. While Dalton provided the materials
and a location on its premises, without some
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nexus that it was actually involved in the
building of sheds or that building sheds was
an integral part of its operation, no
statutory employer relationship existed with
Mr. Robinson and the claimant.
Claimant appealed that decision.
II.
Appellant's sole issue on appeal is that the commission
erred in finding Dalton was not his statutory employer. He
argues that the manufacture of the utility sheds was an integral
part of Dalton's trade, business and occupation because Dalton
was involved in every aspect of the manufacture except the
actual physical assembly of the sheds.
We note that "the issue whether a person is a statutory
employee presents a mixed question of law and fact which must be
resolved in light of the facts and circumstances of each case."
Cooke v. Skyline Swannanoa, 226 Va. 154, 156, 307 S.E.2d 246,
247 (1983). The Supreme Court has stated:
[T]he 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.
Shell Oil Co. v. Leftwich, 212 Va. 715, 722, 187 S.E.2d 162, 167
(1972).
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In Cinnamon v. International Business Machines Corp., 238
Va. 471, 384 S.E.2d 618 (1989), the Supreme Court extended the
"Shell Oil" test delineating each prong of the test.
One, the so-called "normal-work test",
relates to the determination of
statutory-employer status as defined in [now
Code § 65.2-302(A)]. As the language of
th[e] statute makes clear, that prong
relates to an owner who engages an
independent contractor to perform certain
work. If the work out of which the
industrial accident arose is, in the
language of Shell Oil, work "normally
carried on through [the owner's] employees
rather than independent contractors", it is,
in the language of the statute, a "part of
[the owner's] trade, business or
occupation". In such case, the owner is the
statutory employer of the injured worker,
whether directly employed by the independent
contractor or by a subcontractor.
Id. at 476, 384 S.E.2d at 622 (internal citations omitted). The
second prong of the test is inapplicable to the instant case. 2
In this case, the commission applied the Shell Oil test and
found "[i]n the current case, while the sale of sheds may be
part of Dalton's occupation and business, there is no evidence
that the actual manufacturing was work which it undertook."
(Emphasis added.) The Shell Oil test and Code § 65.2-302(A)
require that the work performed by the injured claimant be part
of the trade or business of the alleged statutory employer and
2
The second prong of the test, an exception to the first
and sometimes labeled the "subcontracted-fraction test," relates
to the determination of statutory-employer status as defined in
Code § 65.2-302(B). See Cinnamon, 238 Va. at 476, 384 S.E.2d at
620.
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as such the work must "normally [be] carried on through
employees." The evidence proved that Dalton's business was to
plane lumber for resale. It did not, except on one occasion
after claimant's injury, build any utility sheds. Dalton
requested the size and specific type of utility shed to be
built, sold the utility sheds, delivered the utility sheds to
customers and made a profit from the sale of the utility sheds,
but it did not build the utility sheds.
The commission's finding, that Dalton was not claimant's
statutory employer, is supported by credible evidence and within
the first prong of the Shell Oil test.
For the foregoing reasons, we hold that Dalton was not
claimant's statutory employer, and the decision of the
commission is affirmed.
Affirmed.
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