Estate of Norman Ray Pelfrey v. Sam V Sorah T/A Sam ( 2003 )

COURT OF APPEALS OF VIRGINIA
Present: Judge Annunziata, Senior Judges Hodges and Coleman
ESTATE OF NORMAN RAY PELFREY
MEMORANDUM OPINION*
v. Record No. 0647-03-3 PER CURIAM
JULY 8, 2003
SAM V. SORAH T/A SAM'S GUN SHOP AND
UNINSURED EMPLOYER'S FUND
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
(D. Edward Wise, Jr.; Arrington, Schelin &
Herrell, P.C., on brief), for appellant.
(Jerry W. Kilgore, Attorney General; John J.
Beall, Jr., Senior Assistant Attorney
General; James W. Osborne, Special Counsel
and Assistant Attorney General, on brief),
for appellee Uninsured Employer's Fund.
No brief for appellee Sam V. Sorah t/a Sam's
Gun Shop.
The Estate of Norman Ray Pelfrey contends the Workers'
Compensation Commission erred in ruling (1) it lacked
jurisdiction to consider the claim filed by Kitty L. Pelfrey
(claimant) because employer had less than three employees
regularly employed within the Commonwealth on August 10, 2000,
the date of Pelfrey's injury and death; and (2) the doctrine of
res judicata did not apply to bar the deputy commissioner from
reconsidering whether the commission had jurisdiction. Upon
* Pursuant to Code § 17.1-413, this opinion is not
designated for publication.
reviewing the record and the parties' briefs, we conclude that
this appeal is without merit. Accordingly, we summarily affirm
the commission's decision. Rule 5A:27.
Jurisdiction
Under Code § 65.2-101, employers with
fewer than three employees are exempt from
coverage under the Workers' Compensation
Act. The employer has the burden of
producing evidence that it is exempt from
coverage. "What constitutes an employee is
a question of law, but whether the facts
bring a person within the law's designation,
is usually a question of fact." We are
bound by the commission's findings of fact
if those findings are supported by credible
evidence. On appeal, we construe the
evidence in the light most favorable to the
employer, the party prevailing below.
Osborne v. Forner, 36 Va. App. 91, 95, 548 S.E.2d 270, 272
(2001) (footnote omitted) (citations omitted).
Pursuant to Code § 65.2-101, the term "Employee" includes
"every executive officer, including president, vice president,
secretary, treasurer or other officer" of a corporation, except
for certain executive officers who have rejected coverage
pursuant to Code § 65.2-300. 1
In ruling that employer proved by a preponderance of the
evidence that it had fewer than three employees regularly in
service within the Commonwealth at the time of Pelfrey's injury
and death, the commission found as follows:
1
It was undisputed that neither Sam nor Mary Sorah filed
the required rejection notice with the commission.
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The Deputy Commissioner credited the
testimony of Sam and Mary Sorah and, based
on this testimony, concluded that the
employer regularly employed fewer than three
employees at the time of the claimant's
injury. Mr. Sorah testified that his mother
resigned as the employer's secretary,
treasurer, and director before the
claimant's injury and death, leaving him as
the employer's sole officer, director and
shareholder, and Mrs. Sorah substantiated
her son's testimony. We find no reason to
disturb the Deputy Commissioner's
credibility determination.
We also find that the Deputy
Commissioner's decision is supported by the
documentary evidence, and, in particular,
the minutes from the employer's board of
directors' meeting on March 5, 2000,
reflecting Mrs. Sorah's immediate
resignation. Pursuant to Code § 13.1-695,
an officer may resign from a corporation "at
any time by delivering notice to the
corporation" and pursuant to Code
§ 13.1-679, a corporate director can resign
at any time by "delivering written notice to
the board of directors, its chairman, the
president or the secretary." Mrs. Sorah
testified that she told her son, the
employer/corporation's president, that she
wished to resign. She also signed the
minutes from the meeting on March 5, 2000,
and these minutes provided written notice
that she was being "removed from all
association with the corporation due to her
health." Under the circumstances, we find
that as of March 5, 2000, before the
decedent's injury and death, the employer
had no more than two employees regularly in
service in the Commonwealth-that is, Mr.
Sorah and the decedent.
The commission, as fact finder, found the testimony of Sam
and Mary Sorah to be credible. It is well settled that
credibility determinations are within the fact finder's
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exclusive purview. Goodyear Tire & Rubber Co. v. Pierce, 5
Va. App. 374, 381, 363 S.E.2d 433, 437 (1987). Their testimony,
coupled with the written minutes of the March 5, 2000 Board of
Directors' meeting, established that Mary Sorah orally and in
writing resigned as an officer and director of the corporation
as of March 5, 2000. That testimony and the written minutes
constitute credible evidence to support the commission's factual
findings that Mary Sorah was not an "employee" at the time of
Pelfrey's injury and death on August 10, 2000. Accordingly, we
cannot disturb those findings on appeal. Based upon those
findings, the commission did not err in determining that the
employer had only two employees regularly in service within the
Commonwealth on the date of Pelfrey's injury and death and,
therefore, was not subject to the Act.
Res Judicata
Claimant argues that the commission was barred by the
doctrine of res judicata from considering the issue of
jurisdiction because that issue was previously litigated when
Deputy Commissioner Herring rejected the parties' voluntary
submission of a proposed settlement on August 8, 2001. In his
August 8, 200l letter to the parties and J. Jasen Eige,
employer's counsel, Deputy Commissioner Herring wrote as
follows:
After careful review of the materials
submitted to me in the settlement of this
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claim, I regret that I am unable to enter
the proposed order. . . .
* * * * * * *
For Mr. Eige's [employer's counsel]
benefit, I note that the firm's annual
report on file with the State Corporation
Commission at the time of Mr. Pelfrey's
death listed two corporate officers, Sam and
Mary J. Sorah. Mr. Pelfrey, as the third
employee, would bring the firm within
coverage of the Workers' Compensation Act
and consequently, subsection 65.2-512(A).
* * * * * * *
This case is returned to the
Commission's claims department for referral
to the hearing docket.
(Footnote omitted.)
In Lowes of Christiansburg v. Clem, 37 Va. App. 315, 557
S.E.2d 745 (2002), we recognized that
in a proper case "principles of res judicata
apply to Commission decisions." Where
applicable, the principle "bars relitigation
of the same cause of action, or any part
thereof which could have been litigated
between the same parties and their privies."
"One who asserts the defense of res judicata
has the burden of proving by a preponderance
of the evidence that an issue was previously
raised and decided by [the commission] in a
prior cause of action."
Id. at 322, 557 S.E.2d at 748 (citations omitted). Unless we
can say as a matter of law that claimant's evidence sustained
her burden of proof, the commission's findings are binding and
conclusive upon us. See Tomko v. Michael's Plastering Co., 210
Va. 697, 699, 173 S.E.2d 833, 835 (1970).
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In ruling that the doctrine of res judicata did not bar
Deputy Commissioner Burchett from considering whether the
commission had jurisdiction to consider claimant's claim against
the employer, the commission found as follows:
We find that the Deputy Commissioner's
statement regarding the employer's corporate
officers within his letter rejecting the
proposed settlement did not constitute a
final judgment in the claimant's favor to
which the doctrine of res judicata applies.
There is also no evidence that the issue of
the number of "employees" was ever actually
"litigated" before Deputy Commissioner
Herring.
The record established that the employer, claimant, and the
Uninsured Employer's Fund neither actually litigated nor could
have finally litigated the issue of the number of employees
regularly in service in the Commonwealth at the time of
Pelfrey's injury and death before Deputy Commissioner Herring
when he considered whether to approve the settlement agreement.
In addition, the Uninsured Employer's Fund was not before the
commission at that time. Deputy Commissioner Herring considered
the proposed settlement, rejected it, and then returned the case
to the hearing docket for further proceedings. Thus, the
statements contained in his August 8, 2001 letter did not
constitute a final ruling or decision on the merits of the issue
of the number of employees regularly in service. The issue of
jurisdiction was before the deputy initially and continued to be
an issue at each stage of the proceedings.
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Based upon this record, the doctrine of res judicata did
not apply to bar the commission from considering whether the
employer had three employees so as to fall within the Act so
that the commission would have jurisdiction over the claim.
For these reasons, we affirm the commission's decision.
Affirmed.
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