Title: Uninsured Employer's Fund v. Gabriel

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  Hassell, C.J., Lacy, Keenan, Kinser, Lemons, and 
Agee, JJ., and Carrico, S.J. 
 
UNINSURED EMPLOYER'S FUND 
 
v.  Record No. 060053 
OPINION BY JUSTICE DONALD W. LEMONS 
November 3, 2006 
ANNE GABRIEL, ET AL. 
 
FROM THE COURT OF APPEALS OF VIRGINIA 
 
 
In this appeal, we consider whether the Court of Appeals 
erred in its judgment that the Workers' Compensation 
Commission (the "Commission") had jurisdiction over this case.  
For the reasons discussed herein, the judgment of the Court of 
Appeals will be reversed in part and vacated in part, and 
final judgment will be entered in favor of the Uninsured 
Employer's Fund. 
I. 
Facts and Proceedings Below 
On September 11, 2001, Richard Gabriel ("Gabriel") 
boarded an airplane for a business meeting.  The airplane was 
hijacked by terrorists and crashed into the Pentagon in 
Arlington County, Virginia.  Gabriel did not survive the 
crash.  Gabriel's estate filed a claim for death benefits 
under Code § 65.2-512 of the Virginia Workers' Compensation 
Act (the "Act").  In order for the Commission to have 
jurisdiction over this claim, Gabriel's employer, Stratin 
Consulting, Inc. ("Stratin"), would be required to have three 
employees "regularly in service" in the Commonwealth at the 
time of Gabriel's death.  Code § 65.2-101. 
On October 20, 1999, Gabriel and Edward Preble ("Preble") 
formed Stratin, which is a Virginia corporation.  Stratin 
provides management consulting services to businesses 
throughout the world.  Gabriel was president and treasurer of 
the company, and Preble served as vice president and 
secretary.  Stratin had two offices.  The principal office was 
located in Virginia where Gabriel resided in Fairfax County.  
Another office was maintained in Massachusetts where Preble 
resided. 
Gabriel frequently traveled on airplanes in the course of 
Stratin's business.  At the time of Gabriel's death, in 
addition to Gabriel and Preble, Stratin employed Gabriel's 
wife in Virginia and Susan Petralia ("Petralia") in 
Massachusetts. 
On January 30, 2002, Gabriel's estate filed a claim for 
benefits under the Act.  A deputy commissioner (the "deputy") 
denied the claim.  The deputy held that because Stratin did 
not employ the requisite three employees pursuant to Code 
§ 65.2-101, Stratin was not subject to the Act and that the 
Commission was without jurisdiction to adjudicate the claim.  
Gabriel's widow and two sons (the "claimants") appealed the 
deputy's decision to the full Commission. 
 
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On April 16, 2004, the Commission reversed the decision 
of the deputy and ruled that it did have jurisdiction over the 
claim.  The Commission also ruled that Gabriel's death arose 
out of his employment with Stratin.  The Commission remanded 
the case to the Deputy "for an award of benefits."  Stratin 
and the Uninsured Employer's Fund (the "Fund") appealed the 
Commission's decision to the Court of Appeals.  By order, the 
Court of Appeals held that the Commission's decision to remand 
the case "to the deputy commissioner for further proceedings 
to award benefits" was  "not a final decision in the case."  
Stratin Consulting, Inc. v. Gabriel, Record No. 1191-04-4, 
slip op. at 1 (June 21, 2004).  The Court of Appeals held 
"that the commission's order [was] interlocutory and not 
determinable of the controversy" and that the court was 
"without jurisdiction to entertain the appeal."  Id. at 2.  
The appeal was dismissed without prejudice.  Id.
On remand, the deputy granted an award on August 13, 
2004.  Both the Fund and Stratin requested review of the 
award.  On March 14, 2005, the Commission declined to 
reconsider its April 16, 2004, decision.  The Fund again 
appealed the decision to the Court of Appeals.  The Court of 
Appeals affirmed the Commission's decision holding that the 
Commission had jurisdiction and that the claim arose out of 
Gabriel's employment. 
 
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The Fund appeals to this Court based on four assignments 
of error.  The Fund argues that the Court of Appeals "erred in 
affirming the opinion" of the Commission.  The Fund also 
argues that the Court of Appeals "erred in finding that 
credible evidence in the record supported the [C]ommission's 
decision that it had jurisdiction."  The Fund next argues that 
the Court of Appeals "erred by declining to address the 
presumption adopted by the [C]ommission."  Finally, the Fund 
argues that the Court of Appeals erred in finding that 
Gabriel's death arose out of his employment. 
II. Analysis 
 
"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."  Baker v. Nussman, 152 Va. 
293, 298, 147 S.E. 246, 247 (1929).  The standard of review we 
must employ is familiar and well-settled.  "We review 
questions of law de novo, including those situations where 
there is a mixed question of law and fact."  Westgate at 
Williamsburg Condo. Ass'n v. Philip Richardson Co., 270 Va. 
566, 574, 621 S.E.2d 114, 118 (2005). 
"Code § 65.2-700 vests the Commission with jurisdiction 
to determine all questions 'arising under' the Virginia 
Workers' Compensation Act," however, "[t]he jurisdiction is 
not unlimited."  Bogle Dev. Co. v. Buie, 250 Va. 431, 434, 463 
 
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S.E.2d 467, 468 (1995).  The threshold question in this case 
is whether the Commission had jurisdiction.  Code § 65.2-101 
states that under the Act " '[e]mployee' shall not mean . . . 
[e]mployees of any person, firm or private corporation, 
including any public service corporation, that has regularly 
in service less than three employees in the same business 
within this Commonwealth." 
The Commission held in relevant part that: 
 
We find that as a matter of law, Mr. Preble is, 
for workers' compensation purposes, deemed to be an 
employee regularly in service in Virginia, because 
he is an officer of a Virginia corporation.  Under 
§ 65.2-101 of the Code of Virginia, an individual is 
deemed an employee by virtue of being an officer of 
a corporation.  While not every employee of a 
Virginia corporation is regularly in service in the 
state, we adopt the presumption that a corporate 
director assumes certain responsibilities with 
regards to that corporation that constitute 
rendering regular service in the Commonwealth.  We 
therefore REVERSE the finding that the Commission 
does not have jurisdiction over this claim. 
 
Gabriel v. Stratin Consulting, Inc., VWC File No. 208-43-28 
(Apr. 16, 2004)(emphasis added).  There is not a presumption 
in Virginia that by virtue of holding the position of a 
corporate director of a Virginia corporation, that corporate 
director renders regular service in Virginia.  The Commission 
based its decision on a presumption that does not exist in 
Virginia law. 
 
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The Court of Appeals did not address the Commission's 
adoption of a presumption. Rather, the Court of Appeals based 
its decision on the Commission's "findings of fact."  
Uninsured Employer's Fund v. Gabriel, 47 Va. App. 95, 102, 622 
S.E.2d 273, 276 (2005).  The Court held that "[t]he facts of 
this case constituted credible evidence in the record that 
supported the commission's decision that it had jurisdiction."  
Id.  We have previously held that this Court is bound by the 
Commission's factual finding that a company lacks, on or 
immediately prior to the date of the accident prompting a 
claim for benefits, a number of employees sufficient to bring 
it within the ambit of the Act.  Vanzant v. Southern Bending 
Co., 143 Va. 244, 248-49, 129 S.E. 268, 269 (1925).  However, 
such findings of fact are "conclusive and binding" only to the 
extent that they are "predicated upon evidence introduced or 
appearing in the proceedings."  Id. at 246, 129 S.E. at 268.  
In other words, "[i]f . . . there is no credible evidence on 
which the Commission's findings of fact are based, its 
findings [of fact] are not binding and the question presented 
becomes one of law."  Great Atlantic & Pacific Tea Co. v. 
Robertson, 218 Va. 1051, 1053, 243 S.E.2d 234, 235 (1978). 
We hold that the evidence in the record does not support 
a finding that the Commission had jurisdiction.  At the time 
of Gabriel's death, Stratin had four employees. Only two of 
 
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the four employees, however, were "regularly in service" in 
Virginia as required by Code § 65.2-101. 
It is undisputed that Mr. and Mrs. Gabriel were 
"regularly in service" in the Commonwealth.  However, 
Stratin's other two employees Preble and Petralia, were not 
"regularly in service" in Virginia.  Petralia served as 
Preble's administrative assistant.  She worked and lived in 
Massachusetts.  Petralia's only contact with Virginia was 
through limited phone calls and emails made to Gabriel who 
worked in the Virginia office.  Consequently, Petralia was not 
regularly in service in Virginia.  Thus, whether the 
Commission had jurisdiction over this case depends on whether 
Preble was an employee regularly in service in Virginia. 
At the time of Gabriel's death, Preble served as vice 
president and secretary of Stratin.  Preble's office was in 
Concord, Massachusetts.  Preble testified that most of the 
work for his clients was performed "on the site of the 
client."  Stratin had no clients in Virginia.  While Stratin 
was headquartered in Virginia where its financial affairs were 
handled, Preble was in charge of Stratin's business 
development of marketing and sales and did not handle 
financial matters.  Additionally, from 1999 to 2001, Preble 
was only in Virginia four times.  The evidence does not 
support a finding that Preble was regularly in service in the 
 
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Commonwealth.  The fact that Preble may have had certain 
statutory duties as an officer of Stratin does not render him 
regularly in service in Virginia.  Because Stratin did not 
have three employees regularly in service within the 
Commonwealth at the time of the cause of action, the 
Commission had no jurisdiction over this matter.  See Code 
§ 65.2-101.  Because we have determined that the Commission 
had no jurisdiction in this case, the Court of Appeals and 
this Court have no jurisdiction over this matter, except to 
decide that there is no jurisdiction.  Morrison v. Bestler, 
239 Va. 166, 170, 387 S.E.2d 753, 755 (1990) (holding that "a 
court always has jurisdiction to determine whether it has 
subject matter jurisdiction"). 
III. Conclusion 
Because the Commission and the Court of Appeals had no 
jurisdiction to hear this case, we will reverse the Court of 
Appeals' holding concerning jurisdiction and vacate the 
remaining portion of the Court of Appeals' judgment, and enter 
final judgment for the Uninsured Employer's Fund. 
Reversed in part, 
vacated in part, 
and final judgment.
 
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