1 TENNESSEE BUREAU OF WOR KERS’ COMPENSATION

WORKERS’ COMPENSAT ION APPEALS BOARD

David Carpenter ) Doc ket Nos. 2017-08-0232 ) 2017-08-0233

v. ) ) State File Nos. 4008-2017 Southern Transit, et al. ) 14688-2017 ) ) Appeal from the Court of Workers’ ) Compensation Claims ) Deana C. Seymour, Judge )

Affirmed and Remanded – Filed March 1, 2018

In this interlocutory appeal, the employee alleged an injury to his low back while driving a truck owned by one of several employers named as defendants. During the expedited hearing, the trial court was asked to address whether the emplo yee came forward with

sufficient evidence to establish a likelihood of prevailing at trial with respect to the issue of medical causation and, if so, which employer is responsible for the claim. The trial court concluded the employee established he would likely prevai l at trial on the issue of medical causation and placed responsibility on the company that owned the truck the employee was driving, controlled the conduct of the employee’s work, and paid his wages on the date of the injury . We affirm the trial court’s d ecision and remand the case.

Judge Timothy W. Conner delivere d the opinion of the Appeals Bo ard in which Presiding Judge Marshall L. Davidson, III, joined. Judge David F. Hensle y filed a separate opinion concurring in part and dissenting in part.

Michael W. Jones, Nashville, Tennessee, for the employers-appel lants, P&M Logistics and Carter O’Neal Logistics

Monica Rejaei, Memphis, Tenness ee, for the employee-appellee, D avid Carpenter

J. Allen Brown, Nashville, Tenne ssee, for the employer-appellee , Southern Transit2 Factual and Procedural Background

David Carpenter (“Employee”), a sixty-six year old resident of Shelby County, Tennessee, worked as a truck driver and typically completed a F edEx route from Memphis, Tennessee to Greenville, Mississippi several times a w eek. Pursuant to a program put in place by FedEx, m ultiple independent trucking co mpanies contracted to cover various FedEx delivery rout es. To be eligible to cover F edEx routes, trucking companies and drivers were requi red to be pre-approved by FedEx

.

In the present case, Carter O’Neal Logistics (“Carter”) and P& M Logistics (“P&M”) were two trucking companies owned and operated by Boris Penchion (“Penchion”). 1 A third company, Southern Trans it, was owned by Penchion’s fr iend, Macilyn Harper (“Harper”). FedEx pre-approved these three comp anies to cover certain delivery routes. In an effort to assist Harper with the operat ion of her company, Penchion instructed his Operations Manager, Mike Mathias (“Mathias”), to run the day-to-day operations of Southern Transit as well as his companies. 2 Mathias hired and supervised truck drivers, assigned drivers to various routes, and, accordi ng to Penchion, was authorized to “run the operation on my businesses.” Penchion f urther explained that

Mathias “deals with the drivers and the trucks and makes sure e verybody is where they

need to be.”

Although Penchion was responsible for FedEx’s Memphis-to-Green ville route, he allowed Harper’s company to run th at route to give her a “consi stent income every week.” Harper did not hire Employee personally to drive her tr uck and, in fact, never met Employee prior to the expedited hearing. Instead, Mathias hired Employee and assigned him to Southe rn Transit’s truck.

Employee operated the Memphis-to-Greenville route in Southern Transit’s truck until November 2016. At some poi nt that month, Southern Transi t’s truck became inoperable. As a result, Mathias instructed Employee to run th e route with one of Carter’s trucks. During the week s Employee was operating Carte r’s truck, his wages were paid by Carter. He received no wages from Southern Transi t when he was not operating the Southern Transit truck.

As Employee was operating Carter’s truck, he began to experien ce pain and other symptoms in his low back. He a sserted that the driver’s seat i n the Carter truck was not adjusting properly and caused his low back symptoms that manife sted on or about

1 For purposes of a previously-filed motion for summary judgment and the expedited hearing, the trial

court treated Carter and P&M as “related entities considered on e employer for purposes of this litigation.” No party objected to this characterization and the issue has no t been raised in this appeal. Therefore, like the trial court, we treat Carte r and P&M as one employer for pu rposes of this appeal.

2 Mathias was paid by one of Penc hion’s companies and never appe ared on Southern Transit’s payroll.3 November 29, 2016. Thereafter, on or about December 8, 2016, h e experienced increased pain while exiting the Carter truck. He reported the se incidents to Mathias.

When Employee received no respon se from Mathias, Penchion, or Harper, he contacted Southern Transit’s workers’ compensation insurer dire ctly. The insurer provided a panel of physicians, from which Employee selected Dr . Samuel Schroerlucke. After several visits, however, Southern Transit’s insurer denie d Employee’s claim and declined to authorize any further medical treatment. The insur er also terminated temporary disability benefits. E mployee did not return to work for Carter, P&M, or

Southern Transit.

At the expedited hearing, Empl oyee, Penchion, and Harper testi fied in person. In addition, the trial court consid ered the deposition testimony o f Dr. Schroerlucke and other

exhibits admitted into evidence. Thereafter, the trial court c oncluded that although Employee was originally hired and paid by Southern Transit, at the time of his work injury, he was working under an implied contract of employment with P&M or, in the alternative, P&M was his “special employer” as of the date of t he work injury. 3 The trial court further concluded Employee satisfied his burden of proof on the medical causation issue through the testimony of D r. Schroerlucke, who opined Emp loyee’s condition was “fifty-one percent or more relate d to his employment.” Carter and P&M have appealed.

Standard of Review

The standard we apply in reviewing a trial court’s decision pre sumes that the court’s factual findings are correct unless the preponderance o f the evidence is otherwise.

See Tenn. Code Ann. § 50-6-239(c)(7) (2017). When the trial judge has had the opportunity to observe a witness’s demeanor and to hear in-cour t testimony, we give

considerable deference to factual findings made by the trial co urt. Madden v. Holland Grp. of Tenn., Inc. , 277 S.W.3d 896, 898 (Tenn. 2009). However, “[n]o similar deference need be afforded the trial court’s findings based upo n documentary evidence.” Goodman v. Schwarz Paper Co. , No. W2016-02594-SC-R3-WC , 2018 Tenn. LEXIS 8, at *6 (Tenn. Workers’ Comp. Panel Ja n. 18, 2018). Similarly, the interpretation and application of statutes and regu lations are questions of law th at are reviewed de novo with no presumption of correctness a fforded the trial court’s conclu sions. See Mansell v. Bridgestone Firestone N. Am. Tire, LLC , 417 S.W.3d 393, 399 (Tenn. 2013). We are also mindful of our obligation to construe the workers’ compens ation statutes “fairly, impartially, and in accordance wi th basic principles of statuto ry construction” and in a way that does not favor either the employee or the employer. T enn. Code Ann. § 50-6- 116 (2017).

3 Because the trial court considered Carter and P&M to be “relate d entities,” it collectively referred to those two companies as “P&M.”4 Analysis

Implied Contract of Hire /Loaned Servant Doctrine

On appeal, Carter and P&M assert the trial court erred with re spect to the “contract of hire and employment status of . . . Employee.” Sp ecifically, they argue “the weight of the evidence reveals neither P&M nor any related enti ty was the actual employer of [Employee] during any period [in] which he alleged to have been injured.” Instead, Carter and P&M argue that Penchion merely “lent his tr uck to Southern and never hired Mr. Carpenter.”

Tennessee Code Annotated section 50-6-102(12)(A) (2017) define s “employee” to mean “every person . . . in the service of an employer . . . un der any contract of hire or apprenticeship, written or implied.” In Black v. Dance , 643 S.W.2d 654 (Tenn. 1982), the Tennessee Supreme Court addr essed the employment relationsh ip as follows:

In order for one to be an employee of another for purposes of o ur Workers[’] Compensation Law, it is . . . required that there be an express or implied agreement for the alleged employer to remunerate the alleged employee for his services in behalf of the former.

Id. at 657 (emphasis added). Thereafter, the Tennessee Court of A ppeals concluded the Supreme Court’s opinion in Black “unequivocally enunciates the rule that there must be

an express or implied contract for compensation for services in order to support a s tatus of employee under the Workers[’] Compensation Act.” Hill v. King , 663 S.W.2d 435, 439 (Tenn. Ct. App. 19 83) (emphasis added).

In Federal Ins. Co. v. Pennsylv ania National Mutual Casualty , No. M1999-01917- WC-R3-CV, 2000 Tenn. LEXIS 449 (Tenn. Workers’ Comp. Panel Aug. 17, 2000), the

deceased worker had worked as a concrete finisher for a constru ction company for nine

years. Id. at *2. On the day of the accident, the decedent had been aske d to work for another construction company beca use that company “needed a per son to assist his regular employees with concrete finishing work.” Id. During the course of his work for the second company, the dec edent was electrocuted. Id. at *4.

In analyzing whether the circumstances of the case were covere d by the “loaned servant” doctrine, the Court in Federal Ins. Co. explained,

When a general employer loans an employee to a special employer , the special employer becomes liable for work[ers’] compensation onl y if (a) the employee has made a contract of hire, express or implied, with the special employer; (b) the work being done is essentially that of the sp ecial5 employer; and (c) the special empl oyer has the right to control the details of

the work.

Id. at *6. Thereafter, the court considered whether an implied co ntract of hire existed, which “require[d] an express or i mplied agreement for the alleg ed employer to pay the alleged employee.” Id. The court then explained, “[t]he test for whether or not one is a loaned servant focuses less on who was to pay the employee, but instead focuses more on

for whom the work w as being done.” Id. at *7.

In the present case, it is undisputed that Mathias, Penchion’s Operations Manager who directed Employee’s day-to -day work activities, was hired a nd paid by one of Penchion’s companies. It is fur ther undisputed that FedEx had assigned the dedicated Memphis-to-Greenville route to P enchion, who allowed Southern T ransit’s truck to run that route. There is no question that Mathias instructed Emplo yee to operate a Carter

truck when Southern Transit’s tr uck became inoperable, resultin g in Employee receiving wages from one of Penchion’s comp anies during the weeks Employe e operated the Carter truck. Employee has asserted that the cause of his work injury was the driver’s seat in Carter’s truck. Finally, when E mployee sought to report his wo rk injury, he contacted Mathias, who, in turn, contacted Penchion.

Thus, when considering the three-pronged test as enunciated in Federal Ins. Co.

, we conclude that, when Mathias instructed Employee to operate t he Carter truck, Carter, one of Penchion’s companies, entered into an implied contract w ith Employee to pay him for that work. Moreover, the work performed by Employee was es sentially that of Penchion, who was ultimately responsible for the Memphis-to-Gre enville route. Finally, Mathias, who was employed and paid by one of Penchion’s compani es, had the authority to control the details of Employ ee’s work. Therefore, we concl ude that the evidence does not preponderate against the tria l court’s determination that a n implied contract of employment existed between Carter and Employee during the weeks he operated the

Carter truck and was paid by Carter.

Carter and P&M insist that Em ployee admitted during his testim ony he had been hired by Southern Transit, completed employment paperwork for S outhern Transit, and was paid by Southern Transit. Employee further acknowledged th at he never completed any employment paperwork for Carter or P&M. Yet, the very natu re of an “implied contract of hire” indicates the concept applies in circumstance s where traditional indicia of the hiring process are absent. Instead, the Tennessee Supre me Court has indicated it is the agreement for remuneration an d the right to control the det ails of the work that underlie an implied contract o f employment. Here, it is undisp uted that Mathias, the Operations Manager for Carter an d P&M, instructed Employee to o perate a Carter truck,6 and Carter paid Employee for his work while operating a Carter truck. This arrangement supports the trial court’s findi ng of an implied contract of hi re. 4

Medical Causation

Carter & P&M next argue that Dr. Schroerlucke’s medical causat ion opinion is “flawed.” Specifically, they assert that Dr. Schroerlucke offe red “wavering opinions” during his deposition and relied, in part, on Employee’s subjec tive description of when his symptoms manifested. As the Supreme Court’s Special Worker s’ Compensation Appeals Panel has explained, however, a “trial judge has the ad vantage of viewing the written medical proof through the prism of his/her findings as to the credibility of the lay witnesses, especially regarding subjective complaints relied up on by the physician.”

Peeler v. Erin Tr uck Way, Ltd., Inc. , No. M2004-02045-WC-R3 -CV, 2005 Tenn. LEXIS 848, at *8 (Tenn. Workers’ C omp. Panel Oct. 11, 2005).

In Indiana Lumberman’s Mutual Ins. Co. v. Ray , 596 S.W.2d 816 (Tenn. 1980), the Tennessee Supreme Court addressed a trial court’s reliance on medical expert opinions based on an employee’s subjective complaints:

[T]he treating physician, and th e only expert witness that test ified, stated that his opinion of the permanen cy of plaintiff’s disability wa s based upon “recurrent episodes of pain, muscle spasm, limitations of motio n, etc. . . .” Defendant . . . relies upon one page of its cross-examination f or the proposition that [the physician’s] evaluation of permanency was based entirely on subjective complaints, but, of course, his testimon y must be evaluated in its entirety.

Id. at 819. The Court then conclude d, “[t]his record contains amp le material evidence, both expert and lay, to support the trial judge’s finding of si xty percent permanent partial disability.” 5 Id.

4 We further conclude that Penchi on’s decision to give Southern T ransit the profits from the Memphis-toGreenville runs completed while Employee was operating Carter’s truck is not pertinent to this analysis. While Penchion had agreed to allo w Southern Transit to operate that particular route, Penchion was ultimately responsible for the d edicated route and could have d isposed of the profits in any way he chose. While Penchion’s desire to assist Harper with maintaining a ste ady income and in building her business is admirable, it does not change the nature of the implied employm ent relationship between Carter and Employee during the relevant time period.

5 Although the standard of review at the time Indiana Lumberman’s was decided was different than the standard of review we apply on appeal, we conclude the Supreme Court’s rationale remains relevant to the issue of a trial court’s consideration of expert medical te stimony indicating the expert relied on an employee’s subjective complaints in forming his or her opinions

.7 In the present case, Dr. Schroerlucke testified he reviewed wi th Employee his history of symptoms and subjectiv e complaints. An MRI of the l umbar spine revealed

“severe L4-L5 stenosis.” Althou gh Dr. Schroerlucke admitted th e MRI revealed no evidence of an “acute injury,” a nd that he relied on Employee’s subjective description of the work incidents and his symptoms, he also reaffirmed his opi nion that if driving the truck “ignited that pain,” then “his employment caused more tha n 51 percent of this injury.” Specifically, he respon ded “yes” when asked as follow s:

Ultimately, Doctor, with [Employ ee’s] facts surrounding his inj ury – being that he was driving a truck, he had a seat that was broken, tha t was repeatedly striking him in the b ack, and, then, within a very s hort period of time after that happened got out of his truck and began immedia tely feeling this pain that he described to you – in your medical opinion, i s Mr. Carpenter’s injury more likely than not, meaning more than 51 p ercent, related to his employment?

In evaluating this case, the trial court correctly noted that, at an expedited hearing, an employee need not prove every element of his claim by a prep onderance of the evidence, but “must present sufficient evidence for the Court t o determine he is likely to prevail at a hearing on the merits.” After reviewing Dr. Schro erlucke’s records and deposition testimony, the trial c ourt concluded “[Employee] has shown he is likely to prevail at a hearing on the merits on the issue of causation.” Implicit in this

determination is a conclusion th at the trial court found Employ ee’s testimony credible as to the work incidents and the development of his pain and other symptoms. At this stage of the proceedings, we conclude the evidence does not preponder ate against that

determination.

Conclusion

Based on the foregoing, we affi rm the decision of the trial co urt and remand the case for any further proceedi ngs as may be necessary.1 TENNESSEE BUREAU OF W OR KERS’ COMPENSATION

WORKERS’ COMPENSAT ION APPEALS BOARD

David Carpenter ) Doc ket Nos. 2017-08-0232 ) 2017-08-0233

v. ) ) State File Nos. 4008-2017 Southern Transit, et al. ) 14688-2017 ) ) Appeal from the Court of Workers’ ) Compensation Claims ) Deana C. Seymour, Judge )

Opinion Concurring in Part and Dissenting in Part – Filed March 1, 2018

Hensley, J., concurring in part and dissenting in part.

I agree with the majority’s determination that the medical proo f of causation was

sufficient to establish that David Carpenter would likely preva il at a hearing on the merits. However, in my opinion, the preponderance of the evide nce does not support the trial court’s conclusion that Mr. Carpenter was an employee of P & M Logistics, Inc. (“P & M Logistics”), during those da ys he drove its truck while the Southern Transit, Inc. (“Southern Transit”), truck he c ustomarily operated was out of service. I would modify the trial court’s order to require Southern Transit to provide the benefits awarded to Mr. Carpenter. Accordingly, I respe ctfully dissent from the majori ty opinion insofar as it

affirms an award of benefits t o be paid by P & M Logistics.

Determining who Mr. Carpenter’s employer was on the date of his alleged injury requires a detailed analysis of the facts. It is undisputed th at Mr. Carpenter was hired as a truck driver by Southern Transit approximately two years before his alleged injury. His employment with Southern Transit began following a meeting with Mike Mathias wherein Mr. Carpenter completed an application to work for Sout hern Transit and signed other paperwork in connection with his employment. From the in ception of this employment relationship, Mr. Mathias was Mr. Carpenter’s superv isor, to whom he was to report any issues concerning his work or the truck he operat ed. As is addressed in the following testimony, although Mr. Mathias was employed by P & M Logistics, he managed the day-to-day operations of both Southern Transit and P & M Logistics as directed by Boris Penchion, the owner of P & M Logistics.2 Evidence concerning Southern Transit, P & M Logistics, and a th ird company, Carter O’Neal Logistics (“Carter O’Neal”), each being an indepe ndent contractor with FedEx, is important to understanding how Mr. Penchion came to m anage Southern

Transit and how Mr. Mathias came to oversee the day-to-day oper ations of Southern Transit. In an affidavit filed by Mr. Penchion, he stated he w as “the President and owner of Carter O’Neal Logistics (aka P&M Logistics).” In the expedi ted hearing, he testified he was the owner of P & M Logistics and Carter O’Neal, and that each had its own dedicated routes with FedEx. In an order denying Southern Tran sit’s motion for summary judgment and in the expedited hearing order, the trial court stated that P & M Logistics and Carter O’Neal were essentially the same entity. No one has raised an issue on appeal concerning the trial court’s treating P & M Logistics and Carter O’Neal as a single entity, although the record indicates they are separate corporations that both the trial court and the major ity treat as a single entity.

Mr. Penchion’s initial involvemen t with FedEx began in 2007 whe n P & M Logistics entered into a contract with FedEx. He testified P & M Logistics had a truck

with a dedicated route and “a wild truck,” which he explained i s a truck that runs routes

but does not have a dedicated rout e. The following year, he st arted Carter O’Neal “when [he] started buying other contractors out.” He testified that in addition to the two P & M Logistics trucks, he had “probably four spare trucks over there that [he] can run any way that [he] want[s] to.” He explained that spare trucks “are the trucks we use, like just in case something breaks down or you use as needed, because when y ou look at those trucks, they run 250 to 300,000 miles a year.” He explained th at the need for spare trucks was due to the number of days the trucks were in operation and the limited time the

trucks are available for servici ng before they have to go out o n the road again.

Mr. Penchion testified he had eight or nine trucks with Carter O’Neal and that these trucks, the P & M Logistics trucks, and the spare trucks were all on FedEx’s yard. He stated that when he started working with FedEx he would, on occasion, have to use another contractor’s spare truck because he did not have the nu mber of trucks he now has. He stated that as far as FedEx was concerned, they wanted contractors, trucks, and drivers that were in their system, and if another contractor ne eded a truck and he had a spare truck, it would not be any “big deal” for him to let anot her contractor use one of his trucks. He further explained th at FedEx paid th e owner of the truck used to make the run, irrespective of the drive r who completed the run.

Macilyn Harper is the president of Southern Transit, which she testified was her “part-time side job, extra income job.” She described her “ful l-time” job as a preschool

teacher. Southern Transit first became an independent contract or with FedEx in 2010, at which time it was not assigned de signated routes. Rather, Sout hern Transit’s trucks were initially “on a rotation board” a nd would only produce income w hen the trucks went out. Southern Transit “ran off the board” until approximately two ye ars ago when Mr. Penchion agreed to help Ms. Harper by allowing Southern Transit ’s one remaining truck3 to run the dedicated route from Memphis, Tennessee to Greenvill e, Mississippi that one of Mr. Penchion’s companies had with FedEx. She stated this “g ave [her] a consistent income every week.” According to Ms. Harper, the dedicated rou te “was not my contracted [route], but [Mr. Penchion] allowed me to do it . . .,” which was “something that he did to help me out.”

Ms. Harper testified she “assume d” Mr. Mathias was the person w ho hired Mr. Carpenter and stated “ Mr. Carpenter was put in my truck, but I never met Mr. Carpenter.” When asked how she knew to pay Mr. Carpenter, she responded “[h ]is filing status, full name, address, social, all that was passed on to me, and I pass ed it on to my payroll company.” She never disputed that Mr. Carpenter was hired by M r. Mathias as an employee of Southern Transit. She said on a couple of occasion s Mr. Carpenter called her and told her he did not receive a paycheck stub and she pri nted the stubs and “took them to the FedEx yard, and put them in the truck.” She acknow ledged that if Mr. Carpenter had any issues while d riving Southern Transit’s truck he was to call Mr. Mathias. However, she said she d id not hire Mr. Mathias and th at Mr. Mathias was not an employee of Southern Transit. She testified Mr. Mathias wor ked for one of Mr. Penchion’s companies, stating “ I’m not sure under which company it is, but he works for Boris [Penchion], one o f Boris’s companies.”

It is clear from the testimony of both Ms. Harper and Mr. Pench ion that Ms. Harper had very limited, if any, involvement in Southern Transi t’s day-to-day operations.

She was asked whether she could “overrule” instructions that Mr . Mathias might give Mr. Carpenter and responded “normally , I don’t get involved in the operation of the assignment, the truck, the run. . . . So I wouldn’t have a reas on to override or else really get involved.” Her testimony evidenced both her lack of involv ement in Southern Transit’s operations and Mr. Pench ion’s willingness to help her

.

Q. How would you know - - if [Mr. Carpenter] showed up for wor k, how would you know how much to pay him that week?

A. I would not know, unless I was told, maybe [Mr. Mathias] or [Mr. Penchion]. . . . And maybe Mr. Mathias would tell [Mr. Penchion ]. So I wouldn’t know. If Mr. Carpenter w as in the truck, I wouldn’t k now.

. . . .

Q. Okay. Did you have any control over the day-to-day work ac tivities of Mr. Carpenter?

A. No.

Q. Did you have any control ove r supervising him in any way?4 A. No, I did not.

Q. Did you ever reprimand him or punish him or - -

A. No.

Q. - - did you ever give him a goo d write-up or a bad write-up ?

A. No.

Q. Did you ever do any of those activities that normally an em ployer would do on behalf of an employee, like praise or punish or thi ngs of that

nature?

A. No. I never met him, never spoke to him.

Q. Why would Mr. Penchion let you run this route of his and en joy the earnings from it?

A. Well, that was an agreement between him and I [sic], to all ow me to
make the consistent income. I n eeded some financial help, and he did it to help me out.

Consistent with this testimony, Mr. Penchion testified Ms. Harp er allowed him to run her company and that he, in turn, empowered Mr. Mathias to manage the day-to-day operations of Southern Transit.

Q. What I was trying to estab lish - - and please correct me if I am wrong - - you have had the route for much longer than David Carpenter has been around. And it’s been your emp loyees running the route - -

A. Yes . . . . Up until the point that [Ms. Harper] needed sta ble income, and me getting it approved. Then yes, I put - - I made sure her tr uck ran it, and I made sure I got her driver to be in the truck on a consistent basis.

. . . .

Q. Okay. And it was you or Mike [Mathias] that oversaw the da y-to-day operations?

A. Mike, for the most part. I don’t really be [sic] down ther e. I think, over the past five years, I might have been in the FedEx facility fo ur times.5 Q. And the entire time David Carpenter was on her payroll, Ms. Harper’s payroll, who did he report to?

A. As far as what?

Q. As far as any issues with maintenance of the truck, the rou te, calling in

sick?

A. Mike [Mathias]. Mike was like her driver manager that was free, because I paid the bill. So, no matter what, he was like her d river manager. But I am the financee [sic].

. . . .

Q. So who was in control of the day-to-day operations of this route? Did Ms. Harper have any contro l whatsoever over it?

A. If she wanted something to happen, it could, yeah, at the e nd of the day, because at the end of the day, it’s her company. She owns it, the whole nine. But at the end of the day, she put me in place to allow me to run it, so to do what I thought was best. And in turn, I empowered Mike [ Mathias], for him to make good decisions on what goes on day-to-day opera tion. . . . I empowered him to run it.

Mr. Penchion testified that all dr ivers in FedEx’s system were given a number and had to be assigned to a contract, that all of his drivers were assigned “to P&M or Carter O’Neil [sic] Logistics,” and that Mr. Carpenter was assigned to Southern Transit. He also explained how Mr. Carpenter came to be driving a Carter O’ Neal truck at the time of his injury in 2016 and whether M s. Harper would have been aware of the arrangement.

Q. Earlier, you were asked about this lending of your truck in November of

2016. Let’s talk about kind of how that went down. You heard Ms. Harper testify earlier that when her tr uck would break down, she would sometimes not even know it. And it would get repaired and paid for by yo u, without . . . her knowledge. Do you dispute that?

A. I just told you I ran the company. She didn’t have to worr y about anything. Her job was to go - - if she was going to be a schoo l teacher, be a

school teacher.

Q. Okay.6 A. She’s telling you honestly. When she sat here and [told] y ou she really doesn’t know what is going on, or the day-to-day, or none of th at different

stuff.

. . . .

Q. Okay. And so, when you lent her your truck and - - I guess , did you contact her and say, “I’m going to lend you my truck.”?

A. Probably not, because I pr obably did not find out, until af ter the fact, that Mike [Mathias] had done it or did it. But it’s not like i t’s never happened before. I’m saying a lot of stuff that was done was u nderstood

between me and her . . . .

. . . .

Q. So, when a decision has to be made, when a truck breaks dow n and that run has got to go, did Ms. Harper have any say over how that ru n was going to happen the next day, aft er the truck broke down?

A. She didn’t want no [sic] say.

Q. Okay. So who did make the decision as to which truck was g oing to be used and which employee was going to be stuck in the cab?

A. Evidently, that day, Mike [Mathias] made the decision of wh o was going to do it. He is the operational manager.

Q. So you weren’t lending the truck to her business. You were using the truck to keep your business going?

A. No. Trust me, I make money. That’s not the issue. I’m le nding her the truck. I’m making sure that truck - - her company is viable. At the end of the day, this is something that I don’t have to do. But at the end of the day, I make sure that she was able to make the money, because that w as her fulltime job before she became a school teacher.

. . . .

Q. Who controls the day-to-d ay work of the employees?

A. The operati onal manager.7 Q. And who is that?

A. You know that’s Mike [Mathias].

Q. Okay. But he is your employe e, and he runs your business?

A. The two companies, yeah. And he runs Southern [Transit,] t oo.

Mr. Carpenter’s work arrangement over the two years he worked f or Southern Transit differed from the arrangement on the date of his injury in two respects. First, on the date he was injured, he was driving a truck owned by Carter O’Neal rather than

Southern Transit due to Southern Transit’s truck being out of o peration. Second, Carter O’Neal paid his wages for the days he drove its truck. The rec ord does not disclose whether P & M Logistics or Carter O’Neal contracted with FedEx for the Memphis-toGreenville route that Mr. Penchion allowed Southern Transit to run. It is clear that during the fifty-two week period ending December 9, 2016, Carte r O’Neal paid Mr. Carpenter wages totaling $560 for approximately two weeks when he drove its truck. Mr. Penchion testified “it was ju st easier for me to go ahead a nd pay him” rather than pay the money to Southern Transit. He did, however, pay Southern T ransit the balance of the money Carter O’Neal received from FedEx for the runs Mr. Carpen ter completed after deducting the expenses of operating the truck. Two FedEx “Week ly Independent

Contractor Settlement Statements” were entered into evidence co vering the two weeks immediately preceding the time M r. Carpenter drove Carter O’Nea l’s truck, and both

statements identified the contr actor as Southern Transit. The statements identify only one driver by number, but do not include the driver’s name.

The trial court emphasized that Mr. Mathias was the operations manager for P & M Logistics, and that he hired and supervised Mr. Carpenter. A lthough the record supports those determinations, it is unrefuted that Ms. Harper allowed Mr. Penchion to operate Southern Transit for her, and that Mr. Mathias was empo wered by Mr. Penchion to run the day-to-day operations of Southern Transit. Indeed, Mr. Penchion’s testimony that Mr. Mathias was the operations manager of Southern Transit was undisputed. Moreover, Ms. Harper testified th at if Mr. Carpenter had any is sues with his work or the route he drove he was to notify Mr. Mathias. It bears repeatin g that, despite the peculiar circumstances of these business relationships, it is undisputed that Mr. Carpenter was hired by Mr. Mathias to operat e Southern Transit’s truck.

Mr. Carpenter testified he had b een working with and reporting to Mr. Mathias throughout the two years he dr ove for Southern Transit. He tes tified that in late

November 2016 when Southern Trans it’s truck “broke down,” Mr. M athias “just told me, ‘[g]et in this tractor truck over there,’” referring to a truck he said had Carter O’Neal written on its door. He testified he did not sign an applicati on or fill out any paperwork when he started driving the Cart er O’Neal truck, and that he di d not interview with8 anyone to work for Carter O’Neal or P & M Logistics. He testif ied this was the second occasion that Mr. Mathias had assigned him to a Carter O’Neal t ruck, the first occasion being about one year earlier when Southern Transit’s truck woul d not start. He acknowledged he received checks from Carter O’Neal for the two weeks he drove its truck. However, his testimony that he had never been an employ ee of Carter O’Neal or P & M Logistics was unrefuted.

Based upon an implied contract, the trial court concluded “P&M [Logistics] employed Mr. Carpenter at the time of his injury.” The trial c ourt additionally determined that “[e]ven if the C ourt had found Southern Transit to be Mr. Carpenter’s employer, . . . [P & M Logistics] would be liable for benefits as a ‘special employer’ under the loaned servant doctrine.” The majority concludes tha t “when [Mr.] Mathias instructed [Mr. Carpenter] to operate the Carter [O’Neal] truck , Carter [O’Neal], one of Penchion’s companies, entered in to an implied contract with [Mr . Carpenter] to pay him for that work.” Additionally, th e majority concludes that “the work being performed by [Mr. Carpenter] was essentially t hat of Penchion, who was ultim ately responsible for the Memphis-to-Greenville route.” Fin ally, the majority states tha t when Mr. Carpenter sought to report his work injury, “he contacted Mathias, who, i n turn, contacted

Penchion.”

In my opinion, both the trial cou rt and the majority fail to ap preciate that, in directing Mr. Carpenter’s work, Mr. Mathias was managing the op erations of Mr. Carpenter’s employer, Southern Tr ansit, as Mr. Penchion testifi ed he had empowered him to do. The trial court and the majority emphasize that Mr. Mat hias was employed and paid by P & M Logistics as its operations manager, apparently c oncluding that evidence outweighed the undisputed testim ony that Mr. Mathias managed th e day-to-day operations of Southern Transit. He had done so from the date h e hired Mr. Carpenter to operate Southern Transit’s truck. The fact that Ms. Harper cho se not to be involved in the operations of Southern Trans it, but instead allowed Mr. Pen chion and Mr. Mathias to operate Southern Transit, does not alter Mr. Carpenter’s employ ment relationship with Southern Transit. Indeed, Ms. Ha rper acknowledged that Mr. Car penter was to report any issues with the work to Mr. Mathias. Thus, Mr. Mathias was the supervisor to whom Mr. Carpenter would be expected t o report his work injury. Mor eover, Mr. Penchion testified he never employed or intended to employ Mr. Carpenter . He described the arrangement as “lending” a truck to Southern Transit to run the dedicated route when

Southern Transit’s truck broke dow n, thereby keeping Southern T ransit “viable.”

In my opinion, the majority’s conclusion that “the work being p erformed by [Mr. Carpenter] was essentially that of Penchion,” is not borne out by the record; rather, the evidence, in my opinion, established that Mr. Carpenter was com pleting the same route he regularly operated for Southern Transit, only in the Carter O’Neal truck while

Southern Transit’s truck was out of service. The record does n ot disclose which of Mr. Penchion’s companies had a contract with FedEx for the Memphis- to-Greenville route,9 but it was not Mr. Penchion. Mr. Penchion testified the arrang ement for Southern Transit to run the route was “approved,” that Mr. Carpenter “was assign ed to, in FedEx’s system, Southern Transit,” and that he thereafter “made sure I got her driver to be in the truck.” None of this testimony was refute d. Finally, the majority stat es that Mr. Mathias “had the authority to control the details of [Mr. Carpenter’s] work.” W hile that is not disputed,

neither is the fact that in contr olling the work, Mr. Mathias w as doing so as the manager of the day-to-day operations of Southern Transit.

My review of the record leads me to conclude that the preponder ance of the evidence does not support the tr ial court’s determination that P & M Logistics was Mr. Carpenter’s employer on the date of his injury. Accordingly, I would reverse that part of the trial court’s order implying a contract of hire between Mr. Carpenter and P & M Logistics and modify the order to hold Southern Transit liable for the benefits awarded to Mr. Carpenter.TENNESSEE BUREAU OF WORKERS’ COMPENSATION

WORKERS’ COMPENSATION APPEALS BOARD

David Carpenter ) Docket Nos. 2017-08-0232 ) 2017- 08-0233

v. ) ) State File Nos. 4008-2017 Southern Transit, et al. ) 14688-2 017 ) ) Appeal from the Court of Workers’ ) Compensation Claims ) Deana C. Seymour, Judge )

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the Appeals Bo ard’s decision in the referenced case was sent to the following recipients by the following methods of service on this the 1st day of March, 2018.

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Mail First Class Mail Via

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Email Email Address

Monica Rejaei X mrejaei@nstlaw.com

J. Allen Brown X allen@jallenbrownpllc.com

Michael Jones X mjones@wimberlylawson.com

Deana C. Seymour, Judge X Via Electronic Mail
Kenneth M. Switzer, Chief Judge X Via Electronic Mail

Penny Shrum, Clerk, Court of Workers’ Compensation

Claims X Penny.Patterson-Shrum@tn.gov

Jeanette Baird Deputy Clerk, Workers’ Compensation Appeals Board 220 French Landing Dr., Ste. 1-B Nashville, TN 37243 Telephone: 615-253-0064

Electronic Mail: WCAppeals.Clerk@tn.gov