COURT OF APPEALS OF VIRGINIA

Present: Chief Judge Decker, Judges Beales and Russell 

Argued by teleconference

STEVE RAY DIVINO

v. Record No. 1990-19-1

UNINSURED EMPLOYER’S FUND, CAVALIER

 LAND INC., HARLEYSVILLE INSURANCE 

 COMPANY, JAMES McQUITTY, JR., JIMMY 

 McQUITTY HARDWOOD FLOORS AND

 MULT. MISC. PROPERTIES ASSOCIATES, LC

MEMORANDUM OPINION* BY

HEALTHSMART CASUALTY CLAIMS SOLUTIONS JUDGE RANDOLPH A. BEALES

 AND UNINSURED EMPLOYER’S FUND JULY 14, 2020

 v. Record No. 2036-19-1

STEVE RAY DIVINO, CAVALIER LAND INC., 

 HARLEYSVILLE INSURANCE COMPANY, 

 JAMES McQUITTY, JR., JIMMY McQUITTY

HARDWOOD FLOORS AND MULT. MISC. 

 PROPERTIES ASSOCIATES, LC 

FROM THE VIRGINIA WORKERS’ COMPENSATION COMMISSION

W. Mark Broadwell (Forbes & Broadwell, on briefs), for Steve Ray 

Divino. 

Esther King (Jessica Hacker Trivizas; McCandlish Holton, PC, on 

briefs), for HealthSmart Casualty Claims Solutions and Uninsured 

Employer’s Fund.

Adam E. Strauchler (Teumer & Drash, on brief), for Cavalier Land 

Inc. and Harleysville Insurance Company.

Brian N. Casey (Taylor Walker, P.C., on brief), for Mult. Misc. 

Properties Associates, LC.

* Pursuant to Code § 17.1-413, this opinion is not designated for publication.

UNPUBLISHED
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No brief or argument for James McQuitty, Jr. and Jimmy McQuitty 

Hardwood Floors. 

In this consolidated appeal, claimant Steve Ray Divino contends that the Workers’ 

Compensation Commission (“Commission”) erred in denying him benefits for an injury he 

received while installing laminate flooring. He argues that the Commission erred in finding that 

his employer was not subject to the Workers’ Compensation Act (the “Act”) because it had 

regularly in service less than three employees. Divino also contends that the Commission erred 

in finding that the owner and the property manager of the building where he was working when 

he was injured were not his statutory employers under the subcontracted-fraction test of 

Code § 65.2-302(B). The Uninsured Employer’s Fund and HealthSmart Casualty Claims 

Solutions (collectively, “UEF”) also appealed the Commission’s decision, and, like Divino, 

claim that the Commission erred in unanimously finding that the owner and the property 

manager were not Divino’s statutory employers. 

I. BACKGROUND

On appeal, we view the evidence in the light most favorable to the appellees, as we must, 

because they prevailed before the Commission. See Osborne v. Forner, 36 Va. App. 91, 95 

(2001). So viewed, the record before us establishes that on June 22, 2017, Divino was injured 

while working on a laminate flooring project in the Time Building in Norfolk. The Time 

Building was owned by Mult. Misc. Properties Associates, LC (“MMPA”) and managed by

Cavalier Land, Inc. (“Cavalier”) pursuant to a verbal contract.

Prior to Divino’s injury, Cavalier had entered into a lease agreement on behalf of MMPA

with CoreVelo, one of the Time Building’s existing tenants. The terms of the lease provided that 

CoreVelo, which operates a Pilates and cycling studio, would lease both its current space and an 

adjoining vacant space. Pursuant to an amendment to the lease, MMPA was required to perform 

certain work on the adjoining space, identified in the lease amendment as the “Landlord’s 
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Work,” to make it suitable for CoreVelo’s use. Cavalier, acting on behalf of MMPA, hired Jim 

McQuitty Hardwood Flooring Co. (“McQuitty”), a flooring installation company, to perform the 

flooring installation required by the lease amendment. Divino, an employee of McQuitty, was 

injured while performing this work. 

Divino submitted a claim for benefits to the Commission. During the proceedings, 

Divino claimed that McQuitty was liable under the Workers’ Compensation Act as his actual 

employer. He also claimed that MMPA and Cavalier were liable under the Act as his statutory 

employers. After conducting two hearings, the deputy commissioner denied the claims, finding 

none of the alleged employers liable under the Act. Upon review, the full Commission affirmed

the deputy commissioner’s decision, without dissent, and Divino and the UEF timely appealed to 

this Court. 

Jim McQuitty Hardwood Floor Company

Prior to the hearings before the deputy commissioner, the parties stipulated that Divino 

“was an employee of Jim McQuitty Hardwood Floor Co. and/or Jimmy McQuitty in the sense 

that McQuitty controlled the means and methods by which the Claimant performed his work, 

(i.e., he was not an independent contractor).” McQuitty did not have workers’ compensation 

insurance and was not present (or represented) at either of the hearings. 

Divino testified that he had worked for McQuitty for approximately thirty years. His job 

was to “[p]ut down floors, sand and finish floors, and whatever needed to be done.” He testified 

that in 2016, McQuitty had five employees but then the “business changed.” He stated that by 

late 2016, the company no longer had an office, and it had started storing all of its materials in 

various places – including in Divino’s home. Divino testified that in 2017, the company only 

had two employees in addition to Mr. McQuitty, whom Divino described as “the head man –

president.” 
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Divino submitted into evidence the Articles of Incorporation and the Certificate of 

Incorporation of “Jim McQuitty Hardwood Floor Co.” filed with the Virginia State Corporation 

Commission (SCC). The effective date of the Certificate of Incorporation was August 18, 1997. 

Divino also submitted into evidence W-2s for 2015 and 2016. Divino stated that, when the 

accident occurred, he was working twenty to thirty hours a week for McQuitty and was making 

$13 per hour. That year, unlike prior years, he was not given a W-2. He was paid by cash or 

check and had no records of his earnings. 

The deputy commissioner concluded that Divino failed to prove that McQuitty was an 

employer subject to the Workers’ Compensation Act because Divino did not prove that the 

company had three or more employees regularly in service. The deputy commissioner stated that 

“[t]here is no evidence of record to support a conclusion that Employer was still operating as a 

corporate entity at the time of Claimant’s injury in 2017.” The deputy commissioner instead 

found that Mr. McQuitty was a sole proprietor “who regularly employed only two employees at 

the time of Claimant’s injury.” 

The full Commission affirmed the decision of the deputy commissioner although it noted 

that the deputy commissioner had erroneously placed the burden on Divino to prove that 

McQuitty had three or more employees. The Commission explained that once an employee has 

proven his injury occurred while employed in Virginia, the employer has the burden of 

producing sufficient evidence that it has less than three employees regularly in service in 

Virginia. Even though no representative of McQuitty appeared at the hearings, the Commission 

stated that it was still required to “determine whether a preponderance of the evidence 

established Jim McQuitty Hardwood Floor Co. was not subject to the Act.” 

The Commission found that Divino’s testimony that McQuitty “typically had three 

persons, including [Mr.] McQuitty, working in 2017” was undisputed and, therefore, the issue of 
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whether the company was liable under the Act turned on whether Mr. “McQuitty himself was an 

employee.” The Commission noted that the term “employee” under the Workers’ Compensation 

Act “includes every executive officer elected or appointed in accordance with the charter and 

bylaws of a corporation. Va. Code § 65.2-101.” The Commission also stated that “[s]ole 

proprietors who elect to be included as an employee under workers’ compensation coverage are 

also considered employees under the Act.”

To determine if McQuitty was a corporation or a sole proprietorship, the Commission 

searched for the company’s name on the Virginia SCC’s website and found that the company’s 

status was listed as “Purged.” In its opinion, the Commission explained that the SCC’s website 

states that when an “entity’s status is ‘Purged,’ then its existence or registration has been 

canceled, revoked, terminated or withdrawn for a period of more than 5 years and, under

Virginia law, the entity is not eligible for reinstatement or restoration.” The Commission 

acknowledged that this evidence was not presented by the parties but noted its ability to take 

administrative notice of public records prepared by government agencies. Based on this 

information and the evidence presented, the Commission concluded that when Divino was 

injured, “McQuitty was acting as a sole proprietor.” The Commission also found that there was 

no evidence that Mr. McQuitty had elected to be treated as an employee, and thus “the 

preponderating evidence established that Jim McQuitty Hardwood Floor Company only had two 

employees regularly in service at the time of the accident.” Accordingly, the Commission 

concluded that McQuitty “was not an employer subject to the Act.”

Cavalier Land

Marc Poutasse, the President of Cavalier, testified that Cavalier managed the Time 

Building, MMPA’s other properties, and a number of other commercial and residential buildings. 
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Poutasse explained that, as the property manager, Cavalier marketed, entered into lease

agreements, maintained properties, collected rents, and paid expenses on behalf of MMPA.

For the project on which Divino was injured, Cavalier had negotiated a lease on behalf of 

MMPA for an existing tenant, CoreVelo, to take over a space in the Time Building adjoining its 

current space. As part of the terms of the new lease, MMPA agreed to perform some work 

referred to in the lease as the “Landlord’s Work,” which included removing walls and ceiling 

tiles, installing recessed lighting, installing a shower and water heater, slick finishing the plaster 

ceiling, and installing laminate flooring to match the adjoining unit as closely as possible. 

Cavalier hired contractors to perform this work on behalf of MMPA, including McQuitty. 

Poutasse also testified Cavalier had six employees that helped with preparing units for

new tenants and with maintenance requests. He stated that these employees do not do flooring 

work except for repairing small flooring issues or laying vinyl flooring in small spaces, such as 

in closets. For this project, he stated that Cavalier employees did not do any of the flooring work

although they did some cleaning up on the project site and some hauling off of old flooring. 

The deputy commissioner concluded that Cavalier was exempt from statutory employer 

liability under Code § 65.2-302(D)’s property management exception, and the full Commission 

affirmed. The full Commission also concluded that “[e]ven if Cavalier Land were not exempt 

from liability as a property manager, the subcontracted-fraction test [of Code § 65.2-302(B)] 

would not apply to impose liability in this case.” The Commission found that Cavalier “did not 

contract with the owner, Mult. Misc. Properties, to perform renovations on the [T]ime 

[B]uilding.” Instead, it found that MMPA and the tenant agreed that MMPA “would have the 

work performed.” The Commission also found that MMPA “did not hire a general contractor, 

but instead directly hired individual contractors to perform different portions of the work” and 

that “Cavalier Land merely acted as Mult. Misc. Properties’ agent in reaching the agreement with 
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the tenant and in finding and hiring the various contractors, including Jim McQuitty Hardwood 

Floor Company.” Consequently, the Commission found that Cavalier was not liable under the 

Workers’ Compensation Act as Divino’s statutory employer. 

MMPA

Vincent Mastracco, one of two owners of MMPA, testified that MMPA was a “passive 

real estate owner” with no employees. He agreed that MMPA “made money from holding, 

operating, and developing real property.” He also agreed that Cavalier had full authority to 

select the contractors it wanted to perform the work here and that he had no involvement in the 

day-to-day running of the buildings that MMPA owned, such as the Time Building. 

The full Commission unanimously found that MMPA was not Divino’s statutory 

employer under the subcontracted-fraction test of Code § 65.2-302(B). It found that MMPA was 

the owner – not a contractor. The Commission made findings of fact that MMPA was “a passive 

real estate investor,” that it had no employees, and that it was “not engaged in the business of 

flooring installation.” Because the Commission concluded that MMPA was not a contractor, it 

also concluded that McQuitty was not a subcontractor. Therefore, it held that MMPA was not 

liable under Code § 65.2-302(B).

II. ANALYSIS

This appeal requires us to determine which, if any, of the purported employers are liable 

to Divino under the Act. We address each purported employer in turn.

A. Whether McQuitty is Liable to Divino under the Act

On appeal to this Court, Divino argues that the Commission erred in finding that 

McQuitty was not subject to the Act because the Commission improperly relieved McQuitty of 

the burden of proving that it had regularly in service less than three employees. He claims that 

the Commission improperly “produced evidence sua sponte” while McQuitty “produced no 
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evidence at all.” He contends that the Commission deprived him of his right to due process 

when, without giving the parties an opportunity to respond, “it took administrative notice, sua 

sponte, of ‘records’ from the Virginia State Corporation Commission and in particular, an

‘explanation’ from the Virginia State Corporate Commission Clerk’s office website regarding 

the meaning of the term ‘purged.’” In addition, Divino argues that the Commission never 

determined whether, at the time of the accident, McQuitty’s “established mode of performing 

business regularly required less than three or more employees.”

This Court is barred from reaching these arguments because they were not preserved 

below for this Court’s review. “The contemporaneous objection rule, embodied in Rule 5A:18 in 

the Court of Appeals . . . is based on the principle that a litigant has the responsibility to afford 

[the Commission] the opportunity to consider and correct a perceived error before such error is 

brought to the appellate court for review.” Williams v. Gloucester Sheriff’s Dept., 266 Va. 409, 

411 (2003) (quoting Reid v. Baumgardner, 217 Va. 769, 773 (1977)); see also Hodnett v. Stanco

Masonry, Inc., 58 Va. App. 244, 253 (2011). The rule exists to protect the tribunal below “from 

appeals based upon undisclosed grounds, to prevent the setting of traps on appeal,” to allow the 

tribunal to “rule intelligently, and to avoid unnecessary reversals and mistrials.” Williams, 266 

Va. at 411 (quoting Reid v. Boyle, 259 Va. 356, 372 (2000)). Divino’s assignments of error stem 

from the Commission’s consultation of the SCC’s website. Because that alleged error did not 

occur until the case was under review by the full Commission, Divino needed to file a motion for 

reconsideration once the Commission stated in its decision that it was relying on information 

from the SCC in order to give the full Commission the opportunity to correct the alleged error

and also so that Divino could preserve that argument for appeal. See id. at 411-12 (holding that 

appellant was required to file a motion for reconsideration or rehearing to preserve argument for 
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appellate review where the basis for the full Commission’s decision was not raised, litigated, or 

considered in the case prior to the full Commission’s decision). 

Likewise, we cannot consider Divino’s contention that the full Commission erred in 

finding that McQuitty was not subject to the Act when the Commission never determined 

whether, at the time of the accident, McQuitty’s “established mode of performing business 

regularly required less than three or more employees.” The deputy commissioner’s opinion does 

not actually state that McQuitty’s established way of performing business regularly involved less 

than three employees, and Divino did not ask the full Commission to review that issue. Divino 

also never filed a motion for reconsideration before the full Commission to alert it to the fact that 

it also had not actually made that determination. As a result, Divino’s argument is barred under 

Rule 5A:18. See Hodnett v. Stanco Masonry, Inc., 58 Va. App. 244, 253 (2011) (holding that 

appellant failed to preserve an issue for appeal where he did not ask the Commission to review 

the deputy commissioner’s decision on the issue and did not file a motion for reconsideration). 

Consequently, given that we cannot consider these arguments because they were not preserved 

for appeal, we affirm the Commission’s conclusion that McQuitty was not an employer subject 

to the Act. 

B. Whether Cavalier and MMPA are Divino’s Statutory Employers Under the Act

On appeal, both Divino and the UEF argue that the Commission erred when it failed to 

find that Cavalier and MMPA were Divino’s statutory employers. “The Workers’ Compensation 

Act requires an employment relationship of some kind to exist between a claimant and the party 

allegedly liable for compensation. The usual scenario is a true employer-employee relationship 

in which the employer controls the employee’s jobsite conditions, employment tasks, and 

working hours.” Jeffreys v. Uninsured Employer’s Fund, 297 Va. 82, 90 (2019). In addition, an 

employment relationship is created if a party is the employee’s “statutory employer” under 
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Code § 65.2-302. “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, Inc., 226 Va. 154, 156 (1983). “Factual findings by the 

commission that are supported by credible evidence are conclusive and binding upon this Court 

on appeal.” Haley v. Springs Glob. U.S., Inc., 54 Va. App. 607, 612 (2009) (quoting Southern 

Iron Works, Inc. v. Wallace, 16 Va. App. 131, 134 (1993)). However, “[a]n issue 

of statutory interpretation is a pure question of law which we review de novo.” Booker v. 

Commonwealth, 60 Va. App. 35, 42 (2012) (quoting Kozmina v. Commonwealth, 281 Va. 347,

349 (2011)). In addition, as the claimant seeking benefits, Divino (and the UEF, which takes the 

same position) had the burden of proof to show that Cavalier and MMPA were his statutory 

employers. See Jeffreys, 297 Va. at 97.

Code § 65.2-302 is comprised of four subsections. The first three subsections (A, B, and 

C) identify relationships where a party may be liable as a statutory employer under the Act. 

Code § 65.2-302(A)-(C) states: 

A. 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.

B. When any person (referred to in this section as “contractor”) 

contracts to perform or execute any work for another person which 

work or undertaking is not a part of the trade, business or 

occupation of such other person and contracts with any other 

person (referred to in this section as “subcontractor”) for the 

execution or performance by or under the subcontractor of the 

whole or any part of the work undertaken by such contractor, then 

the contractor shall be liable to pay to any worker employed in the 

work any compensation under this title which he would have been 
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liable to pay if that worker had been immediately employed by 

him.

C. When the subcontractor in turn contracts with still another 

person (also referred to as “subcontractor”) for the performance or 

execution by or under such last subcontractor of the whole or any 

part of the work undertaken by the first subcontractor, then the 

liability of the owner or contractor shall be the same as the liability 

imposed by subsections A and B of this section.

“Subsection A addresses the scenario in which ‘any person’ contracts with an 

independent contractor to perform work within the ‘trade, business or occupation’ of that ‘any 

person.’” Jeffreys, 297 Va. at 91. When examining subsection A, Virginia courts generally 

apply the “normal-work test,” which requires this Court to ask “whether the activity in which the 

independent contractor engages is ‘normally carried on through employees rather than 

independent contractors.’” Id. Subsection A would apply, for example, “when a roofing 

company hires an independent contractor to repair a roof.” Id. Because the roofing company 

hired the independent contractor to perform work that would normally be performed by the 

roofing company’s employees, the roofing company is the statutory employer of the independent 

contractor’s employees. 

Unlike the two-tiered scenario of subsection A, “Subsection B involves a three-tiered 

scenario[.]” Id. The Virginia Supreme Court explained that under subsection B:

A “person” hires a contractor to perform work outside the scope 

of that person’s “trade, business or occupation.” Code 

§ 65.2-302(B). The contractor then hires a subcontractor to do 

some or all of that work. In this scenario, we have applied what 

has become known as the subcontracted-fraction test. See Cooke

v. Skyline Swannanoa, Inc., 226 Va. 154, 158-59 (1983). An 

example of this scenario would be where a banker — whose 

business is banking rather than construction — enters into a 

contract with a general contractor to build a home, and the general 

contractor in turn relies on subcontractors (e.g., firms employing 

framers, brick masons, electricians, etc.) to complete the job. The 

general contractor, not the banker, becomes the statutory employer 
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of the subcontractors’ employees. See, e.g., Cinnamon v. Int’l

Bus. Machs. Corp., 238 Va. 471, 474-79 (1989).

Id. at 91-92 (footnotes omitted) (emphasis in original). 

1. Cavalier Land

Divino and the UEF ask this Court to apply the subcontracted-fraction test of 

Code § 65.2-302(B) to find that both MMPA and Cavalier are Divino’s statutory employers. 

Divino argues that Cavalier is “any person (referred to in [Code § 65.2-302(B)] as ‘contractor’)”

who agreed to perform work for “another person” (MMPA) “which work or undertaking is not a 

part of the trade, business or occupation” of “such other person” (MMPA). He contends that

Cavalier then contracted with “any other person (referred to in [Code § 65.2-302(B)] as 

‘subcontractor’)” (McQuitty) “for the execution or performance” of a part of Cavalier’s contract 

with MMPA.

The UEF frames the argument slightly differently. It contends that MMPA is “any 

person (referred to in [Code § 65.2-302(B)] as ‘contractor’)” who contracted through the lease to 

perform the “Landlord’s Work” “for another person” (CoreVelo) and that the work is “not a part 

of the trade, business or occupation” of “such other person” (CoreVelo).1 The UEF contends 

that MMPA then entered into a subcontract with Cavalier to perform all of the “Landlord’s 

Work,” making Cavalier the “subcontractor” under Code § 65.2-302(B). Then, Cavalier, in turn, 

subcontracted a fraction of that contract – the flooring work – out to McQuitty, making both 

MMPA and Cavalier Divino’s statutory employers under Code § 65.2-302(B) and (C).

These arguments fail with respect to Cavalier for several reasons. First, these theories

require MMPA to have entered into a contract with Cavalier to have Cavalier perform the 

1 No party disputes that construction and flooring work were not a part of CoreVelo’s 

trade, business or occupation. 
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“Landlord’s Work.” Second, these theories require Cavalier to have entered into a subcontract 

with McQuitty to perform the flooring work. However, the Commission made findings of fact 

that no such contracts existed. The Commission found, “Cavalier Land did not contract with the 

owner, Mult. Misc. Properties, to perform renovations on the [T]ime [B]uilding.” The 

Commission also found, “Cavalier Land merely acted as Mult. Misc. Properties’ agent in 

reaching the agreement with the tenant and in finding and hiring the various contractors, 

including Jim McQuitty Hardwood Floor Company.” These findings of fact are supported by 

credible evidence in the record. Poutasse testified that Cavalier was a property manager that 

acted as an agent of MMPA and entered into a contract with McQuitty on MMPA’s behalf. 

Because the contract for the flooring work was actually directly between MMPA and McQuitty,

and Cavalier itself did not contract to perform the work, we cannot say the Commission erred in 

concluding that Cavalier was not Divino’s statutory employer.2

2. MMPA

Divino and the UEF argue that MMPA was Divino’s statutory employer under Code 

§ 65.2-302(B). They argue that MMPA is “any person” who contracted through the lease to 

“perform or execute” the “Landlord’s Work” “for another person” (CoreVelo) and that the work 

is “not a part of the trade, business or occupation” of “such other person” (CoreVelo). Divino 

2

In addition to finding that Cavalier was not a statutory employer, the Commission also 

found that Cavalier was not liable to Divino under the Act as a statutory employer because it met 

the exception for persons engaged in “the business of property management” under Code 

§ 65.2-302(D). Because we agree that Cavalier was not a statutory employer and because that is 

the best and narrowest grounds for our decision, we do not reach this additional reason given by 

the Commission. See Levick v. MacDougall, 294 Va. 283, 302 (2017) (“Following the 

traditional doctrine of judicial restraint, we ‘decide cases “on the best and narrowest grounds 

available.’”” (quoting Commonwealth v. White, 293 Va. 411, 419 (2017))). 
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contends that MMPA then contracted with “any other person” (McQuitty) to perform “any part

of the work undertaken by” MMPA (i.e., the flooring).3 

Divino and the UEF object to the Commission’s position that, because MMPA is an 

“owner” and not a “contractor,” MMPA cannot be liable under Code § 65.2-302(B). They argue 

that it is irrelevant that MMPA was not a contractor because the statute only requires that MMPA

be “any person.” They also claim that the question of whether construction is MMPA’s trade, 

business, or occupation is not the relevant inquiry under the statute because the only requirement 

under subsection B is that the work is not the trade, business or occupation of “another person” –

i.e., CoreVelo. 

In response, MMPA argues that the “subcontracted-fraction test only applies where there 

is a general contractor hired by an owner to perform a project whose work is not a part of the 

trade, business or occupation of the owner.” MMPA contends that it “is not a general contractor 

who contracted to do work for an owner and then subcontracted a part or fraction of the work to 

a subcontractor.” Rather, MMPA argues that it is an owner who hired independent contractors to 

perform work on its own buildings so that it could lease units in those buildings, such as the 

Time Building, to tenants. Therefore, MMPA contends that it “does not, and did not, contract to 

perform flooring installation for another person” as Code § 65.2-302(B) requires.

The arguments presented require us to examine the language of Code § 65.2-302. 

“The Virginia Supreme Court has long held that ‘when analyzing a statute, we must 

assume that “the legislature chose, with care, the words it used . . . and we are bound by those 

words as we interpret the statute.”’” Doulgerakis v. Commonwealth, 61 Va. App. 417, 420 

(2013) (alteration in original) (quoting City of Virginia Beach v. ESG Enters., 243 Va. 149, 153 

3 The UEF continues to assert that MMPA contracted with Cavalier to perform all of the 

“Landlord’s Work” and then Cavalier subcontracted the flooring work out to McQuitty. 
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(1992)). “Consequently, we ‘apply[ ] the plain meaning of the words unless they are ambiguous 

or [doing so] would lead to an absurd result.’” Eley v. Commonwealth, 70 Va. App. 158, 164 

(2019) (alterations in original) (quoting Wright v. Commonwealth, 278 Va. 754, 759 (2009)). 

In our review, we are also cognizant that “[t]he Act makes clear . . . that these scenarios 

[in Code § 65.2-302] are exceptions to the general rule that ‘nothing in [the Act] shall be 

construed to make the employees of any independent contractor the employees of the person or 

corporation employing or contracting with such independent contractor.’” Jeffreys, 297 Va. at 

92 (last alteration in original) (quoting Code § 65.2-101); see also Sykes v. Stone & Webster 

Eng’g Corp., 186 Va. 116, 123 (1947). “Consequently, ‘the mere fact a business owner engages 

an independent contractor does not make that independent contractor’s employees statutory 

employees of the owner.’” Jeffreys, 297 Va. at 92 (quoting Rodriguez v. Leesburg Business

Park, LLC, 287 Va. 187, 194 (2014)).

The Commission’s finding that MMPA is not in the business of laying laminate flooring

is not – on its own – fatal to appellants’ argument. Unlike subsection A, which codifies the 

normal work test and that specifically requires that the work contracted for be part of “any 

person[’s]” “trade, business or occupation,” the subcontracted-fraction test of subsection B does 

not state this requirement. The Supreme Court of Virginia recently discussed this difference

between subsections A and B of Code § 65.2-302 in Jeffreys v. Uninsured Employer’s Fund, 297 

Va. 82 (2019). The Supreme Court explained, “Depending upon the circumstances, subsections 

A and B can overlap each other. But they do not necessarily do so. When subsection B applies, 

the contractor becomes the statutory employer of the subcontractor’s employees, and ‘[t]his is 

true even if that work is not normally a part of the []contractor’s normal work, but is a 

subcontracted fraction of the main contract.’” Id. at 92 n.4 (quoting 15 Virginia Practice Series, 

Workers’ Compensation § 4:12, at 24 (2018 ed.)). When the subcontracted-fraction test applies, 
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“we need not reach the question whether the business was normally carried on through 

employees rather than independent contractors.” Smith v. Horn, 232 Va. 302, 308 (1986). See 

also Cooke, 226 Va. at 159 (stating that the normal work test “comes into play only where an 

obvious subcontract is not first found”). 

We also agree with Divino and the UEF that the statute does not apply only to contractors 

and subcontractors engaged in construction projects, as MMPA seems to suggest. The statute 

clearly provides that “any person” can be a statutory employer and then simply refers to that 

person as “contractor” for identification purposes in subsection B of the statute. Moreover, the 

Virginia Supreme Court has applied the subcontracted-fraction test to situations that involve

more than the relationship between a general contractor and a subcontractor that is often seen in 

construction contracts. See Cooke, 226 Va. at 159 (holding that a hotel licensee’s contract with 

the hotel’s restaurant operator was a subcontracted fraction of the licensee’s contract with the 

hotel owner, making that hotel licensee the statutory employer of the restaurant’s injured 

employee). Furthermore, this Court has determined that simply being an “owner” does not 

necessarily relieve a party from being a statutory employer under Code § 65.2-302(B) and the 

subcontracted-fraction test. See Princess Anne Builders, Inc. v. Faucette, 37 Va. App. 102

(2001) (holding that a construction company that contracted with a buyer to complete 

construction of a home and lot to then sell and deliver to the buyer was liable to the injured 

claimant of a tree trimming company because the construction company’s contract with the tree 

trimming company was a subcontracted fraction of the construction company’s contract with the 

buyer). 

However, the Commission’s findings of fact that MMPA was an owner and a passive real 

estate investor who did not engage in the business of laminate flooring or construction 

contracting are very relevant to the determination of whether MMPA was a statutory employer. 
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In fact, viewed all together and considering MMPA’s relationship with CoreVelo, these facts 

establish that MMPA did not “contract[] to perform or execute any work for another person,” as 

Code § 65.2-302(B) requires. (Emphasis added). The agreement in this case to perform the 

work on part of the Time Building was entered into because CoreVelo was a tenant in MMPA’s 

building, and CoreVelo required MMPA’s authorization in order for the work to be performed. 

Through the parties’ lease and lease amendment, the two parties acknowledged that MMPA – the 

party with the superior interest in the real estate as the owner of the building and of the 

improvements and renovations being made – would select which independent contractors it 

wanted to perform the work. Therefore, when MMPA signed the amendment to the lease, it was 

undertaking to have the “Landlord’s Work” performed for itself to part of the building it owned –

and would continue to own even after all of the work was completed.

4

 MMPA hired 

independent contractors – not subcontractors – including McQuitty to perform the work on its 

building. Consequently, MMPA is not Divino’s statutory employer under Code § 65.2-302(B).

5

 

4 This point distinguishes the case from Princess Anne Builders, Inc. v. Faucette, 37 

Va. App. 102 (2001), which Divino contends controls here. Although Princess Anne Builders 

was an “owner” because it owned the property on which it was constructing a house, Princess 

Anne Builders was “engaged routinely in the business of purchasing lots from a developer, doing 

site work, and constructing homes on these lots pursuant to a contract with a prospective buyer.” 

Id. at 104. Unlike in this case, where MMPA would continue to own the property, Princess 

Anne Builders, who regularly built houses to sell, did contract to perform or execute work for the 

future new owner, who was in the process of buying that property from Princess Anne Builders.

5

If MMPA were a statutory employer under Code § 65.2-302(B) and the facts of this 

case, the consequences of the logical extension of that holding would reverberate beyond even 

the commercial landlord scenario now before us. At oral argument before this Court, counsel for 

the UEF stated that Code § 65.2-302(B) could even apply to a homeowner who makes 

renovations for a tenant renting out a room in his home. Viewing the statute as the Commission 

has unanimously done, however, results in a clear, more logical holding commensurate with the 

General Assembly’s intent in Code § 65.2-302. The following example exemplifies what are the 

principles in this case and shows the problem with the UEF’s position. A homeowner rents out a 

bedroom and bathroom to a tenant and later agrees to renovate the bathroom to make it more 

appealing to the tenant to renew the lease. The homeowner hires a general contractor who, in 

turn, hires several subcontractors, including an electrician. If an employee of the electrician is
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III. CONCLUSION 

In short, we cannot say that the Commission erred in unanimously denying Divino 

benefits because Divino failed to prove that any of the alleged employers are liable for his 

injuries under the Workers’ Compensation Act. Divino made several arguments to this Court on

appeal regarding his actual employer, McQuitty. However, this Court cannot reach his 

arguments regarding McQuitty because none of them were preserved for appeal. Consequently, 

we affirm the Commission’s finding that McQuitty did not have at least three or more employees 

regularly in service in Virginia and, therefore, that McQuitty is not subject to the Act.

The Commission also did not err in finding that Cavalier was not Divino’s statutory 

employer. Cavalier did not contract with MMPA to perform the “Landlord’s Work,” and 

Cavalier also did not contract with McQuitty to perform the flooring work. The Commission 

made a finding of fact below that Cavalier was merely acting as an agent for MMPA, and, as 

such, Cavalier could not be Divino’s statutory employer. 

Finally, the Commission did not err in finding that MMPA was not Divino’s statutory 

employer. The lease agreement between MMPA and CoreVelo gave MMPA – the owner of the 

property and the owner of the improvements being made to it – the right to decide which 

contractors would perform the work on MMPA’s own building. Therefore, those contractors 

were independent contractors – not subcontractors – as they went about the work for MMPA on 

its own building. 

injured while doing the work, the homeowner would not be liable as the injured worker’s 

statutory employer. Like MMPA, who continued to own the Time Building, including the rented 

suites undergoing the renovations there, the homeowner (who would continue to own the rented

bathroom being renovated) did not “contract[] to perform or execute any work for another,” as 

Code § 65.2-302(B) requires. Consequently, the homeowner would not be the injured worker’s 

statutory employer – just as commercial landlord MMPA would not be Divino’s statutory 

employer. 
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For all of these reasons, we affirm the decision of the Workers’ Compensation 

Commission.

Affirmed.