Present: All the Justices 

CECILIA RODRIGUEZ, ADMINISTRATOR 

OF THE ESTATE OF UBALDO RODRIGUEZ 

 OPINION BY 

v. Record No. 122029 CHIEF JUSTICE CYNTHIA D. KINSER 

 FEBRUARY 27, 2014 

LEESBURG BUSINESS PARK, LLC, ET AL. 

FROM THE CIRCUIT COURT OF LOUDOUN COUNTY 

James H. Chamblin, Judge 

 The circuit court sustained a plea in bar and dismissed 

this wrongful death action on the basis that the plaintiff's 

exclusive remedy is under the Virginia Workers' Compensation Act 

(the Act), Code §§ 65.2-100 through -1310. The primary issue is 

whether an employee of a general contractor, hired by an owner 

to construct warehouse buildings, was engaged in the "trade, 

business or occupation" of the owner under Code § 65.2-302(A) 

when the employee suffered fatal injuries in the course of 

employment. We conclude that the employee's work at the time of 

the accident was not part of the owner's trade, business, or 

occupation and will therefore reverse the circuit court's 

judgment. 

FACTS AND PROCEEDINGS 

 Leesburg Business Park, LLC (LBP) contracted with E.E. Reed 

Construction, LP (Reed) to construct warehouse buildings on a 

parcel of undeveloped land owned by LBP and known as Leesburg 

Business Park (Park). Ubaldo Rodriguez (Ubaldo) was an employee 

of Reed. Ubaldo was fatally electrocuted when building 
2

materials being moved by another Reed employee came into contact 

with overhead electrical power lines. The Virginia Workers' 

Compensation Commission entered an award of benefits to Ubaldo's 

statutory beneficiaries under the Act. 

Cecilia Rodriguez (Rodriguez) is the widow of Ubaldo and 

the administrator of his estate. In her capacity as 

administrator, Rodriguez filed a wrongful death action under 

Code § 8.01-50, alleging that LBP caused Ubaldo's death by 

negligently failing to keep its premises reasonably safe for 

invitees such as Ubaldo.1

 LBP filed a plea in bar, arguing that 

Ubaldo was the "statutory co-employee of LBP under [the Act]," 

and therefore Rodriguez' claim was barred by Code § 65.2-307. 

At an evidentiary hearing on the plea in bar, the circuit 

court heard testimony from William H. Lauer, LBP's initial 

manager and sole member. LBP, Lauer testified, is a "single 

source" entity, with no employees, which was created to own and 

develop a parcel of real estate and then lease or sell 

warehouses constructed on the parcel. LBP's operating agreement 

states that it was "formed for the purposes of acquiring, 

holding, improving, managing, leasing and selling real property 

in Virginia and elsewhere, and engaging in any other business 

agreed to by the members of the LLC and permitted under the laws 

 1

 Rodriguez named other entities as defendants in the 

amended complaint, but they are not parties to this appeal. 
3

of the Commonwealth of Virginia." Lauer described LBP's 

operation as follows: "[A]s owner and developer, we create the 

opportunity, we build it, we sell it, we lease it, and we manage 

it." After purchasing the property through a separate entity 

and determining that the property was "worthy of development," 

Lauer formed LBP and assigned the purchase contract to LBP. 

LBP, through contracts with other entities, then determined the 

feasibility of development and conducted various preliminary 

steps to enable development of the land. Those steps included 

architectural, engineering, legal, and financing work. 

After considering a number of general contractors, LBP 

contracted with Reed to construct warehouse buildings on the 

property. Reed was "solely responsible for doing all of the 

components to build the building" and was "fully in charge" of 

construction. Under its contract with LBP, Reed was not 

responsible for obtaining building permits, paying utility fees, 

"[m]oving . . . the power lines," or providing "signage for the 

project." These responsibilities, and the responsibility of 

overseeing the construction process to ensure the work was done 

properly and according to specifications, were contracted to a 

consultant, or "owner's rep[resentative]." LBP had no role in 

the actual construction of the buildings. As Lauer stated, it 

did not "move earth[,] lay any rebar[,] pour any concrete [or] 
4

install windows, plumbing [or] electrical." LBP made its money 

from the sale and lease of the warehouses. 

The circuit court found that "LBP was in the trade, 

business or occupation of purchasing, developing, constructing, 

selling and leasing warehouse buildings on" its parcel. 

"[C]onstruction of the warehouses," the court stated, "was a 

part of the trade, business or occupation of LBP." Accordingly, 

the court concluded that Ubaldo "was a statutory co-employee of 

LBP" and that Rodriguez' recovery was limited to the Act. On 

August 10, 2010, the court entered an order sustaining the plea 

in bar and dismissing the amended complaint with prejudice. 

We awarded Rodriguez an appeal. In an unpublished order, 

we held there was no evidence that Ubaldo and LBP were statutory 

co-employees. Rodriguez v. Leesburg Business Park, LLC, Record 

No. 102127, slip op. at 4 (Jan. 6, 2012) (per curiam) 

(unpublished). We noted that the term "statutory co-employee" 

is "not synonymous with the term 'statutory employee' as 

contemplated under Code § 65.2-302(A) in the context of the 

relationship between an alleged statutory employee and statutory 

employer." Id. We reversed the judgment of the circuit court 

and remanded the case for further proceedings. Id. 

On remand, LBP moved to reconsider its plea in bar based on 

the evidence presented at the original hearing. LBP argued that 

the evidence established it was Ubaldo's statutory employer and 
5

that Rodriguez' action against LBP was barred by the exclusivity 

provision under Code § 65.2-307(A). Rodriguez objected that the 

circuit court could not reconsider its ruling on the plea in bar 

because more than 21 days had elapsed since the court entered 

its order sustaining the plea and awarding final judgment. 

Thus, according to Rodriguez, Rule 1:1 divested the court of 

jurisdiction to modify its order. She also argued that the 

evidence did not establish that LBP was Ubaldo's statutory 

employer. 

At a hearing, the circuit court first rejected Rodriguez' 

argument concerning Rule 1:1 and its jurisdiction to reconsider 

the plea in bar. The court then again found that LBP "was in 

the trade, business or occupation of purchasing, developing, 

constructing, selling and leasing warehouse buildings on" its 

parcel, and "the construction of the warehouses was a part of 

the trade, business or occupation of LBP." The court concluded 

that "LBP was the statutory employer of Ubaldo and that 

[Rodriguez'] recovery is limited to Workers' Compensation 

benefits only." It entered an order sustaining the plea in bar 

and dismissing the amended complaint with prejudice. 

We awarded Rodriguez this appeal. 

ANALYSIS 

 The primary issue on appeal is whether at the time of his 

fatal accident, Ubaldo was engaged in work that was part of 
6

LBP's trade, business, or occupation, thus making LBP Ubaldo's 

statutory employer under Code § 65.2-302(A). Determining 

whether work is part of the trade, business, or occupation of an 

owner is a mixed question of law and fact. Carmody v. F.W. 

Woolworth Co., 234 Va. 198, 201, 361 S.E.2d 128, 130 (1987). 

The Court views the facts and any reasonable inferences raised 

by the evidence in the light most favorable to the prevailing 

party below, LBP, and determines whether the circuit court 

correctly applied the law to those facts. Id. Here, because 

the essential facts are undisputed, we are presented only with a 

question of law regarding the circuit court's application of the 

law to those facts and therefore apply a de novo standard of 

review. See Hilton v. Martin, 275 Va. 176, 180, 654 S.E.2d 572, 

574 (2008). 

 Answering the question before us "is not a simple, 

straightforward exercise," Henderson v. Central Tel. Co., 233 

Va. 377, 382, 355 S.E.2d 596, 599 (1987); it "depends upon the 

facts and circumstances of the particular case [and] 'does not 

readily yield to categorical or absolute standards.'" Johnson 

v. Jefferson Nat'l Bank, 244 Va. 482, 485, 422 S.E.2d 778, 780 

(1992) (quoting Bassett Furniture Indus., Inc. v. McReynolds, 

216 Va. 897, 902, 224 S.E.2d 323, 326 (1976)). 

The Act's exclusivity provision, Code § 65.2-307(A), 

mandates that the rights and remedies provided in the Act 
7

"exclude all other rights and remedies" of a covered employee or 

his beneficiaries for injuries sustained in the course of 

employment. An employee cannot maintain a common law tort 

action against his employer or a fellow employee for such 

injuries. Hudson v. Jarrett, 269 Va. 24, 29, 606 S.E.2d 827, 

829 (2005). Likewise, an employee is barred from bringing such 

an action against a party who is not the employee's common law 

employer if that employer is nevertheless a "statutory employer" 

under Code § 65.2-302(A). Id. at 29-30, 606 S.E.2d at 

829; cf. Clean Sweep Prof'l Parking Lot Maint., Inc. v. Talley, 

267 Va. 210, 213, 591 S.E.2d 79, 81 (2004) ("The only exception 

to [the] exclusivity provision is provided in Code § 65.2-309(A) 

permitting an action to be maintained against an 'other party.' 

To be an 'other party,' a defendant must have been a stranger to 

the trade, occupation, or business in which the employee was 

engaged when he was injured.") (internal quotation marks 

omitted). 

With the relevant parties from this case interpolated in 

brackets, Code § 65.2-302(A) states: 

When any person (referred to in this section 

as "owner") [LBP] 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") [Reed] 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 
8

[LBP] 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.2

 The provisions of Code § 65.2-101, however, provide 

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." Thus, in accordance with 

Code § 65.2-101, "the mere fact a business owner engages an 

independent contractor does not make that independent 

contractor's employees statutory employees of the 

owner." Henderson, 233 Va. at 381, 225 S.E.2d at 598. 

Code § 65.2-302(A), however, makes clear that an owner such 

as LBP can contract out all its work yet remain liable 

under the Act. Id. 

 The two statutes read together mean that an owner 

cannot escape liability under the Act by merely contracting 

away work that is part of the owner's trade, business, or 

occupation. Id. at 381, 225 S.E.2d at 598-99. "'[I]f the 

work performed by an employee of the contractor or 

subcontractor is part of the owner's trade, business, or 

occupation,'" the owner is the statutory employer of the 

 2 Code § 65.2-302(B) and (C) apply the same standard to 

situations in which a contractor contracts with a subcontractor, 

or a subcontractor contracts with another subcontractor.
9

employee and "'is liable for compensation as though the 

worker were his own employee.'" Cinnamon v. IBM Corp., 238 

Va. 471, 478, 384 S.E.2d 618, 621 (1989) (quoting Smith v. 

Horn, 232 Va. 302, 305-06, 351 S.E.2d 14, 16 (1986)). 

However, if the work is not part of the trade, business, or 

occupation of the owner, and the owner hires an independent 

contractor to perform the work, the contractor is liable to 

the employee under the Act, not the owner. Sykes v. Stone 

& Webster Eng'g Corp., 186 Va. 116, 122, 41 S.E.2d 469, 472 

(1947). 

 As the Court has stated numerous times, 

[t]he purpose of [Code § 65.2-302] is to 

bring within the operation of the Act all 

persons engaged in work that is a part of 

the trade, business, or occupation of the 

party who undertakes as owner or who 

contracts as contractor to perform the work, 

and to make liable to every employee engaged 

in the work every such owner contractor, or 

subcontractor above such employee. 

Pfeifer v. Krauss Constr. Co., 262 Va. 262, 266, 546 S.E.2d 717, 

719 (2001) (internal quotation marks and footnote omitted). 

Under these principles, it is thus necessary to determine 

whether construction was part of LBP's trade, business, or 

occupation. We begin that analysis by identifying "the nature 

of the particular owner." Nichols v. VVKR, Inc., 241 Va. 516, 

521, 403 S.E.2d 698, 701 (1991). Unlike a governmental entity 

or public utility, see Henderson, 233 Va. at 383, 355 S.E.2d at 
10

599, a private entity, such as LBP, "has broad discretion to 

choose its business activities." Nichols, 241 Va. at 521, 403 

S.E.2d at 701. For this reason, the Court has generally applied 

the "normal work test" as enunciated in Shell Oil Co. v. 

Leftwich, 212 Va. 715, 187 S.E.2d 162 (1972): 

[T]he test is not one of whether the 

subcontractor's activity is useful, 

necessary, or even absolutely indispensable 

to the statutory employer's business, since, 

after all, this could be said of practically 

any repair, construction or transportation 

service. The test . . . is whether this 

indispensable activity is, in that 

business, normally carried on through 

employees rather than independent 

contractors.3

 3

 The test does not apply when the "the work is obviously a 

subcontracted fraction of a main contract." Shell Oil, 212 Va. 

at 722, 187 S.E.2d at 167 (internal quotation marks omitted). 

In the context of the construction business, 

[this test] relates to a general contractor, 

the party obligated by the main contract 

with the owner to complete the whole 

project. If the work out of which the 

accident arose was . . . obviously a 

subcontracted fraction of [that] contract 

and . . . not a part of the trade, business 

or occupation of the owner, the general 

contractor who engaged the subcontractor to 

perform that fraction is the statutory 

employer of the injured worker, whether 

directly employed by the primary 

subcontractor or by a secondary 

subcontractor. 

Cinnamon, 238 Va. at 476, 384 S.E.2d at 620 (internal quotation 

marks omitted). 
11

Id. at 722, 187 S.E.2d at 167 (internal quotation marks 

omitted). This test, however, is "only a corollary guide, 

sometimes useful but not indispensable, in applying the literal 

language of the statutes to the facts in a particular 

case." Cinnamon, 238 Va. at 478, 384 S.E.2d at 621. 

 For example, in Nichols, the Greater Roanoke Transit 

Company (GRTC) owned a "construction/rehabilitation project 

designed to provide public mass transportation facilities, 

downtown parking facilities, retail and office space facilities, 

and revitalization and urban development" of a commercial 

shopping district. 241 Va. at 518, 403 S.E.2d at 699-700. 

Addressing a defendant's argument that the normal work test did 

not apply because GRTC had no employees, the Court stated: 

[T]his argument "misses the mark." . . . . 

The key issue here is whether construction 

and rehabilitation of a transportation and 

retail facility was part of GRTC's business 

purpose of providing mass transportation 

services. This purpose is established in 

its articles of incorporation. 

Id. at 522, 403 S.E.2d at 702 (quoting Carmody, 234 Va. at 205, 

361 S.E.2d at 132); see Evans v. Hook, 239 Va. 127, 132, 387 

S.E.2d 777, 779 (1990) (stating that "a defendant's business 

structure and number of employees have never been considerations 

in deciding whether [it] is entitled to the [A]ct's immunity"). 

The Court stated that although GRTC clearly required a facility 

"from which their business is conducted," the actual 
12

construction or adaptation of the facility "is not itself the 

trade, business, or occupation of the owner." Nichols, 241 Va. 

at 522, 403 S.E.2d at 702. 

We have considered construction or repair of 

such a facility not to be the trade, 

occupation, or business of an owner for 

purposes of determining whether a statutory 

employee or employer relationship 

exists unless those activities are normally 

carried out directly by the owner or are 

part of [its] normal activities. 

 

Id. at 522, 403 S.E.2d at 702 (emphasis added). 

In determining whether Ubaldo's construction work was part 

of LBP's trade, business, or occupation, we therefore do not 

simply examine whether LBP engaged in construction. Nor is the 

fact that LBP had no employees determinative. Rather, we must 

determine whether Ubaldo's construction work at the time of his 

fatal accident was part of LBP's business. See Carmody, 234 Va. 

at 205, 361 S.E.2d at 132; see also Floyd v. Mitchell, 203 Va. 

269, 274, 123 S.E.2d 369, 372 (1962) ("The test is not whether 

the owner, by engaging an independent contractor to perform some 

part of his business, thereby engages in the business of the 

independent contractor. It is whether the independent 

contractor is performing work that is part of the trade, 

business or occupation of the owner."). 

 According to Lauer, LBP was created for a single purpose: 

to develop the Park so that LBP could ultimately lease or sell 
13

the finished warehouses. It necessarily engaged in many 

preliminary steps or activities to accomplish its business 

purpose of selling or leasing the warehouses. The development 

of the property, including the construction of the warehouses, 

was obviously essential, just as a plant is to a 

manufacturer. See Cinnamon, 238 Va. at 478, 384 S.E.2d at 621 

("'Every manufacturer must have a plant, but this fact alone 

does not make the work of constructing a plant a part of the 

trade or business of every manufacturer who engages a contractor 

to construct a plant.'") (quoting Raines v. Gould, Inc., 343 

S.E.2d 655, 659 (S.C. Ct. App. 1986)). While many activities 

may be important or even "indispensable" to the success of a 

business, those activities do not necessarily constitute the 

trade, business, or occupation of the owner. Cinnamon, 238 Va. 

at 475; 304 S.E.2d at 620; see Shell Oil, 212 Va. at 722-23, 187 

S.E.2d at 167-68 (holding that retail sale of gasoline was 

indispensable activity to Shell Oil Company but nevertheless not 

part of its trade, business, or occupation). As a private 

entity, LBP had the "broad discretion to choose its business 

activities." Nichols, 241 Va. at 521, 403 S.E.2d at 701. 

 The circuit court dismissed this wrongful death action on 

LBP's plea in bar. A plea in bar presents a distinct issue 

that, if proven, bars a plaintiff's right of recovery. Hilton, 

275 Va. at 179, 654 S.E.2d at 574. LBP, as the moving party, 
14

had the burden of proving that Ubaldo's construction work at the 

time of the accident was part of LBP's trade, business, or 

occupation. See id. at 179-80, 654 S.E.2d at 574. We conclude, 

as a matter of law, that LBP did not carry that burden. 

Establishing that LBP contracted with Reed to construct the 

warehouses and sought to ensure that the work was "done 

properly" is not sufficient to establish that construction is 

part of LBP's trade, business or occupation. Henderson, 233 Va. 

at 381, 225 S.E.2d at 598 ("[T]he mere fact a business owner 

engages an independent contractor does not make that independent 

contractor's employees statutory employees of the 

owner."); Cinnamon, 238 Va. at 479, 384 S.E.2d at 622 

(overseeing construction by employees does not compel the 

conclusion that construction is the trade, business or 

occupation of the owner). LBP may have demonstrated that the 

construction of warehouses was indispensable to the success of 

its business, but it did not prove that Ubaldo's construction 

work was part of LBP's trade, business, or 

occupation. See Cinnamon, 238 Va. at 475, 384 S.E.2d at 620. 

 In arguing that Ubaldo's construction work was part of its 

trade, business, or occupation, LBP relies principally 

on Pfeifer. There, as here, a company with no employees, 

Linkhorn Bay Associates, L.L.C., contracted all work on a 

project to subcontractors. 262 Va. at 265, 546 S.E.2d at 718. 
15

An employee of one subcontractor sued another subcontractor, 

Krauss Construction Company of Virginia, Inc. (Krauss) for 

personal injuries sustained while Krauss employees were 

installing natural gas lines. Id. As a statutory co-employee 

case, the determinative issue was whether Krauss' "installation 

of the gas line was a part of the trade, business, or occupation 

of Linkhorn Bay, making Krauss [the plaintiff's] statutory coemployee." Id. at 267, 546 S.E.2d at 719. The Court held that 

it was: "Linkhorn Bay had been formed solely to build and 

develop these condominiums [and] had no other function[;] the 

installation of the gas lines was part of Linkhorn Bay's 

construction project covered by the terms of [the parties'] 

contract." Id. at 268, 546 S.E.2d at 720. 

Contrary to LBP's argument, Pfeifer does not control here. 

Determining whether work is part of the trade, business, or 

occupation of an owner "depends upon the facts and circumstances 

of the particular case." Johnson, 244 Va. at 485, 422 S.E.2d at 

780. Linkhorn Bay had been formed "solely to build and develop 

. . . condominiums." Pfeifer, 262 Va. at 268, 546 S.E.2d at 720 

(emphasis added). Its trade, business, or occupation was not 

disputed, and installing the natural gas lines and connecting 

them to the condominium units were obviously part of its 

business purpose to build the condominiums. 
16

CONCLUSION 

For these reasons, we conclude that LBP was not Ubaldo's 

statutory employer under Code § 65.2-302(A) at the time of his 

fatal accident. As a matter of law, the circuit court erred by 

granting LBP's plea in bar. We will reverse the circuit court's 

judgment and remand the case for further proceedings consistent 

with this opinion.4

Reversed and remanded. 

 4

 In light of our holding, we need not address Rodriguez' 

other assignments of error except for her argument that, under 

Rule 1:1, the circuit court lacked jurisdiction over the case to 

reconsider the plea in bar after this Court's first remand. 

Rodriguez' argument is without merit. 

 Upon Rodriguez' timely appeal from the circuit court's 2010 

judgment sustaining the plea in bar, this Court obtained 

jurisdiction over the case. Ghameshlouy v. Commonwealth, 279 

Va. 379, 390, 689 S.E.2d 698, 703 (2010). By reversing the 

circuit court's order and remanding the case, we vacated the 

circuit court's August 2010 order. See Nassif v. Board of 

Supervisors, 231 Va. 472, 480, 345 S.E.2d 520, 525 (1986) ("When 

this Court rules that the judgment of a trial court is erroneous 

. . . it is no longer viable. Unless we say otherwise, the 

slate is wiped clean, with the result that on remand the parties 

begin anew."). Although the circuit court made the same 

findings of fact on remand and concluded that LBP was Ubaldo's 

statutory employer, it did not simply modify its prior order. 

Instead, it entered a new order. That action, therefore, did 

not implicate Rule 1:1. 
JUSTICE McCLANAHAN, with whom JUSTICE POWELL joins, concurring 

in part and dissenting in part. 

Today the majority terminates the ability of injured workers 

to seek workers' compensation from developers like LBP, contrary 

to the remedial purposes of the Virginia Workers' Compensation 

Act (the Act). At the same time, the majority exposes such 

developers to common law tort liability that is completely at 

odds with applicable statutory and case law. The majority 

offers no discernible rationale for effecting these results. We 

are provided only the majority's conclusory assertion – contrary 

to the facts and law - that LBP failed to prove that Ubaldo, as 

Reed's employee, was performing work that was part of LBP's 

trade, business or occupation at the time of his work-related 

accident. 

On the undisputed facts in this case, the circuit court 

correctly concluded that LBP was Ubaldo's statutory employer 

based on its finding that Reed's construction of the warehouses 

at Leesburg Business Park (the Park) was a part of LBP's trade, 

business or occupation. I would therefore affirm the judgment 

of the circuit court sustaining LBP's plea in bar pursuant to 

the Act's exclusive remedy provision.1

 1

 In light of this conclusion, as explained in Part II 

below, I would also address, but would reject, Rodriguez' 
18

Accordingly, I dissent from the majority's conclusion that 

LBP was not Ubaldo's statutory employer and its reversal of the 

circuit court's judgment. However, I concur in the majority's 

rejection of Rodriguez' jurisdictional argument based on Rule 

1:1.2

I. LBP'S STATUTORY EMPLOYER STATUS 

A. Controlling Statutes and Remedial Purpose 

 By the terms of the Act's exclusive remedy provision, Code 

§ 65.2-307(A),3

 the rights and remedies provided in the Act are 

exclusive of all other rights and remedies that a covered 

employee and his beneficiaries might otherwise possess as a 

result of the employee's job-related accident. Under this 

statute, an injured employee and his beneficiaries are precluded 

from maintaining a common law action against the employee's 

immediate employer for an injury sustained in the course of 

 

alternative argument that, even if LBP was Ubaldo's statutory 

employer, LBP waived its defense of immunity under the Act 

because LBP did not purchase workers' compensation insurance or 

qualify as a self-insurer. 

2

 The majority discusses and disposes of Rodriguez' 

jurisdictional argument in footnote 4 of its opinion. 

3

 Code § 65.2-307(A) states: 

The rights and remedies herein granted to an employee when 

his employer and he have accepted the provisions of this title 

respectively to pay and accept compensation on account of injury 

or death by accident shall exclude all other rights and remedies 

of such employee, his personal representative, parents, 

dependents or next of kin, at common law or otherwise, on 

account of such injury, loss of service or death. 
19

employment when the employee and the employer have accepted the 

Act's provisions. See Hudson v. Jarrett, 269 Va. 24, 29, 606 

S.E.2d 827, 829 (2005); Pfeifer v. Krauss Const. Co., 262 Va. 

262, 266, 546 S.E.2d 717, 719 (2001). An exception, however, to 

the Act's exclusive remedy provision is set forth in Code § 

65.2-309(A), which permits the employee to bring a common law 

action against a third-party tortfeasor, provided the tortfeasor 

is an "other party" within the meaning of the Act. Crocker v. 

Riverside Brick & Supply Co., 273 Va. 235, 238-39, 639 S.E.2d 

214, 216 (2007); Anderson v. Dillow, 262 Va. 797, 799-800, 553 

S.E.2d 526, 527 (2001). 

 An owner such as LBP, which is not the injured employee's 

immediate employer, is nonetheless "under the canopy of the 

[A]ct and entitled to the immediate employer['s] statutory 

immunity from common-law actions" if the owner qualifies as the 

injured employee's statutory employer, thereby negating "other 

party" status. Evans v. Hook, 239 Va. 127, 131, 387 S.E.2d 777, 

779 (1990). The test for determining whether an owner becomes a 

statutory employer is set forth in Code § 65.2-302(A) as 

follows: 

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 
20

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. 

The project owner is thus deemed to be the statutory employer of 

the independent contractor's employees if those employees are 

engaged in work that is a part of the owner's trade, business, 

or occupation.4 If so, the owner is rendered liable to those 

employees for workers' compensation benefits. 

The purposes of Code § 65.2-302(A) are to afford protection 

to "'the employees of [independent contractors] who are not 

financially responsible,'" Bassett Furniture Industries, Inc. v. 

McReynolds, 216 Va. 897, 902, 224 S.E.2d 323, 326 (1976) 

(quoting Sears, Roebuck & Co. v. Wallace, 172 F.2d 802, 810 (4th 

Cir. 1949)), and to "prevent an owner from escaping liability 

under the Act by the simple expedient of subcontracting away 

work which is part of its trade, business, or 

occupation." Henderson v. Central Tel. Co. of Va., 233 Va. 377, 

381, 355 S.E.2d 596, 598-99 (1987). 

These purposes are reflective of the "highly remedial" 

nature of the Act, id. at 382, 355 S.E.2d at 599; Board of 

Supervisors of Amherst County v. Boaz, 176 Va. 126, 134, 10 

S.E.2d 498, 501 (1940), which is to be construed to effect its 

fundamental purpose of providing workers with statutory 

 4

 The employees, in turn, become the "statutory employees" 

of the owner. Crocker, 273 Va. at 238-39, 639 S.E.2d at 216.
21

compensation for accidental injuries resulting from the hazards 

of their employment. Henderson, 233 Va. at 382, 355 S.E.2d at 

599; Feitig v. Chalkley, 185 Va. 96, 98, 38 S.E.2d 73, 75 

(1946). Accordingly, in this case, even though Rodriguez does 

not seek workers' compensation benefits from LBP, "our 

consideration of this appeal is nevertheless governed by the 

principles that apply in a case where coverage is 

sought." Henderson, 233 Va. at 382, 355 S.E.2d at 599. 

B. LBP's Trade, Business or Occupation 

The undisputed facts, material to the analysis of whether 

Reed's construction of the Park warehouses was part of LBP's 

trade, business, or occupation under the terms of Code § 65.2-

302(A), are as follows. LBP, a Virginia limited liability 

company, was organized by Lauer, its owner and sole member, for 

the purpose of "acquiring, holding, improving, managing, leasing 

and selling real estate," as set forth in its operating 

agreement.5

 LBP was specifically organized to effect that 

purpose through the Park property project. Upon its acquisition 

of the Park property, LBP was, in fact, responsible for the 

property being commercially developed, and for the sale and 

lease of the warehouse units that were constructed on the 

 5

 In this context, Black's Law Dictionary defines the word 

"improve" to mean: "To develop (land) . . . ." Black's Law 

Dictionary 826 (9th ed. 2009). 
22

property. LBP received its income from the sale and lease of 

those warehouse units. 

With no employees or equipment, LBP implemented its 

organizational objectives through Lauer, independent contractors 

and consultants. LBP acquired the Park property as totally 

undeveloped, raw land. In developing the property, LBP 

obtained, among other things: numerous studies regarding the 

financial viability of developing the Park property, the 

practicality of construction, and the risk of development; 

appraisals; bids from contractors; various government permits, 

bonds and approvals; and construction financing. 

LBP made the decision to improve the Park property by the 

construction of the Park warehouses, obtained the necessary 

approvals for their construction, and procured an architect to 

design them. After interviewing various contractors to 

construct the warehouses, LBP selected Reed. LBP and Reed then 

entered into a contract making Reed solely responsible for 

constructing the warehouses to the agreed specifications. LBP 

hired an owner's representative to oversee the construction 

process, "serving as [Lauer's] eyes and ears as to what's going 

on with the project," as Lauer explained. Lauer had weekly 

meetings with this representative regarding the progress of the 

construction. The architect that designed the warehouses also 

inspected, on LBP's behalf, Reed's work over the course of the 
23

warehouses' construction. Lauer made the ultimate decision on 

any construction issues. 

The majority, without acknowledging it, evidently accepts 

Rodriguez' central argument that because LBP did not, and could 

not, construct the Park warehouses itself, Reed's construction 

of the warehouses was not a part of LBP's trade, business, or 

occupation; rather, LBP was merely "investing in real estate," 

placing LBP outside the purview of the definition of statutory 

employer in Code § 65.2-302(A) for that part of the Park's 

development. 

This argument is unavailing as it conflicts with the 

express terms of Code § 65.2-302(A), which imposes workers' 

compensation liability on an owner, as a statutory employer, 

when the owner undertakes through an independent contractor 

"the whole or any part of the work" that is "a part of [the 

owner's] trade, business or occupation." (Emphasis added). The 

statute thus "contemplates that an owner such as [LBP] can 

subcontract all its work yet remain liable under the 

Act." Henderson, 233 Va. at 381, 355 S.E.2d at 598. Hence, 

under our case law, "a defendant's business structure and number 

of employees have never been considerations in deciding whether 

[it] is entitled to the [A]ct's immunity" from a common law suit 

as a statutory employer. Evans, 239 Va. at 132, 387 S.E.2d at 

779. 
24

As this Court has previously explained, "an owner may 

perform or execute work that is part of [its] trade, business, 

or occupation through contractors or subcontractors, directly 

employing no workers for the purpose." Smith v. Horn, 232 Va. 

302, 305, 351 S.E.2d 14, 16 (1986) (emphasis added) 

(citing Anderson v. Thorington Const. Co., 201 Va. 266, 272-73, 

110 S.E.2d 396, 400-01 (1959)). But "if the work performed by 

an employee of the contractor or subcontractor is [such a] part 

. . . the worker is deemed the statutory employee of the owner, 

and the owner is liable for compensation as though the worker 

were [its] own employee." Id. at 305-06, 351 S.E.2d at 16. 

LBP utilized a business model for its development of the 

Park property that required no direct employees for the 

construction of its Park warehouses. However, LBP should be 

unable to thereby "escap[e]" statutory employer 

status. Henderson, 233 Va. at 381, 355 S.E.2d at 598. "[T]he 

whole [warehouse construction] work undertaken by [LBP]" was 

performed by Reed, LBP's independent contractor, in a manner 

contemplated by Code § 65.2-302(A). The undertaking was in 

furtherance of the express purposes for which LBP was 

established, and comprised the main component of the Park 

property's intended development and use. From the beginning, 

LBP's plan was to acquire the Park property in its unimproved 

state, improve the property through the construction of the Park 
25

warehouses, and then sell or lease the warehouse units. The 

construction of the Park warehouses was thus necessarily an 

integral part of LBP's "trade, business or occupation" under the 

terms of Code § 65.2-302(A). 

It is therefore inconsequential that LBP did not "make money off 

of the construction [of the warehouses] itself," as Lauer 

acknowledged, with Reed being paid to construct them. Even if 

LBP had performed the construction with employees of its own, it 

would not have made "money off of the construction itself," as 

the project's owner (i.e., LBP would not have received payments 

for its own construction work). In either case, LBP's income 

would have been generated at the point of sale and/or lease of 

the warehouse units, just like any other owner-developer of a 

similar project (with or without its own construction crew). By 

the very nature of commercial real estate development, the 

developer generates income upon completion of the project from 

the sale or lease of the developed property or some portion of 

it. Nonetheless, we have never deemed the point at which income 

is generated from a commercial undertaking to be dispositive in 

determining an entity's trade, business or occupation under Code 

§ 65.2-302(A), and I see no good reason for doing so here. 

Finally, the majority's stated reasons for rejecting LBP's 

reliance on Pfeifer plainly support the counter-position. 

Applying Code § 65.2-302 in Pfeifer, we held that an independent 
26

contractor's installation of gas lines undertaken for a 

condominium development project was a part of the trade, 

business, or occupation of the owner-developer, Linkhorn Bay 

Associates, L.L.C. (Linkhorn Bay). Much like LBP, Linkhorn Bay 

was a limited liability company that was organized for the 

purpose of developing condominiums, had no employees and 

"subcontracted all the work to various subcontractors." Id. at 

265, 546 S.E.2d at 718. In attempting to distinguish Pfeifer, 

the majority points to the fact that Linkhorn Bay had been 

formed solely to build and develop condominiums. The majority 

then concludes that "installing the natural gas lines and 

connecting them to the condominium units were obviously part of 

its business purpose to build the condominiums." This 

observation seems to simply ignore the fact that LBP's 

development of the Park property by the construction of 

warehouse units was undisputedly in furtherance of LBP's 

organizational and business purpose, as set forth in LBP's 

operating agreement. It would thus be completely illogical to 

contemplate that somehow installation of natural gas lines to 

those warehouse units would be a part of LBP's business purpose 

to build those units, but the actual construction of the units 

would not be a part of that purpose. 

 Accordingly, I would hold the circuit court correctly 

concluded that LBP was Ubaldo's statutory employer because 
27

Ubaldo, as Reed's employee, was performing work that was a part 

of LBP's trade, business, or occupation at the time of his workrelated accident. Given the undisputed facts before it, the 

circuit court's conclusion was dictated by both the express 

terms of Code § 65.2-302(A) and the statute's remedial purpose.6

II. LBP AS UNINSURED STATUTORY EMPLOYER 

 Rodriguez argues that even if Ubaldo was LBP's statutory 

employer, pursuant to Code § 65.2-805 of the Act, LBP waived 

its defense of immunity in this action because LBP failed to 

purchase workers' compensation insurance covering Reed's 

employees, or to qualify as a self-insurer. 

 6

 I take issue with the majority's indication that, 

initially, LBP argued and the circuit court held that "Ubaldo 

and LBP were statutory co-employees," citing this Court's 

unpublished order in Rodriguez' first appeal, Rodriguez v. 

Leesburg Business Park, LLC, Record No. 102127, slip op. at 4 

(Jan. 6, 2012) (per curiam). At no time did the circuit court 

or LBP refer to LBP and Ubaldo as "statutory co-employees." 

(Emphasis added.) This phrase was of Rodriguez' making, and 

then attributed to LBP and the circuit court by the current 

majority of this Court in its unpublished order remanding this 

case for reconsideration, as well as in its instant opinion. 

The circuit court actually found in its initial ruling that 

"[Ubaldo] was a statutory co-employee of LBP." (Emphasis 

added.) This finding no doubt derived from LBP's use of this 

phrase in the context of framing the issue as a question of 

"whether [Ubaldo] was a statutory employee of LBP, as well as an 

employee of EE Reed." LBP otherwise referred to Ubaldo as 

"LBP's statutory co-employee." LBP also referred to itself as 

Ubaldo's "co-employer" and his "statutory employer." Thus, 

while LBP's phraseology may have been novel for workers' 

compensation law, it did not reflect a misapprehension that LBP 

and Ubaldo were somehow "statutory co-employees." 
28

On the facts of this case, LBP's uninsured status is 

immaterial. Under the Act, both Reed, as Ulbaldo's immediate 

employer, and LBP, as Ulbaldo's statutory employer, would have 

been liable to Ulbaldo and his statutory beneficiaries for his 

work-related accident. Upon Ulbaldo's death, the beneficiaries 

would have been entitled to benefits under the Act from either 

Reed or LBP, but not from both. David White Crane Service v. 

Howell, 282 Va. 323, 329, 714 S.E.2d 572, 576 (2011). The 

beneficiaries pursued their rights and remedies under the Act 

and obtained a full recovery of workers' compensation benefits 

from Reed. Therefore, as the beneficiaries have received the 

"one full recovery" they were entitled to under the Act, id.

(citation and internal quotation marks omitted), they would be 

barred from pursuing "other rights and remedies" against LBP 

under the Act's exclusive remedy provision. Code § 65.2-307(A). 

I would thus hold the trial court correctly rejected Rodriguez' 

argument that, because LBP was uninsured, it waived its immunity 

to suit in this common law action. 

For these reasons, I would affirm the judgment of the 

circuit court in sustaining LBP's plea in bar pursuant to the 

Act's exclusive remedy provision. I therefore dissent to the 

majority's conclusion that LBP was not Ubaldo's statutory 

employer and its reversal of the trial court's judgment. I 

concur, however, in the majority's rejection of Rodriguez' 
29

jurisdictional argument based on Rule 1:1, as the majority 

addresses in footnote 4 of its opinion.