Source: https://law.justia.com/cases/california/court-of-appeal/3d/123/776.html
Timestamp: 2019-04-22 14:22:01+00:00

Document:
KEITH GERMANN, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD, EDWARD C. CASTRO et al., Respondents.
Byhower & Petherbridge and Nicholas C. Byhower for Petitioner.
Banks, Leviton & Kelley, Eugene Leviton, William K. Dietz and Steven S. Kocalis for Respondents.
The facts herein are not in substantial dispute. Applicant sustained injury to his right major hand on February 11, 1976, while working as a carpenter on the home owned by Germann. fn. 2 Germann had decided to add a room to his residence and hired an architect, Rodriguez, to prepare the plans. Germann is not a builder or contractor by trade; at the time of injury, he was regularly employed as a manager of data processing for Teledyne.
Rodriguez advised that Germann could proceed with the building by subcontracting out the work rather than just turning the project over to a general contractor. Rodriguez gave Germann a list of contractors and Germann looked up others in the "yellow pages." Germann entered into separate written contracts for performance of the concrete work, electrical work, plumbing, etc. Most of these contracts were with licensed building contractors.
Applicant was in charge of directing the other carpentry workers. Rodriguez did try to explain to applicant how he, Rodriguez, interpreted the woodwork according to the plans; Rodriguez, however, never told applicant to perform the work differently than applicant was doing it.
Although Germann was present when applicant was doing the work, Germann at no time told applicant how to do the job. Applicant even looked at the plans and made up the list of lumber that was needed for the carpentry work. Germann then ordered the necessary lumber.
Germann worked along with applicant and the others in an attempt to save time and money in completing the job. Germann would carry lumber and applicant acknowledged that on occasion applicant told Germann what lumber to carry and where to carry it. According to Germann, he would do whatever applicant told him to do (carry lumber, tear off the old roof, etc.). He admitted that he was not really aware of the "legal distinction between a contractor and an employee." Germann had not at any time previously worked on a home.
The injury herein complained of occurred when applicant slipped on an electric cord and fell off the roof.
"Labor Code Section 5705 places the burden of proof on [Germann] to establish that applicant was actually an independent contractor rather [123 Cal. App. 3d 782] than an employee. In determining whether [Germann] has met this burden, we consider such questions as the right to control the way the work is performed, whether a termination of the relationship before completion would give rise to legal liability, how payment is to be made, who furnishes the materials, whether the services are being performed as part of a regular business, whether a special license is required and what the parties actually thought they were agreeing to.
Instructive is Perguica v. Ind. Acc. Com. (1947) 29 Cal. 2d 857 [179 P.2d 812]. There Perguica, a farmer, was having a house constructed on his farm. Perguica hired one Witmer to do his plastering with payment by a lump sum. Before Witmer could do the plastering, wire netting or screening had to be attached to the outside of the house to serve as a lathing for the plaster. Witmer introduced one Walker to Perguica as the man who could put up the wiring. Perguica was to pay Walker when the work was done. Payment was to be by the number of rolls of wire utilized. Perguica supplied the wire but Walker used his own tools. Prior to the performance of the actual work, Walker was fatally injured while transporting scaffolding to the work site. The issue was whether Walker was an employee of Perguica or an independent contractor. Annulling the Commission's decision, the Supreme Court found Walker was an independent contractor stating: "The controlling facts as to the working arrangement between Perguica and Walker stand undisputed, by inference or otherwise. It appears to have been simply an informal agreement showing that Perguica was interested solely in the final result to be attained, the lathing of his house; but that he had not the slightest concern either in the means by which the work should be done or in the details of its accomplishment. Perguica testified that he was a 'dairy farmer' who knew nothing about lathing or other work incident to 'the building of houses.' When asked whether he told Walker 'exactly what work there was to be done,' Perguica said: 'No, I didn't, because I didn't know; he knew.' Walker was an experienced lather, and he had undertaken to furnish his own tools and equipment. Perguica agreed to furnish the wire and pay on the 'yardage basis,' but with respect to any other phase of the work, Perguica testified: 'We don't mention anything. He just got the job. He just got the job. That is all that was said. The work should be done; then afterwards I was going to pay him then; I didn't know. I didn't know.' Walker was free to set his own hours and days for working, the length of time depending on the job's duration, for Perguica stated that he did not know whether it would take 'one day or five days.' Nor did Perguica know 'whether [Walker] was going to do it all by himself or whether he was going to have anybody to help him.' Perguica reserved no right to discharge Walker at will but Walker 'just got the job' and was to receive upon its completion 'fifteen cents a yard' for the wire used, the customary rate of pay in that locality for such a 'specialist.' While the preceding carpentering work on Perguica's house had been performed on a 'daily wage basis.' Perguica was firm in his stand that he did not want such hiring to prevail with respect to other work on his house. Thus, Perguica testified that he employed the carpenters 'by the day' because 'that's the only way I could get it [the carpenter [123 Cal. App. 3d 786] work]' but he was dissatisfied with such arrangement inasmuch as it permitted 'loafing around ... on [his] pocketbook.' To avoid such time-wasting practices at his expense Perguica decided to adopt a different arrangement with respect to other construction work on his house and to pay 'for the job' done, both the 'lathing' by Walker and the 'plastering' by Witmer.
"These considerations demonstrate this to be a case of independent contractorship, and that Perguica and Walker intended it as such, though they never had the opportunity to proceed under their agreement inasmuch as Walker was fatally injured before 'the wiring job' was actually commenced. Perguica not only did not reserve the right to exercise any shadow of control over Walker's work, but he could not have done so had he desired. Having no knowledge of the specialized type of work in question. Perguica 'called in' an experienced lather, 'just as one would summon a plumber, an auto mechanic, or an electrician' to work 'upon his own time and in the exercise of his own knowledge and skill.' (Ponsetti v. Industrial Acc. Com., 5 Cal. App. 2d 498, 500 [42 P.2d 1043].) It is immaterial that another element entered into the factual situation in the Ponsetti case, for the decision is precisely in point in legal principle. While the machinist there involved was 'one engaged to repair a dough mixer' for some bakers and was injured while attempting 'of his own accord' to 'grease the gears,' the fact that he so proceeded without instructions was not made the premise of the decision. Rather the determinative factor negativing the propriety of the compensation award was the working arrangement between the parties, emphasizing the bakers' lack of control over the machinist's operations because of his pursuit of 'an independent employment or occupation of a highly technical character' and their 'want of knowledge and experience in mechanical repairs.' Like considerations prevail here in fixing the status of Walker as an 'independent contractor' under the established rules.
 In the present matter the facts are nearly identical. Germann is not a builder or contractor but a homeowner wanting a room addition. Applicant was an experienced carpenter and member of the carpenters' union. Germann gave no instructions to applicant or the other people performing the carpentry work. Rodriguez, the architect, actually gave no instructions to applicant but only went over the plans with applicant [123 Cal. App. 3d 787] to ensure their proper interpretation. Indeed, applicant supervised the work and even told Germann what to do to help. Applicant and not Germann determined the number of the workers needed to assist on the carpentry. Applicant worked hours to fit his own schedule around his own regular union carpentry work.
In our view the Board overemphasized the manner in which applicant was paid for his labors. "[T]he amount of remuneration and the manner in which it is paid, although factors to be considered in connection with other tests, are not conclusive. For instance, payment may be measured by time, by the piece, or by successful completion of the service, instead of a fixed salary, and still constitute employee wages if other factors indicate an employer-employee relationship. Correlatively, designating the payment a 'salary' does not necessarily establish an employment relationship where other factors indicate an independent contractor status." (2 Hanna, op. cit., supra, § 4.02  [d].) "It is a common practice, even when undertaking a specific piece of work such as construction, repair or renovation of a building, for a carpenter or painter or plumber to calculate his final charge in whole or in part on an hourly rate. This charge may include a labor charge for assistants, perhaps with a profit added. It may also include charges for materials, equipment, and insurance, or it may not. In such cases, it can be argued that the pay is not so much straight payment for the worker's own services on a time basis as a contract charge ultimately related to time." (1C Larson, Workmen's Compensation Law (1980) § 44.33 (a), pp. 8-82 to 8-83.) Thus, payment by the hour is not conclusive. (Id., at pp. 8-81 to 8-82.) Along this line, significant herein is that the method of payment was at applicant's insistence since he could not give an accurate total job estimate.
The decision of the Board finding that applicant was the employee of Germann is annulled.
Compton, J., and Beach, J., concurred.
FN 1. We initially denied the petition for writ of review. Upon Germann's petition for hearing, however, our Supreme Court granted the petition and remanded the matter to this court with directions to issue a writ of review.
FN 2. Germann has no workers' compensation insurance policy to cover applicant. Benefits awarded by the Board would be paid by the Uninsured Employers Fund of the State of California (Fund) if Germann fails to pay the awarded benefits (Lab. Code, § 3716); the Fund then may seek reimbursement from the employer (Lab. Code, § 3716.1 et seq.).
FN 3. Subsequent to his injury applicant went through a contractor's license school and became a licensed contractor but has not worked as a contractor.
FN 4. Applicant charged Germann an hourly wage higher than union scale as Germann was not paying "health and welfare or vacation."
FN 5. Labor Code section 3353 provides: "'Independent contractor' means any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished."
The 1979 amendments merely substituted the words "employees under Division 4 and Division 5" (i.e., the Workers' Compensation Act) in the last paragraph for "Section 3353 of the Labor Code."

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