Court Opinion

ID: 9771041
Source: CourtListenerOpinion
Date Created: 2023-08-29 16:29:40.78694+00
Date Added: 2024-06-11T15:37:57.220703
License: Public Domain

Melvin Mayfield, Judge, dissenting. I cannot agree with the majority opinion in this case. With all due respect, I think the majority has failed to apply the statutory law to the undisputed evidence. The appellant was injured while flying an airplane which was spraying chemicals on a field owned by one of the appellee’s customers. The threshold question is whether the appellant was injured in an employment covered by the Arkansas Workers’ Compensation Law. The Commission found that the appellee was a corporation engaged “in the business of providing services consisting of the aerial application of pesticides and fertilizers.” The Commission also found that the appellant and Randy Atkinson were employees of the corporation, but Howard Cissell, who was president of the corporation, was not actively involved in the operation of the business and should not be counted as an employee in considering whether the corporation was engaged in an employment subject to the compensation act. Therefore, the Commission found that the corporation was not subject to the act because it did not have three employees as required by Ark. Code Ann. § 11-9-102(3)(A) (1987). On the other hand, the appellant contends that Randy Atkinson was not an employee of the corporation but was a subcontractor of the corporation and, therefore, the corporation was subject to the act under Ark. Code Ann. § 11-9- 102(3)(C) (1987), which provides coverage for: (C) Every employment in which one (1) or more employees are employed by a contractor who subcontracts any part of his work. It is well settled that we do not reverse the Commission unless we are convinced that fair-minded persons with the same facts before them could not have reached the conclusion arrived at by the Commission. In this case, in my opinion, fair-minded persons applying the above quoted provision of the act, could not have found that the Commission reached the correct conclusion; therefore, we should reverse the Commission’s decision. See Price v. Little Rock Packaging Co., 42 Ark. App. 238, 856 S.W.2d 317 (1993). The Commission reversed the decision of the administrative law judge who found that the appellee “by its own admission, subcontracted out a portion of [its] obligations to Mr. Atkinson.” The Commission, in a two to one decision, stated that although both the appellee and Atkinson “have characterized the relationship as one of a subcontractor, the evidence fails to support that characterization.” The Commission’s opinion supports its conclusion by quoting from Bailey v. Simmons, 6 Ark. App. 193, 639 S.W.2d 526 (1982), the statement that “subcontracting is merely ‘farming out’ to others all or part of work contracted to be performed by the original contractor” and then stating that “the evidence establishes that Atkinson was solely in charge of the routine operations of the business.” I do not think the Commission’s reasoning actually reaches the point involved. The president of the appellee corporation testified that Randy Atkinson was in charge of “my flying service” and then looked at a document, admitted it said that Atkinson was a “self-employed sub-contractor,” and admitted that this was “correct.” The document was introduced into evidence. It is signed by Mr. Atkinson and states: I hereby acknowledge that I am an independent contractor and not an employee of Mustang Agri-Air, and I hereby agree to be responsible for commissions earned. I hereby request that Mustang Agri-Air do not withhold any taxes from the above earnings. As a self-employed sub-contractor I agree that I am responsible for insurance and personal liability while working for named business above. I hold named business above harmless in all injury or damages to other parties also. In addition to the above evidence, the appellant points to the record where one of the appellee’s attorneys stated at the hearing before the law judge that Mr. Atkinson was “an independent contractor.” Moreover, the appellant testified that Mr. Atkinson had his own airplane; that the plane appellant was flying on the day he was injured was owned by the appellee; and that “sometimes” the appellant and Atkinson would “fly the same field.” The appellant also testified that the owner of the field that appellant was spraying at the time of the crash came to the appellee’s office and arranged for the job to be done. No one testified contrary to the appellant’s testimony. Most of the cases dealing with subcontractors have been concerned with what is now Ark. Code Ann. § 11-9-402 (1987) (formerly Ark. Stat. Ann. § 81-1306). That statute provides that where a subcontractor fails to secure compensation required by the Workers’ Compensation Law the prime contractor shall be liable for compensation to the employees of the subcontractor. Bailey v. Simmons, supra, pointed out that the statute applies only where the “prime contractor” is contractually bound to perform the work in which the subcontractor’s employee was engaged at the time of the injury. See also D&M Construction Co. v. Archer, 14 Ark. App. 198, 686 S.W.2d 799 (1985). The terms “independent contractor” and “subcontractor” should not confuse the matter because one can be “an independent subcontractor.” Hale v. Mansfield Lbr. Co., 237 Ark. 854, 855, 376 S.W.2d 670, 671 (1964). In fact, a subcontractor is ordinarily an independent contractor. Thomas v. Southside Contractors, Inc., 260 Ark. 694, 697, 543 S.W.2d 917, 919 (1976). Although it is conceded that the appellee does not have workers’ compensation insurance, Ark. Code Ann. § 11-9-402 does not apply in this case because the injured employee was an employee of the prime contractor — the appellee — and not an employee of the subcontractor. However, Ark. Code Ann. § ll-9-102(3)(C) does apply in this case because it provides that every employment is subject to the Workers’ Compensation Law where “one or more employees are employed by a contractor who subcontracts any part of his work.” In Liggett Construction Co. v. Griffin, 4 Ark. App. 247, 629 S.W.2d 316 (1982), this court held that Ark. Stat. Ann. § 81-1306 (now Ark. Code Ann. § 11-9-402) makes a prime contractor liable for compensation to employees of a subcontractor who has failed to secure workers’ compensation coverage. In our en banc decision, we stated: The primary purpose of this provision is to protect the employees of subcontractors who are not financially responsible, and to prevent employers from relieving themselves from liability by doing through independent contractors what they would otherwise do through direct employees. Hobbs-Western Co. v. Craig, 209 Ark. 630, 192 S.W.2d 116 (1946). 4 Ark. App. at 251, 629 S.W.2d at 318. I think it is obvious that Ark. Code Ann. § ll-9-102(3)(C) is intended to accomplish this same general purpose. In the present case the appellee is engaged, as found by the Commission, “in the business of providing services consisting of the aerial application of pesticides and fertilizers.” It has one employee — the appellant — who flies an airplane, owned by the appellee, and makes aerial application of the pesticides and fertilizers. The appellee also has an arrangement with Randy Atkinson — evidenced by a written document — whereby Atkinson, who is an independent contractor and not an employee, also flies an airplane (sometimes his own plane) and makes aerial application of the. pesticides and fertilizers. Under this method of doing business the appellee — in the absence of the provisions in Ark. Code Ann. § 1 l-9-102(3)(C) — would not have to carry insurance, or be responsible, for workers’ compensation coverage on the appellant. But Ark. Code Ann. § ll-9-102(3)(C) provides that the appellee is liable for coverage because it is engaged in an “employment in which one (1) or more employees are employed by a contractor who subcontracts [a] part of his work.” The president of the appellee corporation, who the Commission found “furnished the financing for the corporation,” testified that Atkinson was in charge of “my flying service” and that the written document signed by Atkinson correctly set out Atkinson’s status as a “self-employed sub-contractor.” Appellee’s attorney admitted the same thing in the hearing before the law judge. The written document also specifically requests that the appellee not withhold any taxes from the “commissions” earned by Atkinson. Under the law and the evidence, I have to find that the appellee is liable for the workers’ compensation benefits to which the appellant is entitled as a result of his injury. I would reverse and remand for the determination of those benefits.