Court Opinion

ID: 1067890
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:27:58.331878+00
Date Added: 2024-06-11T12:39:24.607147
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Judges Willis, Fitzpatrick and Overton
Argued at Salem, Virginia

F. RICHARD WILTON, JR., INC.

v.      Record No. 2314-95-3                   OPINION BY
                                      JUDGE JOHANNA L. FITZPATRICK
ROGER ALLEN GIBSON, GARY C.                  JUNE 18, 1996
 CONLEY AND UNINSURED
 EMPLOYERS' FUND

       FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
          Rodney A. Satterwhite (Pamela L. Ventura;
          McGuire, Woods, Battle & Boothe, on briefs),
          for appellant.

          Rhonda Overstreet (Gary L. Lumsden; Lumsden &
          Overstreet, on brief), for appellee Roger
          Allen Gibson.

          Christopher D. Eib, Assistant Attorney
          General (James S. Gilmore, III, Attorney
          General; Richard L. Walton, Jr., Senior
          Assistant Attorney General; John J. Beall,
          Jr., Senior Assistant Attorney General, on
          brief), for appellee Uninsured Employers'
          Fund.

          No brief or argument for appellee Gary C.
          Conley.

     In this workers' compensation case, F. Richard Wilton, Jr.,

Inc. (Wilton) appeals the commission's decision awarding benefits

to Roger Allen Gibson (claimant).   Wilton argues that the

commission erred in finding that Wilton was claimant's statutory

employer under Code § 65.2-302.   Finding no error, we affirm the

commission.

     Wilton, a drywall contractor, handles both interior and

exterior drywall work.   In March 1994, Century Construction
Company (Century) hired Wilton as a subcontractor to install

drivit 1 on the exterior of a Richmond restaurant.     Although

Wilton's business is ninety-five percent interior drywall

installation, the company routinely accepts drivit installation

contracts and subcontracts the drivit installation included in

its projects.      No Wilton employees install drivit full time, and

Wilton's drivit installation constitutes only two to three

percent of its business.      Wilton subcontracted the drivit

installation to Conley Construction Company (Conley).
       Claimant worked for Conley and was assigned to the drivit

installation job.      Claimant provided his own hand tools, and

Wilton's supervisor, William Sirk, insured that the Conley

workers had the materials and instruments needed to complete the

job.       While installing drivit, claimant fell off scaffolding and

injured his foot.

       Because Conley was uninsured, claimant filed a claim for

benefits against Wilton as a statutory employer.      The commission

found that "the activity of installing 'drivit' is not so

distinct or separate as to be outside the overall nature of

Wilton's trade" and awarded benefits to claimant.

       On appeal, Wilton argues that the commission erred in

holding it liable as a statutory employer under Code § 65.2-302.

 Wilton asserts that drivit installation is a different trade,

       1
      Drivit is a new synthetic plaster, and installing drivit
involves a different process than regular drywall work.

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business, or occupation than standard drywall work and that the

commission applied the wrong analysis in awarding benefits to

claimant.

     Code § 65.2-302 2 provides as follows:
               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 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.
     2
      Code §§ 65.1-29, 65.1-30, and 65.1-31 were recodified in
1991 as Code § 65.2-302.

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The purpose of Code § 65.2-302 is to "'protect the employees of

subcontractors who are not financially responsible and to prevent

employers from relieving themselves of liability (for

compensation) by doing through independent contractors what they

would otherwise do through direct employees.'"   Bassett Furn.

Indus., 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)).   "'The issue whether a person is a

statutory employee presents a mixed question of law and fact
. . . .'"   Cinnamon v. International Business Machines Corp., 238
Va. 471, 474, 384 S.E.2d 618, 619 (1989) (quoting Cooke v.

Skyline Swannanoa, Inc., 226 Va. 154, 156, 307 S.E.2d 246, 247

(1983)).

     The Supreme Court of Virginia has used the analysis set

forth in Shell Oil Co. v. Leftwich, 212 Va. 715, 187 S.E.2d 162

(1972), in determining statutory employer status:
          "[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 (except in cases where the
          work is obviously a subcontracted fraction of
          a main contract) is whether this
          indispensable activity is, in that business,
          normally carried on through employees rather
          than independent contractors."

Cinnamon, 238 Va. at 475, 384 S.E.2d at 620 (quoting Shell Oil,

212 Va. at 722, 187 S.E.2d at 167).

                                 4
       In Cinnamon, the Supreme Court discussed the two prongs of

the Shell Oil test--the "normal-work test" and the

"subcontracted-fraction test."   238 Va. at 476, 384 S.E.2d at

620.   The Supreme Court explained that the normal-work prong is

used in determining statutory employer status under Code

§ 65.2-302(A) (former Code § 65.1-29) and "relates to an owner

who engages an independent contractor to perform certain work."

Id.    The Supreme Court also explained that the subcontracted-

fraction test is used to analyze statutory employer status under

Code § 65.2-302(B) (former Code § 65.1-30) and defined the test

as follows:
          In the context of the construction business,
          [the subcontracted-fraction prong] 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, in the language of
          Shell Oil, "obviously a subcontracted
          fraction of [that] contract" and, in the
          language of the statute, "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.

Id.    "The subcontractor similarly becomes the statutory employer

of a sub-subcontractor's employees.   Thus, employees of an

uninsured sub-subcontractor may look to the subcontractor, and to

the general contractor, for coverage, although recovery is not

permitted from both."    States Roofing Corp. v. Bush Constr.

Corp., 15 Va. App. 613, 616-17, 426 S.E.2d 124, 126 (1993)

                                  5
(citation omitted).

     Wilton incorrectly asserts that the commission should have

used the normal-work test in analyzing whether claimant was its

statutory employee.   In this case, Wilton was not an owner

engaging an independent contractor to perform work, and the

normal-work test was inapplicable.    Instead, Wilton was a

subcontractor hired by the general contractor, Century.   The main

contract between Century and the restaurant owner required

Century to remodel the restaurant.    Century subcontracted the

drivit installation to Wilton; Wilton in turn subcontracted the

work to Conley, claimant's employer.   The drivit installation

constituted one hundred percent of Wilton's obligations under the

contract with Century.    Because of the general

contractor/subcontractor/sub-subcontractor relationship, the

appropriate test was the subcontracted-fraction test.
     Although the commission did not specifically analyze

Wilton's status using the subcontracted-fraction test, the

commission did not err in requiring Wilton to pay benefits to

claimant.   The drivit installation was clearly a subcontracted

fraction of the main remodeling contract and not part of the

trade, business, or occupation of the owner, whose business was

operating a restaurant.   Thus, Wilton was claimant's statutory

employer and liable for benefits under Code § 65.2-302(B).

     Accordingly, the decision of the commission is affirmed.

                                                    Affirmed.

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