Court Opinion

ID: 9897707
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:24:01.32362+00
Date Added: 2024-06-11T09:14:41.533030
License: Public Domain

COURT OF APPEALS OF VIRGINIA
UNPUBLISHED

              Present: Judges Humphreys, Ortiz and Senior Judge Annunziata
              Argued at Fairfax, Virginia

              EN & SH PROPERTIES, LLC, ET AL.
                                                                           MEMORANDUM OPINION* BY
              v.     Record No. 1421-22-4                                 JUDGE ROBERT J. HUMPHREYS
                                                                               OCTOBER 24, 2023
              MILTON GRISTO

                            FROM THE VIRGINIA WORKERS’ COMPENSATION COMMISSION

                              J. David Griffin (Winchester Law Group, P.C., on briefs), for
                              appellants.

                              Jose Caballe (Daniel P. Barrera; The Barrera Law Firm, on brief), for
                              appellee.

                     EN & SH Properties, LLC, and its insurer, Flagship City Insurance Company,

              (appellants) appeal an order of the Workers’ Compensation Commission entering an award

              against them for Milton Gristo’s (claimant) temporary total disability wage loss and medical

              benefits. Asserting res judicata, appellants assign error to certain findings of the Commission

              that they claim are contrary to findings made by a deputy commissioner in a final opinion

              resolving a show cause order. Appellants also assert that the Commission erred in failing to find

              that claimant engaged in willful misconduct, in awarding lost time benefits without sufficient

              evidence of disability, and in finding sufficient evidence to award an average weekly wage.

              Lastly, appellants allege that the Commission erred in finding EN & SH Properties was the

              statutory employer yet stripping its ability to pursue subrogation against claimant’s employer.

                     *
                         This opinion is not designated for publication. See Code § 17.1 413(A).
                                         BACKGROUND

       On appeals from the Commission, “we review the evidence in the light most favorable to

the prevailing party”; here, the claimant. R.G. Moore Bldg. Corp. v. Mullins, 10 Va. App. 211,

212 (1990). On August 22, 2018, claimant was working for his brother-in-law, Elder Miguel

Espina, who owned Miguel’s Carpentry. EN & SH Properties hired Miguel’s Carpentry to do

framing for the construction of Valley Extended Suites hotel.

       Around lunchtime on August 22, claimant was walking around the construction site and

talking on his cell phone. He was talking to Espina, who was home for lunch, telling him that

one of the workers wanted to quit and this was impacting their ability to finish the job. While

they were talking, claimant walked on an inclined “2x12” board that was a makeshift walkway

from the ground to an upper level of the building they were constructing. Claimant fell off the

board, about eight to ten feet into the foundation of the hotel. After the fall, an ambulance took

claimant to Augusta Health Hospital. From there he was transported to UVA Medical Center.

Claimant sustained injuries to his left knee and right ankle and underwent three surgeries during

his hospital stay at UVA, from August 22, 2018, through September 9, 2018.

       Claimant filed a claim for benefits on March 9, 2020, against Miguel’s Carpentry.

Miguel’s Carpentry was not covered with workers’ compensation insurance. The Commission

also ordered Miguel’s Carpentry to show cause why it should not be fined for failure to insure its

liability for workers’ compensation benefits. The Commission held a hearing on the show cause

order on December 9, 2020. In an opinion dated January 14, 2021, Deputy Commissioner

Culbreth found that Miguel’s Carpentry was not required to carry insurance under the Workers’

Compensation Act. According to the opinion, Espina testified that he had only one employee,

                                               -2-
Ruven Lorenzo Garcia,1 he rarely had enough work for more than one employee, and he

sometimes brought on other subcontractors to assist him for larger jobs. Espina stated that “he is

primarily a framer and anyone else he would bring to assist would only be brought on a job to

assist with framing.” He testified that he has never had more than three employees. He also

testified that he was aware of claimant’s injury when he was being paid to collect garbage at a

worksite.

       The January 2021 opinion stated the issue as, “Whether a fine is appropriate for failure to

insure.” It noted that an employer must have three or more employees to come under the

jurisdiction of the Act. The deputy commissioner found that “where, as in the present case, the

addition of workers could best be classified as sporadic or occasional rather than recurrent, the

employer cannot be said to come under the jurisdiction of the Act and thereby required to have

insurance.” Espina was not fined, and the show cause was quashed. The order was not

appealed.

       Meanwhile, the Uninsured Employers Fund (“UEF”) discovered that EN & SH Properties

could be the statutory employer, and EN & SH Properties and its insurer were added as

defendants. On December 11, 2020, the Commission entered an agreed order resolving that

EN & SH Properties is the statutory employer and dismissing the UEF. The order expressly

preserved any defenses of EN & SH Properties.

       On May 12, 2021, the parties appeared before the deputy commissioner for a hearing on

claimant’s claim seeking an award of medical benefits and temporary total disability benefits

from August 22, 2018, through September 9, 2018. The parties stipulated that claimant sustained

injuries to his left knee and right ankle on August 22, 2018, and that EN & SH Properties was

       1
         The transcript of the show cause hearing is not in the record. These statements of
Espina’s testimony are taken from the January 2021 opinion on the show cause matter.
                                               -3-
claimant’s statutory employer. There was no agreement as to the average weekly wage of

claimant.

       Claimant called Espina to testify as an adverse witness. Espina testified that his work is

primarily “framing work.” He stated that claimant worked for him since 2016 and “he would

help me do framing, but most of the time was picking up garbage.” He also testified that

“sometimes I would give [claimant] a job” and pay him $10 per hour, or $100 per day. Espina

testified that he told claimant what time to be at work, provided tools to claimant for work,

corrected his work, and directly supervised claimant. When asked if he could fire claimant,

Espina replied, “No, no. He was just helping me temporarily.”

       For the framing of the second and third floors of the hotel, Espina testified that he had

four workers helping with the framing project, including claimant. Espina worked on the Valley

Extended Suites project for three months, and at the very end, only one employee was working

for him there. Espina did not recall anyone from EN & SH Properties telling him that the board

from which claimant fell could not be used as a walkway. Espina testified that the workers were

all trying to get themselves and their tools from the ground up to the floor where they were

working and that the board “was to cross.”2

       Claimant testified that he began working at the Valley Extended Suites project on the first

day that Espina started working there and that he was working as a framer on the day of the

accident. He did not know how long the job was supposed to last. He stated that Espina paid

him $100 per day in cash, set his hours including arrival and departure time, supervised him,

corrected him, and provided tools for his work. He also said Espina could have fired him. On

cross-examination, claimant testified that he does a lot of painting for work, but on the day of the

accident he was working as a framer. Claimant stipulated that he had no pay records, receipts of

       2
           The testimony took place with the assistance of an interpreter.
                                                -4-
payments, or tax returns to document his average weekly wage. He also stipulated that there

were no “direct slips” saying he was out of work but noted that he limited his claim to temporary

total disability benefits to the time medical records show he was hospitalized.

       The defense called witnesses Daniel Mansour and Ed Mansour, who manage EN & SH

Properties. They both testified that they saw claimant fall off the board and that when he fell, he

was talking on his cell phone. Ed testified that before claimant’s fall, he had told Espina and all

of Espina’s employees that using the board as a bridge or walkway was not allowed and to walk

around the building and use the stairs, but he noted that the employees did not understand

English well. He also testified that he told Espina that if his workers continued to use the board

as a walkway, he would not be allowed to finish the job. Ed also stated that he took the board off

the site and had his son cut it in half in order to prevent its use, but the workers would get

another board a couple days later and use it the same way. The 2x12 boards were job site

materials, and workers continued to use it as a walkway/bridge for six to eight weeks, despite

Ed’s warnings and taking down the board. The workers stopped using the board for ingress and

egress only after claimant’s accident.

       The deputy commissioner issued an opinion on August 12, 2021. He found that claimant

was not an employee for the purposes of the Act—he was, “at best, a casual employee.” He

denied an award to claimant. Claimant appealed to the full Commission.

       The full Commission issued an opinion on the record on February 2, 2022. The

Commission found that claimant was not just a casual employee but was employed in the usual

course of the trade, business, and occupation of Miguel’s Carpentry and that claimant was an

employee of the statutory employer, EN & SH Properties. Thus, the Commission ordered the

August 2021 opinion reversed and remanded the case to the deputy commissioner to address the

employer’s remaining defenses.

                                                 -5-
       Accordingly, on April 8, 2022, the deputy commissioner issued an opinion addressing the

employer’s remaining defenses, finding no willful misconduct, that medical evidence proved

claimant was hospitalized for the period claimed of total disability so the award period was

appropriate, and the issue of marketing was moot. EN & SH Properties appealed. On August

29, 2022, the full Commission affirmed the award against EN & SH Properties and Flagship City

Insurance Company of $333.34 per week during the period of temporary total disability

beginning August 29, 2018, through September 9, 2018, and medical benefits for as long as

necessary. EN & SH Properties appealed to this Court.

                                            ANALYSIS

                                           I. Res judicata

       Appellants argue res judicata principles preclude the Commission from having

jurisdiction over claimant’s claim. “Whether a claim or issue is precluded by res judicata

principles is a question of law which we review de novo.” Levy v. Wegmans Food Mkts., Inc., 68

Va. App. 575, 579 (2018).

       First, appellants assert that the deputy commissioner found in the January 2021 opinion

that claimant’s employer, Miguel’s Carpentry, did not fall within the jurisdiction of Virginia’s

Workers’ Compensation Act and therefore it had no jurisdiction to award benefits to claimant.

Appellants state Code § 65.2-101(2)(h) excludes from the Act’s coverage employees of a person

or company that has regularly in service less than three employees. Appellants also argue that

the deputy commissioner found that claimant’s work was “sporadic or occasional rather than

recurrent,” and based on this finding he is a “casual employee” who is not covered by the Act,

citing Code § 65.2-101(2)(e).3

       3
           Code § 65.2-101(2)(e) states that “‘Employee’ shall not mean: . . . Casual employees.”
                                                -6-
       Appellants’ conclusion overlooks the Act’s provisions regarding “statutory employer[s]”

found in Code § 65.2-302. “In 1991, . . . the General Assembly enacted Code § 65.2-302, which

created a new category of employment relationship called ‘Statutory employer.’” Jeffreys v.

Uninsured Emp.’s Fund, 297 Va. 82, 90 (2019). Code § 65.2-302(B) provides:

               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.

       “Thus[,] the subcontractor’s employees are employees of the contractor for purposes of

liability.” Smith v. Weber, 3 Va. App. 379, 381 (1986) (interpreting now repealed Code

§ 65.1-30). “Since they are the contractor’s employees for purposes of determining liability,

reason dictates that they should also be considered employees for determining applicability of

the Act.” Id. Therefore, the fact that Miguel’s Carpentry was found to have less than three

employees did not decide the question of whether claimant may be covered under the Act.

       Regarding the res judicata claim that jurisdiction over EN & SH Properties is precluded,

the January 2021 opinion was issued after a hearing to resolve a show cause order where the only

issue was whether Miguel’s Carpentry should be fined for failure to insure with workers’

compensation coverage. The deputy commissioner found that Miguel’s Carpentry was not

required to have a policy of insurance under the Act because Miguel’s Carpentry had less than

three employees. Res judicata includes the distinct concepts of issue preclusion and claim

preclusion. County of Henrico v. O’Neil, 75 Va. App. 312, 322 (2022). “Issue preclusion, also

referred to as ‘collateral estoppel,’ precludes the same parties from re-litigating ‘any issue of fact

                                                 -7-
actually litigated and essential to a valid and final personal judgment in the first action.’” Id.

(quoting Brock v. Voith Siemens Hydro Power Generation, 59 Va. App. 39, 45 (2011)). This

Court has held that the principles of res judicata apply to workers’ compensation cases, yet res

judicata may have to give way when in irreconcilable conflict with more important public

policies such as reaching equitable results in workers’ compensation cases. Id. at 322-23.

       Here, issue preclusion or collateral estoppel does not demand a finding that claimant was

only a casual employee and thus not covered by the Act. Although the January 2021 opinion

stated that “the addition of workers could best be classified as sporadic or occasional rather than

recurrent” with regard to Miguel’s Carpentry, the issue of whether claimant was an employee of

Miguel’s Carpentry was not a fact actually litigated that was essential to the show cause

dismissal.

       In the second assignment of error, appellants assert that the deputy commissioner found

in the January 2021 opinion that claimant was not engaged in the carpentry trade and thus the

Commission was estopped from later finding that claimant was employed as a carpenter within

the usual course of trade of Miguel’s Carpentry. Appellants cite the definition of “Employee” in

Code § 65.2-101, excluding “one whose employment is not in the usual course of the trade,

business, occupation or profession of the employer.” However, the deputy commissioner made

no determination in the show cause opinion about whether claimant was engaged in the carpentry

trade. We note the deputy commissioner’s summary of Espina’s testimony: “[Espina] was aware

of an incident where his brother-in-law was being paid to collect garbage at a worksite . . . .”

This, however, is a summary of testimony and not a finding regarding the nature of claimant’s

work that was litigated and essential to final judgment on the show cause. Thus, this statement

would not preclude the Commission from finding that claimant was engaged in carpentry or

framing work at the time of his injury.

                                                 -8-
       In their third assignment of error, appellants again assert that res judicata bars the

Commission from finding that claimant was an “employee” under the Act after the deputy

commissioner’s determination that Espina’s testimony at the show cause hearing was “credible.”

While it is true that the deputy commissioner stated in its January 2021 opinion that Espina’s

testimony was “credible” and found that he did not have three or more employees to bring his

company under the jurisdiction of the Act, the deputy commissioner did not make a finding that

Claimant was a casual employee or otherwise not covered by the Act.

       In sum, nothing in the January 2021 opinion expressly addresses whether claimant falls

within the statutory definition of employee or was a “worker” for the statutory employer within

Code § 65.2-302(B), or states that the Commission has no jurisdiction over his claim. Even if

the text of the opinion could arguably bear the construction appellants assert in these assignments

of error, “the full commission nonetheless ‘is entitled to interpret its own orders in determining

the import of its decisions’ for purposes of res judicata.” Brock, 59 Va. App. at 48. Here, the

full Commission declined to interpret the January 2021 opinion resolving a show cause order as

deciding that claimant was not entitled to workers’ compensation coverage. We find no error in

the Commission’s conclusion.

                        II. Evidence supports the Commission’s findings

       Next, appellants assert that the Commission erred in its factual findings regarding

whether claimant willfully violated a safety rule, proved temporary total disability, and proved

average weekly wage. “If there is evidence, or reasonable inferences can be drawn from the

evidence, to support the commission’s findings, they will not be disturbed on review, even

though there is evidence in the record to support a contrary finding.” Advance Auto and Indem.

Ins. Co. of N. Am. v. Craft, 63 Va. App. 502, 520 (2014) (internal quotation marks omitted)

(quoting Amelia Sand Co. v. Ellyson, 43 Va. App. 406, 408 (2004)).

                                                -9-
                                   A. Violation of a safety rule

        Appellants argue the Commission erred when it found that claimant did not violate a

safety rule.4

        Code § 65.2-306(A)(5) states that no compensation shall be awarded to the employee for

an injury caused by the employee’s “willful breach of any reasonable rule or regulation adopted

by the employer and brought, prior to the accident, to the knowledge of the employee.” The

person or entity asserting this defense has “the burden of proof with respect thereto.” Code

§ 65.2-306(B). “To establish this defense, the employer must prove: (1) the rule was reasonable;

(2) the employee knew of the rule; (3) the rule was for the employee’s benefit; and (4) the

employee intentionally performed the forbidden act.” Dan River, Inc. v. Giggets, 34 Va. App.

297, 302 (2001); see also Layne v. Crist Elec. Contractor, Inc., 64 Va. App. 342, 349-50 (2015).

“[T]he employee may rebut the defense by showing that the rule was not kept alive by bona fide

enforcement or that there was a valid reason for his inability to obey the rule.” Buzzo v.

Woolridge Trucking, Inc., 17 Va. App. 327, 332 (1993).

        The Commission found that neither the statutory employer nor the direct employer

adopted a safety rule prohibiting the use of the 2x12 board as a walkway and that the evidence

does not establish that any such rule was known to claimant. Only the Mansours testified to the

safety rule and that they told Espina and claimant not to use the board. Ed Mansour stated that

he took the board down multiple times only to find it replaced by the workers. He testified that

he told Espina that they could not continue working there if the workers continued to use the

        4
          Code § 65.2-306 provides employers’ defenses based on employee’s conduct. Within
this statute, the Commission only addressed whether claimant committed a willful violation of a
safety rule as defined in Code § 65.2-306(A)(5), and not whether he committed willful
misconduct as defined in Code § 65.2-306(A)(1), because it found that appellants had waived
any argument on the later violation. Therefore, we only address appellants’ willful violation of a
safety rule defense.
                                             - 10 -
board as a walkway, but apparently the rule and ultimate consequence were never enforced. As

for claimant’s awareness of the rule, Ed Mansour acknowledged the language barrier between

himself and the workers and that he told the Spanish speaking workers in English not to use the

board. Claimant was not asked at the hearing about his knowledge of the rule. The record

supports the Commission’s conclusion that appellants did not meet their burden of proving the

existence of a safety rule that was known to claimant.

                                      B. Proof of disability

       Appellants argue that the Commission erred in awarding claimant “lost time benefits”

because no physician ever gave him an out-of-work slip. Yet the record shows that claimant was

hospitalized from August 22, 2018, to September 9, 2018, during which time he underwent three

surgeries. The Commission was “not persuaded by EN & SH Properties’ assertion that the

claimant could have performed work under these circumstances.” While there are no

“out-of-work notes” from medical providers, other medical evidence establishes total disability

for the period that claimant was in the hospital. The Commission did not err in affirming the

award of temporary total disability from August 29, 2018, through September 9, 2018.

                                C. Proof of average weekly wage

       Appellants contend that the Commission erred in finding evidence to support the

computation of claimant’s average weekly wage. Appellants argue that without physical

evidence of payments to claimant, the average weekly wage is only speculation and, further, that

awards based on speculation promote perjury. They cite no law that the average weekly wage

can only be proven with records or documented evidence.

       The claimant bears the burden of persuading the factfinder by a preponderance of the

evidence of his average weekly wage. Thorpe v. Clary, 57 Va. App. 617, 626 (2011). Here,

claimant claimed an average weekly wage of $500. He testified that Espina paid him $100 per

                                              - 11 -
day. Espina also testified that he paid claimant $100 per day in cash. Although there was no

documentation of Espina’s cash payments to claimant, nothing in the record contradicts the

testimony that he was paid $100 per day.

       Ed Mansour testified that Miguel’s Carpentry team was onsite working five days a week,

although he stated he saw claimant onsite “[a]bout twice a week. Sometimes three days a week.”

Daniel Mansour testified that Espina would sometimes pull his workers from the jobsite to go do

different jobs. Espina and claimant testified that Espina set the hours for claimant. This

evidence supports a reasonable inference that at the time of the injury claimant was working for

Espina five days a week, whether at the Valley Extended Suites project or at another jobsite, and

that claimant’s pre-injury average weekly wage was $500. We find no error in the

Commission’s finding on claimant’s average weekly wage.

                                      III. Subrogation claim

       Finally, appellants assert that “[t]he Commission erred in determining that EN & SH

Properties was the responsible statutory employer obligated to pay the Claimant yet stripping this

party of its abilities to pursue subrogation against the Employer.” Appellants add that the

Commission has determined it has no jurisdiction over this claim and therefore cannot

“resurrect” the claim to award benefits, forcing EN & SH Properties to pay claimant’s benefits

while divesting them of subrogation rights against Miguel’s Carpentry.

       First, the Commission did not determine that it has no jurisdiction over the case or claim.

The deputy commissioner only found in the January 2021 opinion that the Commission had no

jurisdiction over Miguel’s Carpentry, as stated above. The Workers’ Compensation Act clearly

provides jurisdiction over EN & SH Properties as the statutory employer. See Code

§ 65.2-302(B).

                                              - 12 -
       Second, there was no actual subrogation claim before the Commission.5 The

Commission addressed this argument in a footnote in the February 2022 opinion and stated that

it had made no determination regarding any subrogation rights of appellants and their argument

“raises a purely hypothetical question that is not ripe for review.” We find no error in the

Commission’s determination that the issue is not ripe for review as no subrogation claim was

before the Commission.

       For the foregoing reasons, the Commission’s ruling is affirmed.

                                                                                          Affirmed.

       5
         Code § 65.2-304 provides that a principal contractor who is found liable to pay
compensation under Code § 65.2-302 or Code § 65.2-303 “shall be entitled to indemnity from
any person who would have been liable to pay compensation to the worker independently of
such sections . . . and shall have a cause of action therefor.”
                                                 - 13 -