Court Opinion

ID: 8900767
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:06:29.52056+00
Date Added: 2024-06-11T17:07:49.616829
License: Public Domain

STEELMAN, Judge,
concurring in part and dissenting in part.
I fully concur with the first portion of the majority opinion holding that plaintiffs employer had worker’s compensation insurance through Cincinnati Insurance Company on the date of the accident. I must respectfully dissent from the portion of the majority opinion affirming the holding of the Industrial Commission that Lamm was a statutory employer pursuant to N.C. Gen. Stat. § 97-19, and that its worker’s compensation carrier, Builders Mutual Insurance Company is secondarily liable.
The purpose of N.C. Gen. Stat. § 97-19 was described in the case of Greene v. Spivey, 236 N.C. 435, 73 S.E.2d 488 (1952):
The manifest purpose of this statute, enacted as an amendment to the original Workmen’s Compensation Act, is to protect employees of irresponsible and uninsured subcontractors by imposing ultimate liability on principal contractors, intermediate contractors, or subcontractors, who, presumably being financially responsible, have it within their power, in choosing subcontractors, to pass upon their financial responsibility and insist upon appropriate compensation protection for their workers.
Id. at 443, 73 S.E.2d at 494.
Thus, the purpose of N.C. Gen. Stat. § 97-19 is to make sure that the statutorily mandated worker’s compensation insurance is in effect for all workers, by placing the burden upon the principal contractor to make sure that its subcontractors have the required insurance. The mechanism by which a principal contractor can protect itself from becoming a statutory employer is by obtaining a certificate of insurance.
The issue presented in the instant case is whether the certificate of insurance or the fact that the subcontractor actually had insurance that covered the plaintiffs injury is controlling in determining whether Lamm is liable as a statutory employer. Clearly, Lamm failed to obtain the certificate of insurance for the particular job upon which the plaintiff was injured. Robertson v. Hagood Homes, Inc., *360160 N.C. App. 137, 147, 584 S.E.2d 871, 877 (2003) (“Nor was the defendant’s act of requiring a certificate for the first contract that they sublet to [the subcontractor] sufficient to demonstrate compliance with G.S. § 97-19 as regards the later contract.”). However, this does not end our inquiry.
G.S. 97-19 applies only when two conditions are met. First, the injured employee must be working for a subcontractor doing work which has been contracted to it by a principal contractor. Second, the subcontractor does not have workers’ compensation insurance coverage covering the injured employee. When these two conditions are met, the principal contractor becomes liable to the subcontractor’s employee for payment of workers’ compensation benefits.
Rich v. R. L. Casey, Inc., 118 N.C. App. 156, 159, 454 S.E.2d 666, 667 (1995) (citation omitted); accord Patterson v. Markham & Assocs., 123 N.C. App. 448, 452, 474 S.E.2d 400, 402 (1996).
These cases clearly hold that for a principal contractor to be liable as a statutory employer under N.C. Gen. Stat. § 97-19, the subcontractor must have no worker’s compensation insurance. The certificate of insurance discussed in the statute is simply a means by which a principal contractor may protect itself from liability as a statutory employer, but is not in and of itself determinative of liability. Unless the subcontractor is not insured, there is no liability.
Rich and Patterson clearly state the applicable principles in their two-part test. This court is bound by these holdings. In re Civil Penalty, 324 N.C. 373, 384, 379 S.E.2d 30, 36-37 (1989). These cases enunciate specific principles of law, which are not dependent upon the facts of those cases.
I would reverse the holding of the Industrial Commission, imposing liability upon Lamm and Builders Mutual.