Beal v. Coastal Carriers, Inc.

• Decision Date: 20 December 2016
• Docket Number: No. COA16–420,COA16–420
• Citation: 251 N.C.App. 1,794 S.E.2d 882
• Court: North Carolina Court of Appeals
• Parties: Jeffrey Eugene BEAL, Employee, and Lawrence Craige, Guardian of the Estate of Jeffrey Eugene Beal, Plaintiffs v. COASTAL CARRIERS, INC., (Alleged) Employer, and Zurich American Insurance Company, (Alleged Carrier); Defendants; and The Warehousing Company, LLC, (Alleged) Employer and Key Risk Insurance Company, (Alleged) Carrier, Defendants.

251 N.C.App. 1

794 S.E.2d 882

Jeffrey Eugene BEAL, Employee, and Lawrence Craige, Guardian of the Estate of Jeffrey Eugene Beal, Plaintiffs

v.COASTAL CARRIERS, INC., (Alleged) Employer, and Zurich American Insurance Company, (Alleged Carrier); Defendants; and The Warehousing Company, LLC, (Alleged) Employer and Key Risk Insurance Company, (Alleged) Carrier, Defendants.

No. COA16–420

Court of Appeals of North Carolina.

Filed: December 20, 2016

Stiles, Byrum & Horne, L.L.P., Charlotte, by Henry C. Byrum, Jr., and B. Jeanette Byrum, for defendants-appellees Coastal Carriers, Inc. and Zurich American Insurance Company.

Hedrick Gardner Kincheloe & Garofalo, LLP, Wilmington, by Erica B. Lewis, Shelley W. Coleman, and M. Duane Jones, Charlotte, for defendant-appellant Key Risk Insurance Company.

DAVIS, Judge.

This workers’ compensation insurance coverage dispute arises from a workplace accident that occurred in Florida and injured an employee who lived in North Carolina and had been lent to an employer based in South Carolina. Key Risk Insurance Company ("Key Risk") appeals from an opinion and award of the North Carolina Industrial Commission ordering Key Risk to (1) pay temporary total disability compensation to Jeffrey Eugene Beal ("Plaintiff") pursuant to the North Carolina Workers’ Compensation Act; and (2) pay all indemnity benefits owed on Plaintiff's claim. After careful review, we reverse and remand.

Factual Background

The facts giving rise to this case involve two furniture moving and installation companies—Coastal Carriers, Inc. ("Coastal") and The Warehousing Company, LLC ("TWC"). On 20 July 2010, TWC—a company based in South Carolina—entered into an agreement with Winter Park Construction Company ("Winter Park") to provide furniture, fixtures, and electronics installation services at Plantation Beach Club Condominiums in Stuart, Florida (the "Florida Project"). Because TWC did not have enough manpower to perform the job, TWC's owner, Sidney Baird, contacted Gordon Ray—Baird's longtime friend who was the president of Coastal—to see about the possibility of TWC hiring four of Coastal's employees to temporarily work for TWC on the Florida Project.

In 2010, Plaintiff was working for Coastal, which was based in North Carolina. At a safety meeting of Coastal employees, Ray shared with them the information regarding the Florida Project. Upon learning of the employment opportunity from Ray, Plaintiff and three other Coastal employees—Michael Porter, Anthony Brown, and Randy Wallace—contacted Baird to inform him of their interest in working on the Florida Project. Baird offered each of the four employees the job—which they each accepted—and told all of them that upon completion of the job, they would be paid by TWC.

Plaintiff worked on the Florida Project under the on-site supervision of his fellow Coastal employee, Porter, and a TWC employee named David Fleener. Baird kept in contact with Porter and Fleener on a daily basis from his home in South Carolina.

On 26 September 2010, while working at the Florida job site, Plaintiff was injured when he fell while lifting furniture to the second floor of the building where the TWC crew was working. As a result of the fall, he sustained multiple injuries.

On 22 October 2010, Plaintiff filed a Form 18 "Notice of Accident" with the Industrial Commission, seeking compensation for his injuries from Coastal's workers’ compensation insurance carrier, Zurich American Insurance Company ("Zurich"), due to his need for medical care for which TWC's insurance carrier, Key Risk, had refused to pay. Zurich paid Plaintiff's medical compensation of $350,799.25 and disability compensation of $44,068.85.

On 16 September 2011, Coastal filed a motion to add TWC as a defendant to Plaintiff's workers’ compensation action. The motion was granted on 27 October 2011. On 2 January 2013, Coastal filed a Form 33 "Request That Claim be Assigned for Hearing" requesting that "[TWC] and its workers’ compensation carrier [Key Risk] pay benefits pursuant to the North Carolina Workers’ Compensation Act." On 25 February 2013, Key Risk filed a Form 33R "Response to Request That Claim Be Assigned for Hearing" contending that Key Risk was not a party and "would be prejudiced if added into this claim as a party" more than two years after it was removed from a hearing docket.

On 9 July 2013, a hearing was held before Deputy Commissioner Melanie Wade Goodwin. Deputy Commissioner Goodwin issued an opinion and award providing that Coastal, Zurich, and TWC were jointly liable for indemnity and medical benefits paid by Zurich and ordering that Key Risk be dismissed with prejudice as a party-defendant in the matter. Coastal and Zurich filed a notice of appeal from the deputy commissioner's dismissal of Key Risk on 18 June 2014.

On 15 December 2015, the Full Commission issued an opinion and award containing the following pertinent findings of fact:

1. On September 26, 2010, Jeffrey Eugene Beal (hereinafter, "Jeffrey Beal" or "Mr. Beal" or "Plaintiff’) was injured when he fell approximately 10–20 feet from a piece of equipment called a lull which was being used to lift furniture to the second floor of the building where The Warehousing Company, LLC (hereinafter, "TWC") crew was working. As a result of his fall, Mr. Beal sustained multiple injuries, including fractures of the left sphenoid wing, left lateral orbital wall, left maxillary sinus, and left zygomatic arch; a comminuted right distal radius and ulna fracture ; a left elbow comminuted intra-articular olecranon fracture ; multiple left rib fractures ; a ruptured spleen and a mild subarachnoid hemorrhage.

2. On October 22, 2010, Jeffrey Beal filed a Form 18 Notice of Accident with the North Carolina Industrial Commission seeking compensation for his injuries. The named Defendant was Coastal Carriers, Inc. (hereinafter, "Coastal"). Plaintiff's claim was accepted and paid by Coastal and Zurich American Insurance Company (hereinafter "Zurich") due to the emergent need for medical care which Key Risk Insurance Company (hereinafter, "Key Risk"), the workers’ compensation carrier for TWC, would not address.

....

5. On September 16, 2011, Defendant Coastal filed a Motion to Add Party–Defendant, seeking to add TWC, as a party Defendant. This Motion was granted by the Executive Secretary on October 27, 2011.

6. On September 26, 2010, Gordon Wayne Ray, Jr. (hereinafter Mr. Ray) was the President of Coastal, which was located in Wilmington, North Carolina. Coastal was a mover of household goods regulated by state and federal tariffs.

7. On September 26, 2010, Sidney "Skip" Baird (hereinafter, "Mr. Baird") was the owner of TWC located at 122 Watergate Drive, Myrtle Beach, South Carolina. TWC's business included the warehousing of and the installation of furniture, fixtures, and electronics at resort properties, installing furniture, fixtures, and electronics which was commercial work which was not regulated by state and federal tariffs.

....

11. On July 20, 2010, TWC (through Mr. Baird) entered into a "Subcontract Agreement" with Winter Park Construction Company (hereinafter; "Winter Park") to provide furniture, fixture and electronics installation services at Plantation Beach Club Condominiums in Stuart, Florida. This contract was negotiated entirely by Mr. Baird on behalf of TWC and did not involve Mr. Ray or Coastal in any way.

12. Under the terms of the contract, TWC had eight days to complete the installation of furniture, fixtures and electronics in thirty-two units. At the time in question, TWC had multiple projects underway in various parts of the United States and did not have the manpower to complete all of these jobs. Mr. Baird's situation was further complicated by the fact that he was awaiting the birth of his daughter, which required him to remain in Myrtle Beach, South Carolina. Mr. Baird contacted Mr. Ray indicating he was "in a jam" and that he wanted to hire four of Mr. Ray's employees to work for TWC on a Florida job where all of the furniture, fixture and electronics installation had to be completed in eight days.

13. Sometime prior to September 19, 2010, Mr. Ray announced at a safety meeting of Coastal employees that Mr. Baird wanted to hire workers for a Florida project and since the work for his company was in a slow period, he instructed any of his interested workers to contact Mr. Baird directly. Mr. Ray did not select or designate any of his workers for the Florida job. His workers were free to accept or reject the offer of employment.

....

15. Following this meeting, which occurred in North Carolina, four Coastal employees—Michael Porter, Anthony Brown, Randy Wallace and Jeffrey Beal—arranged with Mr. Baird to go to Florida to work for TWC. Prior to these workers leaving North Carolina, Mr. Baird spoke by telephone with each of these four men—Michael Porter, Anthony Brown, Randy Wallace and Jeffrey Beal—to give a "pep talk["] and discuss payment or wages at the completion of the job in Florida. Mr. Baird informed them they would be paid by TWC. Each one of these four men accepted Mr. Baird's offer of employment while still in North Carolina.

16. Plaintiff testified that he agreed to work the Florida job while he was in North Carolina.

17. The four individuals who agreed to work on the Florida project did not have reliable transportation. When informed of their transportation problems, Mr. Ray loaned the men a Coastal sales van to drive and gave them a gas card to purchase fuel. He expected to be reimbursed by TWC for these expenses.

....

19. When the four individuals hired by TWC—Michael Porter, Anthony Brown, Randy Wallace and Jeffrey Beal—arrived in Florida, they went to a motel room that was paid for by Mr. Baird. Mr. Porter supervised the work for the first couple of days until David Fleener, an employee of TWC arrived on the site. Mr. Fleener then instructed the workers on what to do. Mr. Baird communicated with TWC workers multiple times on a daily basis while the

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