Brd.spire Serv. Inc. v. Workers' Comp. Appeal Bd.

• Decision Date: 23 July 2010
• Citation: 2 A.3d 1268
• Parties: SIX L'S PACKING COMPANY and its claims administrator, Broadspire Services, Inc., Petitioners v. WORKERS' COMPENSATION APPEAL BOARD (WILLIAMSON), Respondent.
• Court: Pennsylvania Commonwealth Court

2 A.3d 1268

SIX L'S PACKING COMPANY and its claims administrator, Broadspire Services, Inc., Petitioners

v.WORKERS' COMPENSATION APPEAL BOARD (WILLIAMSON), Respondent.

Commonwealth Court of Pennsylvania.

Argued May 18, 2010.

Decided July 23, 2010.

Sharolyn L. Murphy, Philadelphia, for petitioner, Six L's Packing Company.

Jeffrey L. Zeitz, Philadelphia, for respondent.

BEFORE: PELLEGRINI, Judge, LEAVITT, Judge, and FLAHERTY, Senior Judge.

OPINION BY Senior Judge FLAHERTY.

Six L's Packing Company (Six L) petitions for review from an order of the Workers' Compensation Appeal Board (Board) that affirmed the decision of a Workers' Compensation Judge (WCJ) that granted a Claim Petition filed against it by Kevin Williamson (Claimant). We affirm.

Six L owned fields upon which tomatoes were grown, a warehouse where they were packed and processing centers to which the tomatoes were delivered. F. Garcia & Sons Harvesters, Inc. (Garcia & Sons) contracted with Six L to provide certain services including the harvesting and hauling of tomatoes. Claimant worked for Garcia & Sons as a truck driver. He was involved in a motor vehicle accident on August 22, 2002 while transporting tomatoes.

Claimant filed a Claim Petition on June 18, 2004 against Garcia & Sons. He listed the insurer/third party administrator as unknown. He alleged that as a result of his motor vehicle accident, he sustained a closed head injury, multiple cerebral hemorrhages, cognitive changes, shoulder and right leg trauma. He sought ongoing total disability benefits. Claimant filed a second Claim Petition concerning the same incident against Six L listing American Protection Insurance Company as its insurer/third party administrator. Six L filed a timely answer to the Claim Petition filed against it. No answer was filed by Garcia & Sons. Garcia & Sons did not participate in the underlying litigation. ¹

Claimant testified that he was employed by Garcia & Sons as a truck driver and he was responsible for hauling tomatoes from Shickshinny, PA to a facility in Crisfield, MD. According to Claimant, he had a conversation with another employee about making sure he was placed on an insurance policy for workers' compensation purposes. Following this conversation, per Claimant, he had a discussion with Fortuno Garcia, the owner of Garcia & Sons, about being put on a workers' compensation policy. He understood that based on this conversation, Fortuno Garcia was going to have him insured through Six L. Claimant was involved in his motor vehicle accident while en route to Crisfield, MD. He sustained multiple disabling injuries. According to Claimant, following his injury, Fortuno Garcia conceded that he never followed through on Claimant's request that he be put on a workers' compensation policy.

Claimant submitted a copy of a Farm Labor Contract entered into between Paragon Produce, Inc., a.k.a. Six L, referred to as Agricultural Employer, and Garcia & Sons, referred to as Farm Labor Contractor. That contract states, in part:

5. Duties of Farm Labor Contractor

5.1 Responsibility for Laborers

5.1.1 FARM LABOR CONTRACTOR shall employ his/her own employees and shall be responsible for all social security, workers' compensation, liability insurance, unemployment insurance ...

5.2 Compliance with Laws. FARM LABOR CONTRACTOR shall ... comply with all federal, state, and local laws, ordinances, rules, regulations and orders of any public authority bearing on the performance of work for AGRICULTURAL EMPLOYER ...

5.4 Insurance... FARM LABOR CONTRACTOR further agrees to maintain at its sole cost and expense any workers' compensation coverage for its laborers if required by state law. Upon request of AGRICULTURAL EMPLOYER, FARM LABOR CONTRACTOR shall provide AGRICULTURAL EMPLOYER with copies of all insurance policies, including the declaration pages thereto.

10. Payroll Service AGRICULTURAL EMPLOYER has a computerized payroll system, and as a service to FARM LABOR CONTRACTOR, is willing to process FARM LABOR CONTRACTOR's payroll. If FARM LABOR CONTRACTOR accepts this service by signing the Acceptance at the end of this Contract, AGRICULTURAL EMPLOYER will be responsible for preparing payroll checks for employees of FARM LABOR CONTRACTOR ... AGRICULTURAL EMPLOYER will also assume responsibility and, as a service to FARM LABOR CONTRACTOR, make payments of unemployment insurance, workers' compensation, withholdings taxes, social security taxes and/or other deductions of employees of FARM LABOR CONTRACTOR. (Emphasis added).

R.R. at 53a-59a.

This Farm Labor Contract was executed April 30, 2002. A representative for Garcia & Sons signed the Acceptance provision for the payroll services of Section 10 of the agreement.

On August 4, 2004, Six L presented a Motion to Dismiss the Claim Petition filed against it. On March 10, 2005, the WCJ issued an interlocutory order wherein he denied Six L's Motion to Dismiss. He concluded that Claimant was an employee of Garcia & Sons, not an independent contractor. The WCJ further concluded Six L was Claimant's statutory employer under Section 203 of the Pennsylvania Workers' Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 52, and was liable for any benefits that may be due Claimant consistent with Section 302 of the Act, 77 P.S. §§ 461-462. ² The WCJ relied on the seminal case of McDonald v. Levinson Steel Co., 302 Pa. 287, 153 A. 424 (1930), which held that to qualify as a statutory employer, (1) the employer must be working under a contract with the premises owner; (2) the premises must be occupied or under the control of the employer; (3) the employer has contracted with a subcontractor to do work; (4) part of the employer's regular work is entrusted to the subcontractor; and (5) the injured person is the subcontractor's employee. The WCJ found these factors were satisfied.

Subsequent to the March 10, 2005 Interlocutory Order, Six L asserted that recent case law necessitated that the WCJ revisit the issue of whether it was Claimant's statutory employer. ³ It contended that the appropriate analysis to determine liability is that of a “borrowed employee,” not the “statutory employer” analysis conducted by the WCJ. It requested that it be afforded the opportunity to develop testimony from David Garcia. The WCJ issued an interlocutory order on February 23, 2006, wherein he reserved ruling on whether the newly presented precedent affected his prior interlocutory order. Nonetheless, he directed the parties to depose David Garcia no later than March 10, 2006.

Six L presented the testimony of David Garcia, compliance manager for Six L packing. ⁴ He explained that Paragon Produce was a farming company created by Six L. David Garcia agreed that Six L obtained workers' compensation insurance for Garcia & Sons employees pursuant to Section 10 of the Farm Labor Contract. According to David Garcia, however, workers' compensation coverage was limited to “employees that work on the site as far as harvesting.” R.R. at 188a. He added Garcia & Sons was responsible for any workers' compensation insurance in regard to drivers of trucks. Per Mr. Garcia, Garcia & Sons provided a list of employees to be covered. Claimant was not on that list.

By a decision dated January 30, 2007, the WCJ granted the Claim Petitions filed against both Garcia & Sons and Six L. He credited Claimant's testimony. The WCJ credited David Garcia's testimony to the extent Six L provided workers' compensation insurance to Garcia & Son's employees. The WCJ rejected this testimony, however, to the extent David Garcia stated Claimant was not covered under Six L's workers' compensation policy. He concluded that Claimant met his burden of proof to establish Six L was his statutory employer. He incorporated by reference his March 2005 Interlocutory Order.

The WCJ concluded that Claimant's work-related injuries, based on credible medical testimony, included a closed head injury with multiple residual cognitive deficits, chronic depression, post-traumatic stress disorder, dementia and organic personality disorder secondary to his head injury, a right rotator cuff tear (surgically repaired), and a left ACL tear (surgically repaired). The WCJ directed Six L's to pay Claimant ongoing total disability benefits as a result of his work-related injury. He found Six L is entitled to be indemnified by Garcia & Sons under the provisions of the Act. The WCJ further awarded Claimant thirty weeks of indemnity benefits for a disfiguring scar to his right eye.

The Board affirmed on appeal, albeit with a slightly different analysis. The Board concluded that Claimant presented circumstantial evidence that Garcia & Sons did not have workers' compensation insurance to cover Claimant's injuries. It explained:

We determine the WCJ's finding that Garcia [ & Sons] did not secure workers' compensation coverage is supported by substantial, competent evidence. Specifically, David Garcia testified that [Six L] had a farm labor contract with Garcia [ & Sons], which required [it] to insure Garcia's employees. However, Claimant's name was not on the list of employees covered by [Six L's] policy. His testimony is circumstantial evidence that Garcia did not carry workers' compensation insurance for its employees in general.

Op. dated 3/17/09, p. 6. (Emphasis added).

The Board further concluded that Six L was Claimant's statutory employer. It noted that Section 302 of the Act is made up of two pertinent subsections. The Board found that Section 302(b) of the Act is applicable to work injuries at fixed work sites such as construction sites. It added that the McDonald tests set forth in the WCJ's March 10, 2005 Interlocutory Order, incorporated into the WCJ's final order, is applicable only to fixed work-site injuries. The Board pointed out that the second prong of the McDonald test requires that the contractor occupy or control the premises where the injury occurred. Under the McDonald t...