Caldarelli v. W.C.A.B. (Mastromonaco)
| Decision Date | 04 May 1988 |
| Citation | 542 A.2d 181,115 Pa.Cmwlth. 611 |
| Parties | Fred CALDARELLI, and Rockwood Insurance Company, Petitioners, v. WORKMEN'S COMPENSATION APPEAL BOARD (Ronald R. MASTROMONACO and James Dean and Altec Corporation), Respondents. |
| Court | Pennsylvania Commonwealth Court |
Daniel D. Harshman, Pietragallo, Bosick & Gordon, Mark Gordon, Pittsburgh, for petitioners.
Alexander Pentecost, Pittsburgh, James Schmitt, Carnegie, Fried, Kane, Walters & Zuschlag, Pittsburgh, for respondents.
Thomas V. Gebler, Jr., Arthur J. Leonard, Robb, Leonard & Mulvihill, Pittsburgh, for Altec Corp.
Before CRAIG and PALLADINO, JJ., and BARBIERI, Senior Judge.
Fred Caldarelli appeals from an order of the Workmen's Compensation Appeal Board (board) that affirmed an order of a referee directing Caldarelli or his insurance carrier to pay worker's compensation benefits to Ronald R. Mastromonaco (claimant). The referee concluded that Caldarelli was a statutory employer as to the injured claimant and hence was responsible for the payment of benefits.
The sole issue is whether substantial evidence of record supports certain findings by the referee essential to his conclusion that Caldarelli was the statutory employer. 1
The undisputed facts, as set forth in the referee's findings, are that on September 13, 1984, the claimant sustained injuries to his head and both lower legs while performing his duties as a painter employed by James Dean (Dean) (Findings Nos. 2 and 3). 2 When this accident happened, Dean had no worker's compensation insurance in effect and had not otherwise secured the payment of compensation ( No. 13). Al-Tech Construction Consultants, Inc. (Altec) was the owner of the premises on which the claimant was working when he was injured ( No. 14).
On the following points the referee made no express findings, but the testimony was consistent and uncontradicted. Ken Leah, principal shareholder of Altec, had decided to expand his company's business from conducting inspections to constructing residences. For that purpose, Altec was building two homes to use as models. Leah approached his friend Caldarelli, principal of Caldarelli, Inc., and asked for his assistance in expanding into this new line of work, because Caldarelli had experience in this field. Caldarelli provided various forms of assistance to Leah, including soliciting a painting bid from Dean on the house involved in this case, submitting that bid to Leah, and advising Dean that the bid had been accepted. Leah offered either to pay Caldarelli for his services or to give him an interest in Altec at some future time, but Caldarelli did not accept either offer.
Section 302(b) of The Pennsylvania Workmen's Compensation Act, Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 462, sets forth the basis of the statutory employer concept, as it relates to the issue of liability for payment of compensation:
Any employer who permits entry upon premises occupied by him or under his control of a laborer or an assistant hired by an employe or contractor, for the performance upon such premises of a part of such employer's regular business entrusted to that employee or contractor, shall be liable for the payment of compensation to such laborer or assistant unless such hiring employe or contractor, if primarily liable for the payment of such compensation, has secured the payment thereof as provided for in this act. Any employer or his insurer who shall become liable hereunder for such compensation may recover the amount thereof paid and any necessary expenses from another person if the latter is primarily liable therefor.
For purposes of this subsection (b) [77 P.S. § 462], the term 'contractor' shall have the meaning ascribed in section 105 of this act [77 P.S. § 25].
Section 105 of the act, 77 P.S. § 25, defines the term "contractor," as follows:
The term 'contractor,' as used in article two, section two hundred and three, and in article three, section three hundred and two (b), shall not include a contractor engaged in an independent business, other than that of supplying laborers or assistants, in which he serves persons other than the employer in whose service the injury occurs, but shall include a subcontractor to whom a principal contractor has sublet any part of the work which such principal contractor has undertaken.
As Caldarelli correctly notes in his brief, the clear intent of section 302(b) is to hold a general contractor secondarily liable for injuries to the employees of a subcontractor, where the subcontractor primarily liable has failed to secure benefits with insurance or self-insurance (or to hold a subcontractor secondarily liable in relation to a subsubcontractor). Ace Tire Company v. Workmen's Compensation Appeal Board, 101 Pa.Commonwealth Ct. 186, 515 A.2d 1020 (1986).
This court has held previously that five elements must be shown in order to establish that a given party is a statutory employer of a claimant for the purposes of section 302(b):
Although the meaning of 'statutory employer' under Section 302(b) of the Act, 77 P.S. § 462, has not itself been interpreted, our Supreme Court has construed similar language in Section 203 of the Act, 77 P.S. § 52, and has required five elements to be shown:
.... Furthermore, actual control must be demonstrated and a showing that there was simply a right to control is insufficient.... We agree with the referee and the parties that these criteria are equally applicable to Section 302(b), 77 P.S. § 462.
In order to satisfy elements (1), (2) and (3) of the test for statutory employer status, quoted above, the referee had to find a relationship of owner and general contractor between Altec and Caldarelli, respectively, actual control of the premises by Caldarelli, and a relationship between Caldarelli and Dean of general contractor and subcontractor. The factual findings that the referee made on these points, and that Caldarelli disputes, are as follows:
15. [At the time of the injury] Fred Caldarelli (Fred) was a general contractor with whom Altec had contracted for Fred to perform certain work in the construction of a model home on Altec's premises for Altec.
16. At said time, said premises was under the control of or occupied by Fred.
17. At said time, Fred had subcontracted Dean for the painting work (work).
18. The work was part of Fred's regular business, and Fred entrusted that work to Dean who hired claimant.
19. The work was embraced within the terms of the principal contract between Altec and Fred.
As Caldarelli correctly emphasizes in his brief, this record does not contain evidence that supports the referee's finding that Caldarelli entered into a contract with Dean to provide the painting work. On direct examination on this point, Dean testified as follows:
Q. On this particular job you were working on September 13, 1984, were you a subcontractor?
A. Yes.
Q. To who?
A. I was working with the Altec Corporation.
THE REFEREE:
Who did you subcontract from?
Q. Fred who?
A. Fred Caldarelli.
(Continuing)--what we were going to paint and that. In November, he called and notified me that they wanted me to do that job.
THE REFEREE:
For whom?
THE WITNESS:
For Altec Company.
THE REFEREE:
That's what I asked you, did you subcontract from Altec?
Q. Was there a written contract?
A. No, there was no written contract.
Q. Who was going to pay you?
A. Altec.
Q. Do you know who the principals are of Altec?
A. The owners?
Q. Yes.
A. I thought Ken Leah.
(N.T. March 4, 1986, 27-28; Reproduced Record 82a-83a, emphasis added.)
During redirect examination the following exchange took place between Mr. Dean and the referee:
THE REFEREE:
For the limited time you were on this particular job, you said nobody paid you anything?
Did you ever ask for payment?
THE WITNESS:
There was no billing.
THE REFEREE:
If you had, who would you have billed?
THE WITNESS:
Altec, I guess.
THE REFEREE:
Was it your expectation, had you continued to do some more work to be paid by Altec? Was that your expectation?
What lead you to believe you'd be paid by Altec?
THE WITNESS:
Well, it seemed to be the name of the company. I knew it wasn't Caldarelli Homes, Inc. He [Caldarelli] and Ken [Leah] apparently had this company name called Altec. And I would bill them.
(N.T. March 4, 1986, 50-51; Reproduced Record 105a-106a, emphasis added.)
In addition, Caldarelli testified that Dean was working for Altec as a contracting painter (N.T. March 4, 1986, 63; Reproduced Record 118a), and Leah testified that Altec would have paid Dean had he completed the job, and that he, Leah, was ultimately in charge of building the house (N.T. March 4, 1986, 87;...
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