Capps v. Southeastern Cable

Decision Date02 August 2011
Docket NumberNo. COA10–505.,COA10–505.
CourtNorth Carolina Court of Appeals
PartiesRufus CAPPS, IV, Plaintiffv.SOUTHEASTERN CABLE and Companion Property & Casualty, Defendants.

OPINION TEXT STARTS HERE

Appeal by plaintiff from Opinion and Award entered 8 March 2010 by the North Carolina Industrial Commission. Heard in the Court of Appeals 1 November 2010.

West & Smith, LLP, Southern Pines, by Stanley W. West, and Jay S. Gervasi, P.A., Greensboro, by Jay A. Gervasi, Jr., for PlaintiffAppellant.

McAngus, Goudelock & Courie, P.L.L.C., Raleigh, by Laura Carter and Layla T. Santa Rosa, for DefendantAppellees.

ERVIN, Judge.

Plaintiff Rufus Capps, IV, appeals from an order entered by the Industrial Commission dismissing his claim for workers' compensation benefits on the grounds that Plaintiff worked for Defendant Southeastern Cable as a subcontractor rather than an employee, thereby depriving the Commission of jurisdiction over Plaintiff's claim. On appeal, Plaintiff argues that the evidence established that he was Southeastern's employee and that his claim for workers' compensation benefits was, in fact, subject to the Commission's jurisdiction. After carefully considering Plaintiff's arguments in light of the record and the applicable law, we conclude that Plaintiff's argument has merit.

I. Factual Background
A. Substantive Facts

Time Warner, Inc., provides cable television and internet service. In 2007, Time Warner contracted with Southeastern to install cable TV and internet service for customers. Robert Hair, who owns Southeastern, entered into agreements with eight to ten people, including Plaintiff, to perform the actual installation work. Southeastern treated the installers as independent subcontractors and required them to obtain workers' compensation insurance prior to starting work. Plaintiff obtained a “ghost” insurance policy that excluded him from its coverage.

After working for Southeastern for several weeks, Plaintiff fell while performing installation work, resulting in injuries to his left foot which the parties agree would be compensable in the event that Plaintiff were a Southeastern employee. Southeastern denied Plaintiff's claim on the grounds that Plaintiff was not an employee. Plaintiff, on the other hand, contends that he was a Southeastern employee.

B. Procedural History

On 14 November 2007, Plaintiff filed an amended Form 18, in which he sought workers' compensation benefits, and an amended Form 33, in which he requested that his claim be assigned for hearing. In response, Defendants asserted that Plaintiff was a subcontractor and that he was not entitled to receive workers' compensation benefits for that reason. On 17 November 2008, Deputy Commissioner Philip A. Baddour, III, conducted a hearing concerning Plaintiff's claim. On 29 July 2009, Deputy Commissioner Baddour issued an Opinion and Award concluding that Plaintiff was a Southeastern employee and awarding Plaintiff medical and disability benefits. Both Plaintiff and Defendants appealed Deputy Commissioner Baddour's order to the Commission. On 8 March 2010, the Commission, by means of an Opinion and Award issued by Commissioner Dianne C. Sellers with the concurrence of Commission Chair Pamela T. Young and Commissioner Staci Meyer, reversed Deputy Commissioner Baddour's order on the grounds that, since Plaintiff was an independent contractor, the Commission lacked jurisdiction over Plaintiff's claim. Plaintiff noted an appeal to this Court from the Commission's order.

II Legal Analysis
A. Standard of Review

“To maintain a proceeding for workers' compensation, the claimant must have been an employee of the party from whom compensation is claimed. Thus, the existence of an employer-employee relationship at the time of the injury constitutes a jurisdictional fact.... ‘The finding of a jurisdictional fact by the Industrial Commission is not conclusive upon appeal even though there be evidence in the record to support such finding. The reviewing court has the right, and the duty, to make its own independent findings of such jurisdictional facts from its consideration of all the evidence in the record.’ McCown v. Hines, 353 N.C. 683, 686, 549 S.E.2d 175, 177 (2001) (citing Youngblood v. North State Ford Truck Sales, 321 N.C. 380, 383, 364 S.E.2d 433, 437 (1988), and quoting Lucas v. Stores, 289 N.C. 212, 218, 221 S.E.2d 257, 261 (1976)). As a result, “when a party challenges the Commission's jurisdiction to hear a claim, the findings relating to jurisdiction are not conclusive and the reviewing court may consider all of the evidence in the record and make its own determination on jurisdiction.” Tilly v. High Point Sprinkler, 143 N.C.App. 142, 146, 546 S.E.2d 404, 406 (2001) (citing Craver v. Dixie Furniture Co., 115 N.C.App. 570, 577, 447 S.E.2d 789, 794 (1994)), disc. review denied, 353 N.C. 734, 552 S.E.2d 636 (2001). This Court makes determinations concerning jurisdictional facts based on the greater weight of the evidence. Youngblood, 321 N.C. at 384, 364 S.E.2d at 437. As is generally the case in connection with jurisdictional issues, [t]he plaintiff bears the burden of proving each element of compensability ... by ‘a preponderance of the evidence.’ Everett v. Well Care & Nursing Servs., 180 N.C.App. 314, 318, 636 S.E.2d 824, 827 (2006) (quoting Holley v. ACTS, Inc., 357 N.C. 228, 231–32, 234, 581 S.E.2d 750, 752 (2003)). Thus, “the claimant bears the burden of proving the existence of an employer-employee relationship at the time of the accident.” McCown, 353 N.C. at 686, 549 S.E.2d at 177 (citing Lucas, 289 N.C. at 218, 221 S.E.2d at 261).

Although Defendants acknowledge that this Court must make its own findings of jurisdictional facts, they argue that we “cannot reweigh the evidence regarding the credibility of the witnesses and must defer to the ... [C]ommission's findings regarding credibility.” However, as we have previously noted, [i]n performing our task to review the record de novo and make jurisdictional findings independent of those made by the Commission, we are necessarily charged with the duty to assess the credibility of the witnesses and the weight to be given to their testimony, using the same tests as would be employed by any fact-finder in a judicial or quasi-judicial proceeding.” Morales–Rodriguez v. Carolina Quality, ––– N.C.App. ––––, ––––, 698 S.E.2d 91, 94 (2010). We are conscious of the fact that we have not had an opportunity to observe the demeanor of the witnesses. However, in that respect, we are in the same position as the Commission, which based its findings in this case on information contained in the written record rather than upon testimony provided by live witnesses.

Whether the full Commission conducts a hearing or reviews a cold record, [N.C. Gen.Stat.] § 97–85 places the ultimate fact-finding function with the Commission—not the hearing officer. It is the Commission that ultimately determines credibility, whether from a cold record or from live testimony. Consequently, in reversing the deputy commissioner's credibility findings, the full Commission is not required to demonstrate, as Sanders

[ v. Broyhill Furniture Industries, 124 N.C.App. 637, 641, 478 S.E.2d 223, 226 (1996),]

states, “that sufficient consideration was paid to the fact that credibility may be best judged by a first-hand observer of the witness when that observation was the only one.” To the extent that Sanders is inconsistent with this opinion, it is overruled.

Adams v. AVX Corp., 349 N.C. 676, 681, 509 S.E.2d 411, 413–14 (1998) (quoting Sanders, 124 N.C.App. at 641, 478 S.E.2d at 226, disc. rev. denied, 346 N.C. 180, 486 S.E.2d 208 (1997), overruled in part as stated ). In our credibility determination, we “consider the [tests enunciated in the] North Carolina pattern jury instructions, which” state that a credibility determination should rest upon the use of ‘the same tests of truthfulness which you apply in your everyday lives....' In re Hayes, 356 N.C. 389, 404–405, 584 S.E.2d 260, 270 (2002) (quoting N.C.P.I.-Civil 101.15 (1994)). Finally, at least in this instance, we are not called upon to make many judgments as to the truthfulness of any witness. Although the Commission found that the testimony of one of Southeastern's witnesses was more credible than that of Plaintiff, we are not convinced that there is any significant credibility issue involved in this case. Instead, the proper resolution of the jurisdictional controversy at issue here hinges primarily upon the proper application of the law to essentially undisputed evidentiary facts.

Our determination of whether Plaintiff has demonstrated the existence of an employee-employer relationship begins with N.C. Gen.Stat. § 97–2(2), which provides that:

The term “employee” means every person engaged in an employment under any appointment or contract of hire or apprenticeship, express or implied, oral or written ... whether lawfully or unlawfully employed[.]

As the Supreme Court has stated, [t]his definition adds nothing to the common law meaning of the term ‘employee.’ Hicks v. Guilford County, 267 N.C. 364, 367, 148 S.E.2d 240, 243 (1966) (citing Hayes v. Elon College, 224 N.C. 11, 19, 29 S.E.2d 137, 142 (1944)). The Supreme Court stated in Hayes that:

[T]he retention by the employer of the right to control and direct the manner in which the details of the work are to be executed and what the laborers shall do as the work progresses is decisive, and when this appears it is universally held that the relationship of master and servant or employer and employee is created. Conversely, when one who, exercising an independent employment, contracts to do a piece of work according to his own judgment and methods, and without being subject to his employer except as to the result of the work, and who has the right to employ and direct the action of the workmen, independently of such employer and freed from any superior authority in him to say how the specified work shall be...

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