Collins v. James Paul Edwards, Inc.

• Decision Date: 15 May 1974
• Docket Number: No. 7311IC511,7311IC511
• Citation: 204 S.E.2d 873,21 N.C.App. 455
• Court: North Carolina Court of Appeals
• Parties: Lonnie G. COLLINS, Employee Plaintiff, v. JAMES PAUL EDWARDS, INC., Employer, Ohio Casualty Insurance Company, Carrier, Wooten Asphalt Company, Employer, Aetna Casualty & Surety Company, Carrier, Defendants.

Page 873

204 S.E.2d 873

21 N.C.App. 455

Lonnie G. COLLINS, Employee Plaintiff, v. JAMES PAUL EDWARDS, INC., Employer, Ohio Casualty Insurance Company, Carrier, Wooten Asphalt Company Employer, Aetna Casualty & Surety Company, Carrier, Defendants.

No. 7311IC511.

Court of Appeals of North Carolina.

May 15, 1974 Certiorari Denied by Supreme Court July 1, 1974.

Young, Moore & Henderson by B. T. Henderson, II, and R. Michael Strickland, Raleigh, for defendant appellants, Wooten Asphalt Co. and Aetna Casualty & Surety Co.

Smith, Anderson, Blount & Mitchell by John L. Jernigan, Raleigh, for defendant appellees, James Paul Edwards, Inc. and Ohio Casualty Ins. Co.

PARKER, Judge.

By executing Industrial Commission Forms 21 and 26, Edwards and its compenation insurance carrier admitted their liability to pay compensation to the injured employee. The question presented by this appeal is whether the Industrial Commission was correct as a matter of law in ruling that Wooten Asphalt Company and its compensation insurance carrier must share in that liability. More precisely, the question is whether the facts disclosed by the record support the Commission's conclusion of law that a joint employment relationship existed such as to make both Edwards and Wooten and their respective carriers liable to pay compensation to the injured employee. We hold that they do not.

Certainly situations may exist under which an employee may properly be considered to be in the joint employment of two employers so that both become jointly responsible to pay compensation if the employee is injured by accident arising out of and in the course of such employment. Leggette v. McCotter, 265 N.C. 617, 144 S.E.2d 849, and certain of the cases noted in Annotation, 'Workmen's compensation: liability of general or special employer for compensation to injured employee,' 152 A.L.R. 816, illustrate such situations. One authority analyzes the 'lent employee' problem as follows:

'When a general employer lends an employee to a special employer, the special employer becomes liable for workmen's compensation only if

'(a) the employee has made a contract of hire, express or implied, with the special employer;

'(b) the work being done is essentially that of the special employer; and

'(c) the special employer has the right to control the details of the work.

'When all three of the above conditions are satisfied in relation to both employers, both employers are liable for workmen's compensation.' 1A, Larson, Workmen's Compensation Law, § 48.00.

By statutory definition, the term 'employee' for purposes of the Workmen's Compensation Act means 'every person engaged in an employment under any appointment or contract of hire or apprenticeship, express or implied, oral or written. . . .' G.S. § 97--2(2). Because of this statutory requirement that the employment be under an 'appointment or contract of hire,' Larson states that the first question which must be answered in determining whether a lent employee has entered into an employment relationship with a special employer for Workmen's Compensation Act purposes is: Did he made a contract of hire with the special employer? If this question cannot be answered 'yes,' the investigation is closed, and '(t)his must necessarily be so, since the employee loses certain rights along with those he gains when he strikes up a new employment relation.' 1A, Larson, Workmen's Compensation Law, § 48.10. Further discussing the matter in the same section, the author states:

'In one sense, the lent-employee doctrine is not a separate doctrine at all. Theoretically, the process of determining whether the special employer is liable for compensation consists simply of applying the basic tests of employment set out earlier in this chapter. If they are satisfied, the presence of a general employer somewhere in the background cannot change the conclusion that the special employer has qualified as an employer of this employee for compensation purposes.

'What gives the lent-employee cases their special character, however, is the fact that they begin, not with an unknown relation, but with an existing employment relation. The conflict of interest becomes one not between coemployer and employee (who is assured of recovering from someone) but between two employers and their insurance carriers. There is here no place for presumptions based on the beneficent purposes of the act. The only presumption is the continuance of the general employment, which is taken for granted as the beginning point of any lent-employee problem. To overcome this presumption, it is not unreasonable to insist upon a clear demonstration that a new temporary employer has been substituted for the old, which demonstration should include a showing that a contract was made between the special employer and the employee, proof that the work being done was essentially that of the special employer, and proof that the special employer assumed the right to control the details of the work; failing this, the general employer should remain liable.' Pages 8--208, 8--210, 8--211.

Here, the general employer, Edwards, has stipulated that it is liable to pay compensation to its employee, Collins, and no question is raised as to Collins's right to receive compensation payments from Edwards and its compensation insurance carrier. In our opinion, however, the facts do not support the Commission's conclusion of law that an additional special employment relationship was entered into between Collins and Wooten Asphalt Company such as to make Wooten jointly liable with Edwards for compensation payments to Collins.

As noted above, entering into any such special employment relationship would result in Collins losing certain rights while gaining others, and such a relationship could not arise without his express or implied consent. As pointed out by Larson in the treatise above cited:

'The necessity for the employee's consent to the new employment relation stems, of course, from the statutory requirement of 'contract of hire,' discussed in the preceding section. The consent may be implied from the employee's acceptance of the special employer's control and direction. But what seems on the surface to be such acceptance may actually be only a continued obedience of the general employer's commands.' 1A, Larson, Workmen's Compensation Law, § 48.10, pages 8--214, 8--215.

Here, there was no evidence nor is there any contention that Collins and Wooten ever expressly consented to enter into any employment relationship with each other, and certainly there was no express 'appointment or contract of hire' entered into between them. In...