CompTrust AGC v. Whitaker's, Inc.
| Decision Date | 03 May 2007 |
| Docket Number | 2007-UP-199 |
| Parties | CompTrust AGC, f/k/a The Carolinas Associated General Contractors Workers' Compensation Self Insurance Trust Fund, Appellant/Respondent, v. Whitaker's, Inc. of Sumter and Whitaker's Trust, by and through its Trustees, Edsel V. Whitaker, Sr. and Edsel V. Whitaker of whom Whitaker's Inc. is Appellant and Whitaker's Trust is Respondent. |
| Court | South Carolina Court of Appeals |
THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.
Submitted April 10, 2007
Appeal From Sumter County Thomas W. Cooper, Jr., Circuit Court Judge
Jerry Leo Finney and Richard C. Detwiler, both of Columbia, for Appellant-Respondent.
Andrew Lindemann, of Columbia, for Appellant Whitaker's Inc.
M.M Weinberg, Jr., of Sumter, for Respondent Whitaker's Trust.
CompTrust AGC (CompTrust”) and Whitaker's, Inc. cross-appeal from a judgment in an action seeking to recover payment from an underlying workers' compensation case. CompTrust contends the trial court erred in failing to extend the liability of Whitaker's, Inc. to Whitaker's Trust. Whitaker's, Inc. contends the trial court erred in admitting evidence of a previous workers' compensation case and failing to instruct the jury on two requested charges. We affirm. [1]
The Whitaker family runs Whitaker's, Inc., a company classified as a cabinet manufacturer for workers' compensation purposes. The Whitaker family also maintains a trust, Whitaker's Trust, which is a separate entity set up by the Whitaker family purportedly for the benefit of the Mormon church. Edsel Whitaker and his son Whit Whitaker are trustees. In 1999, Whitaker's Trust owned approximately one hundred rental units, along with a farm, a warehouse, and the Mayesville plant, which Whitaker's Inc. leased from Whitaker's Trust. Whitaker's Trust does not have any employees.
Although classified as a cabinet manufacturer, Whitaker's, Inc. was used as a real estate management service for Whitaker's Trust. Whitaker's, Inc. oversaw the management of Whitaker's Trust properties for a fee of $48, 000 per year.
Over the years, Whitaker's, Inc. also oversaw the construction of several apartment buildings for Whitaker's Trust. [2] The Whitakers employed Judy Jernigan at various times over the course of ten years. Jernigan is a friend of the Whitaker family, and began her working relationship with them on a contractual basis while employed full-time with a construction company. In the early years, Jernigan worked for the Trust apartments. She was paid in full by the Trust after completing odd jobs such as landscaping, cleaning around the apartments, getting the apartments ready to be shown to potential tenants, and painting a pool at one of the apartment complexes. During the relevant period for purposes of this appeal, Jernigan was employed by Whitaker's, Inc. to work on an apartment project called Jernigan Trail. Jernigan Trail is a twenty-four unit apartment building Whitaker's, Inc. constructed for Whitaker's Trust. Jernigan performed various duties at the job site, including answering the phone, receiving and signing for deliveries sending and receiving faxes, making sure that subcontractors showed up for work, and escorting various county inspectors out to the job site.
On July 8, 1999, Jernigan was injured on this job site while using a lull to unload roof trusses from a delivery truck. Subsequently, Jernigan filed a workers' compensation claim with CompTrust, Whitaker's Inc.'s workers' compensation carrier. CompTrust listed Jernigan as a clerical employee. CompTrust provided workers' compensation benefits to Jernigan; however, upon receiving Jernigan's claim for workers' compensation, CompTrust performed an investigation and determined that Jernigan was either not an employee of Whitaker's, Inc. or had been misclassified as a clerical employee. CompTrust paid Jernigan's workers' compensation benefits and medical treatment under a reservation of rights.”
CompTrust instituted this action, which included both legal and equitable claims, against Whitaker's, Inc. and Whitaker's Trust, seeking to recover funds it paid as a result of Jernigan's workers' compensation claim. The jury returned a verdict in favor of CompTrust and against Whitaker's, Inc. for breach of contract, breach of contract accompanied by a fraudulent act, and negligent misrepresentation. CompTrust was awarded $98, 468.14 for reimbursement of workers' compensation benefits, $120 914.04 in total medical benefits, $15, 952.00 in additional expenses, and $150, 000.00 in punitive damages. The trial court did not submit CompTrust's equitable claims against Whitaker's Trust to the jury. Post trial, the trial court denied Whitaker's, Inc.'s motion for a new trial granted Whitaker's, Inc.'s motion for a new trial nisi (reducing the additional expenses from $15, 952.00 to $4, 074.40), and denied CompTrust's equitable causes of action against Whitaker's Trust. Both parties appeal.
As CompTrust frames the issues, its cause of action against Whitaker's Trust for equitable subrogation turns on whether Whitaker's Trust was either the de facto employer or statutory employer of Jernigan. [3]
Concerning the argument that Whitaker's Trust was the de facto employer of Jernigan, CompTrust cites no authority, case law or otherwise, to support this contention. CompTrust merely refers to various dealings of the Whitakers and concludes that Whitaker's Trust is nothing but a sham.” In the absence of citation to supporting legal authority, we must consider this issue abandoned. See Fields v. Melrose Ltd. P'ship, 312 S.C. 102, 106 n.3, 439 S.E.2d 283, 285 n.3 (Ct. App. 1993) ().
Turning to the statutory employment argument, we concur with the trial court that CompTrust has failed to prove Whitaker's Trust was the statutory employer of Jernigan.
Section 42-1-400 of the South Carolina Code (1976) provides that an owner is liable to a worker of a contractor or subcontractor who is injured while performing or executing any work that is a part of the owner's trade, business or occupation. Specifically, this section states:
When any person, in this section and 42-1-420 and 42-1-430 referred to as owner, ” undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (in this section and 42-1-420 to 42-1-450 referred to as subcontractor”) for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any workman employed in the work any compensation under this Title which he would have been liable to pay if the workman had been immediately employed by him.
S.C. Code Ann. § 42-1-400. Whether a worker is a statutory employee is a question of law for the court. Glass v. Dow Chem. Co., 325 S.C. 198, 202, 482 S.E.2d 49, 51 (1997). Our courts have outlined three factors to consider when determining whether the activity constitutes work which is part of the owner's trade, business, or occupation: (1) whether the activity is an important part of the trade or business, (2) whether the activity is a necessary, essential, and integral part of the trade, business or occupation, or (3) whether the activity has been performed by employees of the employer. Id. at 201, 482 S.E.2d at 50.
The evidence shows Whitaker's Trust hired Whitaker's, Inc. to perform both management and construction duties. The record indicates Jernigan was hired to work mainly in construction, although she also had clerical duties. [4] Jernigan was injured while performing her construction duties. Therefore, the question we must determine is whether Whitaker's Trust was in the trade, business, or occupation of construction. See Harrell v. Pineland Plantation, Ltd., 337 S.C. 313, 322, 523 S.E.2d 766, 771 (1999) ().
The record is not clear on this critical issue. It appears that at the time of Jernigan's injury, Whitaker's Trust owned about one hundred apartment units. We are not certain how many of these units were constructed by Whitaker's Trust. Part of our uncertainty is based on the evasive testimony given by the Whitakers. Nevertheless, we feel it would be inappropriate to speculate by holding that construction was an important or integral part of the business of Whitaker's Trust.
Whitaker's Trust, through its trustees, contracted work out to various professionals. Here, Whitaker's Trust hired Whitaker's, Inc. to build apartments. The evidence establishes that Whitaker's, Inc. employed Jernigan and that Whitaker's, Inc. was in the business of constructing residential dwellings. The record does not establish that Whitaker's Trust was in the construction business; rather, Whitaker's Trust was the legal vehicle for holding title to various properties. It was Whitaker's, Inc. that engaged in the construction and management oversight of the properties. We fully recognize the improper conduct and gamesmanship of Whitaker's, Inc. vis-à-vis its workers' compensation policy with CompTrust, but this nefarious conduct does not warrant the leap that Whitaker's Trust is the statutory employer of Jernigan.
A number of cases applying the Glass factors are analogous to the case at hand. See Wilson v. Duke Power Co., 273 S.C. 610, 616-17, 258 S.E.2d 101, 104-05 (1979) (...
To continue reading
Request your trial