A.G. Van Metre, Jr., Inc. v. Gandy

• Decision Date: 20 September 1988
• Docket Number: No. 0698-87-4,0698-87-4
• Court: Virginia Court of Appeals
• Parties: A.G. VAN METRE, JR., INC. and Fireman's Fund Insurance Company v. Henry GANDY, et al. Record

Page 198

372 S.E.2d 198

7 Va.App. 207

A.G. VAN METRE, JR., INC. and Fireman's Fund Insurance Company v. Henry GANDY, et al.

Record No. 0698-87-4.

Court of Appeals of Virginia.

Sept. 20, 1988.

Joseph C. Veith, III (Bromley, Brown & Walsh, Rockville, Md., on brief), for appellants.

Lawrence J. Pascal (Ashcraft & Gerel, Washington, D.C., on brief), for Henry Gandy, appellee.

Robert C. Baker, Jr. (Jeffrey P. Bloom, Friedlander, Misler, Friedlander, Sloan & Herz, Washington, D.C., on brief), for John Driggs Co., appellee.

Stephen W. Robinson (McGuire, Woods, Battle & Boothe, McLean, on brief), for Bob Banks Const. Co. and Commercial Union Ins. Companies, appellee.

Present: BAKER, COLE and DUFF, JJ.

DUFF, Judge.

A.G. Van Metre, Inc. (Van Metre) appeals the decision of the Industrial Commission finding that it was the primary statutory employer of Henry Gandy under Code § 65.1-30 and 65.1-31, and denying it indemnity from the Uninsured Employers Fund, Code § 65.1-149. Van Metre raises various issues in its appeal that will be addressed, in seriatim, to the extent required. After considering the record, authorities cited and the arguments presented, we affirm the opinion of the Industrial Commission.

I.

The following facts contained in the record are relevant to these issues:

Henry Gandy was an equipment operator employed by B & D Excavating (B & D), a sole proprietorship operated by Bob Banks, Jr. B & D was engaged in the business of excavation and hauling. Van Metre is a corporation also engaged in the business of excavation and hauling, as is the John Driggs Company (Driggs).

Van Metre was under contract to supply vehicles and personnel to Driggs, which was working on the National Pension job site in Alexandria, Virginia. In order to supplement its own fleet of vehicles and personnel, Van Metre would often hire owner/operators or companies to assist in its work of excavation and hauling. B & D was on a list of such owner/operators maintained by Van Metre.

The record shows that before claimant's accident on January 16, 1984, B & D had, at Van Metre's request, supplied trucks for Driggs' work sites on December 9 and 15, 1983, and January 5 and 10, 1984. After being requested and directed to do so, the driver would proceed to the appropriate job site. Upon arrival, Driggs' personnel would check the B & D driver into the job site, direct his activities for the remainder of the day, and clock him out at the end of the work shift. B & D would then submit a bill on a weekly basis to Van Metre, who would pay it and rebill Driggs at a higher rate for the use of the vehicle and driver. Van Metre paid for the hired truck and driver only for the hours they were actually at the job site. Van Metre, in turn, was only paid by Driggs for the same time period. The time spent going to and from the site was not billable.

The record contains credible evidence that on January 16, 1984, Van Metre had contracted with B & D for the use of a truck and driver on the Driggs' work site at the National Pension job. Henry Gandy drove the vehicle, a dump truck with a snow plow attachment on the front. The truck became disabled on Interstate 95, and in order to move it, the plow attachment had to be removed. While undertaking this task, the claimant was injured. He secured a favorable award against Van Metre from both the deputy commissioner and the full commission. This appeal followed.

II.

Van Metre's first contention is that the evidence failed to establish that it was the statutory employer of Gandy within the meaning of Code §§ 65.1-30 and 31. Its first argument with respect to § 65.1-30 is that in order to be a "contractor" under the statute, the party involved must have contracted to perform work that was not a part of the regular trade, business or occupation of the party for whom the work was being performed. As Van Metre contracted with Driggs to perform hauling work, since hauling was admittedly a part of the trade, business or occupation of Driggs, Van Metre could not be a "contractor" under Code § 65.1-30.

As to Code § 65.1-31, Van Metre disputes that it could be found liable for payment of compensation as a "subcontractor". Its argument proceeds thus: a "subcontractor" is defined in Code § 65.1-30 as one engaged to perform work by a "contractor"; as there is no "contractor", pursuant to the argument above, Van Metre could not be liable as a subcontractor. These arguments, while ingenious, are flawed. They fail to recognize the purpose behind the statutory employer statutes and the cases that have construed them.

To appreciate the statutory scheme, one must consider Code §§ 65.1-29, 30, and 31 together. Their purpose is to bring within the operation of the Workers' Compensation Act all persons engaged in any work that is a part of the trade, business or occupation of the original party who undertakes as owner, or contracts as contractor, to perform that work, and to make liable to every employee engaged in that work every such owner, contractor or subcontractor above such employee. Sykes v. Stone & Webster Engineering Corp., 186 Va. 116, 122, 41 S.E.2d 469, 472 (1947). As was explained by the Sykes court:

It clearly appears to be the purpose of section 20(a) to bring within the operation of the Compensation Act all persons engaged in any work that is a part of the trade, business or occupation of the original party who undertakes as owner, or contracts as contractor, to perform that work, and to make liable to every employee engaged in that work every such owner, or contractor, and subcontractor, above such employee. But when the employee reaches an employer in the ascending scale, of whose trade, business or occupation the work being performed by the employee is not a part, then that employer is not liable to that employee for compensation under section 20(a). At that point paragraph 5 of section 12 intervenes and the employee's right of action at common law is preserved.

Id. at 122-23, 41 S.E.2d at 472.

Thus, as we view these statutes, it is immaterial that the record does not show the trade, business or occupation of the person with whom Driggs contracted. If it did and the work was part of the business of Gandy's employer, the only effect would be to add another party responsible for paying compensation in the ascending scale. But this would in no way affect Van Metre's liability under Code § 65.1-30 and 31. The commission was faced with three companies, all engaged in the same trade, business and occupation. Driggs contracted with Van Metre to do a part of its work; Van Metre in turn contracted with B & D to do a portion of that work. Thus, Gandy had a right to look up the ascending scale for compensation payments, first from his immediate employer, B & D, then from Van Metre, and next from Driggs. We do not view the concept of "contractor" in Code § 65.1-30 as does Van Metre. When the three statutes are read together, it is clear that liability, as a statutory employer, is imposed on a subcontractor in Van Metre's position in this case. We hold that this was precisely the situation contemplated by the enactment of these statutes, and the commission was correct in finding Van Metre liable for compensation payments to Gandy in the same manner as if Gandy had been Van Metre's direct employee.

III.

Van Metre next contends that it was not Gandy's statutory employer because he was not employed "in the work" at the time of his accident but was engaged in mere preparatory work in order to reach the job site. Van Metre asserts that the commission erred in imposing liability premised on the notion that B & D was in the process of performing the contract between B & D and Van Metre at the time of the injury. We disagree.

While it is true that the method of calculating payment for B & D's work commenced when the truck reached the job site, it does not follow that B & D was operating outside the terms of the contract at the time of the accident. Basic contract principles control here. Van Metre requested that a truck and driver be dispatched to the Driggs' site. Pursuant to this request, B & D directed Gandy to proceed to the site and he was injured enroute. Assuredly, Gandy's accident arose out of and in the course of his employment with B & D. We agree with the commission that his rights as a statutory employee of the party (Van Metre) with whom B & D contracted cannot be defeated by the fact that Van Metre's contractural obligation was conditioned upon arrival at the job site. To hold otherwise would subvert the legislative intent behind these statutes.

We do not find that Burroughs v. Walmont, Inc., 210 Va. 98, 168 S.E.2d 107 (1969), controls the question presented here. In that case, the issue was whether an employee who had accepted compensation benefits from his employer, a trucking company delivering for a material supplier, could bring a common law tort action against the contractor to whom he was delivering material. If the supplier was an "other party" as described in Code § 65.1-40 and 41, the suit could be maintained. If not, then workers' compensation was the only remedy. The holding turned on whether the claimant and the contractor were engaged in the same trade, business or occupation. They were held not to be and the common law action was allowed. In the instant case, however, there is no dispute that all parties involved were in the same trade, business or...