Georgia Cas. & Sur. Co. v. Rainwater

• Decision Date: 23 May 1974
• Docket Number: No. 48878,Nos. 1,2,3,48878,s. 1
• Citation: 132 Ga.App. 170,207 S.E.2d 610
• Court: Georgia Court of Appeals
• Parties: GEORGIA CASUALTY & SURETY COMPANY et al. v. Leon RAINWATER

Page 610

207 S.E.2d 610

132 Ga.App. 170

GEORGIA CASUALTY & SURETY COMPANY et al. v. Leon RAINWATER.

No. 48878.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

May 23, 1974.

Rehearing Denied June 19, 1974.

Gambrell, Russell, Killorin, Wade & Forbes, Edward W. Killorin, Richard L. Stumm, Atlanta, for appellants.

George & George, William V. George, Forest Park, for appellee.

Syllabus Opinion by the Court

EVANS, Judge.

This is a workmen's compensation case. J. A. Rainwater was a builder of dwelling houses, in which he used subcontractors for each and every item of construction. He employed his brother, Leon Rainwater, to install all roofing. Leon Rainwater did all the work himself. J. A. Rainwater contends he did not have any employees except casual day laborers for some specific job, and that he used subcontractors in erecting his buildings.

Georgia Casualty & Surety Co. issued a policy of workmen's compensation insurance to J. A. Rainwater, doing business as J. A. Rainwater, Builder. The policy provided that the premium to be paid would be determined by the amount of compensation paid by the insured to various classifications of operations, including roofing. The policy also provided for audits of the payroll of J. A. Rainwater from time to time. Georgia Casualty collected the premiums and increased same because of an audit as to the roofing work for which Leon Rainwater was paid. Leon Rainwater was injured thereafter, on the job and applied for workmen's compensation. The insurer defended on the theory that Leon Rainwater was not an employee of J. A. Rainwater, but was an independent contractor.

The testimony before the board shows that J. A. Rainwater's insurance premium was increased and collected by the insurer because of the labor or work performance as to roofing work for which Leon Rainwater was paid (Tr. pp. 33-39).

The insurer is now estopped to contend that Leon Rainwater was not covered by the policy. Under the provisions of Code § 114-607 a policy of workmen's compensation insurance 'shall always first be construed as an agreement to pay compensation.'

'. . . (A)n insurer who issues a policy of compensation insurance to an employer not subject to this Title shall not plead as a defense that the employer is not subject to the Title; and an insurer who issues to an employer subject to this Title a policy of compensation insurance covering an employee or employees ordinarily exempt from its provisions shall not plead the exemption as a defense.' (Emphasis supplied.)

Pasler v. Maryland Casualty Co., 97 Ga.App. 263, 264, 103 S.E.2d 90, 91.

The law further provides that compensation shall be paid 'as if the employer and/or employee was subject to this Title, the policy of compensation insurance constituting a definite contract between all parties concerned.' (Emphasis supplied). New Amsterdam etc. Co. v. Thompson, 100 Ga.App. 677, 680, 112 S.E.2d 273.

But even if the claimant was an independent contractor, since the insurance carrier issued a policy to cover the work to be done by the claimant and others, it is bound by the contract of insurance, and cannot set up as a defense to the claim that claimant was not subject to the Act. Liberty Mutual Insurance Co. v. Henry, 56 Ga.App. 868, 194 S.E. 430. Further, in the Henry case, supra, at page 872, 194 S.E. 430, the contract was held to be a definite contract in favor of such workmen, and was binding on the insurer. This case is similar on its facts to the case sub judice, and must be followed here.

The policy of compensation insurance was issued. Leon Rainwater was covered under the policy by payment of premiums. Leon Rainwater is suing for payment of compensation under a definite contract between all parties concerned, and the insurer is estopped to question whether he is or is not an employee or independent contractor. The workmen's compensation board did not err in holding that the insurer was estopped to deny that Leon Rainwater was an employee. Whether or not he was an independent contractor or employee is a moot question, since the insurer is liable for payment of benefits under the provisions of Code Ann. § 114-406.

Code § 38-114 defines certain acts which constitute an estoppel, among which is 'other admissions upon which other parties have acted, either to their own injury or the benefit of the persons making the admissions.' The insurance company here collected premiums for the remuneration paid by J. A. Rainwater to Leon Rainwater in that it collected premiums based upon the compensation received by Leon Rainwater from J. A. Rainwater, Builders. This was of definite benefit to the insurer. If Leon Rainwater was not an employee, then to require J. A. Rainwater, Builder, to pay premiums based upon the compensation received by Leon Rainwater, was a definite and distinct disadvantage and injury to J. A. Rainwater, Builder. All of the elements of estoppel are present here. Estoppel is abundantly shown in this case against the insurer. The insurer is not allowed to fail to recognize the claimant as one covered under its policy, because it has collected premiums based on his work, and has recognized him as one covered under the policy and as an employee whose pay it has audited and increased its premium as a result of payments to this employee.

Judgment affirmed.

BELL, C.J., and DEEN, QUILLIAN, CLARK, STOLZ and WEBB, JJ., concur.

EBERHARDT and PANNELL, P. JJ., dissent.

PANNELL, Presiding Judge (dissenting).

Mr. Leon Rainwater filed a claim with the State Board of Workmen's Compensation seeking compensation for injury to a foot, suffered when he fell from a ladder. The deputy director of the board held that the claimant was an independent contractor and not an employee. The Full Board of the State Board of Workmen's Compensation reversed the deputy director and awarded compensation benefits, holding that the insurer, having accepted a premium and issued a compensation insurance policy covering Leon Rainwater was estopped from denying that the insured was an employee. The award was affirmed by the Superior Court of Fulton County. From that order and judgment, appellants appeal.

The sole question for resolution in this case is whether the State Board of Workmen's Compensation had jurisdiction to make the award without first finding an employer and employee relationship existed.

The full board, relying on Ga.L.1920, p. 206; 1933, pp. 184, 185 (Code § 114-607) and on decisions of this court in New Amsterdam Casualty Co. v. Thompson, 100 Ga.App. 677, 112 S.E.2d 273; and Pasler v. Maryland Casualty Co., 97 Ga.App. 263, 103 S.E.2d 90, reached the conclusion that the appellants were 'estopped from denying that Leon Rainwater was an employee' and hence, 'the question as to whether or not he was in fact an employee or a sub-contractor is moot . . .' I disagree.

Neither of the above cited cases supports the board's conclusion. In the New Amsterdam case, supra, the evidence disclosed that at the time Mr. Thompson met his death he was and had been a salesman for an employer for some nine or ten years, operating in a territory encompassing some fourteen counties in South Carolina. He worked under a contract entered in Georgia, for an employer whose principal place of business was in Georgia, and his verbally amended contract of employment was not exclusively for services outside the State of Georgia. It was held that the board had jurisdiction. Mr. Thompson, as a salesman, was an employee. Thus, under the facts of that case...