Hopper v. Terry Hunt Const.

• Decision Date: 23 April 2007
• Docket Number: No. 4238.,4238.
• Citation: 646 S.E.2d 162
• Parties: Timothy Mark HOPPER, Employee/Claimant, v. TERRY HUNT CONSTRUCTION, Employer, Uninsured, South Carolina Uninsured Employers' Fund, Kajima USA, Inc., Statutory Employer, and Zurich American Insurance Company, Carrier, Defendants, of whom Kajima USA, Inc., Statutory Employer, and Zurich American Insurance Company, Carrier are Respondents, and South Carolina Employers' Fund is Appellant.
• Court: South Carolina Court of Appeals

646 S.E.2d 162

Timothy Mark HOPPER, Employee/Claimant, v. TERRY HUNT CONSTRUCTION, Employer, Uninsured, South Carolina Uninsured Employers' Fund, Kajima USA, Inc., Statutory Employer, and Zurich American Insurance Company, Carrier, Defendants of whom Kajima USA, Inc., Statutory Employer, and Zurich American Insurance Company, Carrier are Respondents and South Carolina Employers' Fund is Appellant.

No. 4238.

Court of Appeals of South Carolina.

Submitted February 1, 2007.

Decided April 23, 2007.

Rehearing Denied June 28, 2007.

Latonya Dilligard Edwards, of Columbia and Terry M. Mauldin, of Lexington, for Appellant.

Steven M. Rudisill, of Charlotte, for Respondents.

WILLIAMS, J.

The South Carolina Uninsured Employers' Fund (the Fund) appeals the circuit court's reversal of the Appellate Panel of the Workers' Compensation Commission (the Commission). The circuit court found Kajima USA, Inc. (Kajima) and its workers' compensation carrier, Zurich American Insurance Company (Zurich), were entitled to transfer liability to the Fund pursuant to Section 42-1-415 of the South Carolina Code (Supp.2006). The Fund argues the circuit court erred by: (1) concluding Kajima satisfied the requirements of section 42-1-415 to transfer liability; (2) concluding no substantial evidence existed to support the Commission's finding that the certificate of insurance presented to Kajima showed coverage only in Georgia; and (3) relying on our decision in South Carolina Uninsured Employers' Fund v. House, 360 S.C. 468, 602 S.E.2d 81 (Ct.App.2004). We reverse.

FACTS

Timothy Hopper suffered an injury while working for Hunt Construction Company (Hunt) in Greenwood, South Carolina. Hopper sought workers' compensation benefits from Hunt and Kajima. In response, Kajima and Zurich sought to transfer liability to the Fund pursuant to section 42-1-415.

At the time of the accident, Hunt was performing work as a subcontractor for the general contractor Kajima. Both companies are based in Georgia, and at the time of the accident, Hunt did not have workers' compensation insurance coverage in South Carolina. However, prior to Hopper's injury, Hunt presented a certificate of workers' compensation insurance to Kajima.

The single commissioner found Kajima was not entitled to transfer liability to the Fund pursuant to section 42-1-415 and ordered Kajima and Zurich to pay benefits to Hopper. The commissioner reached this conclusion by stating Hunt lacked workers' compensation insurance coverage in South Carolina at the time of the accident and the certificate of insurance Hunt provided to Kajima showed coverage in Georgia but no coverage in South Carolina. Kajima and Zurich appealed this decision to the Commission, which affirmed the single commissioner. Thereafter, Zurich and Kajima appealed to the circuit court.

The circuit court ruled no substantial evidence existed to support the Commission's finding that the certificate of insurance showed coverage only in Georgia. The circuit court determined the Commission erred in its application of section 42-1-415 and concluded Kajima and Zurich were entitled to transfer liability to the Fund pursuant to section 42-1-415. The Fund now appeals the circuit court's rulings.

STANDARD OF REVIEW

The Administrative Procedures Act applies to appeals from decisions of the Commission. Lark v. Bi-Lo, Inc., 276 S.C. 130, 134-35, 276 S.E.2d 304, 306 (1981). In an appeal from the Commission, neither this Court nor the circuit court may substitute its judgment for that of the Commission as to the weight of the evidence on questions of fact, but it may reverse when the decision is affected by an error of law. Corbin v. Kohler Co., 351 S.C. 613, 617, 571 S.E.2d 92, 95 (Ct.App.2002).

"Any review of the [C]ommission's factual findings is governed by the substantial evidence standard." Lockridge v. Santens of Am., Inc., 344 S.C. 511, 515, 544 S.E.2d 842, 844 (Ct.App.2001). "Substantial evidence is evidence that, in viewing the record as a whole, would allow reasonable minds to reach the same conclusion that the full commission reached." Id. at 515, 544 S.E.2d at 844. "The possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Lee v. Harborside Café, 350 S.C. 74, 78, 564 S.E.2d 354, 356 (Ct.App.2002) (internal quotations and citations omitted).

As noted above, an appellate court may reverse the Commission when the Commission's decision is based on an error of law. Corbin, 351 S.C. at 617, 571 S.E.2d at 95. Certain situations involve a mixed question of law and fact. Statutory interpretation is a question of law. House, 360 S.C. at 470, 602 S.E.2d at 82. But whether the facts of a case were correctly applied to a statute is a question of fact, subject to the substantial evidence standard. Bursey v. South Carolina Dep't of Health & Envtl. Control, 369 S.C. 176, 184-85, 631 S.E.2d 899, 904 (2006) (The meaning of a statutory term is a question of law, but whether a gas and electric company's activities met this definition is a question of fact.).

Therefore, the determination of the requirements to transfer liability under section 42-1-415 is a question of law. However, whether Kajima and Zurich met those requirements is a question of fact.

LAW/ANALYSIS

The Fund initially argues the circuit court erred by concluding Kajima satisfied the requirements of section 42-1-415 to transfer liability to the Fund. In other words, the Fund contends the circuit court erred because substantial evidence existed to support the Commission's conclusion that Kajima did not satisfy the requirements under section 42-1-415. However, before we determine the issue of whether Kajima met the requirements of section 42-1-415, we must ascertain what those requirements are.

A. Requirements of section 42-1-415

Section 42-1-415 in pertinent part provides:

(A) [U]pon the submission of documentation to the commission that a ... subcontractor has represented himself to a higher tier ... contractor ... as having workers' compensation insurance at the time the ... subcontractor was engaged to perform work, the high tier ... contractor ... must be relieved of any and all liability.... In the event that [the subcontractor] is uninsured ... the higher tier ... contractor ... shall ... pay all benefits due.... The higher tier ... contractor ... may petition the commission to transfer responsibility for continuing compensation and benefits to the Uninsured Employers' Fund. The Uninsured Employers' Fund shall assume responsibility for claims within thirty days of a determination of responsibility made by the commission.

(B) To qualify for reimbursement ... the higher tier ... contractor ... must collect documentation of insurance as provided in subsection (A) on a standard form acceptable to the commission. The documentation must be collected at the time the ... subcontractor is engaged to perform work and must be turned over to the commission at the time a claim is filed by the injured employee.

If the language in the statute is plain and unambiguous, there is no need to resort to the rules of statutory interpretation. City of Columbia v. Am. Civil Liberties Union of South Carolina, Inc., 323 S.C. 384, 387, 475 S.E.2d 747, 749 (1996). If the terms of the statute are clear, the court must apply those terms according to their literal meaning. Id. Therefore, we must first determine if the language used in section 42-1-415 is ambiguous.

The dispute between Kajima and the Fund arises in their interpretation of the type of documentation required to transfer responsibility for compensation. Kajima ultimately argues as long as a subcontractor provides a general contractor with proof of workers' compensation insurance in any state, the general contractor is relieved of its duty, irrespective of whether the subcontractor has coverage in South Carolina. The Fund argues there must be coverage in South Carolina for section 42-1-415 to apply.

Section 42-1-415 provides the means for a general contractor to shift liability for workers' compensation benefits. To gain this benefit, the subcontractor has to provide the general contractor with "documentation" that shows the former has workers' compensation insurance. § 42-1-415.

"Documentation" is not a defined term in section 42-1-415. However, Regulation 67-415 of the South Carolina Code (Supp.2006) sets out an acceptable way to demonstrate insurance coverage. This regulation provides:

For purposes of Section 42-1-415, the ACORD Form 25-S, Certificate of Insurance, as published by the ACORD Corporation and as issued by the insurance carrier for the insured, shall serve as documentation of insurance. The Certificate of Insurance must be dated, signed, and issued by an authorized representative of the insurance carrier for the insured.

On the surface, it would appear Regulation 67-415 sets out the definition of "documentation." However, our recent decision in Barton v. Higgs, 372 S.C. 109, 641 S.E.2d 39 (Ct.App.2007), is illustrative on this point. In that case, we held Regulation 67-415 describes documentation that is always acceptable. Id. But the Regulation does not set out the only acceptable means to prove coverage. Id.

Because the term is susceptible to at least two different meanings, it is ambiguous. Consequently, we must resort to the rules of statutory construction to ascertain its meaning.

The cardinal rule of statutory construction is to determine and give effect to the intent of the legislature. Charleston County Sch. Dist. v. State Budget & Control Bd., 313 S.C. 1, 5, 437 S.E.2d 6, 8 (1993). Following Kajima's interpretation of the statute would lead to a conclusion that the legislature did not intend.

Kajima's argument stands for the proposition that although a subcontractor does not have workers' compensation insurance in South Carolina, if a subcontractor shows a general contractor...