Hughart v. Dasco Transp., Inc.

• Decision Date: 04 January 2005
• Docket Number: No. COA03-1295.,COA03-1295.
• Citation: 606 S.E.2d 379,167 NC App. 685
• Parties: Rita Boyd HUGHART, Administrator and Guardian Ad Litem for James Dakota Levi Boyd, Minor Son, and Kristin Nicole Boyd, Minor Daughter, of James D. Boyd, Deceased Employee, Plaintiff, v. DASCO TRANSPORTATION, INC., Employer, and/or Strategic Outsourcing, Inc., Employer, Continental Casualty Company, Carrier, Defendants.
• Court: North Carolina Court of Appeals

606 S.E.2d 379

167 NC App. 685

Rita Boyd HUGHART, Administrator and Guardian Ad Litem for James Dakota Levi Boyd, Minor Son, and Kristin Nicole Boyd, Minor Daughter, of James D. Boyd, Deceased Employee, Plaintiff, v. DASCO TRANSPORTATION, INC., Employer, and/or Strategic Outsourcing, Inc., Employer, Continental Casualty Company, Carrier, Defendants.

No. COA03-1295.

Court of Appeals of North Carolina.

January 4, 2005.

Randy L. Cranford, Thomasville, for plaintiff-appellee.

Wyatt, Early, Harris & Wheeler, L.L.P., by Kim R. Bauman, High Point, for defendant-appellant Dasco Transportation, Inc.

Robinson & Lawing, L.L.P., by Jolinda J. Babcock and Rebecca Miller, Winston-Salem, for defendants-appellants Strategic Outsourcing, Inc. and Continental Casualty Company. GEER, Judge.

Defendants Dasco Transportation, Inc. ("Dasco"), Strategic Outsourcing, Inc. ("SOI"), and SOI's carrier, Continental Casualty Co., appeal from the Full Commission's Opinion and Award requiring them to pay, in equal portions, workers' compensation death benefits as a result of James D. Boyd's death in a motor vehicle accident while delivering furniture for Dasco. Both defendants contend that Boyd was not their employee and that the Commission, therefore, did not have jurisdiction to award benefits. After reviewing the record de novo, as we are required to do with workers' compensation jurisdictional questions, we hold that Boyd was an employee of Dasco at the time of his accidental death, but that he was not an employee of SOI. Accordingly, we reverse that part of the Opinion and Award imposing liability on SOI.

Facts

Defendant Dasco is a North Carolina corporation, specializing in home furniture delivery throughout the southeastern United States. This workers' compensation case involves the death of James Boyd, who was driving a Dasco furniture delivery truck on a delivery trip when he was killed in a motor vehicle accident on 25 June 1999.

Defendant SOI provides administrative services to small and medium-sized companies. Dasco and SOI entered into a service agreement under which SOI, in return for a fee, approved prospective Dasco employees and then handled payroll services and insurance, including workers' compensation insurance, for those employees, called "assigned employees." Dasco was exclusively responsible for managing and supervising the assigned employees. In order to meet its staffing needs, Dasco relied not only on the assigned employees, but also on employees of another trucking company and independent contractors.

On Dasco furniture delivery trips, there would be a "lead driver" and a "helper." In June 1999, Dasco needed a replacement worker to assist lead driver Adam Epperson, an assigned employee, because his regular helper, also an assigned employee, was sick. Scott Shipley, the president of Dasco, asked Mark Hughart, an independent contractor driver for Dasco and Boyd's stepfather, if he knew anyone who could go out on a truck as a helper. After Hughart suggested Boyd, Shipley asked Hughart to bring Boyd in to fill out an application. Although Boyd did not have a commercial driver's license, he had previously worked as a helper and a driver in the in-home furniture delivery business.

Hughart brought Boyd to meet with Shipley. The evidence is disputed as to whether Boyd completed an application for employment. Although Shipley testified that Boyd did not complete an application, Hughart testified — without objection — that Boyd told him that he had filled out an application and Shipley let Epperson, as lead driver, look it over. Epperson said that the application was fine and he would take Boyd. Shipley testified that Boyd was to be paid a flat fee of $350.00 per trip.

Boyd ultimately made two trips with Epperson as Epperson's helper. The role of a "helper" in the home furniture delivery business is to assist the lead driver by helping with the driving and carrying the furniture into the home. Boyd and Epperson made one furniture delivery trip during the week of 14 June 1999 and returned to High Point later the same week. The following week, the two made a second trip, during which the fatal accident occurred.

After Boyd's workers' compensation claim was denied, the case was heard before Deputy Commissioner Bradley W. Houser, who entered an Opinion and Award on 7 January 2002, concluding that Boyd was a joint employee of Dasco and SOI and awarding benefits. Both defendants appealed to the Full Commission. After argument before the Full Commission, defendants were ordered to produce a copy of the agreement between Dasco and SOI and, over SOI's objection, Dasco produced the agreement. On 6 June 2003, the Full Commission affirmed the Deputy Commissioner's Opinion and Award with certain modifications. Defendants gave timely notice of appeal to this Court.

Discussion

"To be entitled to maintain a proceeding for workers' compensation, the claimant must be, in fact and in law, an employee of the party from whom compensation is claimed." Youngblood v. North State Ford Truck Sales, 321 N.C. 380, 383, 364 S.E.2d 433, 437 (1988). An independent contractor is not covered by the Workers' Compensation Act and does not come within the jurisdiction of the Industrial Commission. Id. The claimant has the burden of proving that an employer-employee relationship existed at the time that the injury by accident occurred. Lucas v. Li'l General Stores, 289 N.C. 212, 218, 221 S.E.2d 257, 261 (1976).

The question whether an employer-employee relationship existed is a jurisdictional one, and "the finding of a jurisdictional fact by the Industrial Commission is not conclusive upon appeal even though there be evidence in the record to support such finding." Id. Thus, "[t]he reviewing court has the right, and the duty, to make its own independent findings of such jurisdictional facts from its consideration of all the evidence in the record." Id.

I

Defendant SOI argues that the Commission erred when it found that Boyd was a joint employee of SOI and Dasco and when it concluded that SOI was estopped from denying an employment relationship. We agree that Boyd was not an employee of SOI.

A. The Relationship Between Boyd and SOI

The Workers' Compensation Act defines an employee as "every person engaged in an employment under any appointment or contract of hire or apprenticeship, express or implied, oral or written...." N.C. Gen.Stat. § 97-2(2) (2003). This Court has observed that "it is fundamental that under some circumstances a person can be an employee of two different employers at the same time, in which event either employer or both may be liable for Workers' Compensation." Henderson v. Manpower of Guilford County, Inc., 70 N.C.App. 408, 413, 319 S.E.2d 690, 693 (1984). Joint employment exists "`when a single employee, under contract with two employers, and under the simultaneous control of both, simultaneously performs services for both employers, and when the service for each employer is the same as, or is closely related to, that for the other.'" Id. at 413-14, 319 S.E.2d at 693 (quoting 1C Larson, Workman's Compensation Law § 48.40 (1982)). When joint employment has occurred, both employers are liable for workers' compensation. Id.

Nevertheless, "`joint employment as to one employer cannot be found in the absence of a contract with that employer.'" Anderson v. Texas Gulf, Inc., 83 N.C.App. 634, 638, 351 S.E.2d 109, 111 (1986) (quoting 1C Larson, The Law of Workmen's Compensation § 48.44, pp. 8-531 to 32). This is consistent with the general rule that "[t]he relationship of employer-employee `is essentially contractual in its nature, and is to be determined by the rules governing the establishment of contracts, express or implied.'" Dockery v. McMillan, 85 N.C.App. 469, 473, 355 S.E.2d 153, 155 (quoting Hollowell v. N.C. Dep't of Conservation & Dev., 206 N.C. 206, 208, 173 S.E. 603, 604 (1934)), disc. review denied, 320 N.C. 167, 358 S.E.2d 49 (1987).

We must, therefore, first address the question whether the evidence established that there was a contract, express or implied, between Boyd and SOI. While plaintiff points to evidence that Shipley acted as an agent for SOI in hiring assigned employees and argues that he necessarily was acting as SOI's agent when hiring Boyd, plaintiff's argument overlooks the limits placed on Shipley's authority by the parties' agreement. Paragraph 4.1 of the service agreement between SOI and Dasco provides that no individual shall be hired by SOI until the individual has completed an SOI employment application, the application has been accepted and signed by Dasco and SOI, and SOI has designated the individual as an assigned employee. While the testimony was conflicting as to whether Boyd filled out an application, the record contains no evidence that Shipley ever forwarded any application from Boyd to SOI. Moreover, under the agreement between Dasco and SOI, receipt of an application by Dasco was not enough to create an employee relationship under the service agreement. SOI had to approve the application and receive payroll information before the individual became an SOI employee. SOI offered uncontroverted testimony that SOI received neither an application nor any payroll information regarding Boyd — and indeed was not aware of Boyd's hiring at all.

The only evidence as to any connection whatsoever between SOI and Boyd was that Boyd was supervised by Epperson, who was an assigned employee of SOI. This fact, while relevant to the question whether Boyd was an independent contractor or an employee, does not have any bearing on whether Boyd had entered into a contractual relationship with SOI in the first place.

Accordingly, we find from the evidence that there was no contractual relationship, implied or otherwise, between Boyd and SOI. Since "`joint employment as to one employer cannot be found in the absence of a contract with that employer[,]'" Anderson, 83 N.C.App. at 638, 351 S.E.2d at...