Jeffreys v. Uninsured Employer's Fund

• Decision Date: 14 February 2019
• Docket Number: Record No. 171467
• Parties: Charlie JEFFREYS v. The UNINSURED EMPLOYER’S FUND, et al.
• Court: Virginia Supreme Court

823 S.E.2d 476

Charlie JEFFREYS

v.The UNINSURED EMPLOYER’S FUND, et al.

Record No. 171467

Supreme Court of Virginia.

FEBRUARY 14, 2019

James B. Feinman (James B. Feinman & Associates, on briefs), Lynchburg, for appellant.

Matthew J. Griffin (Midkiff, Muncie & Ross, on brief), Roanoke, for appellee The Uninsured Employer's Fund.

No brief filed by appellees Mount Lebanon Missionary Baptist Church, Harvey School Historical Society and Annie L. Mosby.

PRESENT: All the Justices

OPINION BY JUSTICE D. ARTHUR KELSEY

Charlie Jeffreys was injured while renovating a historic school building. The Virginia Workers’ Compensation Commission denied his claim for benefits against a church and a historical society, which Jeffreys had alleged were his statutory employers. The Court of Appeals affirmed. On appeal to us, Jeffreys argues that the Court of Appeals erred in affirming the Commission’s decision not to award him benefits. We disagree.

I.

A.

By statute, determinations of the Commission "shall be conclusive and binding as to all questions of fact." Code § 65.2-706(A). Consequently, on appeal, "we do not retry the facts before the Commission nor do we review the weight, preponderance of the evidence, or the credibility of witnesses." Caskey v. Dan River Mills, Inc. , 225 Va. 405, 411, 302 S.E.2d 507 (1983). "If there is evidence or reasonable inference that can be drawn from the evidence to support the Commission’s findings, they will not be disturbed by this Court on appeal, even though there is evidence in the record to support contrary findings of fact." Id. This deference to the Commission’s factfinding necessarily requires that we, as well as the Court of Appeals, construe the evidence in the light most favorable to the prevailing parties before the Commission. See Rodriguez v. Leesburg Bus. Park, LLC , 287 Va. 187, 193, 754 S.E.2d 275 (2014) ; R & T Invs., Ltd. v. Johns , 228 Va. 249, 253-54, 321 S.E.2d 287 (1984).

B.

The Harvey Colored School ("the School") is a small building where African-American students in Pittsylvania County were educated from approximately the 1880s to the mid-1900s. About 15 former students and interested individuals, led by Annie Mosby, formed the Harvey School Historical Society ("the Historical Society")¹ "to restore the school to its original condition" and to register it as a historical site. 2 J.A. at 804. The Historical Society operated as a non-profit organization. Its mission was "to purchase, restore, preserve, and maintain the Harvey Colored School as a historical site." Id. at 801-02. Mosby lived in California and directed the Historical Society’s activities from there.

Seeking tax-exempt status, the Historical Society became an "auxiliary" of the Mount Lebanon Missionary Baptist Church (the "Church") in 2003. Id. at 800, 811-12, 817-18. The record is unclear regarding the precise nature of this informal relationship. Practically speaking, however, the relationship appears merely to have allowed the Historical Society to meet in the Church building. The Church provided no financial support to the Historical Society, and the two entities maintained separate bank accounts. The Church neither participated in the decisions that the Historical Society made nor exercised any control over the Historical Society.

In 2012, Mosby entered into an agreement with William Johnson, an unlicensed contractor, to relocate and renovate the School. Having no construction experience, Mosby relied entirely on Johnson to plan and perform the renovation. While she was briefly present on site at the beginning of the project, Mosby lived in California and did not exercise any control over Johnson or over any aspect of his working conditions. Johnson initially worked with one other individual on the job, but he later asked Mosby for permission to hire Jeffreys as well. Mosby agreed. Johnson was the "boss" on the job, id. at 522, 700, and exclusively managed Jeffreys on the worksite. Johnson kept records of Jeffreys’s work hours and reported them to Mosby for payment. Mosby never met Jeffreys and did not know his name prior to his injury.

While working for Johnson, Jeffreys was badly injured when a beam fell from the roof of the school building and struck him on the neck. He filed a claim for workers’ compensation benefits against Mosby, the Church, and the Historical Society — but not against Johnson. Because none of the defendants had workers’ compensation insurance, the Uninsured Employer’s Fund ("UEF") was also made a party. Jeffreys argued that Mosby, the Church, and the Historical Society were his direct employers and thus owed him compensation. In the alternative, Jeffreys contended, each defendant was his statutory employer pursuant to Code § 65.2-302 because he had been performing work within their trade, business, or occupation.

A deputy commissioner agreed that Jeffreys had been the direct employee of the Historical Society as well as Mosby, who was acting as the Historical Society’s "agent," and that the Historical Society was in turn "a part of the Church, making the Church an employer of" Jeffreys as well. 2 J.A. at 879-81. The deputy commissioner entered an award against the Church. The full Commission disagreed in part, holding that Mosby was not Jeffreys’s direct employer because she had lacked any meaningful control over his work or over how he performed it. However, the Commission affirmed the deputy commissioner’s award against the Church because no party had appealed that decision.

The Court of Appeals affirmed the Commission’s finding that Mosby was not Jeffreys’s direct employer, reversed the Commission’s finding that the UEF had waived its argument regarding the Church and the Historical Society, and remanded the case for further factfinding. See Uninsured Emp’r’s Fund v. Jeffreys , Record No. 1676-15-3, 2016 WL 1637823, at *6 (Va. Ct. App. Apr. 26, 2016) (unpublished). On remand, the Commission held that "there was insufficient evidence to conclude the Historical Society and the Church were the claimant’s employer." 2 J.A. at 1034. Neither had exercised any control over Jeffreys. Instead, Johnson had "recruited" Jeffreys, had told Jeffreys "what to do each day, [had] kept track of his hours and [had been] the ‘boss’ on the project." Id. at 1035. Moreover, the Commission added, "Johnson was not an employee of Mosby either." Id. Johnson "was free to adopt the methods he needed to accomplish the result" and to decide "what materials were needed." Id. Johnson was, at most, "an independent contractor," id. at 1036, and thus, Jeffreys, who worked under Johnson, could not have been a direct employee of any of the individual defendants.

Having held that none of the three individual defendants were Jeffreys’s direct employer, the Commission turned to the statutory-employer argument. "There is no evidence the Church and Historical Society were in the construction business," the Commission stated, "[h]ence there is no statutory employer situation at issue here." Id. Jeffreys appealed again to the Court of Appeals, which affirmed the Commission’s decision.

II.

On appeal to us, Jeffreys contends that the Court of Appeals and the Commission erroneously held that the Church and the Historical Society were not his statutory employers. We disagree.

A.

The Workers’ Compensation Act requires an employment relationship of some kind to exist between a claimant and the party allegedly liable for compensation. The usual scenario is a true employer-employee relationship in which the employer controls the employee’s jobsite conditions, employment tasks, and working hours. In 1991, however, the General Assembly enacted Code § 65.2-302, which created a new category of employment relationship called "Statutory employer." In relevant part, that section provides:

A. When any person (referred to in this section 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 (referred to in this section 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 worker employed in the work any compensation under this title which he would have been liable to pay if the worker had been immediately employed by him.

B. When any person (referred to in this section as "contractor") contracts to perform or execute any work for another person which work or undertaking is not a part of the trade, business or occupation of such other person and contracts with any other person (referred to in this section as "subcontractor") for the execution or performance by or under the subcontractor of the whole or any part of the work undertaken by such contractor, then the contractor shall be liable to pay to any worker employed in the work any compensation under this title which he would have been liable to pay if that worker had been immediately employed by him.

C. When the subcontractor in turn contracts with still another person (also referred to as "subcontractor") for the performance or execution by or under such last subcontractor of the whole or any part of the work undertaken by the first subcontractor, then the liability of the owner or contractor shall be the same as the liability imposed by subsections A and B of this section.

Code § 65.2-302(A)-(C). See generally Lawrence J. Pascal, Virginia Workers’ Compensation Law and Practice § 2.08[3][a]-[b], at 2-35 to -39 (4th ed. 2011).²

Subsection A addresses the scenario in which "any person" contracts with an independent contractor to perform work within the "trade, business or occupation" of that "any person." Code § 65.2-302(A). This situation often occurs when a business outsources its own unique "trade, business or occupation," id. , to an independent contractor, for example, when a roofing company hires an independent contractor to repair a roof. In these situations, we have applied what...