Lawrence v. Atlanta Door Co.

• Decision Date: 12 July 1984
• Docket Number: No. 68681,68681
• Citation: Lawrence v. Atlanta Door Co., 320 S.E.2d 627, 171 Ga.App. 741 (Ga. App. 1984)
• Parties: LAWRENCE v. ATLANTA DOOR COMPANY et al.
• Court: Georgia Court of Appeals

Page 627

320 S.E.2d 627

171 Ga.App. 741

LAWRENCE v. ATLANTA DOOR COMPANY et al.

No. 68681.

Court of Appeals of Georgia.

July 12, 1984.

Rehearing Denied July 24, 1984.

Thomas E. Raines, Gerald B. Kline, Atlanta, for appellant.

Warner R. Wilson, Jr., Kent Murphy, Theresa S. Barnes, Atlanta, for appellees.

DEEN, Presiding Judge.

Appellant Lawrence, president of appellee Atlanta Door Co. (Atlanta Door) and owner of more than half of the company's stock, sustained a broken leg while engaged in activity related to his job. The issue on appeal is not whether a job-related injury occurred, but (1) whether appellant, as president and majority stockholder, comes within the statutory definition of "employee" (OCGA § 34-9-1) so as to qualify for compensation under the Workers' Compensation Act, and (2) whether, regardless of claimant/appellant's status as employee vel non, Atlanta Door's workers' compensation carrier, appellee Nationwide Mutual Insurance Co. (Nationwide), is estopped to deny coverage after having issued a policy the premium for which was calculated on the basis of all salaries paid by the company, including that of appellant.

In addition to serving as Atlanta Door's president and holding a majority of its stock, appellant was also a salesman for the company and its general manager, his duties including, inter alia, the hiring of other salesmen. His brother, who owned approximately one-fourth of the firm's stock, hired and fired shop and field personnel and also did work in the field. In the fall of 1979 Nationwide issued to Atlanta Door an insurance policy which contained no language or attachments excluding company officers, or anyone else, from workers' compensation coverage. Appellant testified that the policy was intended expressly to cover himself and his brother as well as other employees, in view of the fact that the two of them from time to time performed work that would subject them to risk of injury. Nationwide's agent, who had designed and sold the policy, corroborated appellant's testimony as to this intention. The agent further testified that the salaries of all Atlanta Door personnel, including appellant, were initially factored into the calculation of the premium, and that subsequent audits, conducted for the purpose of determining whether premium adjustments were necessary, also included appellant's salary in the recalculation of the premium. The agent also corroborated appellant's testimony that he had not been asked to execute any form excluding himself from the policy's coverage.

After he was injured on January 21, 1981, Lawrence filed a worker's compensation claim. On the following February 4, Nationwide filed a notice to controvert the claim, stating that the policy had been canceled on December 1, 1980; an amended notice to controvert, filed April 14, 1981, added as a ground Lawrence's alleged non-employee status. Neither Atlanta Door nor Nationwide's agent was notified of the purported cancellation until February 4, 1981; in fact, on December 15, 1980, Nationwide had sent to Atlanta Door a routine "Record of Payment" statement showing the status of premiums paid and those due currently and in the future. Atlanta Door's check in payment of the current premium was dated December 31, 1980, and cleared the bank January 5, 1981. The agent received a routine notice on January 8, 1981, reflecting all premium payments credited through December 31, 1980.

After a hearing held April 22, 1981, an administrative law judge (ALJ) awarded payment of all previously incurred medical expenses and authorized payment of expenses for reasonable and necessary future treatment. The Full Board affirmed and adopted the ALJ's award, holding that appellees were estopped to deny coverage. The Board also awarded attorney fees. On appeal the DeKalb County Superior Court, relying on Denis Aerial Ag-Plicators v. Swift, 154 Ga.App. 742, 269 S.E.2d 890 (1980), reversed the award and held that appellant was not an employee within the meaning of OCGA § 34-9-1(2) (Code Ann. § 114-101(2)), and that appellee was not estopped to deny coverage. Lawrence appeals, enumerating as error the superior court's reversal of the Board's award, alleging that the court erred in concluding as a matter of law that appellant was not an employee and that the insurer was not estopped to deny coverage; in denying attorney fees; in misapplying to the instant case Denis Aerial Ag-Plicators v. Swift. Appellant further asserts that the superior court's ruling and conclusions are not supported by the facts of the case. Held:

1. The workers' compensation statute in effect at the time of appellant's injury, Ga.Code Ann. § 114-101 (OCGA § 34-9-1), is silent as to whether a person like appellant, who is an officer and/or principal stockholder in a firm is covered under a workers' compensation insurance policy issued...