Shell Oil Co. v. Leftwich
| Decision Date | 06 March 1972 |
| Citation | 187 S.E.2d 162,212 Va. 715 |
| Parties | SHELL OIL COMPANY v. Jeffrey Stephen LEFTWICH. SHELL OIL COMPANY v. Linda Susan GARNETT et al. |
| Court | Virginia Supreme Court |
Francis V. Lowden, Jr., Richmond (James A. Harper, Jr., Paul M. Thompson, Hunton, Williams, Gay, Powell & Gibson, Richmond, on the brief), for appellant Shell Oil Co.
James A. Eichner, Richmond (James M. Minor, Jr., Henry H. McVey, III, Allen, Allen, Allen & Allen, Minor, Thompson, Savage, Smithers & Benedetti, McGuire, Woods & Battle, Richmond, on the brief), for appellee Jeffrey Stephen Leftwich.
Henry H. McVey, III, Richmond (James A. Eichner, James M. Minor, Jr., McGuire, Woods & Battle, Allen, Allen, Allen & Allen, Minor, Thompson, Savage, Smithers & Benedetti, Richmond, on the brief), for appellees Linda Susan Garnett.
Before SNEAD, C.J., and CARRICO, GORDON, HARRISON, COCHRAN and HARMAN, JJ.
Shell Oil Company appeals the entry of awards by the Industrial Commission of Virginia following its decisions that Jeffrey Stephen Liftwich and Wayne Eugene Garnett were the statutory employees of Shell, and that an accident which occurred on January 6, 1969, in which Leftwich was injured and Garnett was killed, arose out of and in the course of such employment.
Shell Oil Company was the owner of a service station leased to Vilas G. Robinson trading as Providence Forge Shell Station. Garnett and Leftwich were employed by Robinson. On January 6, 1969 the two employees were on a service call away from the premises of the service station in Providence Forge. They were driving a wrecker truck owned by Robinson. While on this call the employees were struck by a Chesapeake and Ohio Railway train. Garnett was killed and Leftwich was seriously injured.
The facts surrounding the lease agreement between Shell and Robinson were stated in the opinions of the Commission to be as follows:
'In September 1964 Shell and Robinson entered into several written agreements. Shell leased to Robinson land and improvements on Route 60 in Providence Forge, Virginia. By the lease the premises were to be used 'only for the operation of (an) automobile service station thereon, including the retail sale of petroleum products, accessories and minor repair and other services for motor vehicles,' and the station was to be kept open 'for the sale of such products' by Robinson for a specified number of hours each day, except 'those days prohibited by law.' The rent was based upon the volume of gasoline sales.
notice. The contract was nonassignable without the prior written consent of Shell.
'Shell sold to Robinson for $1.00 an illuminated sign displaying the letters, 'Shell,' which sign Shell agreed to install and maintain on the premises.
'Shell leased to Robinson a credit card imprinter to be used by Robinson at the service station only with credit card holders of Shell or such others as Shell authorized in writing.
'Shell granted to Robinson a license to use a program promoting such car maintenance services as Robinson and his employees were qualified to perform; however, there was no qualification certification, and the program 'never got off the ground' and was phased out.
'Shell offered, and Robinson accepted, a procedure termed a 'Meter Reading Price Assistance Plan.' The procedure allowed Shell to provide a 'competitive price allowance' during periods of 'dealer price subnormality.' In common terminology, the procedure allowed Shell to be competitive during so-called gasoline price wars; however, Robinson remained free to establish his own retail price for gasoline.
'Shell has had various games to promote the sale of its products, but Robinson had the choice of participating or not. Robinson elected to participate in some of the games but not all.
'Prior to December 12, 1968 Robinson bought gasoline from Shell pursuant to a consignment-remittance system. After that date Robinson began paying Shell by cash, check, credit cards, or a combination thereof, for the gasoline at the time of delivery of the service station by Shell. Shell, however, retained a security interest in the product.
'It is not contended that Robinson was an employee of Shell, as the common law relationship of master and servant did not exist between him and Shell. We find that Robinson was an independent contractor, not an employee of Shell.
'Robinson was free to hire and fire his employees, to set their pay and hours of work. He withheld taxes and Social Security, and he controlled the manner and means by which his employees performed their work.
'At the service station Robinson sold gasoline, oil, batteries, tires, accessories, and other specialties, and did minor tuneups and road service calls. The station had two bays, a sales room, and four gasoline pumps.
'Robinson sold some products, other than gasoline, not Shell's. Robinson set the prices he charged for products and services, but it was his testimony that Shell had a suggested list price which he followed.
'The wrecker, in which Leftwich (and Garnett) were riding when (Leftwich) was injured (and Garnett was killed), had the Shell emblem and 'Providence Forge Shell' on the door. The wrecker also displayed the sign, 'Allstate Road Service.'
'Shell encouraged the use of a vehicle to answer such service calls as Leftwich (and Garnett) were on at the time (Leftwich was injured and Garnett was killed), and the use of a Shell credit card was acceptable payment for service calls.
'In Shell's Richmond District, which comprises Virginia less the metropolitan District of Columbia area, there are 130 to 140 leased stations such as Robinson's.
The evidence further shows that Shell employs dealer salesmen whose responsibility is to seek out prospective dealers, install them in the stations, counsel with them, collect the rent when due, and generally promote the image of Shell in a given territory.
Gordon C. Goodyear, Jr., sales supervisor for the Richmond district of Shell, described the business that Shell normally operates with its own employees. He said that its geologist located likely places where there might be oil and the company drilled for it; that if oil were found the company's production crews pumped the crude oil out of the ground and it was then moved by tanker, barge or pipeline to the refinery; that its biggest single product is gasoline which was moved from the refinery by tanker, barge or pipeline to bulk plants which are scattered around the United States; and that at its bulk plants Shell has trucks to make delivery to the dealers.
Goodyear testified that when the gasoline goes out to a station and 'we drop it into the ground, the gasoline is invoiced at that point and we pick up credit cards and a check or cash from the dealer'. He testified that Shell does not operate service stations, it does not repair automobiles and it is not in the business of giving road service.
Prior to 1967 it was testified that Shell, on one occasion when left with a vacant station, had conducted a temporary interim operation with its own employees. This practice was discontinued in 1967 and thereafter when Shell was left with a vacant station it would either close the station or install a new dealer. It never used one of its own employees to keep a station operating.
The issue before us is not a novel one. It has been considered by numerous state and federal courts. The decisions vary depending on the language of the statute being construed and the facts in the case under review.
The statute involved here is Code § 65.1--29 which provides:
'Liability of owner to workmen of subcontractors.--When any person (in this section and §§ 65.1--31 and 65.1--32 referred to 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 (in this section and §§ 65.1--31 to 65.1--34 referred to 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 workman employed in the work any compensation under this Act which he would have been liable to pay if the workman had been immediately employed by him.'
The position of Shell is that the long standing rule in Virginia is that the owner becomes liable for workmen's compensation to statutory employees only if by contract he has work performed which work he, the owner, would normally do with his own employees. Shell cites Bamber v. City of Norfolk, 138 Va. 26, 121 S.E. 564 (1924), Perkinson v. Thomas, 158 Va. 699, 164 S.E. 561 (1932), Sears,...
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