SHERMAN v. LONG
| Decision Date | 12 April 2011 |
| Docket Number | Record No. 1940-10-2,Record No. 1900-10-2 |
| Court | Court of Appeals of Virginia |
| Parties | SHERMAN & SHERMAN PROPERTIES v. PETER L. LONG PETER L. LONG v. SHERMAN & SHERMAN PROPERTIES AND UNINSURED EMPLOYER'S FUND |
OPINION TEXT STARTS HERE
Present: Judges Frank, Beales, and Powell
(Cathleen P. Welsh; Lenhart Obenshain PC, on briefs), for Sherman & Sherman Properties. Sherman & Sherman Properties submitting on briefs.
(Edmund R. Michie, on briefs), for Peter L. Long. Peter L. Long submitting on briefs.
(Thomas G. Bell, Jr.; Timberlake, Smith, Thomas & Moses, P.C., on brief), for Uninsured Employer's Fund. Uninsured Employer's Fund submitting on brief.
Peter Long (claimant) was awarded compensation under the Workers' Compensation Act ("the Act") based on an accident that occurred when he fell from a ladder on April 6, 2006, while he was working for Sherman & Sherman Properties (Sherman Properties). Sherman Properties appeals from the Workers' Compensation Commission's (the commission) opinion, arguing that the commission erred in finding that claimant was an "employee" under the Workers' Compensation Act and in finding that Sherman Properties was an "employer" under the Act. Claimant appeals that portion of the commission's opinion finding that he was not entitled to temporary total disability benefits after August 10, 2007. After reviewing the record and the parties' arguments, we find that the commission did not err on the issues raised by either of the parties in the appeals before us here.
The commission found that claimant was an employee1 of Sherman Properties. Sherman Properties argues that the commission erred because claimant was an independent contractor -not an employee.
Whether a person is an employee under the Act presents a mixed question of fact and law. See Baker v. Nussman & Cox, 152 Va. 293, 298, 147 S.E. 246, 247 (1929). Therefore, while we review the evidence on this issue in the light most favorable to claimant, as the party who prevailed on this issue before the commission, see Uninsured Emplr's. Fund v. Clark, 26 Va. App. 277, 280, 494 S.E.2d 474, 475 (1998), we review the legal principles involved in this assignment of error de novo, see Westgate at Williamsburg Condo. Ass'n v. Philip Richardson Co., 270 Va. 566, 574, 621 S.E.2d 114, 118 (2005).
Sherman Properties owned several pieces of real estate that it either rented or put up for sale. Some of these properties would require maintenance or renovation. Ben Sherman, a partner in Sherman Properties, periodically hired claimant to do various "basic laborer" jobs around the real estate properties owned by the company.
Claimant had previously worked as an hourly employee at another business owned by the Sherman family, W.A. Sherman, Inc. Sherman generally paid claimant at the same hourly wage that W.A. Sherman, Inc., had paid claimant. Sherman paid claimant either in cash or by check drawn on a Sherman Properties account. Claimant testified that the only contract work that he did from Sherman Properties involved the building of a retaining wall, and he received two "contract checks" for that project. Claimant also testified that he never received a 1099 tax form from Sherman Properties until after his workplace accident on April 6, 2006. Sherman Properties could produce only two 1099 forms that allegedly were sent to claimant - a handwritten form for 2005 and a typed form for 2006.
The parties never signed a written contract about their working relationship. At the conclusion of a task, claimant would approach Sherman and tell him how long it took to complete the task. Sherman would occasionally say that the task took too long. In such cases, he would pay claimant less money than was indicated by the actual number of hours that claimant had worked on the job. In his testimony, Sherman did not express any concern about claimant suing him for a breach of a contract as an independent contractor could do.
Sherman checked up on claimant's work and occasionally told him to do the job differently. Although Sherman did not specifically tell claimant how to do his jobs, the nature of his work - digging trenches and cleaning out basements -- did not require much oversight. On occasion, however, Sherman had told claimant that he was doing the task incorrectly and would instruct claimant on how it was supposed to be done. Sherman provided most of the tools and materials for the jobs done by claimant, and he allowed claimant to check out the tools from W.A. Sherman's warehouse in order to complete some tasks. In his work for Sherman Properties, when claimant would complete a task, or be near to completion, Sherman would occasionally ask claimant to begin working on a new task.
The commission found that claimant was an employee engaged in the "usual course of business" for Sherman Properties. Sherman Properties argues that claimant was an independent contractor - not an employee under the Act. We find that claimant was an employee of Sherman Properties.
No "'hard and fast rule'" exists for determining if a person is an employee of a company as opposed to an independent contractor. Creative Designs Tattooing Assocs. v. Estate of Parrish, 56 Va. App. 299, 308, 693 S.E.2d 303, 308 (2010) (quoting Hann v. Times-Dispatch Pub. Co., 166 Va. 102, 105-06, 184 S.E. 183, 184 (1936)). The label that the parties put on their relationship is not controlling. Virginia Employment Comm'n v. A.I.M. Corp., 225 Va. 338, 347, 302 S.E.2d 534, 540 (1983). Instead, four criteria are generally reviewed when a court is asked to determine if a person is an "employee" under the Act: "'(1) [s]election and engagement of the servant; (2) payment of wages; (3) power of dismissal; and (4) the power of control of the servant's action.'" Dillon Constr. & Accident Fund Ins. Co. of Am. v. Carter, 55 Va. App. 426, 430, 686 S.E.2d 542, 544 (2009) (quoting Crowder v. Haymaker, 164 Va. 77, 79, 178 S.E. 803, 804 (1935)) (alteration in original). Virginia courts have held previously that "the [potential] power of control is the determining factor." A.I.M. Corp., 225 Va. at 347, 302 S.E.2d at 539-40. When considering the fact of potential power of control, "the nature of the work" is important. Purvis v. Porter Cabs, Inc., 38 Va. App. 760, 770, 568 S.E.2d 424, 429 (2002).
Here, claimant had previously worked as an employee of another Sherman family business, at the same hourly wage that he worked for Sherman Properties. Ben Sherman checked up on claimant's work and occasionally told him to do the work differently. Although Sherman did not specifically tell claimant how to dig a trench or clean out a basement or rip plaster off a wall, the nature of this work did not require that level of control by an employer. Instead, Sherman Properties controlled claimant's work as it would any other employee doing similar jobs. Sherman Properties provided most of the tools and all of the materials that claimant would need to complete his tasks - either directly or by allowing him to use the tools owned by the family's other business, W.A. Sherman, Inc. The parties did not have a written contract, and Sherman Properties docked claimant's pay unilaterally if the job took more hours than expected. Based on all these facts, viewed in the light most favorable to claimant as the party who prevailed before the commission, we find as a matter of law that, under the Act, claimant was an employee of Sherman Properties - not an independent contractor.
In addition, claimant's work for Sherman Properties was part of the "usual course of business" of that company. Code § 65.2-101(1)(a) (defining "employee" under the Act). Sherman Properties bought and sold real estate, as well as retaining some properties that it rented. Sherman Properties constantly improved the properties that it owned, as evidenced by the number of jobs that claimant and others did for the company over several years. Although Sherman Properties claims it was simply a rental agency, when the evidence is viewed in the light most favorable to claimant, who prevailed on this issue before the commission, the record contains sufficient evidence to conclude that the company was engaged both in renting out properties that it owned and also in renovating and selling properties that it had bought. As renovation was part of the company's usual course of business, and claimant was engaged in the renovation of these properties, he was clearly employed in the "usual course of business" under the Act.2
Ben Sherman and his brother created Sherman Properties in 1990. At the time of claimant's accident in 2006, the company owned approximately sixteen pieces of real estate with thirty-six rental units. The company had previously owned fourteen other properties that it had renovated and then sold. Ben Sherman claimed in his testimony before the deputy commissioner that, by 2006, the company was operating without any employees.
At the time of claimant's accident, the Sherman family also owned W.A. Sherman, Inc., a corporation with more than three employees.3 Sherman Properties continually used W.A. Sherman for a significant portion of the work on its properties. Claimant worked alongside several W.A. Sherman employees while working for Sherman Properties - occasionally helping them with their tasks and occasionally asking for assistance from them. Claimant would use tools provided by W.A. Sherman to perform his work.
W.A. Sherman billed Sherman Properties for work on the properties using the hourly wages of its employees and the material costs of the supplies needed for the work. Sherman Properties also paid W.A. Sherman for doing its administrative work and its accounting. Sherman Properties used W.A. Sherman's...
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