Specialty Employee Leasing v. Davis, 98-3725.

• Decision Date: 07 July 1999
• Docket Number: No. 98-3725.,98-3725.
• Citation: 737 So.2d 1170
• Parties: SPECIALTY EMPLOYEE LEASING and The Zenith Insurance Company, Appellants, v. William DAVIS, Hartley Brothers Construction And Sterling Cooke Insurance Services, Inc., Appellees.
• Court: Florida District Court of Appeals

737 So.2d 1170

SPECIALTY EMPLOYEE LEASING and The Zenith Insurance Company, Appellants, v. William DAVIS, Hartley Brothers Construction And Sterling Cooke Insurance Services, Inc., Appellees.

No. 98-3725.

District Court of Appeal of Florida, First District.

July 7, 1999.

Susan J. Anger of Lore & Anger, P.A., Winter Park, for Appellants.

Dawn M. Ikerd, of Ikerd & Matthews, P.A., Maitland, for Appellant Specialty Employee Leasing, Inc.

David I. Rickey of Morgan, Colling & Gilbert, P.A., Orlando, for Appellee Davis.

Holly A. Davis and Betty D. Marion of McCarty, Keeter, Marion, Davis & O'Connor, P.A., Ocala, for Appellees Hartley

Brothers Construction and Sterling Cooke Insurance Services, Inc.

WEBSTER, J.

In this workers' compensation case, Specialty Employee Leasing (Specialty) and its insurer, The Zenith Insurance Company (Zenith), seek review of an order directing that they provide any benefits to which William Davis might be entitled. They argue that there is no competent, substantial evidence to support the findings that Specialty was Davis' employer at the time of the accident, and that, therefore, Zenith provided workers' compensation insurance for Davis. We agree. Moreover, on the evidence presented, it is clear that Hartley Brothers Construction (Hartley) is responsible for any workers' compensation benefits to which Davis might be entitled. Accordingly, we reverse, and remand.

The evidence presented establishes that, in November 1996, Davis was working for Roland Davidson, a construction subcontractor. Davidson had an employee leasing agreement with Specialty, pursuant to which Specialty agreed to lease employees to Davidson, and to provide employee-related services, including paying workers' compensation premiums. Davis submitted an employment application to Specialty on November 25, 1996. However, he never received a paycheck from Specialty. Rather, he was paid in cash by Davidson.

On December 9, 1996, Davidson and Davis met with the president of Specialty. They discussed Davis resigning from Specialty, starting his own subcontracting business, and signing up as a client company of Specialty. That day, Specialty sent Davis a letter telling him that his employment with Specialty had been terminated, effective immediately, because of his voluntary resignation. On December 13, 1996, Davis signed and mailed to the Division of Workers' Compensation a notice of election to be exempt from the workers' compensation law.

On January 7, 1997, Davis was injured in a work-related accident while working for Davidson on a job for which Hartley was the general contractor. From December 9, 1996, until the date of the accident, Davis worked continuously for Davidson, considering himself an employee of Davidson and receiving his pay directly from Davidson, who was a subcontractor on the Hartley job site. Davis had spoken to a principal of Hartley a couple of weeks before the accident about the possibility of working directly for Hartley, as a subcontractor. He was told that Hartley could not hire him as long as he was employed by Davidson and that, before Hartley would consider hiring him, he would need to have workers' compensation and liability insurance. On the date of the accident, Hartley believed that Davis was working for Davidson, and that he had workers' compensation coverage "through" Specialty.

On December 30, 1996, a principal of Hartley had received a certificate of insurance which reflected that Zenith provided workers' compensation coverage to its insured, Specialty, and that "Roland Davidson [wa]s under agreement with Specialty." He testified that he understood from Davidson that Davidson "ran all of his employees through ... Specialty." Therefore, when he received the certificate of insurance, he believed that Davis had workers' compensation coverage "through" Specialty and Zenith. He never received from Davis a notice of election to be exempt from the workers' compensation law. He said that he would not have allowed Davis to work on the site had he known that Davis did not have workers' compensation coverage. He also testified that Hartley usually checked with Specialty to determine which employees were employed (and, therefore, afforded workers' compensation coverage) by Specialty, but that he could not say whether that had been done in this case.

Davis subsequently filed two petitions seeking, among other things, a determination of compensability of his claim. The first was filed against Hartley and its carrier, Sterling Cooke Insurance Services; and the second was filed against Specialty and Zenith. Hartley and its insurer responded that no benefits were due from any source because Davis had filed a notice of election to be exempt from the workers' compensation law before the accident but that, if benefits were due, they were the responsibility of Specialty and Zenith because Specialty either was Davis' employer or was estopped from denying an employment relationship by virtue of the certificate of insurance that had been provided. Specialty and Zenith responded that they had no responsibility for any benefits because, at the time of the accident, Davis was either an employee of Davidson, who was an uninsured subcontractor of Hartley, or himself an uninsured subcontractor of Hartley.

Following a hearing, the judge of compensation claims entered an order in which he found that Davis was not an independent contractor at the time of the accident; at the time of the accident, Davis was an employee of Davidson, who had consistently paid him directly; prior to the accident, Specialty had forwarded to Hartley a certificate of insurance "indicating that ... Zenith was the carrier for ... Davidson's company"; and "Specialty ... indicated to Hartley ... that there was workers' compensation coverage in effect for ... Davis" while he was working on the Hartley job. Based on these findings, the judge of compensation claims concluded that Davis "should have been considered an employee of Specialty" at the time of the accident, and that Specialty and Zenith were estopped from denying that an employment relationship existed, obligating them to provide workers' compensation benefits to Davis. This appeal follows.

We agree with the finding that Davis was not an independent contractor on the date of the accident. All of the evidence establishes, without dispute, that Davis was employed by Davidson. However, given the undisputed evidence that any relationship Davis might have had with Specialty had been terminated several...