Stephens & Stephens v. Logan

• Decision Date: 28 June 1976
• Docket Number: No. 75--333,75--333
• Citation: 260 Ark. 78,538 S.W.2d 516
• Parties: STEPHENS & STEPHENS and Rockwood Insurance Co., Appellants, v. Emma LOGAN et al., Appellees, and Henry Lee Dunn, Jr., Cross-Appellant.
• Court: Arkansas Supreme Court

Page 516

538 S.W.2d 516

260 Ark. 78

STEPHENS & STEPHENS and Rockwood Insurance Co., Appellants, v. Emma LOGAN et al., Appellees, and Henry Lee Dunn, Jr. Cross-Appellant.

No. 75--333.

Supreme Court of Arkansas.

June 28, 1976.

Rehearing Denied July 19, 1976.

Shackleford, Shackleford & Phillips, El Dorado, for appellants.

William E. Johnson, Hamburg, for Christe Lee Davis and Henry Lee Dunn.

Arnold, Hamilton & Streetman, Crossett, for Rochelle Blankenship & Christy Joy Blankenship.

Switzer & Switzer, Crossett, for Linda Carol Davis.

William E. Johnson, Hamburg, and Joe D. Bridgforth, Crossett, for Emma Logan.

HOLT, Justice.

This is a workmen's compensation case. In October, 1973, Eddie Lee Jackson, Oscar Logan and Elbert Davis were passengers in a pickup truck owned and driven by their employer Rogers Blankenship. Rogers had picked the three men up at their homes and they were on their way to a pulpwood cutting work site when the pickup truck collided with a school bus causing the immediate death of all four men. Rogers had purchased his father's pulpwood business and was supplying pulpwood to Georgia-Pacific through the account of appellant Stephens and Stephens. It is undisputed that at the time of the accident appellant Stephens had workmen's compensation insurance with appellant Rockwood. Numerous claims by the alleged dependents of the decedents were filed with the Arkansas Workmen's Compensation Commission against appellants. ¹ At the request of Rockwood, W. R. Blankenship, father of deceased Rogers Blankenship, and his workmen's compensation insurance carrier, Hartford Insurance Company, were made parties respondent to the claims.

The Commission found that the appellant Rockwood was estopped to deny that it extended workmen's compensation coverage to Rogers Blankenship; Rogers Blankenship was an uninsured subcontractor of Stephens; and all the decedents were statutory employees of Stephens. The Commission also found that Rochelle Blankenship is the widow of Rogers Blankenship and Christie Joy Blankenship is his daugher, who are entitled to benefits; Emma Loan and Christie Lee Davis are not widows within the meaning and definition of the Workmen's Compensation Act and, therefore, are not entitled to benefits; Elbert Davis is survived by his acknowledged, illegitimate daughter, Linda Carol Davis, who is entitled to benefits; and Henry Lee Dunn, Jr., is not the child of Elbert Davis. The Commission further found that none of the claims were barred by the coming and going rule and Hartford Insurance Company had no policy in effect with W. R. Blankenship that extended coverage to the families of any of the decedents.

The circuit court affirmed the Commission's findings except it reversed the Commission's findings that Emma Logan is not the widow of Oscar Logan and Christie Lee Davis is not the widow of Elbert Davis. From this order comes this appeal. Henry Lee Dunn, Jr., cross-appeals from the court's order affirming the Commission's finding that he is not the dependent child of Elbert Davis.

We first consider appellants' contention that there is no substantial evidence to support the Commission's finding that appellees' decedents were not employees of W. R. Blankenship. We do not agree. Appellants recognize that the finding of the Workmen's Compensation Commission will be affirmed if there is substantial evidence to support it. We further observe that in determining if there is substantial evidence to support the factfinder, we need only ascertain that evidence, although contradicted, which is most favorable to the appellee. Thirty Rent-A-Car v. Jeffrey, 257 Ark. 904, 520 S.W.2d 304 (1975). In the present case there is testimony by Rogers Blankenship's father and his wife that Rogers had bought the pulpwood operation from his father in February, 1973, under a rental purchase agreement. By the terms of the agreement, he was paying his father $200 a week on the equipment until a total of $30,000 was paid. Rogers applied for and got a Federal Employer's Identification Number in July, 1973, and began making his own payroll. He hired, fired and supervised the employees in his pulpwood operation. He had employed all three of the individuals who were killed in the truck with him. Edgar Stephens, sole owner of appellant Stephens & Stephens, testified that Rogers Blankenship was one of his pulpwood subcontractors. Stephens stated he knew that Rogers had bought or was buying this equipment from his father because Rogers' mother had so told him (Stephens) about a month before the accident. There is ample substantial evidence that Rogers Blankenship was not his father's employee and at the time of the fatal accident was the employer of the three men who were killed in the truck with him.

Appellants assert that the Commission's finding that they are estopped to deny coverage is not supported by substantial evidence. Appellants argue it is not relevant that Rockwood had consistently paid claims on subcontractors knowing they were subcontractors. We cannot agree.

We deem it necessary to discuss some background facts concerning the pulpwood industry in Ashley County. For at least the last ten years, Georgia-Pacific has purchased pulpwood from only two sources in Ashley County, appellant Stephens and another individual, Marcel Baker. Each was assigned a zone of operation in the county and sometimes a quota. Their subcontractors (such as Blankenship) would cut and deliver pulpwood directly to the Georgia-Pacific mill; however, payment was made either to appellant Stephens or Baker, as the case may be. When Georgia-Pacific paid either appellant Stephens or Baker, it withheld premiums for workmen's compensation insurance from the remuneration due the dealers based on the cords of wood delivered by the subcontractors. Georgia-Pacific would then pay these premiums directly to the Guy Nolley Agency, agent for appellant Rockwood. The dealer would then deduct the premium when he paid the subcontractor. It was estimated that the annual premium for workmen's compensation coverage for forty-two contractors-producers was $215,000.

W. R. Blankenship, Rogers' father, testified that in 1970 he made a verbal contract with appellant Stephens to cut and haul pulpwood to Georgia-Pacific through the Stephens' account. At the time of the initial agreement, Stephens advised him that he would pay him once a week for the wood produced and that workmen's compensation insurance would be deducted from the pay he received. Stephens told him that anyone who worked in connection with the cutting, hauling or loading of the pulpwood was covered under his (Stephens') policy of workmen's compensation insurance. When Blankenship sold the equipment to his son Rogers, he told his son that workmen's compensation insurance premiums were being withheld and Rogers and his men would be covered under Stephens' workmen's compensation policy. Stephens corroborated this understanding by testifying that he told his subcontractors he considered all of them and their employees as his employees for purposes of workmen's compensation coverage. He never made any distinction between the subcontractors and their employees when he reported any injuries to appellant Rockwood. Stephens himself had had no employees since 1964. In other words he carried workmen's compensation with appellant Rockwood for the benefit of his subcontractors and their employees. He considered Rogers Blankenship one of his subcontractors. Rogers' wife testified that when one of Rogers' men was injured, he would be referred to Edgar Stephens who handled the claim for them.

Harry Whatley, the adjuster for Rockwood in southern Arkansas, testified that he did all of the adjusting for Rockwood on the policies of insurance written for Stephens during the past ten to fifteen years. He knew as early as 1968 that Stephens was producing pulpwood exclusively through subcontractors. He said, as far as he was concerned, it didn't make one bit of difference whether the man that got hurt was a subcontractor or a producer or whether he was an employee of a subcontractor, as long as he was hurt while he was working and producing wood for Stephens. When various claim forms were sent to Whatley's office, he would correct them if necessary to show the name of Stephens & Stephens as the employer and listed the subcontractor as foreman.

Dale Schrock, claims supervisor for Rockwood, testified that Rockwood paid claims whether they were subcontractors or employees of subcontractors. As an examiner or claims supervisor, he didn't make any distinction in their status in determining whether or not the claimant was covered. Rockwood had not denied a single claim filed by Stephens until this accident resulting in these death claims. It is undisputed that appellant Rockwood issued workmen's compensation policies to Stephens during the past ten years, accepted premiums thereon, and has consistently paid numerous claims on Stephens' subcontractors and their employees during this time without making any distinction between them. Some of these claims involved three of the four employees who were killed. There is evidence that the subcontractors and their employees were led to believe they had workmen's compensation coverage by what they were told, by the premiums deducted and paid.

The evidence is amply substantial to support the Commission's finding that appellants were estopped to deny coverage. See Phoenix of Hartford v. Coney, 249 Ark. 447, 459 S.W.2d 558 (1970); Hale v. Mansfield Lbr. Co., 237 Ark. 854, 376 S.W.2d 670 (1964), and Stillman v. Jim Walter Corp. 236 Ark. 808, 368 S.W.2d 270 (1963). Consequently, here, we find no merit in appellants' assertion that the Commission's finding that appellees' decedents were statutory employees of Stephens & Stephens is erroneous and unsupported by substantial evidence.

Neither can we agree with appellants' contention that the evidence is insubstantial to support...