Travelers Ins. Co. v. Workers' Comp. Appeals Bd.

• Decision Date: 12 October 1983
• Citation: 147 Cal.App.3d 1033,195 Cal.Rptr. 564
• Court: California Court of Appeals Court of Appeals
• Parties: TRAVELERS INSURANCE COMPANY, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD of the State of California and Terry Taylor, Respondents. Civ. 22334.

Page 564

195 Cal.Rptr. 564

147 Cal.App.3d 1033

TRAVELERS INSURANCE COMPANY, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD of the State of California and Terry Taylor, Respondents.

Civ. 22334.

Court of Appeal, Third District, California.

Oct. 12, 1983.

Hanna, Brophy, MacLean, McAleer & Jensen, and James R. Missler, Sacramento, for petitioner.

Workers' Compensation Appeals Board and Panattoni, Westley, Farrell & Fraulob, and Edward J. Farrell, Sacramento, for respondents.

BOSKOVICH, Associate Justice. ^*

On May 15, 1981, Terry Taylor (applicant) sustained an injury to his right hip while working. He filed an application for adjudication of claim against Zivan Radin and Travelers Insurance Company, Radin's workers' compensation insurer, seeking workers' compensation benefits on account of his injury. The defendants answered The WCAB judge who presided at the trial evaluated the evidence in light of the factors set out in Labor Code section 2750.5 and found that the applicant was an independent contractor and ordered that he take nothing for his claim. ¹ The Workers' Compensation Appeals Board (board) granted reconsideration and determined that regardless of the weight of the evidence tending to show the applicant was an independent contractor, Labor Code section 2750.5 prohibits a finding of independent contractor status for persons engaged in an activity for which a contractor's license is required unless such person holds a valid contractor's license. ² On review petitioner contends the board erred in its interpretation of Labor Code section 2750.5. ³ We conclude the board correctly construed that section and we affirm its decision.

denying employment and contending the applicant was an independent contractor and not an employee at the time of his injury.

The parties stipulated that the applicant suffered an injury while working for Radin. The only issue tried was employment and the only witnesses were the applicant and Radin.

Prior to May 15, 1981, the applicant received a telephone call from Radin soliciting his services at a construction project in Cameron Park.

Radin hired the applicant to provide excavating services with a tractor/loader applicant owned. Applicant was to grade and level places for a house and barn to be constructed; additionally, he was to remove some large rocks from the construction site. On the third day of work applicant was sitting beneath a tree contemplating where to work next when the tree fell on him.

Radin agreed to pay applicant $50 per hour for his services. Applicant calculated this hourly rate represented $15 an hour for his wages (union scale) and $35 an hour as the cost of his tractor. Applicant belonged to the "Operating Engineers Union." He did not possess a state contractor's license.

Applicant did not have a "fixed project" to complete; Radin "told [him] what ... to do." Radin provided grading stakes to mark where applicant was to grade and directed applicant where to deposit the soil he removed. Radin also told applicant which trees to remove. Applicant felt free to quit at any time; he believed Radin could discharge him at any time. Applicant billed Radin for his two days of completed work; Radin payed him the agreed sum without making any deductions. Applicant held himself out as "Terry Taylor Excavating" and considered himself "self-employed." He had no employees. Radin did not require applicant to work any particular hours.

Prior to his injury applicant applied for a contractor's license; he received it sometime after his injury. He obtained a license because he wanted to change his line of work to paving, which he understood required a license.

Radin considered applicant a self-employed independent contractor . He paid applicant an hourly wage for the hours applicant billed. Radin did not sign a written contract with applicant. Radin considered applicant skilled in excavation; he would describe what needed to be done and, thereafter, applicant was "on his own." Radin is himself a building contractor; in addition to a general contractor's license, he holds a number of specialty licenses.

DISCUSSION

Both parties agree that the primary issue in this proceeding is the proper interpretation of Labor Code section 2750.5.

The first paragraph of 2750.5 establishes a rebuttable presumption that a worker performing services for which a contractor's license is required or performing services for a person who is required to hold such a license is an employee rather than an independent contractor. The statute further provides this presumption may be rebutted by satisfactory proof that: (1) the person has control over achieving a result which is the primary object of a contract; (2) the person is customarily engaged in an independent business; and (3) the person's status as an independent contractor is not a subterfuge to avoid employee status.

The penultimate paragraph provides that in addition to these factors a person performing any services for which a contractor's license is required "shall hold a valid license as a condition of having independent contractor status." We hold this paragraph means that no person who performs any work for which a contractor's license is required shall be found to be an independent contractor unless such person holds a valid contractor's license. This holding comports with the plain meaning of this statute. The Court of Appeal for the Fourth Appellate District recently reached the same conclusion in dictum: "The section [Lab.Code, § 2750.5] also absolutely denies independent contractor status to a person required to have such a license who is not licensed." (Foss v. Anthony Industries (1983) 139 Cal.App.3d 794, 797, 189 Cal.Rptr. 31.)

Petitioner argues that since the first sentence of section 2750.5 establishes a rebuttable presumption, the presumption that an unlicensed person performing contracting services is an employee should be rebuttable by the criteria established by subdivisions (a), (b) and (c) of the statute. This argument ignores the plain meaning of the penultimate paragraph of section 2750.5 which conditions a finding of independent contractor status as to a person performing services for which a contractor's license is required upon possession by that person of a valid license. Petitioner's argument requires this court to...