Vance v. Twin River Homes, Inc., 92-CC-1032

• Decision Date: 11 August 1994
• Docket Number: No. 92-CC-1032,92-CC-1032
• Citation: 641 So.2d 1176
• Parties: James R. (Bobby) VANCE v. TWIN RIVER HOMES, INC., and The Travelers Insurance Company.
• Court: Mississippi Supreme Court

Page 1176

641 So.2d 1176

James R. (Bobby) VANCE v. TWIN RIVER HOMES, INC., and The Travelers Insurance Company.

No. 92-CC-1032.

Supreme Court of Mississippi.

Aug. 11, 1994.

Lawrence W. Rabb, Jr., Palmer Wright & Williamson, Meridian, for appellant.

John S. Gonzalez, Daniel Coker Horton & Bell, Jackson, for appellee.

Before DAN M. LEE, P.J., and McRAE and SMITH, JJ.

DAN M. LEE, Presiding Justice, for the Court:

James R. Vance was injured in an on-the-job construction accident and sought workers' compensation benefits. He appealed to this Court from the judgment of the Lauderdale County Circuit Court which affirmed the Workers' Compensation Commission's denial of workers' compensation benefits to him. We reverse, finding that, as a matter of law, James R. Vance was a statutory employee of Twin River Homes, Inc. We further determine that, on the date of the injury at issue, the workers' compensation insurance policy between the employer, Twin River Homes, Inc. ("Twin River"), and the carrier, The Travelers Insurance Company, was not effectively cancelled pursuant to the terms of Miss.Code Ann. Sec. 71-3-77 (1989); therefore, the on-the-job injury of James R. Vance was subject to coverage by that workers' compensation insurance policy.

I.

The claimant below, appellant and cross-appellee herein, James R. Vance ("Bobby"), filed a petition to controvert a workers' compensation claim on April 28, 1988. Therein, Bobby claimed that he sustained an injury on October 6, 1987, while working on a construction job as a carpenter in Lauderdale County, Mississippi. Bobby also claimed that Twin River, an Alabama corporation licensed to do business in Mississippi, was his employer on the date of that injury.

The employer and carrier answered the petition. The carrier, The Travelers Insurance Company ("carrier"): (a) denied that the relationship of employer and employee existed at the time of the injury; and (b) denied that they were subject to the Mississippi Workers' Compensation Act at the time of the injury, alleging that its workers' compensation insurance policy with Twin River had been cancelled prior to the injury; therefore, the carrier did not have workers' compensation coverage for Twin River in effect at the time of the accident, and, as a consequence, Bobby's injury was not covered under that policy.

On November 15, 1989, a hearing was held before a Workers' Compensation Commission administrative judge. Thereafter, on July 3, 1990, the administrative judge entered an order awarding compensation to Bobby, finding, inter alia, that Bobby:

1) sustained a compensable injury pursuant to the Workers' Compensation Act ("the Act");

2) was a "statutory employee" of Twin River at the time of the injury, and had an average weekly wage of $459.00 at that time 3) was temporarily totally disabled from October 6, 1987, to August 12, 1988, the date he reached maximum medical improvement;

4) suffered a seventy-five percent (75%) "industrial loss" of use of his left arm; and

5) was entitled to permanent partial disability benefits of $140.00 per week, beginning on August 12, 1988, and continuing for a period of 150 weeks.

The administrative judge further found that, since the carrier failed to notify the Workers' Compensation Commission of its proposed cancellation of Twin River's insurance policy, as required by Miss.Code Ann. Sec. 71-3-77 (1989), the carrier's insurance policy had not been effectively canceled prior to the time of the injury. Therefore, the carrier's policy provided workers' compensation coverage to Twin River and, as a consequence, to Bobby, on the date of the injury.

The carrier and Twin River appealed to the full Commission and Bobby cross-appealed for an award of penalties pursuant to Miss.Code Ann. Sec. 71-3-37(5) (1972). The Commission denied Bobby's claim, reversing in part, and affirming in part, the order of the administrative judge which awarded benefits to Bobby. Although the Commission affirmed the administrative judge's order, insofar as it found that the carrier's workers' compensation insurance coverage was in force on the date of Bobby's injury, the Commission reversed that part of the administrative judge's order which found that Bobby was a "statutory employee" of Twin River. Instead, the Commission determined that Bobby was an "independent contractor," thus not afforded the benefits of the Act or the workers' compensation policy covering Twin River and its employees.

Bobby appealed the Commission's denial of compensation benefits to the Lauderdale County Circuit Court, focusing on the finding of the Commission that he was an "independent contractor" and not a "statutory employee." The carrier cross-appealed the issue of the ineffective cancellation of the workers' compensation insurance policy by the carrier and the consequent finding of the existence of insurance coverage on the date of Bobby's injury.

The circuit court judge for Lauderdale County, Mississippi, entered an order on the matter on September 29, 1992. There, the judge affirmed the denial of compensation benefits, affirming that part of the Commission's Order which found that Bobby was not a statutory employee of Twin River. Further, the circuit court judge stated that, since it had affirmed the Commission's determination that Bobby was not a statutory employee of Twin River, the circuit court "finds it unnecessary to rule on the issue of coverage contained in issue number two (2) [cancellation of the workers' compensation insurance policy]. The Court therefore preserves the Carrier/Appellee and Cross-Appellant's Assignment of Error on this issue in the event of an appeal from this Order."

Aggrieved, Bobby appealed to this Court, assigning the errors below:

1. The Circuit Court erred in denying compensation benefits to the Claimant.

2. The finding and award of the Commission as affirmed by the Circuit Court is contrary to law.

3. The finding and award of the Commission as affirmed by the Circuit Court is against the overwhelming weight of the evidence and is not supported by substantial evidence.

4. The Circuit Court Judgment erred in failing to apply the law to the facts as developed in the record.

5. The Commission and the Circuit Court erred in failing to find that the Carrier and Employer were estopped to deny compensation coverage to this Appellant.

6. The Circuit Court erred in not reversing, as a matter of law, the Compensation Commission when it found that James R. Vance was not a "statutory employee" of a subcontractor.

7. The Circuit Court erred in failing to reverse the Commission in the Commission's interpretation of Section 71-3-7(d) as that section applied to the language of The Travelers Insurance Company's workers' compensation policy in evidence in this lawsuit.

* * * * * *

8. The Circuit Court erred in failing to apply the legislative presumption that when Section 71-3-7(d) comes into play it is presumed that a worker would elect to be covered when the coverage is a matter of law and not a matter of contract. Therefore, while Claimant denies that he was a partner with his father at this time in this specific work on this specific building, even if he were a partner, he would be a working partner, and the beneficit[sic] policy of this Act would imply coverage, rather than no coverage.

9. The Circuit Court erred in not reversing the Commission and reinstating the Administrative Law Judge's finding that the Claimant was a "statutory employee" and such finding is supported by the overwhelming weight of the evidence in the record. Such finding would give effect the beneficit[sic] purpose of the Act and a fair construction to the facts of this case as required by the Mississippi Workers' Compensation Act.

... [W]hen the full facts are weighed against the requirements of the statute, there is no substantial evidence supporting a denial of an award to the Claimant.

The carrier, The Travelers Insurance Company, cross-appealed, basically asserting that the workers' compensation policy between it and Twin River was properly terminated prior to the date of the injury to Bobby; therefore, even if Bobby was considered a statutory employee of Twin River, the workers' compensation policy would not cover Bobby's injury.

II.

At the time of the hearing before the administrative judge, Bobby was a left-handed carpenter of thirty-four (34) years of age who had worked all of his adult life as a carpenter for his father. On October 6, 1987, the date of the injury, Bobby was working as a carpenter, framing a house in Lauderdale County, Mississippi. The house had been pre-sold to a gentleman named Gary Street, and was being constructed by Twin River, as general contractor. Bobby's father, James William Vance ("James"), had been contacted earlier by Twin River and asked to perform the framing services on three houses in Lauderdale County on which Twin River was the general contractor. James had accepted the offer, and the house on which Bobby was working was the third of the three houses which were being built by Twin River.

On the day of his injury, Bobby was decking the roof when a board on which he had placed his weight loosened, causing him to fall. As a result of the fall, he sustained injuries to his left arm and his left shoulder. Bobby went to the doctor for treatment that day and later notified a Twin River agent of his injury.

Bobby suffered a mild separation of his left shoulder and a partially torn left rotator cuff in the fall. The doctor did not suggest surgery, but ordered more conservative therapy. Nevertheless, the extent of Bobby's injuries prevented him from returning to work as a carpenter because he had difficulty raising his arms over ninety (90) degrees, making it difficult for him to perform the repetitive tasks of a carpenter, such as sawing or hammering. Bobby's doctor stated that, "medically," Bobby had a ten percent (10%) permanent impairment to his left shoulder and that...