Voss v. Ramco, Inc., 2627

• Decision Date: 04 December 1996
• Docket Number: No. 2627,2627
• Citation: 482 S.E.2d 582,325 S.C. 560
• Court: South Carolina Court of Appeals
• Parties: David G. VOSS, Claimant, Respondent, v. RAMCO, INC., Employer, and U.S. Fidelity & Guaranty Co., Carrier, Appellants. . Heard

Page 582

482 S.E.2d 582

325 S.C. 560

David G. VOSS, Claimant, Respondent, v. RAMCO, INC., Employer, and U.S. Fidelity & Guaranty Co. Carrier, Appellants.

No. 2627.

Court of Appeals of South Carolina.

Heard Dec. 4, 1996.

Decided Jan. 27, 1997.

Rehearing Denied March 20, 1997.

Certiorari Granted Oct. 10, 1997.

David Hill Keller, of Haynsworth, Marion, McKay & Guerard, Greenville, for appellants.

J. Marvin Mullis, Jr., Columbia, for respondent.

HOWELL, Chief Judge:

Respondent David G. Voss (Voss) filed a workers' compensation claim in connection with an injury he suffered in Washington state. Ramco, Incorporated (Ramco) denied liability, alleging that the South Carolina Workers' Compensation Commission (the Commission) lacked subject matter jurisdiction over Voss's claim. The single commissioner found for Voss, and Ramco appealed to the full Commission. A three member panel affirmed the Commissioner's decision. Ramco appealed to the circuit court, which affirmed the Commission's ruling. Ramco now appeals the circuit court's decision. We affirm.

I.

Bobby Hawkins (Hawkins) owns Ramco, a company that manufactures small industrial equipment. Ramco is located in Travelers Rest, South Carolina. Bobby Jones (Jones) owns NATCO, also located in Traveler's Rest, a company that sells the equipment manufactured by Ramco. According to Jones, NATCO is not incorporated but, instead, is simply the name under which he presently conducts business.

Voss, a Texas resident, was hired by Jones in Dallas to be a member of Jones's traveling sales force that went from city to city selling Ramco equipment by the pick-up truckload. ¹ Under the arrangement between Ramco and NATCO, Ramco would deliver its equipment to the city in which Jones and his sales force were located. In each city, Jones would hold a breakfast meeting with the sales crew of twelve to fifteen persons to plan the sales strategy. At the meeting, Jones would present a map of the city divided into sections, and each salesperson would sign up to cover a particular section. The salespersons were expected to call on all appropriate businesses within their section. Hawkins or his representative often attended and took part in the sales meetings.

Jones trained his salespersons to use a standard "sales pitch" when selling the Ramco equipment. As part of the standard routine, the salesperson would show to a prospective customer paperwork indicating the value of the truckload of equipment was approximately $15,000. The salesperson explained to the customer that, in order to avoid shipping the equipment back to South Carolina, he was authorized to sell the equipment at a good price. If the customer made an offer on the equipment, the salesperson would generally then call Larry Masters (Masters), a Ramco employee in South Carolina. Masters's role was to increase the price paid for the equipment and verify to the customer that the equipment was not stolen. ² In this capacity, Voss called Ramco's office in South Carolina at least two to five times a day. As long as the sales price was more than the cost of the equipment, the salesperson did not need authorization for any sale. Voss sold equipment below his cost between one and ten times. Voss testified that, for new salespersons, Ramco guaranteed that if they called Ramco with an offer of $750 or more three times a day, five days a week, Ramco would give them $1,000 if they did not make a sale that week.

Generally, the cost to the salesperson for each truckload of equipment was between $2100 and $2500. When the equipment was sold, the salesperson paid this amount to Jones and kept for himself the difference between the cost and ultimate sales price. Jones then took his predetermined share and forwarded the balance to Ramco. If Voss was paid in cash, he simply passed payment down the line to Ramco through Jones. If he was paid by check made payable to Ramco, he was furnished an identification card that authorized him to cash it. If he could not cash the check, he forwarded the check to Ramco, and Ramco remitted the funds down the line. Lastly, if a purchase order was issued, it was sent to Ramco and payment was made by Ramco to Voss and Jones.

During his employment, Voss worked in many states, primarily in the western part of the United States. Voss never sold equipment in South Carolina and made only one trip to South Carolina to pick up equipment.

II.

Ramco raises two issues on appeal: whether Voss is a statutory employee under the Act, and whether Voss is entitled, pursuant to S.C.Code Ann. § 42-15-10 (1985), to file a workers' compensation claim in South Carolina. Because both issues are jurisdictional, see Adams v. Davison-Paxon Co., 230 S.C. 532, 543, 96 S.E.2d 566, 571 (1957) (whether a worker is a statutory employee is a jurisdictional inquiry to be resolved by the court); Moore v. North American Van Lines, 310 S.C. 236, 423 S.E.2d 116 (1992) (treating as jurisdictional an inquiry into whether the claimant satisfied the requirements of section 42-15-10), this Court has the "power and duty to review the record and decide the issue in accordance with the preponderance of the evidence." Kirksey v. Assurance Tire Co., 311 S.C. 255, 256, 428 S.E.2d 721, 722 (Ct.App.1993), aff'd, 314 S.C. 43, 443 S.E.2d 803 (1994); accord Brown v. Moorhead Oil Co., 239 S.C. 604, 124 S.E.2d 47 (1962). Although doubts about jurisdiction are resolved in the claimant's favor in accordance with the inclusive purposes of the Act, this Court is bound by the Act as written and does not have the power to expand the jurisdictional reach of the Act. Brown, 239 S.C. at 607, 124 S.E.2d at 49.

A.

Coverage under the Workers' Compensation Act is generally dependent on the existence of an employer-employee relationship. McDowell v. Stilley Plywood Co., 210 S.C. 173, 182, 41 S.E.2d 872, 876 (1947) ("In the absence of a statutory provision to the contrary, an injured person who is not an employee, but an independent contractor for the work, is not within the scope of a compensation act."); McLeod v. Piggly Wiggly Carolina Co., 280 S.C. 466, 469, 313 S.E.2d 38, 39 (Ct.App.1984) ("No award under the Workers' Compensation Law is authorized unless the employer-employee or master-servant relationship existed at the time of the alleged injury for which claim is made."). However, under certain circumstances, the Act also imposes liability on an employer or business owner for the payment of compensation benefits to a worker not directly employed by the employer:

When any person, in this section and §§ 42-1-420 and 42-1-430 referred to as "owner," undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (in this section and §§ 42-1-420 to 42-1-450 referred to as "subcontractor") for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any workman employed in the work any compensation under this Title which he would have been liable to pay if the workman had been immediately employed by him.

S.C.Code Ann. § 42-1-400 (1985). Thus, depending on the nature of the work performed by the subcontractor, an employee of a subcontractor may be considered a statutory employee of the owner or upstream employer.

Ramco argues that, as to it, Voss was an independent contractor, not an employee. This argument, however, is irrelevant to the question of whether Voss is a statutory employee of Ramco. Section 42-1-400 extends workers' compensation coverage to an injured "workman" of a subcontractor performing work which is part of the owner's trade, business, or occupation. As used in section 42-1-400, "workman" is synonymous with "employee." McDowell, 210 S.C. at 182, 41 S.E.2d at 876. Thus, section 42-1-400 imposes liability on an upstream employer if the injured worker is an employee of the subcontractor, but not if the worker is an independent contractor of the subcontractor. Neese v. Michelin Tire Corp., 324 S.C. 465, ----, 478 S.E.2d 91, 97 (Ct.App.1996); see also McDowell, 210 S.C. at 183, 41 S.E.2d at 876 (reversing award of workers' compensation benefits because the injured worker was an independent contractor of subcontractor rather than employee of subcontractor). "The fact that the subcontractor, and, by extension, the subcontractor's employees, may be independent contractors as to the upstream employer does not preclude the application of section 42-1-100." Neese, 324 S.C. at ----, 478 S.E.2d at 95; accord Bridges v. Wyandotte Worsted Co., 243 S.C. 1, 10-11, 132 S.E.2d 18, 22 (1963) ("Once it is established that the work being done by the subcontractor was a part of the general business of the owner within the meaning of [the precursor to 42-1-400], even though the subcontractor might occupy the status of an independent contractor, the employees of the subcontractor so engaged are limited ... to the exclusive remedy of the Workmen's Compensation Act.") (emphasis added); Murray v. Aaron Mizell Trucking Co., 286 S.C. 351, 355, 334 S.E.2d 128, 130 (Ct.App.1985) (Under section 42-1-400, any contractor for whom a subcontractor undertakes to perform a part of the contractor's trade, business or occupation is liable to pay compensation benefits to an injured employee of the subcontractor in the same manner as if the employee had been employed by the principal contractor, even if the employee's immediate employer is also an independent contractor). Accordingly, the nature of Voss's and Jones's relationship with Ramco is not relevant to the statutory employee inquiry. Instead, it is the nature of Voss's employment relationship with Jones and the nature of the activities performed by Jones that are relevant to the determination of whether Voss is Ramco's statutory employee.

In this case, there is no doubt that Voss is an employee, rather than independent contractor, of Jones. Jones exerts...