W.M. Schlosser Co v. Fund

Decision Date12 May 2010
Docket Number2009.,No. 112,112
Citation994 A.2d 956,414 Md. 195
PartiesW.M. SCHLOSSER CO., et al.v.UNINSURED EMPLOYERS' FUND, et al.
CourtMaryland Court of Appeals

Timothy E. McLaughlin (Ju Y. Oh of Humphreys, McLaughlin & McAleer, LLC, Baltimore), on brief, for petitioners.

Kathleen E. Wherthey, Asst. Atty. Gen. (Douglas F. Gansler, Atty. Gen. of Maryland, Baltimore, and Esther Goldring, Asst. Atty. Gen., Towson), on brief, for respondents.

Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, MURPHY, ADKINS, and BARBERA, JJ.

BATTAGLIA, J.

In this appeal, we address the issue of whether a principal contractor, W.M. Schlosser Co., should be liable to pay workers' compensation benefits to an employee of a subcontractor or whether the Uninsured Employers' Fund has to pay the claim. The employee, Jehue Q. Johnson, suffered an accidental injury while working wholly outside of this State in the District of Columbia for Rose Industrial Services, the subcontractor of Schlosser, which had workers' compensation insurance coverage in D.C. but not in Maryland, where Mr. Johnson resided. The gravamen of this case concerns who has the responsibility of paying benefits to Mr. Johnson-Schlosser or the Fund-not whether the compensation should be paid. The issue arises because Mr. Johnson filed for workers' compensation benefits in Maryland for his accidental injury that occurred solely in the District of Columbia, where Rose only had workers' compensation coverage; Schlosser had workers' compensation coverage in Maryland.

The Workers' Compensation Commission found the situs 1 for the claim to be the determining factor, when determining that Schlosser was a “statutory employer” within the meaning of the Workers' Compensation Act, Sections 9-101 to 9-1201 of the Labor and Employment Article, Maryland Code (1991, 1999 Repl. Vol.),2 but not liable to Mr. Johnson, because there would not have been workers' compensation jurisdiction over a claim in Maryland against Schlosser if it had been the direct employer of Mr. Johnson. The Circuit Court affirmed the Commission, and the Court of Special Appeals reversed, basing its decision on public policy concerns, rather than on a situs determination, without deference to the determination by the Workers' Compensation Commission. We granted certiorari Schlosser v. Uninsured Employers' Fund, 411 Md. 355, 983 A.2d 431 (2009), to address the following questions:

1) Was the Circuit Court correct in affirming the Commission's decision based on Maryland Code, Labor and Employment Article, § 9-508 and finding no Maryland jurisdiction over the Petitioners?

2) Did the Court of Special Appeals err in reversing the Circuit Court's granting of the Petitioners' cross motion for summary judgment by finding that since the Claimant is a covered employee of Rose, he is automatically a covered employee of the alleged statutory employer, Petitioner W.M. Schlosser (hereinafter “Schlosser”)?

We shall answer both questions in the affirmative and uphold the Circuit Court's acceptance of the Commission's determination that the Fund, not Schlosser, was to pay Johnson his workers' compensation benefits. In doing so, we defer to the Commission's interpretation of Section 9-508 of the Workers' Compensation Act and hold that the Court of Special Appeals erred in reversing the Circuit Court, because Mr. Johnson, who was injured while working wholly outside of this State in the District of Columbia, would not have been a “covered employee” under the workers' compensation statute, had he been directly employed by Schlosser, rather than through a subcontractor. As a result, the Uninsured Employers' Fund is liable for workers' compensation benefits payable to Mr. Johnson, because Mr. Johnson's direct employer, Rose, was uninsured in Maryland.3

FACTS AND PROCEDURAL HISTORY

On May 8, 2004, Jehue Q. Johnson was an employee of Rose Industrial Services, a hazardous waste removal company, when he was injured while acting as a hazardous waste removal technician, at the Blue Plains Wastewater Treatment Plant located at 5000 Overlook Avenue, SW, in the District of Columbia. Rose's work at Blue Plains was being performed pursuant to a subcontract with W.M. Schlosser Co., a Maryland based corporation, which had contracted with Rose to do work solely at the Blue Plains site.

Following his injury, Mr. Johnson filed a claim with the Maryland Workers' Compensation Commission.4 Mr. Johnson's employer, Rose, carried workers' compensation insurance in the District of Columbia,5 but not in Maryland, and was, therefore, considered to be an uninsured employer. The Uninsured Employers' Fund defended the claim before the Commission and impleaded Schlosser and its insurer, the Injured Workers' Insurance Fund. Commissioner Lauren A. Sfekas presided over a hearing on November 22, 2005, to determine issues of liability and coverage and thereafter, issued an Award of Compensation, ordering that Mr. Johnson was to receive compensation for his temporary total disability. She also found that Rose had workers' compensation insurance in the District of Columbia but not Maryland, and was, therefore, a “Non-Insured Employer” in Maryland. She further ruled that Schlosser was Mr. Johnson's statutory employer, but that Schlosser, nonetheless, was not liable for Mr. Johnson's claim:

Hearing was held in the above claim at Baltimore, Maryland on November 22, 2005 on the following issues:

1) Did the claimant sustain an accidental injury arising out of and in the course of employment?

2) Was the claimant engaged in willful misconduct at the time of the alleged accidental injury arising out of and in the course of employment?
3) Is the disability of the claimant the result of an accidental injury arising out of and in the course of employment?
4) Does Maryland have jurisdiction in the above claim?
5) Is Rose Industrial Services uninsured in Maryland?
6) Is W.M. Schlosser Co., Inc. the statutory employer?
7) Average Weekly Wage?
The Commission finds on the first, second and third issues that the claimant was not engaged in willful misconduct at the time he sustained an accidental injury arising out of and in the course of employment on May 8, 2004; and that the disability of the claimant is the result of the aforesaid accidental injury; and that the claimant was temporarily and totally disabled from May 8, 2004 to August 23, 2005 inclusive, and additional temporary total disability shall be reserved for future determination. The Commission finds on the fourth issue that Maryland has jurisdiction in the above entitled claim; and finds on the fifth issue that Joanne H. Rose, individually and trading as Rose Industrial Services is uninsured in the State of Maryland. The Commission finds on the sixth issue that W.M. Schlosser Co., Inc. is a statutory employer; however it is not liable to the claimant. Section 9-508 of the Labor Article states it is only liable to pay compensation they would have been liable to pay if they were the direct employer. There would be no Maryland jurisdiction over a claim against W.M. Schlosser Co., Inc. if it were the direct employer; therefore, W.M. Schlosser Co., Inc. cannot be held liable as a statutory employer. Average Weekly Wage-$850.00.
It is, therefore, this 18th day of JANUARY, 2006 by the Workers' Compensation Commission ORDERED that the above named Non-Insured Employer pay unto Jehue Q. Johnson, claimant, compensation for temporary total disability at the rate of $567.00, payable weekly, beginning May 8, 2004 and ending August 23, 2005 inclusive; and further
ORDERED that the Non-Insured Employer pay all casually connected medical expenses incurred by Jehue Q. Johnson, claimant, in accordance with the Medical Fee guide.
It is further ORDERED that the issue of additional temporary total disability, be and the same is hereby RESERVED for future determination.
It is further ORDERED that from the final weeks of compensation due and owing the claimant, a counsel fee in the amount of $3815.91 is approved for payment to William J. Blondell, Jr., Chartered, for legal services rendered for the claimant.
In accordance with Section 9-1005 of the Labor Article, the employer, as non-insurer, is assessed the sum of $500.00, plus an additional assessment of 15% of this Award and any subsequent awards of compensation made in this case, such additional assessments not to exceed, however, the sum of $2,500.00, check to be made payable to the Subsequent Injury Fund, 320. E. Towsontown Blvd., Cranston Bldg., Suite 110, Towson, MD 21286-5318. Please list claimant's name and claim number on check. The assessments of $500.00 shall be paid within 10 days from the date of this Award and any further assessments within 10 days of notice.
Lauren A. Sfekas
Commissioner

(Emboldened in original).

The Uninsured Employers' Fund filed a Motion for Rehearing with the Workers' Compensation Commission, but the Commission denied the motion and affirmed its previous Order. The Fund sought judicial review in the Circuit Court for Baltimore County and later filed a motion for summary judgment with a request for a hearing. Schlosser filed a cross-motion for summary judgment.

Before holding a hearing, Judge Thomas J. Bollinger denied the Fund's motion for summary judgment and granted Schlosser's cross-motion for summary judgment:

Upon consideration of the Uninsured Employer's Fund's Motion for Summary Judgment and all subsequent motions and memoranda filed in opposition and in support of the same, it is on this 30th day of January, 2008, the Uninsured Employer's Fund's Motion for Summary Judgment is hereby DENIED.
Upon consideration of the Alleged Employer/Alleged Insurer's Cross Motion for Summary Judgment and all subsequent motions and memoranda filed in opposition and in support of the same, it is on this 30th day of January, 2008, the Alleged Employer/Alleged Insurer's Cross Motion for Summary Judgment is hereby GRANTED.
Accordingly, it is on this 30th day of January, 2008, the
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