LMI Insurance Company v. Foley

• Court: Court of Appeals of Virginia
• Decided: July 29, 1997
• Docket: 2671964
• Status: Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Fitzpatrick, Overton and Senior Judge Duff

LMI INSURANCE COMPANY

v. Record No. 2670-96-4

JAMES FOLEY, TOWER ELECTRIC COMPANY, CANOVA ELECTRICAL CONTRACTING, INC. AND ROYAL INSURANCE COMPANY OF AMERICA

MEMORANDUM OPINION * BY LMI INSURANCE COMPANY CHARLES H. DUFF JULY 29, 1997 v. Record No. 2671-96-4

CARLOS A. REAL, TOWER ELECTRIC COMPANY, CANOVA ELECTRICAL CONTRACTING, INC. AND ROYAL INSURANCE COMPANY OF AMERICA

FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION

(Cathie W. Howard; Pierce & Howard, P.C., on briefs), for appellant. Appellant submitting on brief.

(Benjamin J. Trichilo; Trichilo, Bancroft, McGavin, Horvath & Judkins, P.C., on briefs), for appellees Canova Electrical Contracting, Inc. and Royal Insurance Company of America. Appellees submitting on brief.

No brief for appellee James Foley.

No brief for appellee Tower Electric Company.

No brief for appellee Carlos A. Real.

LMI Insurance Company (LMI) appeals decisions of the

Workers' Compensation Commission holding it liable to James Foley

* Pursuant to Code § 17-116.010 this opinion is not designated for publication. and Carlos A. Real for workers' compensation benefits. LMI

contends that the commission erred in finding that Real and Foley

were not loaned employees of Canova Electrical Contracting, Inc.

(Canova), but rather, were employees of Tower Electric Company

(Tower) at the time of their industrial accidents. Because

credible evidence supports the commission's decisions, we affirm.

We decline to address the jurisdictional issue raised by the

parties because our affirmance of the commission's decision on

the "loaned employee" issue renders the jurisdictional issue

moot. On appeal, we view the evidence in the light most favorable

to the prevailing party below. See R.G. Moore Bldg. Corp. v.

Mullins, 10 Va. App. 211, 212, 390 S.E.2d 788, 788 (1990).

So viewed, the evidence established that on June 21, 1994

and July 10, 1994, respectively, Real and Foley, Tower's

employees, sustained compensable industrial injuries while

working as electricians at a Sears/Landmark renovation jobsite

(the Landmark job) located in Northern Virginia. Tower filed two

separate Employer's First Reports of Accident with the commission

reporting both accidents.

All Interiors was the general contractor on the Landmark

job. Canova, a company headquartered in Pennsylvania, was a

subcontractor performing electrical work on the Landmark job

renovation. In turn, Canova entered into a labor subcontract

agreement with Tower, a Virginia company, for Tower to supply all

2 of the labor necessary to perform the electrical work. The

agreement required Canova to furnish all necessary supervision

for the Landmark job. The intent of the labor subcontract was

for Tower to provide Canova a pool of laborers for a limited

period of time while Canova worked on the Landmark job, and for

Tower to pay all fringe benefits for its workers, including

workers' compensation insurance. 1

Glen Johnson, Tower's vice-president, testified that at the

end of the month, pursuant to the terms of Tower's subcontract

with Canova, Tower billed Canova for the total direct cost of the

labor Tower furnished for the Landmark job plus a sixty percent

mark-up. Johnson sent Tower employees to the Landmark jobs upon

request from Canova's supervisor, Melvin Worrall. Real believed Worrall was his foreman on the Landmark job.

Worrall routinely checked Real's work. Real heard Worrall give

instructions to Brad Walport, Tower's foreman on the Landmark

job. Real believed that Worrall could terminate his employment.

Worrall recorded Real's hours worked and gave Real his

paychecks. On the day of his accident, Real received his work

instructions from Walport.

Foley did not consider himself an employee of Canova, but

believed that he was employed by Tower. Foley received his

paychecks from a Tower foreman. Foley had been instructed to 1 Pursuant to a policy for workers' compensation insurance and employer's liability insurance, LMI insured Tower for the period from August 1, 1993 through August 1, 1994.

3 report to Worrall when he arrived at the Landmark job. Foley

stated that a Tower official told him he was on loan to Canova

for a temporary period. Immediately preceding Foley's accident,

Worrall instructed Foley to climb the scaffold to work on some

lighting. Foley stated that Walport acted as the Tower

supervisor on the Landmark job. Foley received most of his

instructions from Walport. Walport told Foley who to work with

and where to go. Foley had twenty years experience as an

electrician. Walport, a skilled electrician, testified that he acted as

Tower's sub-foreman on the Landmark job. Walport assigned the

laborers to various tasks under the direction of Worrall, from

whom Walport received his instructions. Walport believed that

Worrall gave raises to several Tower employees who worked on the

Landmark job.

Denise Gold, Tower's office manager, testified that Worrall

or Thomas L. Mattey turned in the time sheets for Tower's

employees each week, and then one of them picked up the paychecks

for the week for Tower's employees on the Landmark job and

delivered the checks to the employees. Gold stated that the

raises received by Tower employees on the Landmark job were only

effective during that job. Tower billed Canova for performing

the payroll function.

Thomas L. Mattey testified that he acted as a supervisor for

Canova on the Sears/Fair Oaks job (the Fair Oaks job). Mattey

4 relied heavily upon a Tower employee, Charlie Jones, to relay

instructions and directions to the approximately thirteen to

fifteen Tower employees on the Fair Oaks job. Mattey verified

that the Tower employees were doing what they were supposed to do

once Jones had assigned them to work. If a task had not been

done in accordance with the general contractor's plans and

specifications, Mattey notified Jones, who then instructed

Tower's employees to make the correction. Tower's employees

notified Jones or Tower if they were going to be late or absent

from work. Tower's workers provided their own hand tools.

Canova provided the larger equipment, such as scaffolding.

Mattey had no authority to hire or fire the Tower employees on

the Fair Oaks job. All Interiors also had a supervisor on the

Fair Oaks job, Anthony Gulianno. Mattey reported to Gulianno

every day. At most, Mattey had three to four additional Canova

employees at the Fair Oaks job. James Canova, Canova's president and owner, testified that

Canova had a subcontract with Sears to renovate two stores in

Northern Virginia. Canova then entered into a labor subcontract

with Tower for Tower to provide the labor for the Sears jobs.

Worrall acted as Canova's superintendent on the Landmark job.

Worrall received his instructions from All Interiors, and then

relayed those to Tower's foreman, who then directed the Tower

workers. Canova sent four to five of its own electricians to

work on the Landmark job. Walport supervised the Tower employees

5 on the Landmark job. Walport reported to Worrall, who told

Walport what needed to be done. James Canova understood that a

portion of the sixty-percent mark-up charged by Tower to Canova

included Tower's cost for workers' compensation coverage for its

workers. James Canova testified that his company had no

authority to hire or fire Tower's employees. If Canova was

dissatisfied with a Tower employee, it sent the employee back to

the Tower office. Worrall testified that he told Walport what needed to be

done on the Landmark job. If Worrall found that a task had not

been done correctly, he told Walport to correct the problem, and

Walport made sure that his employees did so. If Worrall was

displeased with a Tower employee, he sent the employee back to

Tower's office. Worrall faxed the Tower employees' hours to

Tower's office each week so that Tower could do the payroll.

Walport distributed the paychecks at the jobsite. Worrall did

not inspect Tower's work every day, but performed walk-throughs

on a regular basis. Worrall gave Walport the blueprints for the

Landmark job for Tower to use in performing the electrical work.

Ken Pluebell, Tower's president, testified that Tower agreed

to provide Canova labor for the Landmark job at Tower's cost plus

a sixty-percent mark-up. In exchange, Tower agreed to be

responsible for all fringe benefits, including taxes and

overhead, which included workers' compensation insurance

coverage.

6 In affirming the deputy commissioner's decision, the full

commission held that Real and Foley were Tower's employees and

were not loaned employees to Canova. The commission found that

although Tower and Canova exercised some control over Real and

Foley, Tower, through its on-site supervisor, Walport, exercised

7 the stronger and more direct control, giving Real and Foley their

day-to-day assignments. In addition, the commission noted that

Tower assigned employees to the jobsite, paid them, and

reassigned them if requested by Canova.

The commission noted that Canova's limited control was not

similar to the control exercised by the special employer in

Virginia Polytechnic Inst. v. Frye, 6 Va. App. 589, 371 S.E.2d 34

(1988), where the special employer "exclusively and completely"

controlled the employee. The commission further noted that

Canova's control was not similar to the "complete control"

exercised by the special employer in Metro Mach. Corp. v. Mizenko, 244 Va. 78, 419 S.E.2d 632 (1992).

In Mizenko, the Supreme Court recognized that "control over

the employee is the most important factor in consideration of

[loaned employee] status, although it alone may not be

dispositive." Id. at 83, 419 S.E.2d at 635. The factors

"generally accepted as appropriate considerations" for

determining whether an employee is a "loaned employee" are as

follows: (1) who has control over the employee and the work he is performing; (2) whether the work performed is that of the borrowing employer; (3) was there an agreement between the original employer and the borrowing employer; (4) did the employee acquiesce in the new work situation; (5) did the original employer terminate its relationship with the employee; (6) who is responsible for furnishing the work place, work tools and working conditions; (7) the length of the employment and whether it implied acquiescence by the employee; (8) who had the right to discharge

8 the employee; and (9) who was required to pay the employee.

Id.

"On appellate review, the factual findings of the commission

are binding if they are supported by credible evidence." Wagner

Enters., Inc. v. Brooks, 12 Va. App. 890, 894, 407 S.E.2d 32, 35

(1991). Here, the commission's findings that Foley and Real were

Tower's employees and were not loaned employees of Canova are

supported by credible evidence. Even though the labor

subcontract agreement between Tower and Canova required Canova to

furnish all necessary supervision, the facts showed that Tower,

through its on-site supervisor, Walport, actually exercised

stronger and more direct control over the Tower employees than

did Canova. Walport assigned specific tasks to the workers on a

daily basis. Tower paid the workers and reserved the right to

terminate them. Although Canova had general supervisory

authority over Foley and Real, its control was neither exclusive

nor complete, as was the case in Mizenko and Frye. Canova merely

told Tower how many workers it needed and what work needed to be

done in accordance with the blueprints and general contractor's

specifications. Foley testified that he received most of his

supervision from Walport. Foley did not consider himself to be a

Canova employee. Real testified that on the day of his accident,

he received his instructions from Walport. At no point in time

did Tower terminate its employment relationship with Foley or

Real. In fact, Foley testified that he returned to employment

9 with Tower after recovering from his injuries.

Worrall, the Canova supervisor, testified that he allowed

Walport to decide which workers would perform specific tasks.

Worrall testified that he could not fire Tower's workers.

Pluebell, Tower's president, testified that Tower retained

ultimate authority over firing decisions. In addition, Pluebell

admitted that the intent of the agreement was for Tower to supply

workers' compensation coverage for its workers. Moreover, the

duration of the employment was temporary, not long-lasting. Because credible evidence supports the commission's findings

that Tower was Foley's and Real's employer and that Canova was

not their special master, those findings are binding and

conclusive upon this Court on appeal. "The fact that there is

contrary evidence in the record is of no consequence if there is

credible evidence to support the commission's finding." Wagner,

12 Va. App. at 894, 407 S.E.2d at 35. "In determining whether

credible evidence exists, the appellate court does not retry the

facts, reweigh the preponderance of the evidence, or make its own

determination of the credibility of the witnesses." Id.

For these reasons, we affirm the commission's decisions.

Affirmed.