Pullam v. Hercules Inc.

711 So. 2d 72, 1998 Fla. App. LEXIS 3721, 1998 WL 163715
CourtDistrict Court of Appeal of Florida
DecidedApril 9, 1998
Docket96-4184
StatusPublished
Cited by9 cases

This text of 711 So. 2d 72 (Pullam v. Hercules Inc.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pullam v. Hercules Inc., 711 So. 2d 72, 1998 Fla. App. LEXIS 3721, 1998 WL 163715 (Fla. Ct. App. 1998).

Opinion

711 So.2d 72 (1998)

Johnny O. PULLAM, Appellant,
v.
HERCULES INCORPORATED, Appellee.

No. 96-4184.

District Court of Appeal of Florida, First District.

April 9, 1998.
Rehearing Denied June 8, 1998.

*73 Steve M. Watkins, III, Tallahassee, for Appellant.

Mary L. Wakeman of McConnaughhay, Duffy, Coonrod, Pope & Weaver, P.A., Tallahassee, for Appellee.

ERVIN, Judge.

This is an appeal from a final workers' compensation order denying a petition for benefits filed by claimant Johnny Pullam against Hercules Incorporated (Hercules). We agree with claimant that the judge of compensation claims (JCC) incorrectly concluded that Hercules could not be considered claimant's statutory employer under the terms of section 440.10(1)(b), Florida Statutes (1991). We therefore reverse and remand for further proceedings.

On December 9, 1992, claimant, who was employed by B.G. Swilley Trucking Company (Swilley or subcontractor) to remove pine stumps from land owned by St. Joseph Land and Development Company (St. Joe), severely lacerated his right arm. At such time, Swilley had no workers' compensation coverage. Claimant subsequently filed a petition for medical benefits against Hercules on the theory that it was his statutory employer, because Swilley was performing work that Hercules had delegated to it under a contract between Hercules and St. Joe. Claimant based his claim on section 440.10(1)(b), which provides:

In case a contractor sublets any part or parts of his contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment; and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment.

Hercules' status as a statutory employer depends upon whether, in the words of the statute, it is a "contractor [who] sublets any part or parts of his contract work to a subcontractor." In order for Hercules to be considered a contractor it must have "incurred a contractual obligation to a third party, a part of which obligation the [contractor] has delegated or sublet to a subcontractor whose employee is injured." Miami Herald Publ'g v. Hatch, 617 So.2d 380, 381 (Fla. 1st DCA 1993). See also Roberts v. Gator Freightways, Inc., 538 So.2d 55, 57 (Fla. 1st DCA) (to be considered a contractor, the "primary obligation in performing a job or providing a service must arise out of a contract"), approved, 550 So.2d 1117 (Fla. 1989).

The evidence discloses that Hercules had contracted with St. Joe to remove pine stumps from real property owned by St. Joe. Thereafter, Hercules contracted with Swilley, delegating to Swilley its right to remove the stumps and to haul them to the Hercules plant where resin was extracted. The resin *74 was then sold to third parties for making numerous products, including adhesive sealants, chewing gum, toothpaste, citrus drinks, and cleaning materials.

In denying the claim, the JCC found that Hercules could not be considered a "contractor" under the statute, in that it was not performing a job or providing a service arising out of a contract. The pertinent findings of the JCC in this regard are as follows:

[T]hey [Hercules] paid St. Joe for the right to remove stumps.... Hercules was not performing a job nor providing a service arising out of a contract.... Hercules produces a finished product to wit: Resin. They manufacture resin. There is no obligation to any third party. Further, the agreement between Hercules and St. Joe is not to clear and/or remove stumps. Only a right to remove is granted and Hercules pays for the right. There is no actual obligation to remove any stumps. Therefore, claimant is not a statutory employee of Hercules.

We assume from the above language that the JCC considered there was no mutuality of obligation between Hercules and St. Joe, because the contract conferred on Hercules only the right to remove stumps from St. Joe's property, and nothing was stated therein requiring their removal, or when, during the term specified, they should be extracted. The JCC apparently decided that the contract was in the nature of an executory contract, in that it depended on a future performance or event, i.e., the exercise of Hercules' right to remove. The rule is well settled that a contract which is not mutually enforceable is considered an illusory contract. See Pan-Am Tobacco Corp. v. Department of Corrections, 471 So.2d 4, 5 (Fla. 1984); Etheredge v. Barkley, 25 Fla. 814, 6 So. 861 (1889).

What the JCC failed to realize, however, is that the contract's provisions obligated St. Joe to supply all of Hercules' requirements for the use of stump wood during the term designated. Where a contract is for a specified time and obligates the purchaser to buy all that he or she needs from the vendor, it is held that the purchaser's obligation to buy to the extent of his or her requirements supplies mutuality. See Jenkins v. City Ice & Fuel Co., 118 Fla. 795, 160 So. 215 (1935). And it is immaterial to the issue of mutuality of obligation that the right to buy is at the purchaser's option or discretion. Id.

The above rule has been codified in Florida's Uniform Commercial Code as follows:

A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.

§ 672.306(2), Fla. Stat. (1991). Such contracts are not deemed to be indefinite or lacking in "mutuality of obligation since, under this section, the party who will determine quantity is required to operate his plant or conduct his business in good faith and according to commercial standards of fair dealing in the trade so that his output or requirements will approximate a reasonably foreseeable figure." 19A Fla. Stat. Ann. 222 Uniform Commercial Code cmt. 2 (1993).

In its renewal contract with St. Joe, Hercules agreed, during the term from June 1, 1992, through May 31, 1993,[1] to pay the latter a specified sum for each ton of stump wood delivered to Hercules' plant. St. Joe in turn agreed to sell to Hercules "all of the original growth dead pine top wood and stumps ... suitable and acceptable for processing by Hercules," located on lands St. Joe owned during the term of the agreement. This contract was but one of a series of harvesting contracts between the parties, dating back to 1983. In order to carry out the terms of the sale, St. Joe granted to Hercules the right to come onto its property and harvest all such suitable stumps. Hercules thereafter entered into a harvesting contract with Swilley, delegating to it its right to remove dead stumps from St. Joe's land, and promising to pay Swilley a specified amount for each ton delivered to its processing plant in Brunswick, Georgia. Given the terms of the parties' agreements, the contract with St. *75 Joe should be understood as obligating Hercules to buy stump wood to the extent of its requirements or needs, which, as such, supplies the essential element of mutuality and is binding.

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Bluebook (online)
711 So. 2d 72, 1998 Fla. App. LEXIS 3721, 1998 WL 163715, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pullam-v-hercules-inc-fladistctapp-1998.