Race Fork Coal Co. v. Turner

379 S.E.2d 341, 237 Va. 639, 5 Va. Law Rep. 2382, 1989 Va. LEXIS 70
CourtSupreme Court of Virginia
DecidedApril 21, 1989
DocketRecord 880032
StatusPublished
Cited by12 cases

This text of 379 S.E.2d 341 (Race Fork Coal Co. v. Turner) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Race Fork Coal Co. v. Turner, 379 S.E.2d 341, 237 Va. 639, 5 Va. Law Rep. 2382, 1989 Va. LEXIS 70 (Va. 1989).

Opinion

WHITING, J.,

delivered the opinion of the Court.

In this appeal, we decide whether a “statutory” employer under the Virginia Workers’ Compensation Act, Code §§ 65.1-1 to -163 is constitutionally entitled to: (1) the statutorily required notice of an accident from the worker; and (2) be named as a party to the subsequent Industrial Commission proceeding in which the compensation award, which the statutory employer is now being required to pay, was made against the actual employer. 1 Our decision turns on whether the statutory employer is in privity with the actual employer.

On April 12, 1984, while employed by Travis Coal, Inc. (Travis), Mack Turner, a coal miner, suffered an eye injury resulting in the functional loss of one eye. At the time of Turner’s injury, Travis, as an independent contractor, was mining coal belonging to Race Fork Coal Company (Race Fork). Although Race Fork, upon being made a party to the Industrial Commission proceeding, initially argued that it was not Turner’s statutory employer, it now concedes that it was his statutory employer at the time Turner was injured.

Within the required 30-day period after April 12, 1984, Turner apparently gave Travis, but not Race Fork, the written notice of the accident required by Code § 65.1-85. On August 10, 1985, Turner filed a compensation claim against Travis, but not Race Fork, before the Industrial Commission. Because Travis carried no workers’ compensation insurance, the Industrial Commission notified the Uninsured Employers Fund (the Fund) of the hearing to be held on October 7, 1985. Since that time, the Fund has participated in the proceedings. At a hearing on October 29, 1985, *642 Turner, Travis, and the Fund stipulated to the facts surrounding the accident, but the length of disability was contested.

On November 6, 1985, the Commission awarded Turner temporary total disability benefits against Travis, and required Travis to pay Turner’s past and future reasonable and necessary care and related mileage expenses. Although Travis did not appeal the award, it did not make the required payments. Travis has since been dissolved by the State Corporation Commission and has not participated further in this litigation. The Fund filed a petition to rehear, alleging that Race Fork, as Turner’s statutory employer, was “a proper and necessary party to the October 29, 1985 proceeding.” The Industrial Commission denied the petition on December 18, 1985, because it was not timely filed.

Some time before April 3, 1986, the Fund paid Turner the amounts previously awarded him by the Industrial Commission. On April 9, 1986, Turner filed a second claim for compensation, this time naming Race Fork as his employer. The Industrial Commission referred the matter to one of its deputy commissioners to “determine if Race Fork Coal Company is a statutory employer and as such responsible along with Travis Coal Company, Inc., for satisfying the awards of the Commission in favor of Mack Turner for the injury of April 12, 1984.” The scope of the hearing was apparently expanded because Race Fork asserted additional defenses, including the defense that it was denied due process of law because it received no notice of the accident or of the initial hearing of October 29, 1985.

Without discussion of the effect, if any, of the lack of such notice, on December 11, 1986, the Commission ordered Race Fork to reimburse the Fund the monies it had paid Turner in satisfaction of the award. Race Fork appealed to the Court of Appeals. On December 15, 1987, that court held that because Race Fork was in privity with Travis, such notices were not required, and accordingly affirmed the award of the Industrial Commission. Race Fork Coal v. Turner, 5 Va. App. 350, 363 S.E.2d 423 (1987). We granted Race Fork this appeal. Race Fork confines its argument here to the issues regarding the lack of the required notice.

We are faced with an adjudication of which the defendant had no notice and, therefore, no opportunity to defend. Ordinarily, due process would require that Race Fork receive notice of the accident and of the hearing on October 29, 1985. Finkel Products *643 v. Bell, 205 Va. 927, 931, 140 S.E.2d 695, 698 (1965). Recognizing the constitutional necessity for such notice, the Fund argues that it was not required in this case because the Workers’ Compensation Act put Race Fork in privity with Travis.

We have said that “[w]hile privity generally involves a party so identical in interest with another that he represents the same legal right, a determination of just who are privies requires a careful examination into the circumstances of each case.” Nero v. Ferris, 222 Va. 807, 813, 284 S.E.2d 828, 831 (1981). Our examination of the circumstances of workers’ compensation cases indicates that the interests of the statutory employer and the actual employer are not sufficiently identical in interest to regard the employer as representing all of the legal rights and defenses the statutory employer may have against the claimant.

Specifically, Code § 65.1-30 provides that a worker must show that his actual employer was engaged in “a part of [the] same trade, business, and occupation” as the statutory employer to subject the statutory employer to liability for payment of his workers’ compensation benefits. In contrast, no such proof is required to subject the actual employer to liability for payment of such benefits. To that extent, the interests of the actual employer and the statutory employer vis-a-vis the employee diverge. Accordingly, we hold that the Court of Appeals erred in finding that the parties were in privity, so that notice to Travis was also notice to Race Fork.

In our opinion, it makes no difference in this case that Race Fork later conceded that it was Turner’s statutory employer. Because the rules of privity bind a non-party to an adjudication of which it had no notice, and thus implicate due process, see Blonder-Tongue v. University Foundation, 402 U.S. 313, 329 (1971); Hansberry v. Lee, 311 U.S. 32, 40-41 (1940), their application does not turn upon the merits of a possible defense but upon the constitutional right to notice enabling one to make a defense.

The Fund argues that the notices required by Code §§ 65.1-85 and -94 2 to be given an actual employer were intended by the legislature to be notice to any party who might later be *644 found to have been a worker’s statutory employer. If so, the legislation would be unconstitutional for the reasons we have assigned.

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Bluebook (online)
379 S.E.2d 341, 237 Va. 639, 5 Va. Law Rep. 2382, 1989 Va. LEXIS 70, Counsel Stack Legal Research, https://law.counselstack.com/opinion/race-fork-coal-co-v-turner-va-1989.