R. Richard Wilton, Jr Inc v Roger A. Gibson, et al

COURT OF APPEALS OF VIRGINIA
Present: 	Judges Willis, Fitzpatrick and Overton
Argued at Salem, Virginia
F. RICHARD WILTON, JR., INC.
v. 	Record No. 2314-95-3 	OPINION BY
JUDGE JOHANNA L. FITZPATRICK
ROGER ALLEN GIBSON, GARY C. 	JUNE 18, 1996
CONLEY AND UNINSURED
EMPLOYERS' FUND
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
Rodney A. Satterwhite (Pamela L. Ventura;
McGuire, Woods, Battle & Boothe, on briefs),
for appellant.
Rhonda Overstreet (Gary L. Lumsden; Lumsden &
Overstreet, on brief), for appellee Roger
Allen Gibson.
Christopher D. Eib, Assistant Attorney
General (James S. Gilmore, III, Attorney
General; Richard L. Walton, Jr., Senior
Assistant Attorney General; John J. Beall,
Jr., Senior Assistant Attorney General, on
brief), for appellee Uninsured Employers'
Fund.
No brief or argument for appellee Gary C.
Conley.
In this workers' compensation case, F. Richard Wilton, Jr.,
Inc. (Wilton) appeals the commission's decision awarding benefits
to Roger Allen Gibson (claimant). 	Wilton argues that the
commission erred in finding that Wilton was claimant's statutory
employer under Code § 65.2-302. 	Finding no error, we affirm the
commission.
Wilton, a drywall contractor, handles both interior and
exterior drywall work. 	In March 1994, Century Construction

2
Company (Century) hired Wilton as a subcontractor to install
drivit1 on the exterior of a Richmond restaurant. 	Although
Wilton's business is ninety-five percent interior drywall
installation, the company routinely accepts drivit installation
contracts and subcontracts the drivit installation included in
its projects. 	No Wilton employees install drivit full time, and
Wilton's drivit installation constitutes only two to three
percent of its business. 	Wilton subcontracted the drivit
installation to Conley Construction Company (Conley).
Claimant worked for Conley and was assigned to the drivit
installation job. 	Claimant provided his own hand tools, and
Wilton's supervisor, William Sirk, insured that the Conley
workers had the materials and instruments needed to complete the
job. 	While installing drivit, claimant fell off scaffolding and
injured his foot.
Because Conley was uninsured, claimant filed a claim for
benefits against Wilton as a statutory employer. 	The commission
found that "the activity of installing 'drivit' is not so
distinct or separate as to be outside the overall nature of
Wilton's trade" and awarded benefits to claimant.
On appeal, Wilton argues that the commission erred in
holding it liable as a statutory employer under Code § 65.2-302.
Wilton asserts that drivit installation is a different trade,
1Drivit is a new synthetic plaster, and installing drivit
involves a different process than regular drywall work.

3
business, or occupation than standard drywall work and that the
commission applied the wrong analysis in awarding benefits to
claimant.
Code § 65.2-3022 provides as follows:
A. 	When any person (referred to in this
section 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 (referred to in this
section 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 worker employed in the
work any compensation under this title which
he would have been liable to pay if the
worker had been immediately employed by him.
B. 	When any person (referred to in this
section as "contractor") contracts to perform
or execute any work for another person which
work or undertaking is not a part of the
trade, business or occupation of such other
person and contracts with any other person
(referred to in this section as
"subcontractor") for the execution or
performance by or under the subcontractor of
the whole or any part of the work undertaken
by such contractor, then the contractor shall
be liable to pay to any worker employed in
the work any compensation under this title
which he would have been liable to pay if
that worker had been immediately employed by
him. C. 	When the subcontractor in turn
contracts with still another person (also
referred to as "subcontractor") for the
performance or execution by or under such
last subcontractor of the whole or any part
of the work undertaken by the first
subcontractor, then the liability of the
owner or contractor shall be the same as the
liability imposed by subsections A and B of
this section.
2Code §§ 65.1-29, 65.1-30, and 65.1-31 were recodified in
1991 as Code § 65.2-302.

4
The purpose of Code § 65.2-302 is to "'protect the employees of
subcontractors who are not financially responsible and to prevent
employers from relieving themselves of liability (for
compensation) by doing through independent contractors what they
would otherwise do through direct employees.'" 	Bassett Furn.
Indus., Inc. v. McReynolds, 216 Va. 897, 902, 224 S.E.2d 323, 326
(1976) (quoting Sears, Roebuck & Co. v. Wallace, 172 F.2d 802,
810 (4th Cir. 1949)). 	"'The issue whether a person is a
statutory employee presents a mixed question of law and fact
. . . .'" 	Cinnamon v. International Business Machines Corp., 238
Va. 471, 474, 384 S.E.2d 618, 619 (1989) (quoting Cooke v.
Skyline Swannanoa, Inc., 226 Va. 154, 156, 307 S.E.2d 246, 247
(1983)).
The Supreme Court of Virginia has used the analysis set
forth in Shell Oil Co. v. Leftwich, 212 Va. 715, 187 S.E.2d 162
(1972), in determining statutory employer status:
"[T]he test is not one of whether the
subcontractor's activity is useful,
necessary, or even absolutely indispensable
to the statutory employer's business, since,
after all, this could be said of practically
any repair, construction or transportation
service. 	The test (except in cases where the
work is obviously a subcontracted fraction of
a main contract) is whether this
indispensable activity is, in that business,
normally carried on through employees rather
than independent contractors."
Cinnamon, 238 Va. at 475, 384 S.E.2d at 620 (quoting Shell Oil,
212 Va. at 722, 187 S.E.2d at 167).

5
In Cinnamon, the Supreme Court discussed the two prongs of
the Shell Oil test--the "normal-work test" and the
"subcontracted-fraction test." 	238 Va. at 476, 384 S.E.2d at
620. 	The Supreme Court explained that the normal-work prong is
used in determining statutory employer status under Code
§ 65.2-302(A) (former Code § 65.1-29) and "relates to an owner
who engages an independent contractor to perform certain work."
Id. 	The Supreme Court also explained that the subcontracted-
fraction test is used to analyze statutory employer status under
Code § 65.2-302(B) (former Code § 65.1-30) and defined the test
as follows:
In the context of the construction business,
[the subcontracted-fraction prong] relates to
a general contractor, the party obligated by
the main contract with the owner to complete
the whole project. 	If the work out of which
the accident arose was, in the language of
Shell Oil, "obviously a subcontracted
fraction of [that] contract" and, in the
language of the statute, "not a part of the
trade, business or occupation of" the owner,
the general contractor who engaged the
subcontractor to perform that fraction is the
statutory employer of the injured worker,
whether directly employed by the primary
subcontractor or by a secondary
subcontractor.
Id. 	"The subcontractor similarly becomes the statutory employer
of a sub-subcontractor's employees. 	Thus, employees of an
uninsured sub-subcontractor may look to the subcontractor, and to
the general contractor, for coverage, although recovery is not
permitted from both." 	States Roofing Corp. v. Bush Constr.
Corp., 15 Va. App. 613, 616-17, 426 S.E.2d 124, 126 (1993)

6
(citation omitted).
Wilton incorrectly asserts that the commission should have
used the normal-work test in analyzing whether claimant was its
statutory employee. 	In this case, Wilton was not an owner
engaging an independent contractor to perform work, and the
normal-work test was inapplicable. 	Instead, Wilton was a
subcontractor hired by the general contractor, Century. 	The main
contract between Century and the restaurant owner required
Century to remodel the restaurant. 	Century subcontracted the
drivit installation to Wilton; Wilton in turn subcontracted the
work to Conley, claimant's employer. 	The drivit installation
constituted one hundred percent of Wilton's obligations under the
contract with Century. 	Because of the general
contractor/subcontractor/sub-subcontractor relationship, the
appropriate test was the subcontracted-fraction test.
Although the commission did not specifically analyze
Wilton's status using the subcontracted-fraction test, the
commission did not err in requiring Wilton to pay benefits to
claimant. 	The drivit installation was clearly a subcontracted
fraction of the main remodeling contract and not part of the
trade, business, or occupation of the owner, whose business was
operating a restaurant. 	Thus, Wilton was claimant's statutory
employer and liable for benefits under Code § 65.2-302(B).
Accordingly, the decision of the commission is affirmed.
Affirmed.