Godley v. County of Pitt

283 S.E.2d 430 (1981)

Willie GODLEY Employee-Plaintiff, v. COUNTY OF PITT and/or Town of Winterville Employer, U. S. Fire Insurance and/or Great American Insurance Carrier Defendants.

No. 8110IC141.

Court of Appeals of North Carolina.

October 20, 1981.

*431 Young, Moore, Henderson & Alvis by B. T. Henderson, II, and William T. Lipscomb, Raleigh, for defendants-appellants.

Teague, Campbell, Conely & Dennis by George W. Dennis, III, and Jeffery L. Jenkins, Raleigh, for defendants-appellees.

ARNOLD, Judge.

Two assignments of error are brought forth on appeal.

Defendant County first contends that the Industrial Commission erred in concluding that the County and its insurance carrier are estopped from asserting that no employment relationship existed between the plaintiff and the County. We agree. Application of the principles of equitable estoppel was improper on the facts of this case.

We recognize that it is well established law in North Carolina that principles of estoppel are applicable to workers' compensation cases. Aldridge v. Motor Co., 262 N.C. 248, 251, 136 S.E.2d 591 (1964). Furthermore, as the defendant Town correctly *432 points out, acceptance of premium payments by a compensation insurer has been held sufficient to subject the insurer to liability on equitable grounds even where the claimant was not properly includible under the terms of the policy. Aldridge v. Motor Co., supra; Britt v. Colony Construction Co., 35 N.C.App. 23, 240 S.E.2d 479 (1978). However, in each case cited by the Town, an element essential to equitable estoppel, that of detrimental reliance by the party seeking estoppel, has been met. See 5 Strong's N.C. Index 3d, Estoppel § 4.6 (1977). These cases are, in this respect, distinguishable from the case at bar. While it is true that the County's insurer accepted premiums on behalf of the plaintiff, there is no evidence in the record to indicate that the Town or its insurer appreciably altered its position in reliance upon this fact. The only reliance asserted by the Town is its own failure to pay insurance premiums specifically on behalf of the plaintiff. We are not persuaded that this omission constitutes detrimental reliance. The Town's insurer has conceded liability in the event that plaintiff is found to have been an employee of the Town and has made no claim that the policy would have been altered or cancelled had it been known that plaintiff was a covered individual. Although failure to collect premiums for covered individuals does not relieve an insurer of liability, the insurer can, of course, recover unpaid premiums upon discovery of the error. Williams v. Ornamental Stone Co., 232 N.C. 88, 59 S.E.2d 193 (1950).

We find no evidence in the record of an act or omission detrimental to either of the parties seeking estoppel which justifies imposition of this equitable remedy. See Bourne v. Lay and Co., 264 N.C. 33, 140 S.E.2d 769 (1965).

Defendant's second argument is that the Commission erred in concluding that plaintiff was an employee of Pitt County. It is clear that in workers' compensation cases, as the North Carolina Supreme Court has succinctly held, "the test is this: For whom was the plaintiff working as an employee at the time of the accident?" Suggs v. Truck Lines, 253 N.C. 148, 155, 116 S.E.2d 359 (1960).

In answering this question, we find this Court's holding in Forgay v. State University, 1 N.C.App. 320, 161 S.E.2d 602 (1968), to be directly on point. In Forgay, the employee claimant was hired under a federal program (Plan Assuring College Education or "PACE") which, like the CETA program here, involved payment of the employee by one government entity (N. C. State University) for work performed by the employee for another (the Town of Madison). In that case, this Court held unequivocally that payment of the employee's salary and maintenance of his payroll records by the University were not sufficient evidence, standing alone, to support a finding that an employment relationship existed. In Forgay it was the town, not the university, which assigned duties and hours of work to the claimant, and it was the town which received the value of his services. The same is true of the Town in the case at bar.

In the present case it is true that the County had slightly greater authority over the employee than did the university in Forgay. However, we find that the County's added power to assign and dismiss CETA workers, and its payment of compensation insurance premiums as required by the CETA program, are insufficient as a matter of law to distinguish this case from Forgay. Here the Town alone controlled the plaintiff's work schedule, duties, and work environment. The Town alone benefitted from his services. These are the factors to which the Commission should have given weight, absent a showing of detrimental reliance, in determining whether the Town or County was the plaintiff's employer.

We agree with the County that the Commission's findings of fact are insufficient to support its conclusion of law that an employment relationship existed between the *433 plaintiff and the County at the time of the plaintiff's injuries.

Reversed.

VAUGHN and WEBB, JJ., concur.