Cook v. NORVELL-MACKORELL REAL ESTATE

392 S.E.2d 758 (1990)

99 N.C. App. 307

Oscar M. COOK v. NORVELL-MACKORELL REAL ESTATE COMPANY and Aetna Life and Casualty Company.

No. 8910IC1281.

Court of Appeals of North Carolina.

July 3, 1990.

*759 Simpson, Aycock, Beyer & Simpson, P.A. by Louis E. Vinay, Jr., Morganton, for plaintiff-appellant.

Hedrick, Eatman, Gardner & Kinchloe by Scott M. Stevenson and Howard M. Widis, Charlotte, for defendants-appellees.

WELLS, Judge.

Plaintiff brings forward a single argument challenging the Commission's finding and concluding that defendant Norvell-Mackorell was acting as agent for the owners of the property in procuring roofing services from plaintiff's employer, Rainbow Roofing, and therefore was not plaintiff's statutory employer within the meaning of G.S. § 97-19 of the North Carolina Workers' Compensation Act. Because this raises the jurisdictional question of whether an employment relationship within the Act existed between plaintiff and Norvell-Mackorell at the time of the accident, the jurisdictional facts found by the Commission, though supported by competent evidence, are not binding on this Court. Youngblood v. North State Ford Truck Sales, 321 N.C. 380, 364 S.E.2d 433 (1988) (and cases cited therein). Instead, we are required to review the evidence of record and make independent findings of jurisdictional facts established by the greater weight of the evidence with regard to plaintiff's employment status. Id.

G.S. § 97-19 provides in pertinent part:

Any principal contractor, intermediate contractor, or subcontractor who shall sublet any contract for the performance of any work without requiring from such subcontractor or obtaining from the Industrial Commission a certificate ... stating that such subcontractor has complied with G.S. 97-93 [requiring that employers carry workers' compensation insurance]... shall be liable ... to the same extent as such subcontractor would be if he were subject to the provisions of this Article for payment of compensation and other benefits ... on account of injury or death of ... any employee of such subcontractor due to an accident arising out of and in the course of the performance of work covered by such subcontract.

(We note that the amendments to G.S. § 97-19, effective 13 July 1989, are neither applicable to the present case nor germane to the rationale upon which our holding is based.)

This is the so-called "statutory employer" or "contractor under" statute. It is an exception to the general definitions of "employment" and "employee" set forth at G.S. § 97-2 and was enacted by the Legislature to deliberately bring specific categories of conceded nonemployees within the coverage of the Act for the purpose of protecting such workers from "financially irresponsible sub-contractors who do not carry workmen's compensation insurance, and to prevent principal contractors, intermediate contractors, and sub-contractors from relieving themselves of liability under the Act by doing through sub-contractors what they would otherwise do through the agency of direct employees." Withers v. Black, 230 N.C. 428, 53 S.E.2d 668 (1949); Greene v. Spivey, 236 N.C. 435, 73 S.E.2d *760 488 (1952); see also Larson The Law of Workmen's Compensation, vol. 1C § 49.00 et seq. G.S. § 97-19, by its own terms, cannot apply unless there is first a contract for the performance of work which is then sublet. Consequently, G.S. § 97-19 may apply as between two independent contractors, one of whom is a subcontractor to the other; but it does not apply as between a principal, i.e., an owner, and an independent contractor. See Beach v. McLean, 219 N.C. 521, 14 S.E.2d 515 (1941).

Plaintiff contends that, although Norvell-Mackorell may have been an agent of the owners of Briarcreek for purposes of leasing apartments and collecting rent, it was nevertheless a principal contractor with respect to the roofing work performed by Rainbow Roofing and thus falls within G.S. § 97-19. Alternatively, plaintiff contends that the owners of the apartment complex were in a dual status, being both owners of the property and principal contractors with respect to the maintenance thereof. Consequently, Norvell-Mackorell, by virtue of its contract of maintenance with the owners, occupied a position of an intermediate contractor (i.e., a first-tier subcontractor) with respect to the roofing work performed by Rainbow Roofing, plaintiff's employer. We reject both arguments.

It is clear that both of plaintiff's contentions rest upon the single premise that Norvell-Mackorell was not an agent for the owners of Briarcreek, merely obligated under the management agreement to procure on behalf of the owners a suitable party to replace the shingles on the roofs of the buildings within that apartment complex, but rather an independent contractor with the owners of Briarcreek, contractually obligated to itself perform this work, which obligation Norvell-Mackorell sublet to Rainbow Roofing. It has long been the rule in this State that an independent contractor is one "who exercises an independent employment and contracts to do certain work according to his own judgment and method, without being subject to his employer except as to the result of his work." Youngblood, supra (and cases cited therein).

Having carefully reviewed the evidence of record, we find the following jurisdictional facts to be established by the greater weight of the evidence: that on the date of the accident, Norvell-Mackorell operated a rental management business, in the course of which it managed Briarcreek apartments where the roofing project was being performed and plaintiff received his injuries; that when major repairs at Briarcreek were necessary, Norvell-Mackorell's usual practice under its management agreement with the owners of Briarcreek was to procure price quotes from several contractors and submit such quotes to the owners for their authorization, subsequently engaging the contractor authorized by the owners to perform the work; that the management agreement with the owners of Briarcreek contained no provision requiring Norvell-Mackorell to perform major repairs or renovations to the apartment complex as part of its duties; that pursuant to the owners' authorization, Norvell-Mackorell engaged Rainbow Roofing to perform the roofing project at Briarcreek; that Norvell-Mackorell neither required from Rainbow Roofing nor obtained from the Industrial Commission a certificate that Rainbow Roofing had complied with G.S. § 97-19; that Norvell-Mackorell paid Rainbow Roofing out of its general rental management account, which expense was reimbursed by the owners of Briarcreek; and that Norvell-Mackorell received no additional compensation for the roofing project beyond that ordinarily received by it for the performance of its management duties.

We therefore conclude that Norvell-Mackorell was neither contractually obligated to replace the shingles on the roofs of the apartment buildings at Briarcreek nor permitted to exercise its independent judgment in engaging Rainbow Roofing to perform this work. Norvell-Mackorell accordingly was not an independent contractor with the owners of Briarcreek within the standards set forth in Youngblood, supra, with respect to the work performed to repair the roofs, but merely an agent for the owners, and thus had no contract to replace the roofing shingles which it could *761 sublet to Rainbow Roofing. For these reasons, Norvell-Mackorell cannot be plaintiff's statutory employer within the meaning of G.S. § 97-19, notwithstanding its failure to ascertain Rainbow Roofing's compliance with the provisions of G.S. § 97-93. Hence, the Industrial Commission properly concluded that it did not have subject matter jurisdiction over plaintiff's claim against Norvell-Mackorell and correctly dismissed this claim.

For the reasons stated, the opinion and award of the Commission dismissing plaintiff's claim against Norvell-Mackorell must be and is

Affirmed.

EAGLES and LEWIS, JJ., concur.