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At a Glance:
Title:
APD 91005
Date:
August 14, 1991

APD 91005

August 14, 1991

On June 3 and 10, 1991, a contested case hearing was held. The hearing officer determined that the employee, respondent herein, was within the scope of employment at the time he fell at the worksite and sustained a compensable injury. He concluded that the superintendent of a general contractor had the right to control respondent, that respondent became a borrowed servant, and therefore was an employee of the general contractor. He decided that Carrier, appellant herein, was liable for payment of benefits for injuries respondent received on ______. Appellant urges reversal of the finding that the borrowed servant doctrine can apply in view of TEX. REV. CIV. STAT. ANN. art. 8308-3.06 (Vernon Supp. 1991), that the finding of borrowed servant be reversed, that the decision to exclude evidence as to the intoxication issue be reversed and the case remanded for another hearing, and that the finding of average weekly wage be reversed and the case remanded to obtain evidence. Appellant also asks that it not be liable for respondent's attorney's fees, or any part thereof.

DECISION

We find merit in the contention of the appellant that respondent was the employee of Employer and was not a borrowed servant of (Moring) when the accident occurred. The issues of intoxication and average weekly wage are therefore moot. We reverse the decision of the hearing officer and order that the Carrier pay nothing.

Appellant asserts under its first issue that certain evidence was uncontroverted and raises questions of applicability of Article 8308-3.05 and 3.06. In its second issue it states that the evidence as a matter of law does not support a finding of borrowed servant.

I

The Texas Workers' Compensation Act of 1989 (1989 Act), TEX. REV. CIV. STAT. ANN. art. 8308-3.01 (Vernon Supp. 1991), limits liability for compensation to one who is an employee. Then the 1989 Act in both Articles 8308-3.05 and 3.06 strives to codify certain common law principles that determine whether the employer-employee relationship exists. Appellant seeks a determination that Article 8308-3.06 is controlling. That article would be especially germane to the decision if this case contained either a written agreement under 8308-3.06(d) or a joint agreement under 8308-3.06(e). Without either, only subsections (a), (b), and (c) of 8308-3.06 can apply. Declarations made in 8308-3.06(c) simply restate existing workers' compensation case law principles. (General contractor does not have to provide workers' compensation insurance for an independent contractor.) Similarly, 8308-3.06(b) defines an independent contractor using some, but not all, of the criteria found in common law. It states that an independent contractor is paid by the job, is free to hire as many helpers as he wants, and is free to work for other contractors.

Definitions of independent contractor at common law vary somewhat. Anchor Casualty Co. v. Hartfield, 390 S.W.2d 469 (Tex. 1965) looked to right to control and discussed the following controlling factors to establish an independent contractor: did the work require special skill, did the worker furnish his tools, was the task done according to plans, could the worker come and go, was he paid by the job and was tax withheld from him? More recently Ross v. Texas One Partnership, 796 S.W.2d 206 (Tex. App.-Dallas 1990, writ dismissed), and INA of Texas v. Torres, 808 S.W.2d 291 (Tex. App.-Houston [1st Dist.] 1991, n.w.h.), provided that factors to determine right of control in an independent contractor relationship are: the independent nature of the contractor's business, obligation to furnish tools, supplies and materials, right to control the progress of the job, length of time employed, and the method paid.

To be applicable, Article 8308-3.06(a) requires first that the construction site be of a certain class or size. There was evidence that the structure at the Apartment site at which respondent fell on ______, was under 20,000 square feet. There was no evidence that the same "structure", which Moring was under contract to repair at the time of the incident, was 20,000 square feet or greater, so Article 8308-3.06 applies and 8308-3.05 does not. (Note: there was evidence that Moring had a separate contract for maintenance that covered all Apartments which would total over 20,000 square feet.)

Applying the criteria of 3.06(b), respondent was in the position of an independent contractor (as an employee of an independent contractor) to Moring. Evidence of record showed that Kip Kerley from Oklahoma, the superintendent of Moring (superintendent), asked Employer if Laws could repair the cornish and siding of a burned structure that included 12 apartments in apartment totaling approximately 10,368 square feet. Laws, who was at this time the subcontractor on another Moring project, said he could. While Article 8308-3.06 does not define an "employee", there is no dispute that respondent was Employer' employee at the time Laws and the superintendent discussed the apartment work. Laws had hired respondent to work for him at $9.00 an hour at the time he began the other Moring project. Respondent was working in this capacity and was not free to hire others when Laws asked him to go to the apartment project in question. Both BM and his superintendent were not contradicted in saying that they did not pay respondent and did not carry him on their roles for deducting social security or withholding tax. The superintendent testified the price for the apartment job was agreed as $1,600; Laws said he estimated to the superintendent that the job would cost $1,700 and he replied, "$1,500." Laws then testified no agreement was reached and he "assumed" it would be the same as at the other project he had with Moring in which he was paid $25 an hour for himself, $10 an hour for one man, $8 an hour for two men, and $6 an hour for three men. Laws gave a certificate of workers' insurance, showing coverage from December 23, 1990 to December 23, 1991, to the superintendent relative to this other Moring project. Laws testified that he actually had no insurance and the certificate was admitted into evidence. There was no evidence that workers' coverage was discussed relative to the apartment project. There was also no evidence that Laws would be restricted as to what he could pay his men at apartment. Laws said when asked about doing this project that he could send three men. Another time in his testimony he said the superintendent asked for three men. No evidence indicates he was limited to three men, but the evidence was uncontroverted that at least three were needed to effectively do this work because of the nature of the job. The next day Employer took respondent and one other worker to the apartment site, reviewed the work to be done with them, and sent another worker later that day to join them. Laws had testified that at this time he had another subcontracting job for Moring at another project; there was no evidence that he could not subcontract elsewhere. The conclusion of the hearing officer that respondent was an employee of Employer at the time of the injury is amply supported by the evidence. That conclusion is consistent with the determination herein that Employer was an independent contractor to Moring at Apartment.

II

The answer to the question of liability is not obtained just by determining, in conjunction with Article 8308-3.06, that respondent was employed by Employer and Laws was an independent contractor. Article 8308-3.06(c) states that a hiring contractor has no obligation to provide workers' compensation insurance for employees of a subcontractor. However, since that addresses only a static situation, it is not the central issue. The issues are, can the common law doctrine of borrowed servant be used and if so, was respondent the borrowed servant of Moring at the time of his fall? Common law rules can be changed by statute. Fulgham v. Baxley, 219 S.W.2 1014 (Tex. App.-Dallas 1949, no writ). Since nothing in this article attempts to change or restrict the borrowed servant doctrine, it can be considered in this case. Even the underlying question of independent contractor is not answered differently through use of the limited criteria of Article 8308-3.06(b). Employer would still be found to be a subcontractor to Moring applying common law tests of this relationship. Laws and his employees furnished their tools (including the ladder from which respondent fell), Laws was a subcontractor by trade, he had the right to control the progress of work, the length of time was limited by the job to be done, specific tasks were described, and all testimony about the discussion of price for the job involved a fixed sum. The work of Employer on the project in question began the same day respondent fell. It is clear that Employer appeared at the site with respondent; Laws was told what to do and shown the layout by the supervisor. He was told that the job would be to replace facia boards, cornish, trim, and replace siding. Laws further testified that the superintendent also told him there had been problems with trusses and there were a few that were too short and would have to be lengthened.

Uncontroverted evidence of record shows two events that raised the borrowed servant issue. The superintendent for Moring:

(1)asked respondent if Employer had talked to him about "furring out" (to apply siding correctly, short trusses would need to be "furred" out several inches). Respondent states he only discussed "furring out" with the superintendent and not with Laws.

(2)told respondent to stop applying "brick frieze" (a small board that goes under the soffit) until brick workers had replaced missing bricks.

Appellant's position on this issue was that even if at some point Moring's superintendent borrowed respondent, it made no difference. The evidence clearly showed that respondent, when he fell, was not working on that part of the project which the superintendent had discussed with him. Appellant viewed this fact as sufficient to invoke the rationale contained in J.A. Robinson Sons, Inc. v. Wright, 431 S.W.2d 327 (Tex. 1968), Hartford Accident & Indemnity Company v. Hooten, 531 S.W.2d 365 (Tex. App.-San Antonio 1975, writ ref'd n.r.e.) and Denison v. Haeber Roofing Co., 767 S.W.2d 862 (Tex. App.-Corpus Christi 1989, no writ). These cases generally hold that a worker can at times maintain his independent contractor status and at others be an employee. They looked to circumstances of the particular action causing the injury to determine whether he was a borrowed servant at the time.

Those cases are persuasive and respondent himself testified he fell while on a ladder trying to get a barge rafter in place to which to nail facia. (He had cut the rafter--a 2" by 4" board--on the ground and brought one end up the ladder while another worker held the other end from above.) Respondent also said he was not working on the wall that needed to be furred out when he fell. Reversal would be appropriate because respondent was not engaged in any task, or manner of doing the job, which the superintendent had discussed with him. But this point should be addressed only if respondent had become a borrowed servant.

The first event that raised the borrowed servant issue was whether "furring out" was indicative of new or added work given respondent by Moring. The testimony of Employer makes it clear though that while the superintendent did not use the term "furring out," in his description of the work to be done with Laws, he did tell Laws that some trusses were too short and would have to be lengthened. In addition, respondent gave credence to Laws' testimony (that the superintendent had discussed the need to furr out with Laws) when he testified that the superintendent asked him if Laws had talked about "furring out" with him. (emphasis added). After that conversation, the superintendent left without directing respondent as to how to "furr" out. The fact that the superintendent for Moring mentioned this to respondent does not make it added work or indicate right to control when he had first discussed it with respondent's employer. This communication amounts to no more than describing general specifications as in Insurers Indemnity Co. v. Pridgen, 223 S.W.2d 217 (Tex. 1949).

The second event that could trigger a borrowed servant question was the superintendent's statement to wait to put up brick frieze so that some brick could be replaced first. Producers Chemical Co. v. McKay, 366 S.W.2d 220 (Tex. 1963) is quoted frequently on this issue. The court looked to "right of control" as determinative of whether a "borrowed servant" relationship occurred. To help determine right of control the court looked to the nature of the general project, nature of work to be done by both man and machine, length of the special employment, the type of machinery furnished, acts of control, and whether another person could be substituted. In the Producers case, a compressor and crew of three, including McD, were sent by Producers Chemical Co. to another company's well site when its compressor broke. Shortly after beginning, there was an explosion. The court said "Mere directions given to McD as to where to hook up, when to start and when to shut down the compressor in coordinating the work of all men and machinery on the project toward the ultimate object of unloading the hole does not raise the issue that right of control of McD in the manner of performing his work had been transferred from Producers to Canadian River." The Supreme Court found that the trial court made no error in refusing to submit an issue on borrowed servant to the jury.

The Producers case is not alone in discussing right to control the manner of doing a job and ruling on such as a matter of law. U.S. Fidelity & Guaranty Co. v. Goodson, 568 S.W.2d 443 (Tex. App.-Texarkana 1978, writ ref'd n.r.e.) involving a subcontract to do carpentry work on house construction. The builder told an employee of the subcontractor, who was laying out the location, to move it back five to six feet (to improve stability and reduce the amount of fill dirt). He also suggested to the same employee that space between the foundation beams be widened (to strengthen the foundations). This court looked at the following to determine right of control. ". . . when and where to begin and stop work, the regularity of hours and the amount of time spent on particular aspects of the work, the physical method or manner of accomplishing an end result, and control of the type tools and appliances used to perform the work." The court found "no evidence" of any control by the builder. The criteria of Goodson were used in Thompson v. Travelers Indemnity Co. of Rhode Island, 789 S.W.2d 279 (Tex. 1990) in deciding that a jockey was not, as a matter of law, an employee of a race track. The Ross case, supra, also stated that listing several tasks, rather than one, did not affect the contractual relationship.

In the related area of tort law, a series of cases defined the duty a "supervising" contractor has to its subcontractors. Redinger v. Living, Inc.,689 S.W.2d 415 (Tex. 1985), said when a supervising contractor retained any control, he then had a duty to exercise reasonable care to avoid harming a subcontractor. The court found that when Living's superintendent told a subcontractor ". . . to immediately move the dirt to another location," he then exercised ". . . supervising control by coordinating the work performed by two subcontractors", and had a duty to do it reasonably. The court adopted the Restatement (Second) of Torts ' 414 (1977) as to this duty of reasonable care and said it applies when the employer retains some control over the manner in which the independent contractor's work is performed, but does not retain the degree of control which would subject him to liability as a master." 689 S.W.2d 418. More recently Barham v. Turner Construction Co. of Texas, 803 S.W.2d 731 (Tex. App.-Dallas 1990, writ dismissed) cited Redinger and applied its criteria for supervising control.

Examples of acts that do not as a matter of law amount to right to control in the Producers and Goodson cases are clearly as directive as the statement on sequence of work regarding bricks and brick frieze in this case. In addition, this statement to respondent was consistent with the "supervising control" found in Redinger when subcontractor's work was coordinated. This slight control was not sufficient to impose liability under a master/servant theory. We conclude that in this case, as a matter of law, respondent did not become a borrowed servant of Moring.

During the course of the hearing two of three documents offered by appellant were not admitted. The hearing officer was correct in excluding the documents on the basis of relevance and failure to timely provide a copy of a statement to the other party. However, our determination for appellant that respondent was neither the employee of Moring nor its borrowed servant, makes any ruling on those exhibits meaningless. Similarly, the hearing officer's findings as to intoxication and average weekly wage are supported by the evidence but are not required because respondent was the employee of employer. Accordingly, the decision is reversed. Respondent is not entitled to receive workers' compensation benefits for his injury of ______, from Carrier.

Joe Sebesta
Appeals Judge

CONCUR:

Stark O. Sanders, Jr.
Chief Appeals Judge

Robert W. Potts
Appeals Judge

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