Rebuildables Construction, LLC v. WCAB (Clouthier) ( 2015 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Rebuildables Construction, LLC, :
Donegal Mutual Insurance Group :
and Atlantic States Insurance Co., :
Petitioners :
:
v. : No. 335 C.D. 2015
: Submitted: September 18, 2015
Workers’ Compensation Appeal :
Board (Clouthier, Uninsured :
Employers Guaranty Fund, :
ACS Claims Service, :
7400 Roosevelt Apartments, :
US Adjustment Corporation :
and Joel Bliss t/a Bliss Contracting), :
Respondents :
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE COLINS FILED: December 30, 2015
Rebuildables Construction, LLC, and its workers’ compensation
insurers, Donegal Mutual Insurance Company and Atlantic States Insurance
Company (Rebuildables), petition for review of an order of the Workers’
Compensation Appeal Board (Board) that affirmed the decision and order of a
Workers’ Compensation Judge (WCJ), which granted a claim petition filed by
William E. Clouthier (Claimant) against Rebuildables as Claimant’s statutory
employer under the Workers’ Compensation Act (Act).1 Rebuildables argues (i)
that it was not Claimant’s statutory employer because it did not act as a general
contractor that hired Claimant’s direct employer, Joel Bliss t/a Bliss Contract
Flooring, for work performed at 7400 Roosevelt Apartments (7400 Roosevelt),2 the
apartment complex where Claimant suffered his injury, and (ii) that the WCJ’s
denial of the claim petition against the Uninsured Employers Guaranty Fund
(Fund) was contrary to the requirement of the Act that the Fund would guarantee
the workers’ compensation liability of Bliss as an uninsured employer. For the
reasons that follow, we affirm the order of the Board.
The facts relating to Claimant’s work injury are not in dispute. On
June 28, 2012, Claimant and Bliss were working at 7400 Roosevelt removing and
installing carpet in a third-floor apartment. (WCJ Decision, Finding of Fact (F.F.)
¶¶4b, 6a.) Bliss instructed Claimant to dispose of the old carpet by throwing it
over a railing on a balcony adjacent to the apartment while Bliss secured the area
below. (Id.) While in the act of disposing of the carpet, the railing gave way and
Claimant fell approximately 40 to 45 feet, landing on his feet. (Id., F.F. ¶4b.)
Claimant was taken to the hospital and examined by Dr. Justin J. Fleming, who is
board-certified in foot and ankle reconstruction and was on-call in the emergency
room where Claimant was admitted. (Id., F.F. ¶¶4c, 7a.) After an examination,
Dr. Fleming diagnosed Claimant with bilateral ankle fractures and performed
surgery on the day of the injury consisting of a closed reduction and placement of
1
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1–1041.1, 2501–2708.
2
“7400 Roosevelt” is used in this opinion to refer to the apartment complex where Claimant was
injured and the entity that was named as a defendant to Claimant’s workers’ compensation claim.
7400 Roosevelt has at times in this proceeding been referred to by the name of its parent
company, Signature Investment Realty, Inc., which owns other apartment buildings in addition to
7400 Roosevelt.
2
external fixators on both of Claimant’s lower legs. (Id., F.F. ¶¶4c, 7b, 7c.)
Claimant remained in the hospital, and Dr. Fleming performed two more surgeries
in which he removed the fixators and used plates and screws to stabilize the
fractures in both legs. (Id., F.F. ¶¶4c, 7c.) Following Claimant’s release from the
hospital, he has continued to see Dr. Fleming and his injuries have prevented him
from returning to his pre-injury job. (Id., F.F. ¶¶4c, 4e, 7d, 7f.)
On July 26, 2012, Claimant filed a claim petition against Bliss seeking
total disability benefits for his June 28, 2012 work injury. Claimant thereafter filed
an uninsured employer claim petition naming Bliss and the Fund. The Fund then
joined Rebuildables and 7400 Roosevelt as defendants and potential employers or
statutory employers of Claimant. Rebuildables subsequently filed a joinder
petition against 7400 Roosevelt. While the claim petitions were pending, the WCJ
issued an order pursuant to Section 410 of the Act, 77 P.S. § 751,3 awarding
Claimant medical benefits and ongoing temporary total disability benefits in the
amount of $360 per week and requiring Bliss, Rebuildables and 7400 Roosevelt to
each pay one-third of the benefits pending the final decision in the matter. Bliss,
Rebuildables and 7400 Roosevelt appealed the Section 410 order, but the Board
dismissed the appeals as interlocutory.
3
Section 410 provides:
Whenever any claim for compensation is presented and the only issue involved is
the liability as between the defendant or the carrier or two or more defendants or
carriers, the referee of the department to whom the claim in such case is presented
shall forthwith order payments to be immediately made by the defendants or the
carriers in said case. After the department’s referee or the board on appeal, render
a final decision, the payments made by the defendant or carrier not liable in the
case shall be awarded or assessed against the defendant or carrier liable in the
case, as costs in the proceedings, in favor of the defendant or carrier not liable in
the case.
77 P.S. § 751.
3
On the issue of which defendant was Claimant’s employer, Claimant
testified that he had worked for Bliss for two to three years prior to his injury as an
unskilled laborer and Bliss paid him $100 per day of work by check or cash. (Jan.
30, 2013 Hearing Transcript (H.T.) at 7-8, 13-14.) Claimant did not have a
contract with Bliss, did not have his own business and did not carry liability
insurance. (Id. at 14.) Claimant testified that he had worked between three to five
days per week for Bliss in 2011, but there had been a several month gap in his
employment with Bliss in 2012 until the Sunday before the accident when Bliss
called Claimant to assist on a job at an apartment building in another part of
Philadelphia. (Id. at 6-7.) On the date of his work injury, Bliss asked Claimant
and another worker to perform carpet removal and installation at an apartment at
7400 Roosevelt. (Id. at 8-9.) Claimant testified that when he was working with
Bliss he used Bliss’s tools and took direction from Bliss; Claimant knew that Bliss
was in a business relationship with Rebuildables and that he and Bliss had worked
at jobs with Rebuildables, including one at another building in the 7400 Roosevelt
complex, but Claimant did not work directly for Rebuildables and the owner of
Rebuildables was not present on the day of the accident. (Id. at 12-14, 22-29.)
Claimant testified that he had never worked for or taken instruction from anyone at
7400 Roosevelt. (Id. at 12-13, 26-28.)
Joel Bliss testified that he is the owner of Bliss Contract Flooring,
LLC and that he hired Claimant as needed to assist him on jobs with carrying tools
and materials, ripping up and removal of flooring and clean-up. (Id. at 34-35.)
Bliss testified that he directed Claimant, Claimant used Bliss’s tools and that
Claimant did not do installation work because he did not have sufficient
experience. (Id. at 36, 51.) Bliss testified that the job at 7400 Roosevelt was
4
through Rebuildables which had a relationship with Signature Properties, the
parent company of 7400 Roosevelt; however, Bliss stated that the maintenance
supervisor at 7400 Roosevelt contacted him directly for the job on which Claimant
was hurt and that no one from Rebuildables was present on the date of the injury.
(Id. at 38, 57-60.) Bliss testified that he had worked on jobs at other locations for
Signature Properties, including the job on which he had asked Claimant to
accompany him to earlier in the week. (Id. at 52-53.) Bliss sent invoices for his
work at Signature Properties to Aaron Martinez, the owner of Rebuildables, based
on a per-job rate, Martinez then invoiced Signature Properties and he received
payment from Martinez and an IRS Form 1099 at the end of the year. (Id. at 38-
39, 60, 63, 65-67.) Bliss testified that almost all of his work for Rebuildables was
for Signature Properties, although he did other minor work for Rebuildables
including installation of carpet at Martinez’s home. (Id. at 57, 63-64.) Bliss
testified that he did not have a contract with Rebuildables or for any of his work
with 7400 Roosevelt or Signature Properties. (Id. at 51-52, 57.)
Aaron Martinez testified that he is the owner of Rebuildables, which
is a “light commercial and residential interior fit out construction company.” (May
15, 2013 H.T. at 5.) Martinez testified that Rebuildables entered into a contract
with 7400 Roosevelt on September 12, 2011 for the repair of eight water-damaged
apartments in the C building of 7400 Roosevelt and the work under this contract
terminated in November 2011. (Id. at 6-7, 16.) Rebuildables hired Bliss under this
contract as a subcontractor to do vinyl floor and carpet installation, and Martinez
ensured the quality and timeliness of Bliss’s work, but Rebuildables did not hire,
supervise or employ any of Bliss’s employees. (Id. at 8, 11, 17.) Martinez
testified that 7400 Roosevelt contacted him after the conclusion of this work and
5
asked for Bliss to do further carpet installation work there, but Rebuildables did
not supervise or check the quality of any of Bliss’s continuing work for Signature
Properties after the expiration of the initial project. (Id. at 8-9, 12-14.) Instead,
Martinez acted as a billing agent for Bliss; Bliss would send Martinez a note
stating the amount of work he had done for each project with his rate based on the
yardage of flooring installed and Martinez would then bill Signature Properties
adding an additional $1 per yard to the amount invoiced by Bliss. (Id. at 8-9, 12-
16, 18, 20, 28.) Martinez testified that by April 2012, 7400 Roosevelt had stopped
calling him for carpeting installation and instead began to call Bliss directly. (Id.
at 20, 26.) Martinez testified that Rebuildables continued to work for Signature
Properties after the initial contract had expired, including doing sidewalk repair
and other concrete work. (Id. at 22-23.) Martinez testified that Rebuildables also
continued to work with Bliss and would subcontract out carpeting work, which his
company does not do itself. (Id. at 17-18, 27-28.)
7400 Roosevelt presented the testimony of its maintenance supervisor,
Joseph Doran, and its property manager, Denise Fuoco. Doran testified that
whenever he noticed that there was carpeting that needed to be replaced, he would
call Fuoco and she would call for a contractor. (Id. at 33, 36, 39.) Doran stated
that he never called Bliss directly to request him to work at 7400 Roosevelt and
had no supervisory role over Bliss’s or Claimant’s work; Doran’s only contact with
Bliss was to show him into the apartment when he arrived on site. (Id. at 33-38.)
Fuoco testified that when Doran informed her that a contractor was needed to
perform work at one of their buildings, she would direct her assistant to call the
contractor. (Id. at 44.) In the case of the carpeting work that Bliss performed,
Fuoco testified that her office would call Rebuildables to advise that the work was
6
needed, Rebuildables would determine which subcontractor to hire, Rebuildables
would bill the work, payment would be made to Rebuildables and Rebuildables
was responsible to ensure that the work was done properly. (Id. at 45-50.)
By a decision and order circulated on May 22, 2014, the WCJ
concluded that Claimant was entitled to ongoing total disability benefits as of June
28, 2012 and that he was not able to return to his job at the time of his injury.
(WCJ Decision, F.F. ¶18, Conclusion of Law (C.L.) ¶3.) The WCJ further
concluded that the claim petition should be granted against Rebuildables as
Claimant’s statutory employer because 7400 Roosevelt had hired Rebuildables to
perform work at its apartment building and Rebuildables had then subcontracted
the work to Claimant’s direct employer, Bliss, who was uninsured at the time of
the work injury. (Id., F.F. ¶¶14, 16, 17, C.L. ¶2.) The WCJ dismissed the claim
petition against 7400 Roosevelt and the Fund and ordered Rebuildables to pay the
full compensation as required under the Section 410 order with a credit for
amounts already paid and to reimburse other parties found not liable. (Id., F.F.
¶¶21, 22, C.L. ¶¶6-8.)
Rebuildables appealed the WCJ’s decision and order and the Board
affirmed. The Board concluded that, though the WCJ did not make express
credibility findings, a fair reading of the decision showed that the WCJ credited the
evidence which established that 7400 Roosevelt was in the position of an owner
with an ongoing business relationship with Rebuildables, that Rebuildables
subcontracted part of its business to Bliss and that Claimant was an employee of
Bliss. (Board Opinion at 6.) The Board rejected Rebuildables contention that
there was evidence to support a contrary finding that 7400 Roosevelt was
Claimant’s statutory employer and held that there was no evidence to show that the
7
Board had dismissed 7400 Roosevelt from the workers’ compensation case in
order to preserve a third-party recovery against 7400 Roosevelt in a negligence
suit. (Id. at 6-7.) Finally, the Board rejected the argument that the WCJ erred in
dismissing the Fund, holding that the establishment of the Fund did not abolish the
statutory employer doctrine and that the Fund’s liability is secondary to a statutory
employer’s liability. (Id. at 7.) Rebuildables thereafter appealed the Board’s order
to this Court.4
Under the Act, a person or entity may be deemed a “statutory
employer” with secondary liability to pay workers’ compensation benefits for an
injured worker that it does not directly employ when it contracts part of its
business to an uninsured subcontractor and an employee of the subcontractor
sustains a work injury. There are two statutory provisions, Section 302(a) and
Section 302(b) of the Act, 77 P.S. §§ 461, 462, under which an employer can be
shown to be a statutory employer liable to assume the workers’ compensation
obligations of its subcontractor.5 The claimant has the burden of satisfying the
criteria set forth in either Section 302(a) or Section 302(b) in order to hold a party
liable as a statutory employer. Zwick v. Workers’ Compensation Appeal Board
(Popchocoj), 106 A.3d 251, 254 (Pa. Cmwlth. 2014).
The more cited of the two statutory employer provisions is Section
302(b),6 which, as our Supreme Court has explained, relates to the “conventional”
4
Following the filing of its petition for review, Rebuildables filed an application for supersedeas,
which this Court denied by a memorandum and order filed on May 12, 2015.
5
Additionally, Section 203 of the Act provides that a statutory employer has the same immunity
from common-law tort actions as the direct employer. 77 P.S. § 52.
6
Section 302(b) provides that:
Any employer who permits the entry upon premises occupied by him or under his
control of a laborer or an assistant hired by an employe or contractor, for the
8
or “classic” relationship common in the construction trades wherein a property
owner hires a general contractor to perform work on a fixed work site and the
general contractor then delegates some of that work to a subcontractor. Patton v.
Worthington Associates, Inc., 89 A.3d 643, 648 (Pa. 2014); Six L’s Packing Co. v.
Workers’ Compensation Appeal Board (Williamson), 44 A.3d 1148, 1157-58 (Pa.
2012); see also Six L’s Packing Co. v. Workers’ Compensation Appeal Board
(Williamson), 2 A.3d 1268, 1277 (Pa. Cmwlth. 2010) aff’d, 44 A.3d 1148 (Pa.
2012) (“Typically, in statutory employer cases, a traditional contractor-
subcontractor relationship is at issue with construction work being done at a fixed
site. These cases give rise to the application of Section 302(b) of the Act...”). As
set forth in McDonald v. Levinson Steel Co., 153 A. 424 (Pa. 1930), a claimant
must satisfy the following elements to establish a statutory employer relationship
under Section 302(b): (i) the employer is under contract with an owner or one in
position of an owner; (ii) the employer occupies or is in control of the premises
where the injury occurred; (iii) the employer entered into a subcontract; (iv) the
employer entrusted a part of its regular business to the subcontractor; and (v) the
injured party is an employee of such subcontractor. Id. at 426; see also Six L’s
Packing, 44 A.3d at 1151. The Court in McDonald also recognized that the owner
of the property on which the injury took place may not be deemed a statutory
performance upon such premises of a part of such employer’s regular business
entrusted to that employe or contractor, shall be liable for the payment of
compensation to such laborer or assistant unless such hiring employe or
contractor, if primarily liable for the payment of such compensation, has secured
the payment thereof as provided for in this act. Any employer or his insurer who
shall become liable hereunder for such compensation may recover the amount
thereof paid and any necessary expenses from another person if the latter is
primarily liable therefor.
77 P.S. § 462.
9
employer under the Act unless the owner reserved its right by contract to direct
how the general contractor would perform its work under the contract. 153 A. at
427; see also Six L’s Packing, 44 A.3d at 1153-54; Smith v. Workmen’s
Compensation Appeal Board (Miller), 618 A.2d 1101, 1104 (Pa. Cmwlth. 1992).
The other statutory employer provision, Section 302(a), provides that
a “contractor who subcontracts all or any part of a contract and his insurer” is
liable to pay workers’ compensation benefits for any injured employee of its
subcontractor if the subcontractor has failed to secure coverage. 77 P.S § 461.
Section 302(a) defines the contractor-subcontractor relationship as consisting of a
party that contracts with another party for (i) “the removal, excavation or drilling
of soil, rock or minerals”; (ii) “the cutting or removal of timber from lands”; or (iii)
“to have work performed of a kind which is a regular or recurrent part of the
business, occupation, profession or trade of such person.” Id. Though this
definition had traditionally been read as limiting the application of Section 302(a)
only to the provision of services related to the removal of soil, rock, mineral or
timber, in Six L’s Packing, our Supreme Court explained that such a limitation is
inappropriate and that Section 302(a) pertains to any contractual delegation of a
party’s regular or recurrent business activities to another. 44 A.3d at 1158; see
also Zwick, 106 A.3d at 254-55.
In Six L’s Packing, our Supreme Court recognized that while there is
“substantial overlap” between Section 302(a) and Section 302(b) there are also
important differences between the two provisions. 44 A.3d at 1158. Among these
differences is the fact that by its text Section 302(b) requires that the general
contractor occupy or exercise control over the site where the injury occurred while
Section 302(a) does not contain this requirement and instead “extends to any
10
scenario in which a ‘contractor...subcontracts all or any part of a contract.’” Id. at
1157 (quoting 77 P.S. § 461); see also Zwick, 106 A.3d at 255. Thus, though
recognizing that the analysis under the two provisions contain overlapping factors,
the Court rejected the application of the McDonald test to Section 302(a) and held
that this provision must be analyzed according to its own terms. Six L’s Packing,
44 A.3d at 1159 & n.12. Further, the Court held that the broad exclusion of
owners from statutory employer liability of Section 302(b) under McDonald was
inapplicable to Section 302(a). Six L’s Packing, 44 A.3d at 1159. The Court in Six
L’s Packing concluded:
Viewing the statutory scheme as a whole...and employing
the principle of liberal construction in furtherance of the
Act’s remedial purposes,...we find it plain enough that
the Legislature meant to require persons (including
entities) contracting with others to perform work which is
a regular or recurrent part of their businesses to assure
that the employees of those others are covered by
workers’ compensation insurance, on pain of assuming
secondary liability for benefits payments upon a default.
Id. at 1158-59 (citation omitted).
On appeal, Rebuildables argues that the WCJ erred by finding that it
was Claimant’s statutory employer. Rebuildables contends it did not meet the
elements required to show statutory employer status under McDonald because
Rebuildables did not have a contract with 7400 Roosevelt or Bliss and was not
present at the work site where Claimant was injured. Instead of having a
contractor-subcontractor relationship with Bliss, Rebuildables asserts that it was
only acting as a billing agent for Bliss to facilitate Bliss’s independent business
relationship with 7400 Roosevelt. Rebuildables further argues that 7400 Roosevelt
11
was in fact Claimant’s statutory employer because 7400 Roosevelt, and not
Rebuildables, hired Bliss and directed his carpet installation work at its properties.
Our review of an appeal from a determination by the Board is limited
to determining whether an error of law was committed, whether the WCJ’s
necessary findings of fact are supported by substantial evidence and whether Board
procedures or constitutional rights were violated. 2 Pa. C.S. § 704; Zwick, 106
A.3d at 254 n.3. It is irrelevant whether the record contains evidence to support
alternate findings and instead we must determine whether there is substantial
evidence to support the findings of fact actually made by the WCJ. Hall v.
Workers’ Compensation Appeal Board (America Service Group), 3 A.3d 734, 743
n.16 (Pa. Cmwlth. 2010); Hoffmaster v. Workers’ Compensation Appeal Board
(Senco Products, Inc.), 721 A.2d 1152, 1155 (Pa. Cmwlth. 1998). Substantial
evidence has been defined as “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Sell v. Workers’ Compensation
Appeal Board (LNP Engineering), 771 A.2d 1246, 1250 (Pa. 2001) (quoting
Republic Steel Corp. v. Workmen’s Compensation Appeal Board (Shinsky), 421
A.2d 1060, 1062 (Pa. 1980)).
After careful review, we conclude that there was substantial evidence
to show that Rebuildables was Claimant’s statutory employer. Initially, we
observe that, although both the WCJ and the Board cited the McDonald test for
statutory employment applicable to Section 302(b), neither the WCJ nor the Board
indicated whether Rebuildables was found to be a statutory employer under
Section 302(a) or Section 302(b). We agree with Rebuildables’ argument that the
record does not support a finding that Rebuildables occupied or was in control of
the premises where Claimant’s injury occurred, an essential element under the
12
McDonald test. In order to satisfy this element, a claimant must demonstrate that
the alleged statutory employer actually occupied or controlled the work site; it is
not sufficient to show that the employer merely had the right or authority to control
the site. Leibensperger v. Workers’ Compensation Appeal Board (Thomas H.
Lewis Builders, Inc.), 813 A.2d 28, 30-31 (Pa. Cmwlth. 2002); Wright Demolition
& Excavating Co. v. Workmen’s Compensation Appeal Board (Manuel), 434 A.2d
232, 234 (Pa. Cmwlth. 1981). Here, the testimony of Claimant, Bliss and Martinez
demonstrates that no one from Rebuildables was present at the apartment in the
7400 Roosevelt complex where Bliss and Claimant were working on the date of
the work incident and that Rebuildables did not provide any direction regarding the
carpet removal and installation work that was being performed that day. (Jan. 30
2013 H.T. at 12, 24, 29, 58; May 15, 2013 H.T. at 9, 12-14.) The record is thus
insufficient to show that Rebuildables actually occupied or controlled the work site
under McDonald, and there is not substantial evidence to support a finding that
Rebuildables was Claimant’s statutory employer under Section 302(b).
Nevertheless, there was substantial evidence to support the WCJ’s
determination that Rebuildables was Claimant’s statutory employer under Section
302(a) because Rebuildables contracted with Bliss “to have work performed of a
kind which is a regular or recurrent part of [its] business, occupation, profession or
trade.” 77 P.S. § 461. Specifically, the WCJ found, and the evidence of record
reflects, that Rebuildables is a “light commercial and residential interior fit out
construction company,” (May 15, 2013 H.T. at 5), that contracted with 7400
Roosevelt and its parent, Signature Properties, for apartment carpet removal and
installation jobs, which Rebuildables would then subcontract to Bliss. That
Rebuildables was more than merely a billing agent and engaged in the type of
13
construction that it subcontracted to Bliss is evidenced by the fact that
Rebuildables had previously entered into a contract with 7400 Roosevelt in
September 2011 for the remediation and reconstruction of eight water damaged
apartments in which Rebuildables agreed to perform the identical services that led
to the type of injury at issue here. Contrary to Rebuildables’ argument, it is also
irrelevant that the original September 2011 contract between Rebuildables and
7400 Roosevelt had expired before the date of Claimant’s accident; Rebuildables
and 7400 Roosevelt had an ongoing business relationship and there is no
requirement in the Act that a statutory employment relationship must be
memorialized in a written contract. Furthermore, the record reflects that the
contractor-subcontractor relationship between Rebuildables and Bliss was not the
type of fixed-site, construction relationship that has traditionally been analyzed
under Section 302(b). Rather than working on one site over a course of time,
Rebuildables contracted with Bliss to perform numerous carpet removal and
installation jobs at various apartments at 7400 Roosevelt and at other apartments
owned by Signature Properties.
Rebuildables further contends that the WCJ erred by dismissing the
claim petition against 7400 Roosevelt because 7400 Roosevelt, rather than
Rebuildables, was Claimant’s statutory employer for the June 28, 2012 job on
which Claimant was injured. As discussed above, the property owner exclusion
under McDonald and Section 302(b) is not applicable to Section 302(a), Six L’s
Packing, 44 A.3d at 1159, and thus 7400 Roosevelt is not excluded from being a
statutory employer on that ground. However, carpet installation or construction
was not a “regular or recurrent part” of 7400 Roosevelt’s business. 77 P.S. § 461.
Rather, 7400 Roosevelt and its parent company Signature Properties were property
14
owners and property management companies, and to the extent it needed
construction and repair work it enlisted companies like Rebuildables, which in this
case subcontracted its work to Bliss. The fact that 7400 Roosevelt looked to
Rebuildables to perform the carpet installation work and expected Rebuildables to
ensure the quality of the work is evidenced by the testimony of Denise Fuoco, the
property manager of 7400 Roosevelt, that all contact for these jobs, including
notification that work was necessary, billing and payment, went through Aaron
Martinez of Rebuildables and if anything went wrong with a project Fuoco would
call Martinez. (May 15, 2013 H.T. at 45-50.) Accordingly, we agree with the
WCJ that 7400 Roosevelt was not Claimant’s statutory employer under the Act.
Finally, Rebuildables argues that the WCJ improperly dismissed the
Fund from this matter because the WCJ’s decision is contrary to the Fund’s
obligation pursuant to Act 147 of 20067 to assume the workers’ compensation
liabilities of uninsured employers. This argument is without merit. Rebuildables’
argument would essentially abrogate Section 302(a) and Section 302(b) and
insulate general contractors from workers’ compensation liability if their
subcontractors fail to procure insurance. The only authority cited by Rebuildables
is Section 1602(c) of the Act, which provides that the Fund was created for the
“exclusive purpose” of “paying to any claimant or his dependents workers’
compensation benefits due and payable under this [A]ct...where the employer
liable for the payments failed to insure or self-insure its workers’ compensation
liability...at the time the injuries took place.” 77 P.S. § 2702(c). However, Section
1602(c) does not mandate that the Fund pay benefits even where a statutory
employment relationship could be found nor does it define “employer” to exclude
7
Sections 1601 to 1608 of the Act, added by the Act of November 9, 2006, P.L. 1362, as
amended, 77 P.S. §§ 2701-2708.
15
statutory employers, as to which the Fund’s liability is secondary. 8 In the absence
of clear statutory language, we decline to rule that by creating the Fund the General
Assembly intended to abolish the statutory employer doctrine and insulate all
general contractors from workers’ compensation liability if their subcontractors fail
to procure insurance.
The order of the Board is affirmed.
____________________________________
JAMES GARDNER COLINS, Senior Judge
8
The term “employer” in the Act is defined “to be synonymous with master, and to include
natural persons, partnerships, joint-stock companies, corporations for profit, corporations not for
profit, municipal corporations, the Commonwealth, and all governmental agencies created by it.”
Section 103 of the Act, 77 P.S. § 21; Section 1601 of the Act, 77 P.S. § 2701. This definition of
an employer as being synonymous with a master is consistent with the general definition of a
statutory employer in McDonald as “a master who is not a contractual or common-law one, but
is made one by the Act.” 153 A. at 425; see also 77 P.S. § 462 (describing a statutory employer
as an “employer” in Section 302(b)).
16
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Rebuildables Construction, LLC, :
Donegal Mutual Insurance Group :
and Atlantic States Insurance Co., :
Petitioners :
:
v. : No. 335 C.D. 2015
:
Workers’ Compensation Appeal :
Board (Clouthier, Uninsured :
Employers Guaranty Fund, :
ACS Claims Service, :
7400 Roosevelt Apartments, :
US Adjustment Corporation :
and Joel Bliss t/a Bliss Contracting), :
Respondents :
ORDER
AND NOW, this 30th day of December, 2015, the order of the
Workers’ Compensation Appeal Board in the above matter is affirmed.
____________________________________
JAMES GARDNER COLINS, Senior Judge