Osborne, Darry v. Starrun, Inc.

TENNESSEE BUREAU OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
(HEARD OCTOBER 11, 2017, AT KNOXVILLE)
Darry Osborne ) Docket No. 2016-02-0562
)
v. ) State File No. 97626-2016
)
Starrun, Inc., et al. )
)
)
Appeal from the Court of Workers’ )
Compensation Claims, )
Brian K. Addington, Judge )
Affirmed and Remanded - Filed November 8, 2017
The employee, a truck driver, sustained serious injuries when he fell from a flatbed trailer
while in the process of tarping his load. His employer did not have workers’
compensation insurance. The employee initiated claims for workers’ compensation
benefits against the employer, the transportation broker that contracted to transport the
load, and the manufacturer of the materials loaded on the trailer, asserting the broker and
manufacturer were statutory employers. Following an expedited hearing, the trial court
determined the employee was unlikely to prevail at trial in establishing that either the
broker or the manufacturer were statutory employers as contemplated in Tennessee Code
Annotated section 50-6-113 (2017) and denied benefits. The employee has appealed the
trial court’s determination that the manufacturer is not a statutory employer. We affirm
the trial court’s order and remand the case for further proceedings as may be necessary.
Judge David F. Hensley delivered the opinion of the Appeals Board in which Presiding
Judge Marshall L. Davidson, III, and Judge Timothy W. Conner joined.
Dan Beiger, Bristol, Tennessee, for the employee-appellant, Darry Osborne
Eric Shen, Brentwood, Tennessee, for the employer-appellee, KPS Global
Kevin W. Washburn, Memphis, Tennessee, for the employer-appellee, Meadow Lark
Agency, Inc.
1
Factual and Procedural Background
Starrun, Inc. (“Employer”), is a motor carrier headquartered in Bluff City,
Tennessee that employed less than five persons at the time of the October 21, 2016
accident giving rise to this claim. Consequently, Employer was not required to carry
workers’ compensation insurance at the time of the accident and did not have coverage in
place.
Darry Osborne (“Employee”), a sixty-nine-year-old resident of Richland, Virginia,
was hired by Employer as a commercial truck driver approximately one month before
being seriously injured on October 21, 2016. On that date, he traveled to Employer’s
facility in Bluff City, Tennessee, where Employer provided an “18-wheeler” and flatbed
trailer with the equipment necessary to complete an assignment that required him to pick
up a load of refrigeration panels at KPS Global (“KPS”) in Piney Flats, Tennessee, and
deliver the load to KPS’s customer in East Liverpool, Ohio. KPS manufactures walk-in
coolers and freezers and ships its products in panels from its Piney Flats facility either
through coordination with transportation brokers who contract with motor carriers for the
loads to be transported, or through coordination with its customers who arrange for the
transport of KPS’s products themselves. Meadow Lark Agency, Inc. (“Meadow Lark”),
is the transportation broker with whom KPS entered into a “Supply Agreement” to
transport the load Employee was in the process of tarping when the accident occurred.
Employee filed claims for workers’ compensation benefits against Employer, KPS, and
Meadow Lark, contending the latter two were statutory employers from whom he could
recover workers’ compensation benefits as contemplated in Tennessee Code Annotated
section 50-6-113.
On the day of the accident, Employer provided the documents needed in
connection with Employee’s assignment and instructed him where to pick up the load.
Employee testified that Employer explained “the routine that [he] was show[n] to take
and bring the truck into [KPS’s facilities].” Upon his arrival at KPS, he parked in a
“holding area” and provided his documentation to a KPS employee before being
instructed to back into one of two loading docks when a dock became available. Once he
backed his truck into the loading dock, a KPS employee loaded panels onto the flatbed
trailer with the assistance of a forklift. After the panels were loaded and secured, the
forklift operator lifted the tarp that Employee brought with him and placed it on the top of
the load. Although the weight of the tarp was disputed, Employee estimated the tarp
weighed “about 500 pounds.” He testified that KPS’s forklift operator did not put the
tarp over the load; rather, “[h]e put it on top of the load, and I rolled it out and put it over
the load myself.” He acknowledged “[i]t was my duty to put the tarp over the load” and
testified he “went on top and rolled [his] tarp out and was laying it down over the sides to
bungee it down” when a KPS employee told him, “if [he] didn’t mind, to pull it on
outside,” adding “there were four trucks behind [him].”
2
Employee testified that once he pulled outside the covered loading area “when the
wind got in under my tarp, it almost slid it off my load. So I parked to where I could
bungee cord it down, and that’s when the accident happened.” He stated he was still on
KPS’s property at the time of the fall. Describing how the accident occurred, he said “as
I went to pull this tarp, my feet come [sic] out from under me, and I went over the front
down to the catwalk,” which he described as “a platform on the back of the truck that you
can walk on.” He stated he fell “about ten feet” and landed “facedown on the catwalk.”
He was transported by ambulance to Bristol Regional Medical Center and diagnosed as
having suffered a broken leg, broken vertebrae, broken ribs, and a neck injury. There is
no dispute that Employee suffered these injuries as a result of his work-related accident.
The shipping supervisor for KPS, Kevin Bennett, testified that KPS used one of
five brokers to ship its products from the Piney Flats facility, unless its customers
arranged to pick up products themselves. He testified that when a broker is used, KPS
sends a schedule with a pickup date and a delivery date to the brokers and “[i]t is their
responsibility to procure equipment to ship the load.” He testified Meadow Lark was the
broker that agreed to handle the shipment for this job. The contract between Meadow
Lark and Employer identified the required equipment for this job to include a flatbed
trailer and an “8FT” tarp. Mr. Bennett testified KPS does not hire drivers and does not
handle any of the actual shipping of its products. He described the loading process and
the instructions given to drivers upon their arrival at KPS’s facility, stating the process is
the same regardless of whether a broker is used or a customer arranges the shipping.
Mr. Bennett testified that KPS had a tarping machine, but that it wasn’t being used
because of complaints that the machine had been tearing tarps. He further testified that
once KPS performs a final inspection of the load, a check-off sheet is signed and the
driver is given a final bill of lading, “signs for it, and then he leaves.” He testified the
“final approval” by KPS is done before tarping and acknowledged that the final
inspection does not include whether the load is properly tarped or even tarped at all. He
agreed that KPS’s employees have control over the loading of the products and that
KPS’s employees tell the drivers where to park to tarp their loads.
Following an expedited hearing, the trial court concluded that Employee had not
presented sufficient evidence to establish that KPS or Meadow Lark was his statutory
employer on the date of injury, “and thus [he was] not likely to prevail at a hearing on the
merits on this issue.” Employee has appealed only the trial court’s determination as to
KPS, asserting the trial court erred in concluding KPS did not meet the definition of a
statutory employer.
Standard of Review
The standard we apply in reviewing a trial court’s decision presumes that the
court’s factual findings are correct unless the preponderance of the evidence is otherwise.
3
See Tenn. Code Ann. § 50-6-239(c)(7) (2017) (“There shall be a presumption that the
findings and conclusions of the workers’ compensation judge are correct, unless the
preponderance of the evidence is otherwise.”). However, we review questions of law de
novo with no presumption of correctness. See Am. Mining Ins. Co. v. Campbell, No.
M2015-01478-SC-R3-WC, 2016 Tenn. LEXIS 907, at *18 (Tenn. Workers’ Comp. Panel
Dec. 9, 2016) (“A trial court’s conclusions of law are reviewed de novo upon the record
with no presumption of correctness.”). Moreover, the interpretation and application of
statutes and regulations concern issues of law, which we review de novo with no
presumption of correctness afforded to the trial court’s findings. See Seiber v. Reeves
Logging, 284 S.W.3d 294, 298 (Tenn. 2009); Hadzic v. Averitt Express, No. 2014-02-
0064, 2015 TN Wrk. Comp. App Bd. LEXIS 14, at *9 (Tenn. Workers’ Comp. App. Bd.
May 18, 2015).
Analysis
“Under the Tennessee Workers’ Compensation Act, an employee injured in an
accident while in the course and scope of employment is generally limited to recovering
workers’ compensation benefits from the employer.” Fayette Janitorial Servs. v. Kellogg
USA, Inc., No. W2011-01759-COA-R-CV, 2013 Tenn. App. LEXIS 66, at *7 (Tenn. Ct.
App. Feb. 4, 2013); Tenn. Code Ann. § 50-6-103 (2017). However, the Act provides that
a principal contractor, intermediate contractor, or subcontractor may be required to pay
workers’ compensation benefits to an injured worker employed by a subcontractor under
certain circumstances:
A principal contractor, intermediate contractor or subcontractor shall be
liable for compensation to any employee injured while in the employ of
any of the subcontractors of the principal contractor, intermediate
contractor or subcontractor and engaged upon the subject matter of the
contract to the same extent as the immediate employer.
Tenn. Code Ann. § 50-6-113(a).
These provisions have been a part of the Act since its inception in 1919. See 1919
Tenn. Pub. Acts, Ch. 123 § 15. Their purpose is to protect injured employees from
irresponsible and uninsured subcontractors:
In enacting Section 50-6-113, the Legislature sought “to protect employees
of irresponsible and uninsured subcontractors by imposing ultimate liability
on the presumably responsible principal contractor, who has it within his
power, in choosing subcontractors, to pass upon their responsibility and
insist upon appropriate compensation for their workers.” Section 50-6-113
“operates by passing along to upstream contractors the responsibility either
to require their immediate contractors or subcontractors to provide workers’
4
compensation coverage to their own employees or to be responsible for the
coverage themselves.” Section 50-6-113 is said to deem such a principal
contractor to be the injured employee’s “statutory employer.”
Blackwell v. Comanche Constr., Inc., No. W2012-01309-COA-R9-CV, 2013 Tenn. App.
LEXIS 251, at *13-14 (Tenn. Ct. App. Apr. 15, 2013) (citations omitted).
In the instant case, Employee asserts that KPS is his “statutory employer.” He
bases this assertion upon the premise that KPS meets at least one of the tests set out in
Lindsey v. Trinity Communications, Inc., 275 S.W.3d 411 (Tenn. 2009) for determining
whether an entity is a principal contractor. In Lindsey, the Supreme Court stated that
“[g]enerally, a company is considered a principal contractor if: (1) the company
undertakes work for an entity other than itself; (2) the company retains the right of
control over the conduct of the work and subcontractor’s employees; or (3) the work
being performed by a subcontractor’s employees is part of the regular business of the
company or is the same type of work usually performed by the company’s employees.”
Id. at 421 (emphasis added) (citations omitted) (internal quotation marks omitted).
Employee identified three issues in his notice of appeal, asserting that the
transporting of KPS’s product was part of its business, that tarping the loads was part of
KPS’s business, and that KPS controlled the tarping process. However, these issues were
combined into a single issue in Employee’s brief: “[t]he issue is whether the work
performed by [Employee] when he was injured is part of the regular business of KPS.”
Thus, Employee focuses on Lindsey’s third test under which a company may be
determined to be a principal contractor.
The parties have correctly perceived the dispositive issue to be whether KPS is
Employee’s statutory employer; however, none of the parties addressed in the trial court
or on appeal whether Employee was injured “while in the employ of any of the
subcontractors of the principal contractor, intermediate contractor or subcontractor . . . .”
Instead, they focused on another requirement of section 50-6-113(a), which is whether
KPS is “[a] principal contractor, intermediate contractor or subcontractor . . . .” 1
In arguing that tarping is part of the regular business of KPS, Employee contends
the trial court conflates two separate features of transportation, that is, loading products
for shipment and the actual movement of products once they are loaded. He argues that
1
For section 50-6-113(a) to be applicable, there must be a finding that the immediate employer, here,
Starrun, Inc., was a subcontractor of KPS or Meadow Lark. See Blackwell, 2013 Tenn. App. LEXIS 251,
at *20 (holding it was necessary for the court to determine whether the injured employee was employed
by a subcontractor before it could analyze whether the alleged principal contractor was the statutory
employer of the injured employee). Here, we cannot discern from the record whether the parties
presumed that Employer was a subcontractor of KPS or Meadow Lark, and we express no opinion on that
issue.
5
“[w]hile KPS employees may not typically drive its product from Point A to Point B, the
evidence proves that loading the product and securing the load is the type of work usually
performed or assisted by the company’s employees.” Employee argues the trial court
erroneously focused on the transportation of the product in question “when it should have
focused on loading the product.” Employee’s argument necessarily assumes that tarping
is part of the loading process.
The uncontradicted testimony from Employee and KPS’s witnesses reflects that,
while KPS did load the panels onto the trailer, the tarping of the load was a separate
process. KPS’s shipping supervisor testified the “final approval” by KPS is done before
tarping, and he acknowledged that the final inspection does not include whether the load
is properly tarped or even tarped at all. KPS required the loads to be tarped to protect the
product, but Employee agreed he was responsible for the tarping process. Although a
KPS employee placed the tarp on top of the load, Employee testified that KPS’s forklift
operator did not put the tarp over the load; rather, “[h]e put it on top of the load, and I
rolled it out and put it over the load myself.” He acknowledged “[i]t was my duty to put
the tarp over the load,” and he testified he “went on top and rolled my tarp out and was
laying it down over the sides to bungee it down” when he was asked by a KPS employee
to move his truck outside the covered loading area.
In short, although KPS required that loads be tarped to protect the products, there
is insufficient evidence to find that the actual tarping process was part of the regular
business of KPS or the type of work usually performed by KPS’s employees. Moreover,
the evidence of the extent of the control KPS exercised over the process does not
preponderate against the trial court’s determination that “[s]uch ‘control’ is not what the
statute envisioned for a statutory employer.”
Conclusion
At this stage of the proceedings, the evidence does not preponderate against the
trial court’s determination that KPS was not Employee’s statutory employer at the time of
the accident. Accordingly, the trial court’s decision is affirmed and the case is remanded
for further proceedings as may be necessary.
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TENNESSEE BUREAU OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
Darry Osborne ) Docket No. 2016-02-0562
)
v. ) State File No. 97626-2016
)
Starrun, Inc., et al. )
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Appeals Board’s decision in the
referenced case was sent to the following recipients by the following methods of service
on this the 8th day of November, 2017.
Name Certified First Class Via Fax Via Email Address
Mail Mail Fax Number Email
Dan Bieger X dan@biegerlaw.com
Kevin Washburn X kwashburn@allensummers.com
Eric Shen X eric.shen@libertymutual.com
Steve Rife X P.O. Box 728, Blountville, TN 37617
Brian K. Addington, X Via Electronic Mail
Judge
Kenneth M. Switzer, X Via Electronic Mail
Chief Judge
Penny Shrum, Clerk, X Penny.Patterson-Shrum@tn.gov
Court of Workers’
Compensation Claims
Matthew Salyer
Clerk, Workers’ Compensation Appeals Board
220 French Landing Dr., Ste. 1-B
Nashville, TN 37243
Telephone: 615-253-1606
Electronic Mail: WCAppeals.Clerk@tn.gov