{ "id": 8954674, "name": "JOHN ROBERTSON, Employee, Plaintiff v. HAGOOD HOMES, INC., Employer, VILLANOVA INSURANCE COMPANY, Carrier, and/or ERIC SCHUETTE, d/b/a PRECISION HOME BUILDERS, non-insured, Employer, and/or JIM McGUIRT, Employer, Defendants", "name_abbreviation": "Robertson v. Hagood Homes, Inc.", "decision_date": "2003-09-02", "docket_number": "No. COA02-1222", "first_page": "137", "last_page": "150", "citations": [ { "type": "official", "cite": "160 N.C. App. 137" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "483 S.E.2d 150", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1997, "pin_cites": [ { "page": "151" } ], "opinion_index": 0 }, { "cite": "345 N.C. 739", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 54136 ], "year": 1997, "opinion_index": 0, "case_paths": [ "/nc/345/0739-01" ] }, { "cite": "478 S.E.2d 5", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "opinion_index": 0 }, { "cite": "344 N.C. 474", "category": "reporters:state", "reporter": "N.C.", "year": 1996, "opinion_index": 0 }, { "cite": "474 S.E.2d 400", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "pin_cites": [ { "page": "403" } ], "opinion_index": 0 }, { "cite": "123 N.C. App. 448", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11913657 ], "year": 1996, "pin_cites": [ { "page": "453-54" } ], "opinion_index": 0, "case_paths": [ "/nc-app/123/0448-01" ] }, { "cite": "458 S.E.2d 190", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "opinion_index": 0 }, { "cite": "340 N.C. 360", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 790218, 790157, 790191, 790066, 790233 ], "year": 1995, "opinion_index": 0, "case_paths": [ "/nc/340/0360-02", "/nc/340/0360-03", "/nc/340/0360-01", "/nc/340/0360-04", "/nc/340/0360-05" ] }, { "cite": "454 S.E.2d 666", "category": "reporters:state_regional", "reporter": "S.E.2d", "pin_cites": [ { "page": "667" } ], "opinion_index": 0 }, { "cite": "118 N.C. App. 166", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11917228 ], "pin_cites": [ { "page": "158-59" } ], "opinion_index": 0, "case_paths": [ "/nc-app/118/0166-01" ] }, { "cite": "17 Kan. App. 2d 543", "category": "reporters:state", "reporter": "Kan. App. 2d", "case_ids": [ 370511 ], "weight": 2, "year": 1992, "pin_cites": [ { "page": "543" }, { "page": "542" } ], "opinion_index": 0, "case_paths": [ "/kan-app-2d/17/0543-01" ] }, { "cite": "211 Tenn. 232", "category": "reporters:state", "reporter": "Tenn.", "case_ids": [ 8528592 ], "weight": 2, "year": 1963, "pin_cites": [ { "page": "239" }, { "page": "885-86" } ], "opinion_index": 0, "case_paths": [ "/tenn/211/0232-01" ] }, { "cite": "416 N.Y.S.2d 348", "category": "reporters:state", "reporter": "N.Y.S.2d", "year": 1979, "pin_cites": [ { "page": "349", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "69 A.D.2d 965", "category": "reporters:state", "reporter": "A.D.2d", "case_ids": [ 3151344 ], "year": 1979, "pin_cites": [ { "page": "966", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/ad2d/69/0965-01" ] }, { "cite": "738 P.2d 658", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 10408609 ], "year": 1987, "pin_cites": [ { "page": "661", "parenthetical": "quoting 1C A. Larson, Workmen's Compensation Law, \u00a7 49.14 (1986)" } ], "opinion_index": 0, "case_paths": [ "/p2d/738/0658-01" ] }, { "cite": "743 A.2d 921", "category": "reporters:state_regional", "reporter": "A.2d", "year": 1999, "opinion_index": 0 }, { "cite": "560 Pa. 707", "category": "reporters:state", "reporter": "Pa.", "year": 1999, "opinion_index": 0 }, { "cite": "724 A.2d 938", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 11640493 ], "year": 1998, "pin_cites": [ { "page": "941" } ], "opinion_index": 0, "case_paths": [ "/a2d/724/0938-01" ] }, { "cite": "688 So. 2d 752", "category": "reporters:state_regional", "reporter": "So. 2d", "case_ids": [ 7430700 ], "year": 1996, "pin_cites": [ { "page": "757", "parenthetical": "where subsubcontractor does not have workers' compensation insurance, \"the injured employee could ascend the hierarchy to get workers' compensation coverage from the subcontractor immediately above his employer or further up until he received coverage\"" } ], "opinion_index": 0, "case_paths": [ "/so2d/688/0752-01" ] }, { "cite": "698 A.2d 191", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 12001884 ], "weight": 3, "year": 1997, "pin_cites": [ { "page": "195" }, { "page": "194" } ], "opinion_index": 0, "case_paths": [ "/a2d/698/0191-01" ] }, { "cite": "392 S.E.2d 758", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "pin_cites": [ { "page": "759-60" } ], "opinion_index": 0 }, { "cite": "99 N.C. App. 307", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522457 ], "year": 1990, "pin_cites": [ { "page": "310" } ], "opinion_index": 0, "case_paths": [ "/nc-app/99/0307-01" ] }, { "cite": "73 S.E.2d 488", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1952, "pin_cites": [ { "page": "494", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "236 N.C. 435", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626252 ], "year": 1952, "pin_cites": [ { "page": "443", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/236/0435-01" ] }, { "cite": "293 S.E.2d 140", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1982, "pin_cites": [ { "page": "142-43" }, { "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "306 N.C. 275", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568216 ], "year": 1982, "pin_cites": [ { "page": "277-78" } ], "opinion_index": 0, "case_paths": [ "/nc/306/0275-01" ] }, { "cite": "559 S.E.2d 277", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2002, "pin_cites": [ { "page": "280", "parenthetical": "question of law \"is subject to de novo review\"" } ], "opinion_index": 0 }, { "cite": "148 N.C. App. 667", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9367907 ], "year": 2002, "pin_cites": [ { "page": "670", "parenthetical": "question of law \"is subject to de novo review\"" } ], "opinion_index": 0, "case_paths": [ "/nc-app/148/0667-01" ] }, { "cite": "579 S.E.2d 110", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2003, "pin_cites": [ { "page": "118", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "157 N.C. App. 168", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9185540 ], "year": 2003, "pin_cites": [ { "page": "180", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/157/0168-01" ] }, { "cite": "296 S.E.2d 456", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "pin_cites": [ { "page": "458", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "307 N.C. 99", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560726 ], "year": 1982, "pin_cites": [ { "page": "102", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/307/0099-01" ] }, { "cite": "293 S.E.2d 167", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "pin_cites": [ { "page": "169" } ], "opinion_index": 0 }, { "cite": "306 N.C. 357", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568700 ], "year": 1982, "pin_cites": [ { "page": "359-60" } ], "opinion_index": 0, "case_paths": [ "/nc/306/0357-01" ] }, { "cite": "489 S.E.2d 375", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1997, "pin_cites": [ { "page": "378", "parenthetical": "quoting Godley v. County of Pitt, 306 N.C. 357, 359-60, 293 S.E.2d 167, 169 (1982)" } ], "opinion_index": 0 }, { "cite": "347 N.C. 126", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 551278 ], "year": 1997, "pin_cites": [ { "page": "131", "parenthetical": "quoting Godley v. County of Pitt, 306 N.C. 357, 359-60, 293 S.E.2d 167, 169 (1982)" } ], "opinion_index": 0, "case_paths": [ "/nc/347/0126-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 97-19", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 5, "opinion_index": 1 } ], "analysis": { "cardinality": 1047, "char_count": 29986, "ocr_confidence": 0.774, "pagerank": { "raw": 1.6788969823403003e-07, "percentile": 0.6971825384414304 }, "sha256": "dbc13c59254c9d76347a15920d7129d5b8a72ab59805bac304a6e8824bda976c", "simhash": "1:ae6147fb761adec3", "word_count": 4553 }, "last_updated": "2023-07-14T16:12:23.823025+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge MARTIN concurs.", "Judge TYSON concurs in the result with separate opinion." ], "parties": [ "JOHN ROBERTSON, Employee, Plaintiff v. HAGOOD HOMES, INC., Employer, VILLANOVA INSURANCE COMPANY, Carrier, and/or ERIC SCHUETTE, d/b/a PRECISION HOME BUILDERS, non-insured, Employer, and/or JIM McGUIRT, Employer, Defendants" ], "opinions": [ { "text": "LEVINSON, Judge.\nDefendants (Hagood Homes Inc. and Villanova Insurance Company) appeal an opinion of the Industrial Commission awarding plaintiff (John Robertson) medical benefits, temporary total disability, and partial disability compensation. For the reasons that follow, we affirm.\nThe relevant facts as found by the Industrial Commission are summarized as follows: Jim Kenny, president of defendant Hagood, and Eric Schuette, d/b/a Precision Home Builders, began working together in March 1999. The terms of the first contract they negotiated provided that Hagood, general contractor for a house construction job, would subcontract the framing of the house to Schuette. The property was located at \u201cLot 15\u201d in the Magnolia Green Subdivision, and when Hagood sublet the Lot 15 framing contract to Schuette, Kenny required Schuette to provide a certificate of workers\u2019 compensation insurance. Accordingly, Schuette had his insurance agency fax Hagood a copy of a certificate of insurance stating that Schuette was insured under a policy in effect from 16 March 1999 until 16 March 2000. Following completion of the framing for Lot 15, Hagood and Schuette entered into several additional contracts concerning different properties. In each of these, Hagood was the general contractor for a building construction project, and Schuette subcontracted part of the contract. Hagood did not request or obtain a certificate of workers\u2019 compensation insurance when it sublet any of these additional contracts.\nThe instant case arises from one of the contracts between Hagood and Schuette for which Hagood failed to obtain a certificate of workers\u2019 compensation. In fall 1999, Hagood, general contractor for a home construction project, subcontracted the framing to Schuette. In October 1999, Schuette subcontracted the framing to Jim McGuirt. Plaintiff was employed by McGuirt as a framer helper. When Schuette sublet the framing contract to McGuirt, Schuette agreed to provide workers\u2019 compensation insurance, and withheld $1,000 from the contract fee for this purpose. However, at the time Schuette negotiated this deal with McGuirt, Schuette knew his workers\u2019 compensation insurance had already been canceled for nonpayment of premiums.\nOn 26 October 1999, while working as a framing helper for McGuirt, plaintiff fell from a ladder and sustained injuries. At the time of this accident, neither McGuirt nor Schuette had workers\u2019 compensation insurance. On 1 December 1999, plaintiff filed a claim seeking workers\u2019 compensation and medical benefits from defendants. Hagood denied liability, and a hearing was held before a deputy commissioner of the Industrial Commission. The deputy commissioner issued an opinion and award on 31 May 2001, determining that defendants were liable for payment of plaintiff\u2019s workers\u2019 compensation and medical expenses. Defendants appealed to the Full Commission, which issued its opinion and award on 4 June 2002. The Industrial Commission generally affirmed the deputy commissioner\u2019s opinion and awarded plaintiff temporary total disability, medical benefits, and partial disability compensation. From this order, defendants appeal.\n\u201c \u2018Appellate review of opinions and awards of the Industrial Commission is strictly limited to the discovery and correction of legal errors.\u2019 \u201d McAninch v. Buncombe County Schools, 347 N.C. 126, 131, 489 S.E.2d 375, 378 (1997) (quoting Godley v. County of Pitt, 306 N.C. 357, 359-60, 293 S.E.2d 167, 169 (1982)). Thus:\n[\u00a1jurisdiction of appellate courts on appeal from an award of the Industrial Commission is limited to the questions (1) whether there was competent evidence before the Commission to support its findings and (2) whether such findings support its legal conclusions. . . . [Findings of fact made by the Commission are conclusive on appeal when supported by competent evidence . . . even though there is evidence to support a contrary finding of fact.\nMcLean v. Roadway Express, 307 N.C. 99, 102, 296 S.E.2d 456, 458 (1982) (citation omitted). In the present case, the only findings of fact to which defendants assigned error were findings number nine and sixteen, stating that Hagood had likely received notice of the cancellation of Schuette\u2019s workers\u2019 compensation insurance. Because \u201cdefendants failed to assign error to any of the Commission\u2019s [other] findings of fact . . . these findings are conclusively established on appeal.\u201d Johnson v. Herbie\u2019s Place, 157 N.C. App. 168, 180, 579 S.E.2d 110, 118 (2003) (citation omitted). The Commission\u2019s conclusions of law, however, are reviewed de novo. See Shingleton v. Kobacker Grp., 148 N.C. App. 667, 670, 559 S.E.2d 277, 280 (2002) (question of law \u201cis subject to de novo review\u201d) (citation omitted).\nThe primary issue raised by this appeal is whether, pursuant to N.C.G.S. \u00a7 97-19 (2001), a general contractor may become the statutory employer of a subsubcontractor and therefore liable for payment of workers\u2019 compensation benefits to the injured employee of a subsubcontractor. Resolution of this issue requires analysis of G.S. \u00a7 97-19, which states in relevant part that:\nAny principal contractor, intermediate contractor, or subcontractor who shall sublet any contract. . . without requiring from such subcontractor or obtaining from the Industrial Commission a certificate, . . . stating that such subcontractor has complied with G.S. 97-93 hereof, shall be liable, ... to the same extent as such subcontractor would be . . . for the payment of compensation and other benefits under this Article. ... If the principal contractor .. . shall obtain such certificate at the time of subletting such contract... he [is not] liable ... for compensation. . ..\nDefendants argue that the Industrial Commission erred by concluding that under G.S. \u00a7 97-19 they are liable to plaintiff for workers\u2019 compensation benefits. We disagree.\nIn its opinion and award, the Industrial Commission made the following pertinent conclusions of law:\n1. Plaintiff sustained a compensable injury by accident. . . arising out of and in the course of his employment with defendant Jim McGirt on October 26, 1999. N.C.G.S. \u00a7 97-2(6).\n2. Jim McGirt employed plaintiff. . . and was uninsured. . . . Jim McGirt paid Eirk [sic] Schuette for workers\u2019 compensation insurance. N.C.G.S. \u00a7 97-2; [\u00a7] 97-19.\n3. Eric Schuette . . . the next sub-contractor in the chain of subcontractors, was responsible for plaintiff\u2019s workers\u2019 compensation insurance. N.C.G.S. \u00a7 97-19.\n4. Because Eric Schuette . . . was non-insured . . . liability is assumed by Hagood Homes, Inc., the general contractor in the line of sub-contractors.... The chain of liability extends from the immediate employer of the injured employee up the chain to the first responsible contractor who has the ability to pay. . . .\n10. Because Eric Schuette . . . had no valid workers\u2019 compensation insurance, Hagood Homes shall be liable for all compensation and medical treatment. N.C.G.S. \u00a7 97-19; [\u00a7] 97-29; [\u00a7] 97-25.\nDefendants argue that in order for G.S. \u00a7 97-19 to apply \u201ca general contractor must contract directly with a subcontractor or a subcontractor must contract with a lower tier subcontractor.\u201d Defendants note that G.S. \u00a7 97-19 does not explicitly \u201caddress the issue of what should happen in a case where, as here, the subcontractor contracts with a sub-subcontractor to perform work.\u201d Defendants contend liability may not be imposed upon a general contractor who did not contract directly with the subsubcontractor, because the general contractor and subsubcontractor are not \u201cin privity.\u201d On this basis, defendants assert that they are relieved of liability. We disagree, and conclude that if the general contractor fails to comply with G.S. \u00a7 97-19 by obtaining a certificate of insurance from its subcontractor, then G.S. \u00a7 97-19 may be applied to an injured employee of a subsub-contractor of the general contractor.\nIn Deese v. Lawn & Tree Expert Co., 306 N.C. 275, 277-78, 293 S.E.2d 140, 142-43 (1982), the North Carolina Supreme Court noted that the Court \u201chas interpreted the statutory provisions of North Carolina\u2019s workers\u2019 compensation law on many occasions [, and has] . . . been wisely guided by several sound rules of statutory construction^]\u201d Four of the principles articulated in Deese may be summarized as follows: (1) the workers\u2019 compensation statutes should be liberally construed whenever possible to avoid denying benefits based on \u201cnarrow interpretations of its provisions\u201d; (2) appellate courts may not expand upon \u201cthe ordinary meaning of the terms used by the legislature\u201d; (3) appellate courts should avoid adding a provision to a statute \u201cthat has been omitted, which [it] believes ought to have been embraced\u201d; and (4) the legislative intent may be determined by consideration of the \u201clanguage, purposes and spirit\u201d of the workers\u2019 compensation act. Id. (citations omitted). In addition, the Deese Court stated another principle of significance in the present case:\n[F]inally, the Industrial Commission\u2019s legal interpretation of a particular provision is persuasive, although not binding, and should be accorded some weight on appeal and not idly cast aside, since that administrative body hears and decides all questions arising under the Act in the first instance.\nId. We shall endeavor to adhere to these principles in our interpretation of G.S. \u00a7 97-19.\nWe first note that the language of the statute does not prohibit its application to employees of a subsubcontractor. Rather, the statute refers somewhat expansively to \u201cany principal contractor, intermediate contractor, or subcontractor.\u201d We also agree with the Industrial Commission that, if the legislature had intended G.S. \u00a7 97-19 to apply only to those who with whom the general contractor has contracted directly, \u201cthere would be no need of the following provision[] of N.C.G.S. \u00a7 97-19\u201d:\nEvery claim . . . shall be instituted against all parties liable for payment, and said Commission, in its award, shall fix the order in which said parties shall be exhausted, beginning with the immediate employer.\nMoreover, our review of the statute and its interpretive case law compels the conclusion that it was enacted to address situations precisely like the one presented herein:\nThe manifest purpose of this statute, ... is to protect employees ... by imposing ultimate liability on principal contractors, intermediate contractors, or subcontractors[.] ... It is also the obvious aim of the statute to forestall evasion of the [Workers\u2019] Compensation Act by those who might be tempted to subdivide their regular operations with the workers, thus relegating them for compensation protection to small subcontractors, who fail to carry, or if small enough may not even be required to carry, compensation insurance.\nGreene v. Spivey, 236 N.C. 435, 443, 73 S.E.2d 488, 494 (1952) (citation omitted). In the present case, to relieve defendants of liability would, as described in Greene, \u201crelegate [plaintiff] for compensation protection to small subcontractors who fail to carry\u201d workers\u2019 compensation insurance. The statute\u2019s purpose was also addressed in Cook v. Norvell-Mackorell Real Estate Co., 99 N.C. App. 307, 310, 392 S.E.2d 758, 759-60 (1990), in which this Court noted that G.S. \u00a7 97-19 is \u201cthe so-called \u2018statutory employer\u2019 or \u2018contractor under\u2019 statute\u201d and that the statute:\nwas enacted by the Legislature to deliberately bring specific categories of conceded nonemployees within the coverage of the Act . . . 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.\u2019\n(citing Larson, The Law of Workmen\u2019s Compensation, vol. 1C \u00a7 49.00 et s.eq.) (emphasis added) (citations omitted). We conclude that in the present case, the legislative intent and purpose of G.S. \u00a7 97-19 would be served by imposing liability upon defendants. We further conclude that any other result would defy the explicit purpose of G.S. \u00a7 97-19, by permitting general contractors to circumvent the law and to insulate themselves from liability simply by interposing an additional \u201clayer\u201d of subcontractors.\nAdditionally, we observe that when appellate courts in other jurisdictions have interpreted similar statutes, they generally have concluded that the statute may be applied to employees of a subsub-contractor, even if the general contractor did not enter into a contract with the claimant\u2019s employer. In Brogno v. W & J Associates, Ltd., 698 A.2d 191, 195 (R.I. 1997), the Rhode Island Supreme Court summarized rulings from several \u201csister-states\u201d in which workers\u2019 compensation statutes were \u201cconstrued to make the general contractor the statutory employer for the employees of a sub-subcontractor where the general contractor had failed to require proof of insurance from the subcontractor.\u201d This is exactly the situation presented in the case sub judice. The Brogno Court also observed that:\nthe common denominator discernible [among the states adopting this interpretation] ... is a clearly expressed legislative intention to provide relief to an injured employee when the general contractor . . . failed to obtain written documentation from [subcontractor] assuring that it had workers\u2019 compensation insurance[.]\nId. Similar conclusions have been reached in Mississippi and Pennsylvania. See Crowe v. Brasfield & Gorrie Contractor, 688 So. 2d 752, 757 (Miss. 1996) (where subsubcontractor does not have workers\u2019 compensation insurance, \u201cthe injured employee could ascend the hierarchy to get workers\u2019 compensation coverage from the subcontractor immediately above his employer or further up until he received coverage\u201d); see McCarthy v. Dan Lepore & Sons Co., Inc., 724 A.2d 938, 941 (Pa. Super. Ct. 1998), appeal denied, 560 Pa. 707, 743 A.2d 921 (1999):\n[T]he key element of statutory employer status is the vertical relationship between the general contractor, the subcontractor, and the sub-subcontractor, whose employee was injured. . .. [B]y virtue of the vertical relationship, all of the contractors up the ladder remain potentially liable under the Act for payment of the injured employee\u2019s workers\u2019 compensation benefits. ...\n(emphasis added) (citation omitted). A Utah case held that:\n\u2018In the increasingly common situation displaying a hierarchy of principal contractors upon subcontractors upon sub-subcontractors, if an employee of the lowest subcontractor on the totem pole is injured, there is no practical reason for reaching up the hierarchy any further than the first insured contractor.'\nJacobsen v. Industrial Comm\u2019n of Utah, 738 P.2d 658, 661 (Utah Ct. App. 1987) (quoting 1C A. Larson, Workmen\u2019s Compensation Law, \u00a7 49.14 (1986)) (emphasis added). The same conclusion was reached in New York:\n[O]ur concern is whether [the workers\u2019 compensation statute] was intended to extend liability to a subcontractor that is twice removed from the uninsured employer. We are of the opinion that it was so intended. The purpose of the statute, in our view, is to protect an injured employee and place liability on the insured contractor or subcontractor nearest to the uninsured employer in the chain of subcontractors. A contrary conclusion would frustrate the true intent of the statute[.]\nMinnaugh v. Topper & Griggs, Inc., 69 A.D.2d 965, 966, 416 N.Y.S.2d 348, 349 (N.Y. App. Div. 3d Dep\u2019t. 1979) (emphasis added). Finally, from Tennessee:\nThe injured employee was an employee of a sub-contractor under the sub-contractor .... In other words, as between the parties in this case it is a stepping stone. . . . [T]he primary responsibility is on first the employer of the injured employee, then if that employer can\u2019t pay him, he must take it a step up. There is no connection between this injured employee and the sub-contractor and the general contractor. They are only connected by reason of the statute.\nTayloe Paper Co. v. Jameson, 211 Tenn. 232, 239, 364 S.W.2d 882, 885-86 (1963).\nThus, appellate courts in other jurisdictions have concluded that \u201cmore than one employer in a contractor subcontractor employer pyramid may qualify as an injured worker\u2019s statutory employer[.]\u201d Selle v. Boeing Co., 17 Kan. App. 2d 543, 543, 840 P.2d 542, 542 (1992). These decisions employ a variety of metaphors to describe relationships among general contractor, subcontractors, and subsubcontrac-tors. However, regardless of whether the parties are characterized as a chain, a ladder, a totem pole, a pyramid, stepping stones, or simply a hierarchy, the stated conclusion is the same as that reached by the Industrial Commission in the instant case: that the \u201cchain of liability extends from the immediate employer of the injured employee up the chain to the first responsible contractor who has the ability to pay.\u201d Further, we agree with the Rhode Island Supreme Court:\nTo hold otherwise would be to permit general contractors and construction managers to be relieved of responsibility merely by ensuring that the project is sub-subcontracted out.... [0]ur holding ensures that both general contractors and [subcontractors] require written proof of workers\u2019 compensation insurance which in turn will ensure that subcontractors require the same from the sub-subcontractors, and so on down the line.\nBrogno v. W & J Associates, Ltd., 698 A.2d 191, 194 (R.I. 1997). While clearly not precedent for this Court, these holdings from other jurisdictions are persuasive.\nDefendants also argue that imposing workers\u2019 compensation liability upon them is improper because, even if they are deemed to be plaintiffs statutory employer, they would still be subject to a tort suit by plaintiff. Defendants misstate the law in this regard. See, e.g., Rich v. R.L. Casey, Inc., 118 N.C. App. 166, 158-59, 454 S.E.2d 666, 667 (where \u201cdefendant, as a principal contractor, is plaintiffs statutory employer\u201d defendant is \u201centitled to benefit\u201d from exclusivity provisions of workers\u2019 compensation law, and \u201cworkers\u2019 compensation benefits available to plaintiff through defendant\u2019s workers\u2019 compensation carrier constitutef] plaintiff\u2019s exclusive remedy\u201d), disc. review denied, 340 N.C. 360, 458 S.E.2d 190 (1995).\nWe conclude that the Industrial Commission did not err by concluding that on the facts of this case G.S. \u00a7 97-19 may be applied to defendants to impose liability for plaintiff\u2019s workers\u2019 compensation benefits and compensation.\nDefendants also argue that the Industrial Commission erred by finding that it was \u201cmore likely than not\u201d that Hagood had received notice that Schuette\u2019s workers\u2019 compensation insurance was cancelled. Because we conclude that the issue of notification is irrelevant on the facts of this case, we are not required to resolve this question.\nG.S. \u00a7 97-19, which addresses certain obligations and responsibilities attendant upon the parties\u2019 execution of contracts, is written in terms of individual contracts and subcontracts (\u201cAny principal contractor, intermediate contractor, or subcontractor who shall sublet any contract for the performance of any work\u201d) (emphasis added). In this vein, the statute provides that a general contractor who obtains a certificate of compliance with workers\u2019 compensation \u201cat the time of subletting such contract\u201d is relieved of liability as regards employees injured in the performance of the contract. In that situation, the issue of notification to the general contractor regarding termination of the subcontractor\u2019s workers\u2019 compensation insurance may be relevant:\n[The general contractor] complied with N.C.G.S. \u00a7 97-19 by obtaining a certificate of insurance, at the time of subletting its contract to [subcontractor], . . . and thereafter in good faith relied on its purported validity in the absence of notice of cancellation prior to the expiration of the policy period.... [The general contractor] did not have knowledge of the cancellation prior to plaintiffs injury. Accordingly, we conclude that the Commission\u2019s findings support the conclusion that [general contractor] was not a statutory employe [r].\nPatterson v. Markham & Associates, 123 N.C. App. 448, 453-54, 474 S.E.2d 400, 403, disc. review denied, 344 N.C. 474, 478 S.E.2d 5 (1996). Based upon Patterson and G.S. \u00a7 97-19, it appears that a general contractor who obtains a certificate of workers\u2019 compensation insurance is entitled to rely upon its validity until the earlier of (1) the completion of the contract, or (2) notification that the insurance was cancelled. However, in the case sub judice, it is undisputed that defendant Hagood failed to comply with G.S. \u00a7 97-19 when it subcontracted framing to Schuette for the job on which plaintiff was injured. As Hagood failed to obtain a certificate of insurance when it sublet the contract, notification of the cancellation of Schuette\u2019s workers\u2019 compensation insurance is irrelevant.\nNor was the defendant\u2019s act of requiring a certificate for the first contract that they sublet to Schuette sufficient to demonstrate compliance with G.S. \u00a7 97-19 as regards the later contract, In Southerland v. B.V. Hedrick Gravel & Sand Co., 345 N.C. 739, 483 S.E.2d 150 (1997), the North Carolina Supreme Court upheld the Industrial Commission\u2019s conclusion that to comply with G.S. \u00a7 97-19 a general contractor must actually obtain a certificate:\nDefendants\u2019 argument that by contracting with plaintiff to the effect that plaintiff shall furnish a certificate of insurance, defendants \u201crequired\u201d from plaintiff a certificate of insurance and therefore satisfied N.C.G.S. \u00a7 97-19, . . . [although] defendants [n]ever actually received a certificate ... is without merit. The . . . word \u2018require\u2019 in this instance means in fact actually obtain a certificate.\nId. at 741, 483 S.E.2d at 151. In the instant case, it is uncontroverted that defendants neither requested nor obtained a certificate for the contract at issue.\nFinally, we observe that defendant Hagood was free to execute a contract with Schuette that sublet several jobs in a single contract. Or, if defendants wished to secure Schuette\u2019s assistance with framing on an \u201cas needed\u201d basis, they might have hired Schuette as an employee. Indeed, after finishing the job at issue herein, Schuette went to work for Hagood as an employee. However, in the present case, defendants chose to structure their business relationship by executing a series of individual contracts for separate construction projects. Having chosen voluntarily to sublet a series of individual contracts, defendants were required by G.S. \u00a7 97-19 to obtain a certificate for each separate contract.\nFor the reasons discussed above, we conclude that the Industrial Commission\u2019s findings of fact were supported by competent evidence, and that they support its conclusions of law. We further conclude that the Industrial Commission did not err by concluding that defendants are liable for plaintiffs workers\u2019 compensation benefits. Accordingly, the opinion and award of the Industrial Commission is\nAffirmed.\nJudge MARTIN concurs.\nJudge TYSON concurs in the result with separate opinion.", "type": "majority", "author": "LEVINSON, Judge." }, { "text": "TYSON, Judge\nconcurring.\nI concur with the result of the majority\u2019s opinion which affirms the opinion and award of the North Carolina Industrial Commission (\u201cCommission\u201d). I agree with the majority\u2019s determination that N.C. Gen. Stat. \u00a7 97-19 provides liability to the general contractor when an employee of the subcontractor is injured under these facts. The majority\u2019s discussion and focus on out of state statutes and case law is not germane to the resolution of this case. The language of North Carolina\u2019s statute and case law is sufficient to impose liability on the general contractor unless there is a defense.\nN.C. Gen. Stat. \u00a7 97-19 provides a defense to the general contractor\u2019s liability. \u201cIf the principal contractor, intermediate contractor or subcontractor shall obtain such certificate [verifying workers\u2019 compensation insurance] at the time of subletting such contract to subcontractor, he shall not thereafter be held liable to any employee of such subcontractor for compensation or other benefits under this Article.\u201d N.C. Gen. Stat. \u00a7 97-19 (2003). Under the statute, a contractor is entitled to a defense from liability if, \u201cat the time of subletting\u201d the contract covering the job in which the employee was injured, the contractor had obtained a certificate of insurance. If there is one contract with multiple houses, only one certificate covering the period of work need be obtained. However, if there are separate and distinct contracts, the statute requires a new certificate be issued at the time of subletting each contract.\nJames Kenny, president of Hagood Homes, testified that when he received the certificate of insurance for Precision Homes he had only \u201cone verbal contract with [Precision Homes] at that time for one house.\u201d The certificate of insurance specifically stated that it was provided for Lot 15 Magnolia Greens. Kenny acknowledged that he did not request subsequent certificates of insurance for the later jobs. Eric Schuette, owner of Precision Homes, testified that each house was a separate verbal contract between Precision Homes and Hagood Homes.\nThe Commission found:\n6. Schuette and Hagood Home began working together in March of 1999. At that time, Schuette and Jim Kenny, president of Hagood Homes, entered into a verbal contract for Schuette to frame a house on Lot 15 in the Magnolia Green subdivision. That was the only house contracted for at that time. . . . The certificate [of insurance], provided in discovery, had a notation at the bottom that it was for Lot 15 Magnolia Green, and that the policy was to be effective for the period from March 16, 1999 to March 16, 2000.\n7. Schuette completed the house on Lot 15, and then over the next six months entered into separate verbal contracts with Jim Kenny to do four more houses. Each house was a new verbal contract. The evidence is uncontradicted that Jim Kenny did not request a new certificate of insurance at the time each new contract was entered into with Schuette. Had Kenny asked for a certificate of insurance at the time the contract on the house plaintiff was injured at was sublet, Schuette would not have been able to provide one, because his insurance had been canceled. . . .\nNeither of these findings of fact are contested and they are binding on appeal. There is competent evidence in the record to support the findings of the Commission that Hagood Homes and Precision Homes entered into separate contracts. Because the contracts were separate and Hagood did not request nor receive a subsequent certificate of insurance at the time of subcontracting the house where plaintiff was injured, Hagood cannot defend under N.C. Gen. Stat. \u00a7 97-19 on the grounds that he (1) received a certificate of insurance for the first house and (2) did not receive notice of the cancellation of the insurance.\nHagood Homes does not have a defense under N.C. Gen. Stat. \u00a7 97-19 to the imposition of liability for the injury by accident of plaintiff. I vote to affirm the Commission\u2019s order.", "type": "concurrence", "author": "TYSON, Judge" } ], "attorneys": [ "Jones Martin Parris & Tessener Law Offices PLLC, by Tamara R. Nance, for plaintiff-appellee.", "Marshall, Williams & Gorham, L.L.P., by Ronald H. Woodruff and F. Murphy Averitt, III, for defendants-appellants.", "Eric Schuette, pro se.", "James L. McGuirt, pro se." ], "corrections": "", "head_matter": "JOHN ROBERTSON, Employee, Plaintiff v. HAGOOD HOMES, INC., Employer, VILLANOVA INSURANCE COMPANY, Carrier, and/or ERIC SCHUETTE, d/b/a PRECISION HOME BUILDERS, non-insured, Employer, and/or JIM McGUIRT, Employer, Defendants\nNo. COA02-1222\n(Filed 2 September 2003)\n1. Workers\u2019 Compensation\u2014 failure to obtain certificate of insurance \u2014 general contractor a statutory employer of subcontractor\nThe Industrial Commission did not err in a workers\u2019 compensation case by holding in effect that defendant general contractor may become the statutory employee of defendant subcontractor and therefore liable for payment of workers\u2019 compensation benefits to plaintiff injured employee of a sub-subcontractor under N.C.G.S. \u00a7 97-19, because: (1) the general contractor failed to comply with N.C.G.S. \u00a7 '97-19, which requires obtaining a certificate of insurance from its subcontractor; (2) relieving defendants of liability would relegate plaintiff for compensation protection to small subcontractors who fail to carry workers\u2019 compensation insurance; (3) any other result would defy the explicit purpose of N.C.G.S. \u00a7 97-19 by permitting general contractors to circumvent the law and to insulate themselves from liability simply by interposing an additional layer of subcontractors; and (4) the chain of liability extends from the immediate employer of the injured employee up the chain to the first responsible contractor who has the ability to pay.\n2. Workers\u2019 Compensation\u2014 notice of insurance cancellation \u2014 subletting work through series of contracts\nAlthough defendants contend the Industrial Commission erred in a workers\u2019 compensation case by finding that it was more likely than not that defendant general contractor had received notice that defendant subcontractor\u2019s workers\u2019 compensation insurance was cancelled, the issue of notification is irrelevant on the facts of this case because: (1) defendant failed to comply with N.C.G.S. \u00a7 97-19 by failing to obtain a certificate of insurance when it sublet the contract; (2) defendants\u2019 act of requiring a certificate for the first contract that they sublet to defendant subcontractor was insufficient to demonstrate compliance with N.C.G.S. \u00a7 97-19 with regard to the later contract; and (3) having chosen voluntarily to sublet a series of individual contracts, defendants were required by N.C.G.S. \u00a7 97-19 to obtain a certificate for each separate contract.\nJudge Tyson concurring in a separate opinion.\nAppeal by defendants from opinion and award entered 4 June 2002 by the North Carolina Industrial Commission. Heard in the Court of Appeals 11 June 2003.\nJones Martin Parris & Tessener Law Offices PLLC, by Tamara R. Nance, for plaintiff-appellee.\nMarshall, Williams & Gorham, L.L.P., by Ronald H. Woodruff and F. Murphy Averitt, III, for defendants-appellants.\nEric Schuette, pro se.\nJames L. McGuirt, pro se." }, "file_name": "0137-01", "first_page_order": 167, "last_page_order": 180 }