COURT OF APPEALS OF VIRGINIA
Present: Judges Elder, Frank and Haley
Argued by teleconference
AMERICAN ZURICH INSURANCE COMPANY
MEMORANDUM OPINION * BY
v. Record No. 2748-07-1 JUDGE LARRY G. ELDER
MARCH 31, 2009
PETER BRIAN AMUNDSEN,
BANCROFT GRANITE & MARBLE, LLC AND
UNINSURED EMPLOYER’S FUND
FROM THE VIRGINIA WORKERS’ COMPENSATION COMMISSION
Gerard E. W. Voyer (Charlotte A. Dauphin; Taylor & Walker, P.C.,
on briefs), for appellant.
David B. Oakley (Huff, Poole & Mahoney, P.C., on brief), for
appellee Uninsured Employer’s Fund.
No brief or argument for appellees Peter Brian Amundsen or
Bancroft Granite & Marble, LLC.
American Zurich Insurance Company (the carrier) appeals from a decision of the
Workers’ Compensation Commission (the commission) holding Bancroft Granite & Marble,
LLC (the employer) liable to pay medical benefits for Peter Brian Amundsen (claimant) related
to the hernia injury he sustained on April 3, 2006. On appeal, the carrier, joined by the
Uninsured Employer’s Fund (the fund), contends the commission erroneously held the employer
responsible for benefits, based on its conclusion that claimant did not engage in willful
misconduct. The carrier also contends the commission erred in holding it, rather than the fund,
was responsible for claimant’s benefits. We hold credible evidence supported the commission’s
finding that claimant did not willfully violate a known safety rule. However, based on the
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
Supreme Court’s holding in Travelers Property Casualty Co. v. Ely, 276 Va. 339, 666 S.E.2d 523
(2008), we hold the commission erred in concluding the carrier was responsible for those
benefits and, instead, that the fund is responsible. Thus, we affirm in part, reverse in part, and
remand to the commission for entry of an award consistent with this opinion.
I.
BACKGROUND
The evidence, viewed in the light most favorable to claimant, see, e.g., Crisp v. Brown’s
Tysons Corner Dodge, Inc., 1 Va. App. 503, 504, 339 S.E.2d 916, 916 (1986), established the
following:
Claimant worked for the employer, a granite fabrication business, under the supervision
of owner Jimmy Bancroft. Claimant’s duties in the employer’s shop included routing and
polishing granite edges, cutting sink holes, and moving the various granite slabs on which he was
working as needed to perform his job. Also working in the shop was Jimmy Bancroft’s son,
Joseph Bancroft, who was responsible for “run[ning] the cutting table to saw the granite.”
Jimmy Bancroft was sometimes in the shop and sometimes performing duties elsewhere. The
employer owned a “boom” forklift that was used in the shop to pick the granite “up on end,” and
sometime shortly before April 3, 2006, the employer had “just gotten” a different kind of forklift
that used suction to pick up the granite.
On April 3, 2006, claimant was working on a piece of granite on one of the tables in the
shop and needed to stand it on its end so the forklift could pick it up. Claimant asked Joe
Bancroft to hold the table steady, and claimant squatted down beneath the granite and grabbed
onto it. When claimant pushed up on the granite slab, he sustained a hernia and later underwent
surgery to repair it. Claimant said the granite slab was “[p]robably about six by six” or “eight by
seven” and was “pretty heavy,” weighing 200 pounds or more.
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When claimant filed a claim for medical benefits, the employer averred the claim was
barred because claimant willfully violated a known safety rule designed to prevent the injury he
sustained. The carrier also alleged it did not provide coverage to the employer on the date of
claimant’s injury because the policy had lapsed based on the employer’s failure to pay its
premium, whereas the fund contended the carrier remained liable because it failed to notify the
commission pursuant to Code § 65.2-804 of the nonrenewal of the employer’s policy.
At the hearing before the deputy commissioner, claimant testified that he picked up heavy
things at his job for employer “[e]very day” “pretty much all day long.” He knew employer had
two different types of equipment, both forklifts, for use in moving around heavy pieces of
granite, but he testified that this special equipment “was more for . . . if you’re moving like half a
slab around or something like that.” He testified “[i]t wasn’t anything out of the ordinary for
what I was doing to pick a piece of granite up [by hand] and whatever we were doing, moving it
around.” He insisted he “[was not] told that [he] had to” use either the “boom” forklift or the
“suction cup” forklift every time he needed to move a piece of granite.
Jimmy Bancroft testified, claiming the granite slab claimant was lifting at the time of his
injury would, based on its size, have weighed approximately 800 to 1,000 pounds. He also
testified the suction cup forklift was about two months old and that he had instructed claimant on
how to use it. He testified that when he was in the shop and “kn[e]w [the device] need[ed] to be
used,” he “enforce[d] the use of the equipment.” He also admitted, however, that “[u]sually if
[he is in the shop he] tr[ies] to enforce getting the lift out and using it . . . for the sake of the
material and the guys[, but that] there might have been a few times where we might not have. If
it’s not such a large piece, we might not use it. If it’s under 3 or 400 pounds.” (Emphasis
added). He said he had told claimant to use the lift as much as possible and that he had not told
claimant when he “[did not] need to use it” because “it’s pretty obvious.” He could not recall
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whether he had ever seen claimant not use the lift when he should have. Jimmy Bancroft
testified he “[p]robably” had seen his son, Joe Bancroft, “not use the lift when he should have”
and that he would “usually tell them they’re crazy.”
As to the employer’s failure to pay the premium, it was undisputed that, although the
carrier sent the employer a renewal quote offer on December 13, 2005, the employer did not pay
that premium. The employer’s policy with the carrier lapsed on March 14, 2006, and the
employer did not obtain coverage with a new insurance company until April 17, 2006, after
claimant’s injury. It was also undisputed that the carrier did not file a commission form 45H
notifying the commission that it no longer provided workers’ compensation insurance to the
employer.
The deputy commissioner awarded benefits and, based on the en banc decision of the
Court of Appeals in Travelers Property Casualty Co. v. Ely, 49 Va. App. 807, 645 S.E.2d 342
(2007), held the carrier responsible for paying them. On review, the commission affirmed the
deputy’s decision, ruling as follows:
Regarding the willful misconduct claim, we find that the
employer had a safety rule, that the claimant knew of the rule and
the rule was for his benefit, but we find that the claimant did not
intentionally violate the rule because it was not obvious when the
claimant should use the forklifts and when he was not required to
use the forklifts. Under these circumstances, we find that the
claimant did not engage in willful misconduct.
We find that under Virginia Code § 65.2-805 the insurer in
this case was required to notify the Commission of the
non-renewal of the employer’s policy. It did not notify the
Commission. Its policy, therefore, was not effectively terminated.
Accordingly, the insurer is responsible for benefits for the
claimant’s compensable injury by accident.
On November 16, 2007, the carrier noted an appeal of the commission’s decision, and on
September 12, 2008, while that appeal was pending, the Supreme Court reversed the Court of
Appeals’ decision approving the commission’s ruling. See Ely, 276 Va. 339, 666 S.E.2d 523.
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II.
ANALYSIS
A.
WILLFUL MISCONDUCT AND CLAIMANT’S ENTITLEMENT TO BENEFITS
Pursuant to Code § 65.2-306 of the Workers’ Compensation Act,
No compensation shall be awarded to [an] employee . . . for an
injury . . . caused by:
1. The employee’s willful misconduct or intentional
self-inflicted injury;
* * * * * * *
4. The employee’s willful failure or refusal to use a safety
appliance or perform a duty required by statute; [or]
5. The employee’s willful breach of any reasonable rule or
regulation adopted by the employer and brought, prior to the
accident, to the knowledge of the employee . . . .
Code § 65.2-306(A). That code section also provides that “[t]he person or entity asserting any of
the[se] defenses . . . shall have the burden of proof.” Code § 65.2-306(B). Here, the carrier
notified the commission of its intent to rely on the defenses set out in subsections (A)(4) and
(5) and, thus, bore the burden of proving that one of these defenses applied.
To successfully raise a defense of willful misconduct under this statute, the employer
must establish “(1) that the safety rule [or other duty] was reasonable, (2) that the rule was
known to [the employee], (3) that the rule was for [the employee’s] benefit, and (4) that [the
employee] intentionally undertook the forbidden act.” Spruill v. C.W. Wright Constr. Co., 8
Va. App. 330, 334, 381 S.E.2d 359, 360-61 (1989). “[T]he employee may rebut the defense by
showing that the rule was not kept alive by bona fide enforcement or that there was a valid
reason for his inability to obey the rule.” Buzzo v. Woolridge Trucking, Inc., 17 Va. App. 327,
332, 437 S.E.2d 205, 208 (1993). Also, proof of negligence, even gross negligence, will not
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support the defense. Spruill, 8 Va. App. at 334, 381 S.E.2d at 361. Our review of the
commission’s determination regarding whether an employer has proved the defense of willful
misconduct is a mixed question of fact and law. Buzzo, 17 Va. App. at 333, 437 S.E.2d at 209.
Thus, we view the evidence in the light most favorable to the claimant, and we defer to the
factual components of the commission’s ruling if credible evidence in the record supports them.
Id.
The evidence, so viewed, supported the commission’s finding that a reasonable safety
rule existed for claimant’s benefit and that claimant knew of the existence of the rule but that
“claimant did not intentionally violate the rule because it was not obvious when the claimant
should use the forklifts and when he was not required to use the forklifts.” It was undisputed that
the employer had “just gotten” the suction cup forklift shortly before claimant’s injury. Claimant
testified he was aware of the availability of both forklifts for use in the employer’s shop but said
these devices were “more for . . . if you’re moving like half a slab around or something like that”
and that he “[was not] told that [he] had to” use either the “boom” forklift or the “suction cup”
forklift every time he needed to move a piece of granite. Claimant explained that he picked up
heavy things at his job for the employer “[e]very day” “pretty much all day long” and that “[i]t
wasn’t anything out of the ordinary for what [he] was doing to pick a piece of granite up [by
hand] and . . . move it around.” Company owner Jimmy Bancroft, who spent some of his time
working in the shop with claimant, admitted “[i]f it’s not such a large piece, we might not use
[the forklift]. If it’s under 3 or 400 pounds.” Bancroft also admitted he had not given claimant
any specific rules or guidelines for the circumstances under which use of a forklift was required
and those under which use of a forklift was not required because “it’s pretty obvious.”
This evidence supported the commission’s ruling that it was not, in fact, “obvious” to
claimant when the rule applied and, under these circumstances, that the employer failed to meet
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its burden of proving claimant’s failure to use a forklift on April 3, 2006, constituted willful
misconduct.
B.
COVERAGE
The commission applied our en banc decision in Travelers Property Casualty Co. v. Ely,
49 Va. App. 807, 645 S.E.2d 342 (2007) (affirming the commission’s decision by operation of
law based on an evenly divided court), to hold that the carrier was required to file a form 45H
when the employer elected not to renew its workers’ compensation insurance policy and that,
based on the carrier’s failure to do so prior to claimant’s April 3, 2006 injury by accident,
employer was still covered by the carrier on that date. Since that time, however, the Supreme
Court reversed our holding in Ely, concluding a carrier has a statutory obligation to file a form
45H only when the carrier opts not to renew the insured’s policy, not when the employer opts
not to renew. Travelers Property Casualty Co. v. Ely, 276 Va. 339, 666 S.E.2d 523 (2008),
rev’g, 49 Va. App. 807, 645 S.E.2d 342 (2007) (en banc).
The fund acknowledges the Supreme Court’s holding in Ely but argues that Ely “was
wrongly decided to the extent it found failure to pay premiums at the end of a policy’s term is a
non-renewal solely by the insured which does not trigger the notice requirement of Va. Code
§ 65.2-804(B).” Whatever our opinion of the Supreme Court’s holding in Ely, “[w]e are bound
by decisions of the Supreme Court of Virginia and are without authority to overrule [them].”
Roane v. Roane, 12 Va. App. 989, 993, 407 S.E.2d 698, 700 (1991). Thus, we reverse the
commission’s decision on the coverage issue and hold the fund rather than the carrier is
responsible for medical benefits for claimant’s April 3, 2006 compensable injury.
The carrier avers that, because of the Supreme Court’s recent decision in Ely, the fund’s
argument on this point “is not warranted by existing law” and, thus, that the carrier is entitled
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under Code § 8.01-271.1 to an award of fees and expenses incurred as a result of having to reply
to the fund’s argument on this point. We decline the carrier’s request. Code § 8.01-271.1 does
not provide that a party’s signature on a pleading necessarily constitutes his certification that the
pleading is “warranted by existing law.” His signature may instead constitute a certification that
the pleading is “warranted by . . . a good faith argument for the extension, modification, or
reversal of existing law.” Code § 8.01-271.1 (emphasis added). Although the carrier states that
the fund “advances no argument for the reversal of Ely,” the fund spends more than four pages in
its brief explaining why it believes Ely was wrongly decided. The mere recency of the Supreme
Court’s decision in Ely does not prevent the fund from making a good faith argument for its
modification or reversal. See, e.g., Nelson v. Warden, 262 Va. 276, 552 S.E.2d 73 (2002),
overruling Moore v. Commonwealth, 259 Va. 431, 527 S.E.2d 406 (2000). Although the Court
of Appeals is without authority to reverse that decision, the fund must raise that argument in this
Court in order to preserve it for appeal to the Supreme Court.
III.
For these reasons, we hold credible evidence supported the commission’s finding that
claimant did not willfully violate a known safety rule. However, we hold the commission erred
in concluding the carrier was responsible for those benefits and, instead, that the fund is
responsible. Thus, we affirm in part, reverse in part, and remand to the commission for entry of
an award consistent with this opinion.
Affirmed in part,
reversed in part,
and remanded.
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