COURT OF APPEALS OF VIRGINIA
Present: Chief Judge Moon, Judge Coleman and Senior Judge Cole
Argued at Richmond, Virginia
MARSHALL ERDMAN AND ASSOCIATES, INC. AND
LIBERTY MUTUAL FIRE INSURANCE COMPANY
v. Record No. 2549-96-2
EDWIN L. LOEHR,
GREGORY L. URSO (DECEASED) AND
UNINSURED EMPLOYER'S FUND OPINION BY
CHIEF JUDGE NORMAN K. MOON
EDWIN L. LOEHR MAY 13, 1997
v. Record No. 2586-96-2
MARSHALL ERDMAN AND ASSOCIATES, INC.,
LIBERTY MUTUAL FIRE INSURANCE COMPANY,
GREGORY L. URSO (DECEASED) AND
UNINSURED EMPLOYER'S FUND
FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
Roger L. Williams (Vasiliki Moudilos;
Williams & Lynch, on briefs), for Marshall
Erdman and Associates, Inc. and Liberty
Mutual Fire Insurance Company.
Andrew J. Reinhardt (Kerns, Kastenbaum &
Reinhardt, on briefs), for Edwin L. Loehr.
Christopher D. Eib, Assistant Attorney
General (James S. Gilmore, III, Attorney
General; Richard L. Walton, Jr., Senior
Assistant Attorney General; John J. Beall,
Jr., Senior Assistant Attorney General, on
briefs), for Uninsured Employer's Fund.
No brief or argument for Gregory L. Urso
(Deceased).
Marshall Erdman and Associates, Inc. and Liberty Mutual Fire
Insurance Company appeal the decision of the Workers'
Compensation Commission finding that injuries sustained by Edwin
L. Loehr arose out of and in the course of his employment with
Marshall Erdman. Marshall Erdman contends that Loehr was an
employee of Gregory L. Urso at the time of his injuries and that
accordingly, the commission erred in holding it liable for
Loehr's claims.
Loehr asserts that the commission properly determined that
he was an employee of Marshall Erdman at the time of his
injuries, but alternatively if he is found to have been an
employee of Urso, an uninsured employer, he is entitled to be
compensated by the Uninsured Employer's Fund. In Loehr's
separate appeal, he asserts that the commission erred in
suspending his temporary total disability benefits as of November
23, 1995.
Holding that the evidence supports the finding that Loehr
reasonably relied upon Urso's apparent authority as a Marshall
Erdman supervisor, we affirm the commission's finding that
Loehr's injuries arose out of and during the course of his
employment with Marshall Erdman. We further hold that the
commission's finding that Loehr was not entitled to disability
benefits after November 23, 1995 was supported by credible
evidence and, therefore, is affirmed.
In March, 1993, Loehr was hired by Marshall Erdman to work
as a carpenter on a medical park construction job at Stony Point
Shopping Center in Richmond, Virginia. Loehr was interviewed and
hired by Urso, a Marshall Erdman employee and the supervisor of
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the Stony Point construction project. On two separate occasions,
Loehr was sent by Urso to another construction project in
Williamsburg, Virginia, where a residence was being constructed.
At the Williamsburg site, Loehr worked with several other
employees who also worked on the Stony Point project, including
Larry Francis. Francis was the supervisor of the Williamsburg
project and also served as a foreman on the Stony Point project.
Although there were no Marshall Erdman construction signs at the
Williamsburg site, all materials and tools were provided by
Marshall Erdman. In addition, Loehr was paid for his work on the
Williamsburg and Stony Point projects in a single check issued by
Marshall Erdman.
On July 12, 1993, the first occasion that Loehr worked at
the Williamsburg site, he slipped and fell a distance of six
feet. He experienced sharp pain throughout his upper body.
Loehr reported the accident to his supervisor, Francis, and also
discussed the accident with Urso the day after the fall. Urso
instructed the Marshall Erdman secretary located at the Stony
Point project to file the proper paperwork concerning the
accident and advised Loehr of his actions.
Subsequently, Loehr received medical treatment from Dr.
Zelouf for a herniated disk. Dr. Zelouf placed Loehr on
restricted duty on March 14, 1995, prohibiting Loehr from lifting
more than forty pounds while working. Loehr's regular job
activities involved repeatedly lifting between one hundred and
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one hundred twenty-five pounds during the course of each day.
On Loehr's second trip to the Williamsburg site on August 9,
1993, he was again injured when an air gun he was using double
shot, driving a nail through his finger. Loehr informed Francis
and Urso of the injury the following day. Loehr was preparing to
file a claim when Urso informed him that Urso would have to pay
his medical bills because the Williamsburg construction project
was in fact Urso's private residence and was not a project of
Marshall Erdman.
Marshall Erdman became aware of the Williamsburg project in
February, 1994, when an investigation by Marshall Erdman of cost
overruns at the Stony Point project revealed that there were
approximately eighteen thousand unaccounted man-hours on the
Stony Point project. Marshall Erdman determined that while
supervising the Stony Point project, Urso engaged in an
unauthorized "side project" involving the construction of his
private residence in Williamsburg. Urso had three to four
workers from the Stony Point project working on his home in
Williamsburg on a regular basis. Urso also used Marshall Erdman
tools and building materials and included employee hours spent
constructing his home in the work hours he submitted for payment
by Marshall Erdman for work done on the Stony Point project.
Loehr ultimately filed claims for both injuries with
Marshall Erdman. Marshall Erdman refused to pay Loehr's medical
claims, asserting that he was not in their employ at the time of
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his respective injuries. On March 29, 1996, a deputy
commissioner of the Workers' Compensation Commission found
Loehr's claims to be compensable and held Marshall Erdman liable.
The deputy commissioner's award included benefit amounts for
various periods following the accident, including disability
benefits in a weekly amount of $346.67 beginning November 23,
1995. By opinion dated September 23, 1996 the full commission
affirmed the deputy commissioner's finding that Loehr's injuries
arose out of and in the course of his employment with Marshall
Erdman. However, the commission found that Loehr was "not
entitled to temporary total disability benefits during periods
where there [was] no supporting medical evidence or sufficient
proof of marketing." Accordingly, the commission reversed the
deputy commissioner's award of temporary total disability
benefits for the period beginning November 23, 1995.
Employment Status
Marshall Erdman admits that Loehr was its employee during
the time he worked on the Stony Point project. However, Marshall
Erdman asserts that Loehr was not its employee on either of the
two days that he worked for Urso. Instead, it argues that Urso
became Loehr's employer and as such, under the Virginia Supreme
Court's ruling in Ideal Steam Laundry v. Williams, 153 Va. 176,
149 S.E. 479 (1929), Urso should be held responsible for Loehr's
injuries. We disagree and find that Urso's misuse of Marshall
Erdman employees did not constitute a loaned-employee arrangement
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and in accord with the law of agency, hold Marshall Erdman liable
for Loehr's compensable injuries.
In Ideal Steam Laundry, the claimant was employed by J. T.
Eanes trading as Ideal Steam Laundry, a laundry where the
claimant was required to work four days a week. Id. Eanes also
employed the claimant at his personal residence one day a week,
where the claimant performed a variety of yard and farm work.
Id. While building a grape arbor at Eanes' home, claimant was
injured. The Virginia Supreme Court held that
"A servant may be transferred from his
service for one master--who may have made the
express contract for employment of the
servant and may pay the latter his wages and
be his general master--to the service of
another person other than his general master;
in which case . . . (2) the special servant
must look to the special master for his
indemnity, if he is injured, while the
stipulated work is in progress, by dangerous
conditions resulting from the special
master's failure to fulfill one of those
duties which the law imposes upon the master
for the benefit and protection of their
servants."
Id. at 180-81, 149 S.E. at 481 (citation omitted). Marshall
Erdman argues that under this holding, it cannot be held liable
for Loehr's claims because Loehr was a "loaned-employee." 1
1
At the hearing before the deputy commissioner, counsel for
Marshall Erdman appeared to agree with counsel for Loehr and the
deputy commissioner that Marshall Erdman's theory was that Loehr
became a loaned-employee of Urso. However, on brief, Marshall
Erdman initially asserted that "[t]he deputy commissioner
incorrectly relied on the cases concerning loaned employees" and
argued that Loehr could not be a loaned-employee because to be a
loaned-employee Marshall Erdman would have had to have consented
to loaning Loehr to Urso. Nevertheless, later in its brief,
Marshall Erdman argues that under the Virginia Supreme Court's
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For an employee to be a loaned-employee, the borrowing
employer must (1) acquire the right to control and direct the
employee, and (2) the employee must indicate, whether expressly
or impliedly, consent to becoming the employee of the borrowing
employer. See id. at 180, 149 S.E. at 481. Here, as Marshall
Erdman admits, Urso never obtained the right to use Marshall
Erdman employees for work on anything other than the Stony Point
project. Further, the record does not support the conclusion
that Loehr either explicitly or impliedly consented to becoming
Urso's individual employee.
Urso's failure to obtain permission to use or hire Marshall
Erdman employees to construct his private residence and Loehr's
lack of explicit or implied consent to working for an employer
other than Marshall Erdman, distinguish this case from Ideal
Steam Laundry. Therein, the employer and borrowing employer were
the same individual, obviating the need to prove that permission
was granted for the loan of the claimant. The claimant, unlike
Loehr, impliedly agreed to work for a different employer as the
nature of the work was not in the "usual course of the trade,
business, occupation or profession of the [loaning] employer."
Id. at 179, 149 S.E. at 481. While working at the laundry, the
claimant performed janitorial duties, but performed yard work and
garden/farm work at the laundry owner's home. Id. The obvious
ruling in Ideal Steam Laundry, a loaned-employee can only look to
the special master for compensation and therefore, that Loehr
should be limited to seeking indemnification from Urso.
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difference in the nature of the work evidences the claimant's
understanding that he was performing in two different employment
capacities.
Unlike the situation in Ideal Steam Laundry, here the record
establishes that Loehr, relying on the apparent authority of
Urso, believed that the work he performed in Williamsburg was for
Marshall Erdman. The law of agency provides that "when an agent,
acting within the scope of his apparent agency, enters into a
contract with a third person `the principal becomes immediately a
contracting party, with both rights and liabilities to the third
person.'" Equitable Variable Life Ins. v. Wood, 234 Va. 535,
539, 362 S.E.2d 741, 744 (1987) (quoting Restatement (Second) of
Agency § 8 comment d (1957)). Accordingly, Marshall Erdman may
be held liable for Loehr's injuries if Urso acted within the
scope of his apparent authority. "An act is within the apparent
scope of an agent's authority if, in view of the character of his
actual and known duties, an ordinarily prudent person, having a
reasonable knowledge of the usages of the business in which the
agent is engaged, would be justified in believing that he is
authorized to perform the act in question." Wright v.
Shortbridge, 194 Va. 346, 353, 73 S.E.2d 360, 364-65 (1952)
(citations omitted).
Marshall Erdman asserts that "[i]t is incredible to believe
that [Loehr], hired to build a medical office building in
Richmond, would . . . think that his employment would include
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work performed on a personal residence in Williamsburg."
However, the record is devoid of evidence suggesting that Loehr
was ever made aware of the fact that he was not in Marshall
Erdman's employ while working on both construction jobs.
Further, the record contains substantial evidence supporting the
findings of both the deputy commissioner and full commission,
which will be upheld on appeal if supported by credible evidence,
James v. Capitol Steel Constr. Co., 8 Va. App. 512, 515, 382
S.E.2d 487, 488 (1989), that Loehr believed he was a Marshall
Erdman employee at all times.
The record does not reflect that Loehr was told at the time
of his hiring that his work would be limited to the Stony Point
project. Urso hired Loehr to work as a carpenter, and he was
employed in that capacity at both job sites. There is no
evidence to suggest that Loehr was aware of the fact that
Marshall Erdman only constructs medical offices and facilities.
The record does establish that work materials and tools at the
Williamsburg site belonged to Marshall Erdman. Other Marshall
Erdman employees from the Stony Point project were also working
at the Williamsburg site, and the Williamsburg supervisor was
also a foreman on the Stony Point project. Loehr was compensated
for all the construction work he performed in a single check
issued by Marshall Erdman. The evidence also establishes that
Loehr was told by Urso that a claim would be filed with Marshall
Erdman after his first accident at the Williamsburg site. Not
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until after his second accident was Loehr informed that the
Williamsburg job was not a Marshall Erdman project.
The evidence is sufficient to support the finding that an
ordinarily prudent person in Loehr's position could have
believed, as Loehr did, that Urso had the authority as a Marshall
Erdman supervisor to hire and supervise work crews on both the
Stony Point and Williamsburg construction projects. Accordingly,
we affirm the commission's ruling that Marshall Erdman compensate
Loehr for injuries arising out of and in the course of his
employment with Marshall Erdman.
Suspension of Temporary Total Disability Benefits
As previously noted, findings of fact of the Workers'
Compensation Commission are conclusive on appeal, provided they
are supported by credible evidence. James, 8 Va. App. at 515,
382 S.E.2d at 488. Further, the evidence is to be construed in
the light most favorable to the party prevailing before the
commission. Crisp v. Brown's Tysons Corner Dodge, Inc., 1 Va.
App. 503, 339 S.E.2d 916 (1986).
The commission determined that the evidence did not support
a finding of disability for the period beginning November 23,
1995. There is no presumption in the law that once a disability
has been established, a claimant will be assumed to remain
disabled for an indefinite period of time. Hercules, Inc. v.
Carter, 14 Va. App. 866, 419 S.e.2d 438 (1992). To the contrary,
a party seeking compensation bears the burden of proving his
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disability and the periods of that disability.
Here, the latest medical record presented to the commission
at the time of Loehr's hearing was a letter from Dr. Zelouf,
Loehr's treating physician, dated March 27, 1995, some ten months
prior to the hearing before the deputy commissioner and seventeen
months prior to the hearing before the full commission. In the
letter, Dr. Zelouf indicated that he had previously placed Loehr
on light duty, restricting his lifting to forty pounds or less.
However, Dr. Zelouf also indicated that, "[c]ertainly as [Loehr]
improved, I would progress him to full duties." The letter did
not indicate the last occasion upon which Loehr had been treated,
how long the partial disability was expected to continue, or
when, if ever, Loehr would receive additional medical evaluation.
Given the absence of proof of continuing disability and the
evidence that Loehr would eventually be returned to full duties,
the commission had credible evidence upon which to find that
Loehr was not entitled to disability benefits after November 23,
1995. Consequently, we need not reach the question of whether
the commission erred in determining that Loehr failed to
adequately market his remaining work capacity. 2
We affirm the commission's decision awarding Loehr
disability benefits until November 23, 1995.
Affirmed.
2
The parties stipulated that this defense was not being
advanced.
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