THE STATE OF SOUTH CAROLINA
In The Supreme Court
Gregory A. Collins (Deceased), Employee, Claimant,
Respondent,
v.
Seko Charlotte and Nationwide Mutual Ins. Co.,
Petitioners,
v.
West Expedited & Delivery Service, Inc., Defendant,
v.
Seko Worldwide and Federal Ins. Co., Defendants,
v.
Uninsured Employers Fund, Respondent.
Appellate Case No. 2012-213425
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Appeal From the South Carolina Workers' Compensation
Commission Appellate Panel
Opinion No. 27519
Heard March 5, 2015 – Filed April 29, 2015
AFFIRMED
Weston Adams, III, of McAngus Goudelock & Courie,
LLC, of Columbia, and Helen Faith Hiser, of McAngus
Goudelock & Courie, LLC, of Mt. Pleasant, both for
Petitioner.
Linda Byars McKenzie, of Bowen McKenzie & Bowen,
LLP, of Greenville, and Timothy Blair Killen, of Willson
Jones Carter & Baxley, P.A., of Columbia, for
Respondents.
JUSTICE BEATTY: This matter is before the Court on a writ of certiorari
to the Court of Appeals to review the decision in Collins v. Charlotte, 400 S.C. 50,
732 S.E.2d 630 (Ct. App. 2012). The Court of Appeals reversed the Workers'
Compensation Commission's (Commission) decision which found that Gregory
Collins was not a statutory employee of Seko Charlotte at the time of his death. We
affirm.
I. Facts
Collins worked for West Expedited & Delivery Service, Incorporated (West
Expedited) and was killed in an automobile collision while returning to South
Carolina after making a delivery in Wisconsin for Seko Charlotte. West Expedited,
as a subcontractor, contracted with Seko Charlotte to make an interstate delivery of
parts. Seko Charlotte, like West Expedited, is in the cargo delivery business.
Collins made deliveries to Wauwatosa and Menomonee Falls, Wisconsin.
Although there is no written contract, Seko Charlotte engaged in business with
West Expedited roughly two to three times per month. In this case, as was
customary, Seko Charlotte paid West Expedited for mileage one way, however,
West Expedited included the cost of the return trip in the mileage rate charged
Seko Charlotte.
As a result of Collins' work-related death, Collins' dependents filed a
workers' compensation claim against West Expedited1, Seko Worldwide, Federal
Insurance Company, Seko Charlotte2, and Nationwide Mutual Insurance Company
(Nationwide).3 The case was heard by a single commissioner of the Workers'
Compensation Commission. The single commissioner applied the three tests from
Voss v. Ramco, Inc., 325 S.C. 560, 482 S.E.2d 582 (Ct. App. 1997) 4 and
determined that Collins was Seko Charlotte's statutory employee at the time of his
fatal accident pursuant to section 42-1-410 of the South Carolina Code.5
1
The Uninsured Employers Fund was brought into the case because West
Expedited did not carry workers' compensation insurance at the time of Collins'
fatal accident.
2
Seko Charlotte and Nationwide Mutual Insurance Company were brought into the
case after Seko Worldwide, LLC filed a motion to add them as parties.
3
Nationwide is Seko Charlotte's workers' compensation insurance carrier.
4
Voss states:
To determine whether the work performed by a subcontractor is a part
of the owner's business, this Court must consider whether (1) the
activity of the subcontractor is an important part of the owner's trade
or business; (2) the activity performed by the subcontractor is a
necessary, essential, and integral part of the owner's business; or (3)
the identical activity performed by the subcontractor has been
performed by employees of the owner.
Voss, 325 S.C. at 568, 482 S.E.2d at 586 (emphasis added).
5
Section 42-1-410 reads:
When any person . . . referred to as "contractor," contracts . . . with
any other person . . . for the execution or performance by or under the
subcontractor of the whole or any of the work undertaken by such
contractor, the contractor shall be Liable to pay to any workman
employed in the work any compensation under this Title which he
would have been liable to pay if that workman had been immediately
employed by him.
S.C. Code Ann. § 42-1-410 (1985).
Additionally, Collins was determined to be a traveling employee.6 Therefore, Seko
Charlotte, and its insurance company, Nationwide, were liable.
Seko Charlotte and Nationwide timely appealed the single commissioner's
order. The appeal was heard by the Appellate Panel of the Commission. Applying
the four factors of the employee/independent contractor test, the Appellate Panel of
the Commission concluded Collins was not an employee of Seko Charlotte on the
return trip because West Expedited had "the exclusive right of control over
[Collins]" after the deliveries were made in Wisconsin. The Appellate Panel of the
Commission reversed the single commissioner.
The Uninsured Employers Fund (Fund) appealed to the Court of Appeals.
Collins, 400 S.C. at 50, 732 S.E.2d at 630. The court found that the Commission
committed an error of law when it applied the employee/independent contractor
test instead of the statutory employee test. Id. at 57, 732 S.E.2d at 634. Applying
the statutory employee test, the Court of Appeals concluded that Collins was Seko
Charlotte's statutory employee, reversed the Commission's decision, and reinstated
the single commissioner's order. Id. at 58, 732 S.E.2d at 634. This Court granted
Seko Charlotte and Nationwide's petition for a writ of certiorari to review the
decision of the Court of Appeals.
II. Standard of Review
"[Appellate] review is limited to deciding whether the Commission's
decision is unsupported by substantial evidence or is controlled by some error of
law." Hargrove v. Titan Textile Co., 360 S.C. 276, 289, 599 S.E.2d 604, 611 (Ct.
App. 2004). "The determination of whether a worker is a statutory employee is
jurisdictional and, therefore, the question on appeal is one of law." Fortner v.
Thomas M. Evans Constr. & Dev., L.L.C., 402 S.C. 421, 429, 741 S.E.2d 538, 543
(Ct. App. 2013). "As a result, this court has the power and duty to review the
entire record and decide the jurisdictional facts in accord with its view of the
preponderance of the evidence." Id. "It is South Carolina's policy to resolve
6
"It is well settled that 'traveling employees are generally within the course of their
employment from the time they leave home on a business trip until they return, for
the self-evident reason that traveling itself is a large part of the job.'" Hall v.
Desert Aire, Inc., 376 S.C. 338, 357, 656 S.E.2d 753, 762 (Ct. App. 2007) (quoting
Arthur Larson, Larson's Workers' Compensation Law, § 14.01 (Lexis-Nexis
2004)).
jurisdictional doubts in favor of the inclusion of employers and employees under
the [Workers' Compensation Act]." Id. at 429-30, 741 S.E.2d at 543.
III. Discussion
The issue on appeal is whether the Court of Appeals erred in holding that
Collins was a statutory employee of Seko Charlotte at the time of his fatal
accident? The statutory employment section of the Workers' Compensation Act
("WCA") provides:
When any person, in this section . . . referred to as "owner,"
undertakes to perform or execute any work which is part of his trade,
business or occupation and contracts with any other person (in this
section . . . referred to as "subcontractor") for the execution or
performance by or under such subcontractor of the whole or any part
of the work undertaken by such owner, the owner shall be liable to
pay to any workman employed in the work any compensation under
this title which he would have been liable to pay if the workman had
been immediately employed by him.
S.C. Code Ann. § 42-1-400 (1985). "The terms owner and contractor can be used
interchangeably." Fortner, 402 S.C. at 431, 741 S.E.2d at 544. "Thus, depending
on the nature of the work performed by the subcontractor, an employee of a
subcontractor may be considered a statutory employee of the owner or upstream
employer." Voss, 325 S.C. at 565, 482 S.E.2d at 585 (emphasis added). There are
three tests to determine whether a statutory employment relationship exists:
To determine whether the work performed by a subcontractor is a part
of the owner's business, this Court must consider whether (1) the
activity of the subcontractor is an important part of the owner's trade
or business; (2) the activity performed by the subcontractor is a
necessary, essential, and integral part of the owner's business; or (3)
the identical activity performed by the subcontractor has been
performed by employees of the owner.
Id. at 568, 482 S.E.2d at 586 (emphasis added). "If any of these tests is satisfied,
the injured worker is considered the statutory employee of the owner." Id.
"The concept of statutory employment provides an exception to the general
rule that coverage under the WCA requires the existence of an employer-employee
relationship." Fortner, 402 S.C. at 432, 741 S.E.2d at 544 (citing S.C. Code Ann.
§ 42-1-410). "The statutory employee doctrine converts conceded non-employees
into employees for purposes of the [WCA]." Id. at 432, 741 S.E.2d at 544.
Seko Charlotte and Nationwide, (collectively Petitioners) argue the Court of
Appeals erred in holding that Collins was Seko Charlotte's statutory employee at
the time of this fatal accident because the contractual relationship between West
Expedited and Seko Charlotte had terminated. Petitioners argue their contract
terminated once the deliveries were made and Collins began his return trip to South
Carolina. Petitioners, therefore, submit that without a contractual relationship, no
statutory employment relationship may be found to exist between Collins and Seko
Charlotte.
Conversely, the Fund argues that Collins was Seko Charlotte's statutory
employee because the return trip was "necessarily incidental to [Collins'] statutory
employment with Seko." The Fund represents that each of the three tests for
creating a statutory employment relationship were met here. Further, the Fund
submits that Collins' injuries arose out of his employment relationship as he was a
"traveling employee" and Collins does not meet the exception to the rule because
he "did not deviate from the most direct route to return him to South Carolina."
This case is fact-driven and under these facts, Collins qualifies as a statutory
employee. The circumstances here involve a delivery of goods on a round-trip to
Wisconsin and back to South Carolina. Seko Charlotte concedes that Collins was a
statutory employee on the trip to Wisconsin. At issue is whether Collins' status
ever changed.
The Court of Appeals was correct in concluding that the Commission erred
in applying the employee/independent contractor test when it should have applied
the statutory employee test. The statutory employee status is an exception to the
normal employee/employer relationship. In the statutory employment analysis,
active control of the worker is not the focal point. It is evident that Seko Charlotte
understands this because Seko Charlotte had no more control over Collins on the
trip to Wisconsin than it did on the return trip to South Carolina, yet it concedes
that Collins was its statutory employee on the trip to Wisconsin.
Seko Charlotte contends that it was the parties' understanding that the
delivery of the cargo to Wisconsin terminated their contract. Assuming this to be
so, Seko Charlotte's and West Expedited's understanding of when their obligation
to each other terminated is not dispositive of our inquiry. This is so because the
contract only provides the necessary foundation for the creation of the statutory
employee relationship. Once the statutory employee status attaches, the extent of
the status is determined by the nature of the work contracted to be performed. We
must view this issue from the perspective of when was the employee's contracted
work for the statutory employer completed. Our focus thus becomes the nature of
the work itself.
Collins was engaged in an "express hot delivery" from South Carolina to
Wisconsin for Seko Charlotte. In this instance, an "express hot delivery" is
understood in the trade to mean an immediate and direct trip to Wisconsin. It is
also understood that it is unlikely that the driver will have cargo on the return trip.
Moreover, Morris West, owner of West Expedited, testified that it was unusual to
carry cargo on a return trip of an "express hot delivery," and when West Expedited
did have a load it was for the same primary contractor.
Seko Charlotte frequently used West Expedited's services and knew that the
trip was being made especially for them and that, more than likely, the return trip
would be without cargo for another West Expedited customer. Indeed, Collins did
not pick up any cargo for the return trip to South Carolina. Therefore, the nature of
the work required immediate travel to Wisconsin and an expected return trip to
South Carolina. As the Court of Appeals stated in Hall, the traveling itself is a
large part of the job. Hall v. Desert Aire, Inc., 376 S.C. 338, 357, 656 S.E.2d 753,
762 (Ct. App. 2007). Viewed from this perspective, it is reasonable to conclude
that, under the facts of this case, the work for Seko Charlotte ended when Collins
returned to South Carolina.
This conclusion is buttressed by the fact that Seko Charlotte concedes that:
(1) it is in the cargo delivery business; (2) interstate deliveries are a necessary and
integral part of its business; and (3) its drivers make similar deliveries as Collins
did if it is within 100 miles of Charlotte. The nature of the work for Seko
Charlotte's direct employees is the same as the work performed by Collins. This
fits squarely within the requirements of Voss.
Further, the language of section 42-1- 400 states, "the owner shall be liable
to pay to any workman employed in the work any compensation under this title
which he would have been liable to pay if the workman had been immediately
employed by him." As such, this section does not allow for partial or conditional
statutory employees. Seko Charlotte concedes that its drivers are covered on their
return trips. Collins was entitled to the same coverage as Seko Charlotte's direct
employees.
IV. Conclusion
The Court of Appeals properly reversed the Commission's decision and
reinstated the single commissioner's order. We, therefore, affirm the Court of
Appeals.
AFFIRMED.
PLEICONES, Acting Chief Justice, KITTREDGE, HEARN, JJ., and
Acting Justice James E. Moore, concur.