Riddell Flying Service v. Callahan

John B. Robbins, Judge.

In this appeal from the Workers’ Compensation Commission, it is undisputed that pilot Clarence Douglas Callahan was seriously injured in a plane crash on April 9,1995. The issue in this case was the determination of the responsible party for Callahan’s injuries.

Appellant Riddell Flying Service is in the business of providing crop dusting services and selling new and used airplanes. It is an uninsured entity. In 1995, Riddell successfully bid on a state contract for the Arkansas Forestry Commission, which had received Federal Emergency Management Agency funds following ice storms in the region. Riddell bid on the service of providing preventive forest firefighting services, agreeing to provide three planes and three pilots to get the job done. Callahan was one of the pilots provided for the job, and while firebombing, Callahan crashed. In the claim for benefits, Riddell and the Arkansas Forestry Commission (“AFC”) were named as potential employers and responsible parties.

The Administrative Law Judge found that Callahan was not an independent contractor but an employee of Riddell and that AFC was the prime contractor and bore responsibility for the claim. AFC appealed. On March 12, 2004, the Workers’ Compensation Commission found (1) that Callahan was an employee of Riddell rather than an independent contractor, and (2) that Rid-dell was a contractor to AFC when Callahan was injured, but that AFC was not a “prime contractor” such that only Riddell, not AFC, was liable for workers’ compensation benefits.

Appellant Riddell filed a timely notice of appeal, contending that the Commission’s finding that Callahan was an employee is not supported by substantial evidence. Callahan filed a notice of cross-appeal, contesting the finding that AFC was not the prime contractor and thus asserting that AFC is Hable for his workers’ compensation benefits.1 In response to the arguments of Riddell and Callahan, AFC contends that Callahan was not an employee, and further that AFC was not a prime contractor. We affirm the finding that Callahan was an employee of Riddell, and we affirm the finding that AFC was not a prime contractor.

This court reviews decisions of the Workers’ Compensation Commission to see if they are supported by substantial evidence. Deffenbaugh Indus, v. Angus, 39 Ark. App. 24, 832 S.W.2d 869 (1992). In determining the sufficiency of the evidence to support the findings of the Workers’ Compensation Commission, we view the evidence and all reasonable inferences deducible therefrom in the light most favorable to the Commission’s findings, and we will affirm if those findings are supported by substantial evidence. Farmers Coop. v. Biles, 77 Ark. App. 1, 4-5, 69 S.W.3d 899, 902 (2002). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Id. The determination of the credibility and weight to be given a witness’s testimony is within the sole province of the Commission. Id. The Commission is not required to believe the testimony of the claimant or any other witness, but may accept and translate into findings of fact only those portions of the testimony it deems worthy of belief. Id.

We first review the finding of Callahan’s employment status. The determination of whether a person was an employee or an independent contractor at the time of injury is a factual one. See Franklin v. Arkansas Kraft, Inc., 12 Ark. App. 66, 670 S.W.2d 815 (1984) (“Franklin II’); Silvicraft, Inc. v. Lambert, 10 Ark. App. 28, 661 S.W.2d 403 (1983); Franklin v. Arkansas Kraft, Inc., 5 Ark. App. 264, 635 S.W.2d 286 (1982) (“Franklin I”). Once the Commission makes that factual determination, we view the evidence in the light most favorable to the Commission’s decision and affirm if it is supported by substantial evidence. In order to reverse a decision of the Commission, we must be convinced that fair-minded persons, with the same facts before them, could not have arrived at the conclusion reached by the Commission. Franklin II, supra. The question on appeal is not whether the facts at bar would have supported the opposite conclusion, but whether these facts supported the decision the Commission made. Id.

In Franklin I, our court stated:

There are numerous factors which may be considered in determining whether an injured person is an employee or an independent contractor for purposes of workers’ compensation coverage. Obviously, the relative weight to be given the various factors must be determined by the Commission. Some of the factors which might be considered, depending on the facts of a given case, are:
(1) the right to control the means and the method by which the work is done;
(2) the right to terminate the employment without liability;
(3) the method of payment, whether by time, job, piece or other unit of measurement;
(4) the furnishing, or the obligation to furnish, the necessary tools, equipment, and materials;
(5) whether the person employed is engaged in a distinct occupation or business;
(6) the skill required in a particular occupation;
(7) whether the employer is in business;
(8) whether the work is an integral part of the regular business of the employer; and
(9) the length of time for which the person is employed.
These are not all the factors which may conceivably be considered in a given case, and it may not be necessary in some cases for the Commission to consider all of these factors. Traditionally, the “right to control” test has been sufficient to decide most of the cases, although many variations of “control” have probably been squeezed into that test.

Franklin I, 5 Ark. App. at 269-70. The ultimate question in these cases is not whether the employer actually exercises control over the doing of the work, but whether he has the right to control. See Irvan v. Bounds, 205 Ark. 752, 170 S.W.2d 674 (1943); Wright v. Tyson Foods, Inc., 28 Ark. App. 261, 773 S.W.2d 110 (1989). The resolution of the issue depends upon the facts of each case. Sands v. Stombaugh, 11 Ark. App. 38, 665 S.W.2d 902 (1984).

The Commission reviewed the testimony, and it applied the factors applicable to the determination of an agency relationship in Restatement (Second) of Agency, § 220. Those factors are identical to the nine listed above with the exception of not including factor two above (right to terminate), and adding as factors: (1) whether the type of work is usually done with supervision or by a specialist without supervision, and (2) whether the parties believe they are creating a master/servant relationship. The Commission also cited to Franklin I for the proposition that not all factors that could conceivably be relevant have to be considered in every case, and furthermore that it was vested with the power to determine the weight to be given to the various factors. The Commission pointed out that the right to control is paramount.

The relevant testimony is outlined as follows. Riddell had never before performed firebombing services, so he contacted Burl Shears, the owner of a different flying service company. Riddell and Shears agreed that Shears would receive one-third of the contract amount if he supervised the performance of the contract and provided one plane and one pilot; Riddell was to provide the other two planes and pilots. Riddell made arrangements with Mooney Easley and Callahan (claimant) to fly his two planes. Both Easley and Callahan received federal 1099 forms from Riddell, who did not consider either man to be an employee. Callahan was paid $500 per week to be on standby and a certain amount per actual flight hour, and his out-of-town expenses were paid by Riddell. Callahan was also a certified airplane mechanic, and he hoped that in the off-flying time he could work as a mechanic. Callahan quit his earlier employment to work for Riddell. Riddell provided the plane, the fuel, the radio, and Callahan’s helmet. Callahan worked only when called and was supervised by Shears.

The Commission found that though the manner of his pay was more indicative of an independent contractor, this was outweighed by the control exerted by Riddell and Shears over his assignments of when and where to fly and by their provision of all the necessary tools for him to complete the task. The Commission found that Callahan was, therefore, an employee. There may be substantial evidence to support the Commission’s decision even though we might have reached a different conclusion if we sat as the trier of fact or heard the case de novo. Brower Mfg. Co. v. Willis, 252 Ark. 755, 480 S.W.2d 950 (1972). We hold that the Commission applied appropriate factors to the facts of this claim, and we cannot say that its factual finding is not supported by substantial evidence. See Wright v. Tyson Foods, Inc., supra (affirming finding of Commission that relief driver was employee, rather than independent contractor for self-insured employer; even though there was some evidence to the contrary, evidence showed that driver was backup driver; company furnished truck, loaded and fueled; company supervisor controlled driver’s time schedule, expected the same work out of relief drivers as regular drivers, could dismiss relief driver, and expected relief drivers to follow and respond to supervisor’s directions).

The other issue on appeal concerns the Commission’s finding that AFC was not the “prime contractor” over Riddell, thus rendering Riddell the responsible party. The relevant law on this topic is found at Ark. Code Ann. § ll-9-402(a) (Repl. 2002), which states that “[wjhere a subcontractor fails to secure compensation required by this chapter, the prime contractor shall be liable for compensation to the employees of the subcontractor.” The Commission determined that AFC was not obligated to a third-party for Riddell’s proper completion of the state contract. Therefore, AFC was not the “prime contractor,” and thus section 11-9-402 did not apply. The Commission found that Riddell was a contractor to AFC, but AFC was a contractor to no one. We hold that this finding is also supported by substantial evidence.

In Bailey v. Simmons, 6 Ark. App. 193, 639 S.W.2d 526 (1982), our court provided a definition of “subcontractor” within the meaning of section 11-9-402:

A subcontractor is one who enters into a contract with a person for the performance of work which such person has already contracted to perform. In other words, subcontracting is merely “farming out” to others all or part of work contracted to be performed by the original contractor.

Id., 6 Ark. App. at 196. The Bailey decision determined that there cannot be a prime contractor without a contract to do the work for a third party. See also Lofton v. Bryan, 237 Ark. 376, 373 S.W.2d 145 (1963).

In the present appeal, the Commission reviewed the status of the relationship between Riddell and AFC. The Commission agreed that there was some control exerted by AFC over Riddell, which was expected given the state contract between the two. In examining the relationship between AFC and the federal government, the Commission noted that AFC was awarded federal grant monies to reduce the increased fire hazard created by the ice storms of early 1994. The federal emergency plan, supported by the grant funds, required cooperation between the state and federal governments to meet the objective of abating wildfires. This is borne out by the plan’s stated goal of reducing risk of losing life and property to wildfire by public education via mass media, rapid response to any fire ignition, and reduction of hazards in high-risk areas. However, there was no evidence that a contractual obligation existed in the manner of how AFC met those goals, and AFC was thus found to be a contractor to no one. The status of a prime contractor presupposes work to be done for a third party. Nucor Holding Corp. v. Rinkines, 326 Ark. 217, 931 S.W.2d 426 (1996). We cannot say that the Commission’s finding that AFC was not a prime contractor is not supported by substantial evidence.

Affirmed on direct appeal; affirmed on cross-appeal.

Bird and Crabtree, JJ., agree. Griffen, J., dissents. Baker and Roaf, JJ., concur.

Callahan filed a timely notice of cross appeal, but the next day he filed a notice to withdraw his cross appeal. A subsequent letter and notice of appeal in his addendum purporting to again file a cross appeal are not file marked, nor are they part of the record on appeal. Nevertheless, the record on appeal contains an order of the Commission finding that it had no jurisdiction to grant Callahan’s motion to dismiss his cross-appeal because the matter was pending before the appellate court, and further that even if it had jurisdiction, there was not an agreement of all Parties to do so Pursuant to Ark. R. APP. P.-Civ. 3(b)(2004). The Commission denied the motion to withdraw, and it noted that any request should be made to the court of appeals. None was made.