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NO. COA06-322
NORTH CAROLINA
COURT OF APPEALS
Filed: 16
January 2007
AKHTAR
MASOOD,
Employee,
Plaintiff,
v. North
Carolina Industrial Commission
I.C. File No. 013942
ERWIN
OIL COMPANY,
Employer,
and
EMC
INSURANCE COMPANIES,
Carrier,
Defendants.
Appeal by
plaintiff from opinion and award entered by the North Carolina Industrial
Commission on 23 November 2005. Heard
in the Court of Appeals 18 October 2006.
Patterson
Harkavy, L.L.P., by Leto Copeley, for plaintiff-appellant.
Patterson,
Dilthey, Clay, Bryson & Anderson, L.L.P., by Phillip J. Anthony and
Kathrine Downing Fisher, for defendant-appellee.
HUDSON, Judge.
Plaintiff filed a workers’ compensation claim on 23 February 2000 against plaintiff’s uninsured employer, Iftikhar Taj Abbasi (“Abbasi”), who does business as Tri-Star Amoco Food Shop (“Tri-Star Amoco”), and against Erwin Oil Company (“Erwin Oil”) as a statutory employer pursuant to N.C. Gen. Stat. §97-19 (2002). The workers’ compensation case was stayed while plaintiff proceeded with a tort action against both Abbasi and Erwin Oil. Plaintiff dismissed his workers’ compensation and civil claims against Abbasi after reaching a settlement with that employer’s general liability insurance carrier. He also dismissed his civil suit against Erwin Oil. Plaintiff’s workers’ compensation claim against Erwin Oil was heard before the deputy commissioner on 10 September 2003. On 15 April 2004, the deputy commissioner issued an opinion and award finding that N.C. Gen. Stat. §97-19 did not apply to plaintiff’s employment. Plaintiff appealed to the Full Commission, which issued a decision denying plaintiff’s claim on 23 November 2005. Plaintiff appeals. We reverse and remand.
The evidence
tends to show the following facts. On 6
August 1999, plaintiff was shot in the neck by an armed assailant while working
as a cashier for Abbasi at Tri-Star Amoco.
Plaintiff sustained serious injury from the shooting. Erwin Oil Company is a “jobber,” or
wholesaler, of petroleum; Erwin Oil buys gasoline from a producer, such as
Amoco, and resells it. Erwin
Distributing Corporation owns the real estate upon which Tri-Star Amoco is
located and it leases that real estate to Erwin Oil. Erwin Oil owns the underground tanks and pumps or equipment
connected to those tanks. Abbasi leases
the convenience store and equipment from Erwin Oil and operates the store with
his own employees. Erwin Oil supplies
Abbasi with gasoline on consignment for sale at Tri-Star Amoco and Abbasi
receives a commission per gallon of gasoline sold. Abassi’s role is known in
the industry as a “jobber-dealer.” At
the time of plaintiff’s injury, Erwin Oil had a “jobber contract” with Amoco to
purchase gasoline. Most of the gasoline
sold by Erwin Oil is distributed to the public through gas station/convenience
stores, although Erwin Oil does have some commercial accounts as well.
Plaintiff
argues that the Commission erred in finding and concluding that Erwin Oil was
not a statutory employer within the meaning of N.C. Gen. Stat. §97-19. We agree.
N.C. Gen. Stat. §97-19 provides, in pertinent part, that
[a]ny principal contractor, intermediate contractor, or subcontractor who shall sublet any contract for the performance of any work 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 if he were subject to the provisions of this Article for the payment of compensation and other benefits . . . on account of the injury or death of any employee of such subcontractor due to an accident arising out of and in the course of the performance of the work covered by such subcontract.
Id. It is undisputed that Abbasi did not have
workers’ compensation insurance for his employees and that he did not provide
such a certificate to Erwin Oil. The
Commission found and concluded that Erwin Oil was not a contractor, Abbasi was
not a subcontractor, and that N.C. Gen. Stat. §97-19 did not apply. Whether a defendant is a statutory employer
within the meaning of N.C. Gen. Stat. §97-19 is a jurisdictional matter. Cook v. Norvell-Mackorell Real Estate Co.,
99 N.C. App. 307, 309, 392 S.E.2d 758, 759 (1990). We review this issue de novo:
Findings of jurisdictional fact made by the Industrial Commission are not conclusive, even when supported by competent evidence. It is incumbent upon this Court to review the evidence of record and make independent findings of fact with regard to plaintiff’s employment status.
Youngblood v.
North State Ford Truck Sales, 321 N.C. 380, 383, 364 S.E.2d 433, 437 (1988)
(internal citations and quotation marks omitted).
In determining
that N.C. Gen. Stat. §97-19 did not apply here, the Commission concluded that
Erwin Oil was not an original or principal contractor because it had not
“undertaken for another to do something, the performance of which he has in
whole or in part sublet to another.” Evans
v. Tabor City Lumber Co., 232 N.C. 111, 117, 59 S.E.2d 612, 616
(1950). “G.S. §97-19, by its own terms,
cannot apply unless there is first a contract for the performance of work which
is then sublet.” Cook, 99 N.C.
App. at 310, 392 S.E.2d at 760. The
Commission concluded that although Erwin Oil had a jobber contract with Amoco,
this contract did not require Erwin Oil to re-sell the gasoline or perform any
other duties, and thus Abbasi was not performing any duties for Erwin Oil that
were required by Erwin Oil’s contract with Amoco. However, our review of the evidence, especially the plain
language of the contract, leads us to the opposite conclusion.
At the time of
the hearing in this matter, Erwin Oil owned over twenty stores, some of which
were managed directly by Erwin Oil, and some of which were owned by Erwin Oil
but run by others. At the time of
plaintiff’s injury, Erwin Oil had a “branded jobber contract” with Amoco which
included the following pertinent provisions:
2. . . .
Amoco agrees to sell and Jobber agrees to purchase and receive Amoco’s
currently offered and available branded petroleum products . . .
* * *
5(d) . . .
At all times and at each retail site, including Jobber-Dealer sites, Jobber
shall offer for sale, or cause to be offered for sale, representative amounts
of each grade of Amoco-based gasoline, currently offered to Jobber, necessary
to satisfy public demand.
* * *
8(a) . . . Jobber shall use its best efforts to market the Products covered by this Contract and develop its . . . area.
The contract
further requires Erwin Oil to operate one or more bulk storage plants, and to
operate a sufficient number of tank trucks to efficiently perform its delivery
functions. Thus, under the contract,
Erwin Oil was required to market and sell Amoco products “necessary to satisfy
public demand,” using its “best efforts to market the Products.” Erwin Oil could not successfully fulfill
these contractual obligations to Amoco without access to retail outlets, such
as Tri-Star Amoco, through which to market gasoline to the general public. Furthermore, the addendum to the lease
between Erwin Oil and Abbasi states that:
Lessee agrees to maintain this location up to AMOCO’s IMAGE STANDARDS and to operate the facility open to the public 18 hours per day, 7 days a week. Lessee agrees to furnish ERWIN OIL COMPANY, INC., on a daily basis, accurate and current inventory and sales figures of all petroleum products sold and received at this location. Lessee agrees to notify ERWIN OIL COMPANY, INC., immediately [sic] of any unauthorized discharge of petroleum product such as a leak or a spill. Failure to comply with any or all of the provisions of this addendum will give the lessor the right to cancel this lease at lessor’s discretion.
That Erwin Oil
and Abbasi had a landlord/tenant relationship does not preclude them from also
having a contractor/sub-contractor relationship. As the documents between Erwin Oil and Abbasi required Abbasi “to
maintain” and “to operate” the gas pumps seven days a week, we conclude that in
those agreements lies a contract for Abbassi to perform work Erwin was required
to do -- to market and sell gasoline to meet public demand. Thus, we conclude that Erwin Oil is a
statutory employer pursuant to N.C. Gen. Stat. §97-19. Abbasi, as the owner of a gas station and
convenience store, was in the business of selling gasoline and sundries to the
public. Accordingly, we vacate the
Commission’s opinion and award and remand for additional findings of fact, in
accordance with this opinion, regarding plaintiff’s injuries and defendant’s
liability.
Reversed and
remanded.
Judge CALABRIA
concurs.
Judge HUNTER
dissents in a separate opinion.
The judges
participated and submitted this opinion for filing prior to 1 January 2007.
NO.
COA06-322
NORTH CAROLINA
COURT OF APPEALS
Filed: 16
January 2007
AKHTAR
MASOOD,
Employee,
Plaintiff,
v. North
Carolina Industrial Commission
I.C. File No. 013942
ERWIN
OIL COMPANY,
Employer,
and
EMC
INSURANCE COMPANIES,
Carrier,
Defendants.
HUNTER, Judge, dissenting.
I disagree with the majority’s conclusion that Erwin Oil was
plaintiff’s statutory employer pursuant to section 97-19 of the North Carolina
General Statutes. The majority’s
reasoning in this case would greatly expand the definition of a statutory
employer beyond its intended scope. I
therefore respectfully dissent.
The Commission concluded that section 97-19 did not apply to
the instant case. I agree with the
Commission’s conclusion. The majority
recognizes that “G.S. §97-19, by its own terms, cannot apply unless there is
first a contract for the performance of work which is then sublet.” Cook v. Norvell-Mackorell Real Estate Co.,
99 N.C. App. 307, 310, 392 S.E.2d 758, 760 (1990) (emphasis added). “Consequently, G.S. §97-19 may apply as
between two independent contractors, one of whom is a subcontractor to the
other; but it does not apply as between a principal, i.e., an owner, and
an independent contractor.” Id.
In the instant case, the evidence tends to show that Erwin
Oil, a petroleum wholesaler, purchased gasoline from various producers,
including Amoco. Erwin Oil in turn
leased a convenience store, Tri-Star Amoco, and equipment to Abbasi, who
independently operated the store. Erwin
Oil also supplied Abbasi with gasoline on consignment for sale at Tri-Star
Amoco, and Abbasi received a commission per gallon of gasoline sold at Tri-Star
Amoco. Erwin Oil was the owner of the
gasoline sold at Tri-Star Amoco. The
primary purpose of the contract between Erwin Oil and Amoco was an agreement to
purchase gasoline. Although the
majority is correct that the contract between Erwin Oil and Amoco also required
Erwin Oil to “‘offer for sale, or cause to be offered for sale, representative
amounts of each grade of Amoco-based gasoline, currently offered to [Erwin
Oil], necessary to satisfy public demand[,]’” this was not a task then sublet
to Abbasi. The majority points to an
addendum in the lease agreement requiring Abbasi to maintain the Tri-Star Amoco
location according to “AMOCO’s IMAGE STANDARDS and to operate the facility
open to the public 18 hours per day, 7 days a week.” (Emphasis added.)
Contrary to the majority’s broad interpretation regarding gasoline
pumps, the addendum language is silent as to any specific requirement regarding
the sale or marketing of gasoline. The
lease agreement between Erwin Oil and Abbasi does not require Abbasi to perform
any task required by the contract between Erwin Oil and Amoco. Erwin Oil clearly owned the gasoline offered
for sale at Tri-Star Amoco, for which Abbasi merely received a commission. Erwin Oil owned the premises which Abbasi
leased. Thus, Abbasi was not a
subcontractor for Erwin Oil. Rather, the nature of the relationship between
Erwin Oil and Abbasi was that of an owner and an independent contractor.
As Erwin Oil did not sublet its duties to Abbasi, Abbasi was
not a subcontractor, nor was Erwin Oil a principal contractor. See Mayhew v. Howell, 102 N.C. App.
269, 273, 401 S.E.2d 831, 834 (Industrial Commission properly found that the
defendant homebuilding company did not sublet any contract for the performance
of work to framers and that defendant was not a “‘principal contractor’” with
regard to subdivision under construction but the “‘owner’”), affirmed per
curiam, 330 N.C. 113, 408 S.E.2d 853 (1991). Section 97-19 therefore does not apply, and Erwin Oil cannot be
considered plaintiff’s statutory employer.
The majority’s interpretation would make Erwin Oil a statutory employer
of every employee hired by any independent contractor leasing property owned by
Erwin Oil where Amoco gasoline is sold.
I believe this interpretation far exceeds the intended scope of section
97-19, and I would affirm the opinion and award of the Commission denying
plaintiff’s claim for benefits.