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SHERWIN-WILLIAMS COMPANY v. ESCUADRA2/27/1997
This appeal addresses whether the sole proprietor of a business which operates as a subcontractor may be considered an "employee" of the subcontractor for purposes of the workers' compensation statutory employer provisions of OCGA § 34-9-8. Felipe Escuadra worked as a subcontractor and independent contractor for Sherwin-Williams. He was injured on the job. A carpet layer, Escuadra had his own trucks and tools and "three or four employees." He believed his sole proprietorship had workers' compensation coverage, as Sherwin-Williams required of its subcontractors, but it appears his insurance
agent never paid for the coverage and absconded with his premiums. In an effort to obtain injury benefits from Sherwin-Williams pursuant to OCGA § 34-9-8 and its statutory employer provisions, Felipe claimed he was an "employee" of a subcontractor who was unable to pay benefits. The administrative law judge (ALJ) and the appellate division of the State Board of Workers' Compensation determined he was not an "employee" and denied his claim. The superior court reversed and held he was an "employee" for purposes of receiving compensation pursuant to OCGA § 34-9-8. The question presented us is whether, as a matter of law, Escuadra is an "employee" of his unincorporated sole proprietorship for purposes of OCGA § 34-9-8. Under the facts herein involved, we answer that question in the negative and reverse the superior court's judgment.
The ALJ and appellate division found Escuadra to be an independent contractor, and neither party contests that finding on appeal. Normally, an independent contractor is not entitled to workers' compensation benefits from his principal. See, e.g., RBF Holding Co. v. Williamson, 260 Ga. 526 (397 S.E.2d 440) (1990). An exception to this rule is OCGA § 34-9-8, which provides that " principal . . . shall be liable for compensation to any employee injured while in the employ of any of his subcontractors engaged upon the subject matter of the contract to the same extent as the immediate employer." (Emphasis supplied.) This statutory employer provision, designed "to ensure that employees in construction and other industries are covered by workers' compensation," allows the subcontractor's employees to seek benefits from their employer's principal when the subcontractor defaults in his obligations to them. Wright Assoc. v. Rieder, 247 Ga. 496, 499 (277 S.E.2d 41) (1981). It also encourages the principal to require subcontractors to carry workers' compensation insurance for the subcontractors' employees. Id.
The ALJ and appellate division rejected Escuadra's claim that he was an "employee" of a subcontractor under OCGA § 34-9-8 because Escuadra himself was the subcontractor. The superior court reversed that finding, and we are called on to determine if it erred in so ruling. "When reviewing the decisions of the Board and ALJ, the superior court sits as an appellate body and is bound by the any evidence standard of review." L. C. P. Chemicals v. Strickland, 221 Ga. App. 742, 743 (472 S.E.2d 471) (1996). A superior court reviewing a workers' compensation appeal must construe the evidence in the light most favorable to the prevailing party and make every presumption in favor of upholding the award. Chandler v. Hancock Builders, 205 Ga. App. 303, 304 (422 S.E.2d 206) (1992).
In reversing the ALJ and appellate division, the superior court reasoned that nothing in the Workers' Compensation Act prohibited it from finding that a person can be an employer and employee at the
same time. However, this interpretation conflicts with OCGA § 34-9-1 (2), which defines an "employee" as "every person in the service of another." (Emphasis supplied.) Interpreting that definition,
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