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Workers' Compensation Board

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Case # G1222847
Date of Accident: 10/03/2014
District Office: NYC
Employer: John Coffey Contracting
Carrier: *** Carrier Undetermined ***
Carrier ID No.: W000004
Carrier Case No.:
Date of Filing of Decision: 01/25/2017
Claimant's Attorney: Fogelgaren, Forman & Bergman LLP
Panel: Kenneth J. Munnelly

MANDATORY FULL BOARD REVIEW
FULL BOARD MEMORANDUM OF DECISION

The Full Board, at its meeting held on December 20, 2016, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed on June 3, 2016.

ISSUE

The issue presented for Mandatory Full Board Review is whether an employer/employee relationship existed between the claimant and the alleged employer, Mary R. Plese.

The Workers' Compensation Law Judge (WCLJ) found that the claimant had a work-related injury to his back and left ankle and he was employed by Mary R. Plese. The WCLJ also found that the employer had no workers' compensation coverage on the date of the accident, that Workers' Compensation Law (WCL) § 56 was applicable, and that John Coffey Contracting was the General Contractor.

The Board Panel majority modified the WCLJ's decision to "establish the claim under the [New York State Construction Industry] Fair Play Act" and to return the case to the calendar "for further development of the record as to the identity of the employer against whom penalties for lack of insurance should be assessed."

The dissenting Board Panel member would disallow the claim because the claimant was engaged in casual employment and there was no employer-employee relationship.

In the alleged employer's application for Mandatory Full Board Review, she argues that the claimant was engaged in casual employment pursuant to WCL § 2(4) and the case should be disallowed.

In rebuttal, the claimant argues that the Board Panel majority's opinion was correct and should be affirmed.

Upon review, the Full Board votes to adopt the following findings and conclusions.

FACTS

In a Form C-3 (Employee Claim) filed with the Board on October 28, 2014, the claimant stated that he was a demolition worker employed by Mary Plese and he injured his left foot and back on October 3, 2014, when he was knocked off a ladder by a piece of sheetrock.

On January 20, 2015, the Board's Bureau of Compliance issued a Report of Investigation which stated that the alleged employer acknowledged knowing the claimant since 2009 through his employment with ABF Construction and that the claimant was injured on her property. The alleged employer denied that the claimant was an employee, stated that he was there of his own volition, and he volunteered his services as a friend.

At a hearing on July 16, 2015, the parties agreed that the accident happened and the issue was whether the claimant was an employee.

The claimant testified on July 16, 2015, that on October 3, 2014, he was working for Mary Plese doing demolition and he started working for her in July 2014. He first started to work at the house when he was employed by ABF Construction. Ms. Plese offered him more money, so he started to work for her directly. He worked mostly two days a week, but sometimes three days for Ms. Plese doing demolition, taking down the ceiling and walls with a crowbar and a hammer. She provided him with the tools and materials to do his work, including a ladder and a crowbar. He had a full-time job and would work for Ms. Plese on his days off. He and Ms. Plese would text each other about what days he would work. He did not own a business, he did not have business cards, and he did not own a vehicle that he used for demolition or construction work. He was injured when a big piece of sheetrock hit him and knocked him off a ladder. He testified that the ladder was provided to him by Ms. Plese. Ms. Plese would be next to him telling him what to do. There were other workers and tools in the building. He would meet with Ms. Plese before he started working and she would pay him when he was leaving. He told Ms. Plese what happened right after the accident and she went with him in a taxi to the doctor's office. He had surgery on his ankle, Ms. Plese paid the doctors' bills, and gave him $1,600.00 after the accident.

The alleged employer, Mary Plese, testified on July 16, 2015, that she did not have any businesses in New York City. She first came in contact with the claimant in December of 2009, when she hired ABF Contracting to work on her property, and that he started performing tasks directly for her in August 2014. There was not a formal arrangement as to how much the claimant would be paid, she always paid the claimant in cash, and she did not have any receipts. She paid the claimant when he arrived because she did not know where she would be for the day. She did not exercise any supervision or control over the claimant's work, she injured her knee and needed him to bring debris down to the carting company, and she never asked him to perform any demolition work. She did not provide any tools to the claimant and he brought his own tools, including a hammer, a flat bar, a hard hat, gloves, and a brace. There were other contractors at the property, they had equipment there, and J. Coffey was the general contractor on the project. When asked what her connection was with the property, she responded that, "Six of us bought that so three new graduates could live in the apartments. There was a structural issue. They found oil in the basement, and John Coffey was there to remediate the oil" (p. 33-34). She would tear out the sheetrock and the claimant would take the debris down to the carts. When asked whether the building permit, which was issued to J. Coffey, covered more than oil remediation, she responded that "As homeowner I'm only allowed to take out surfaces. I am not allowed to take out anything else. I can only take Sheetrock or plaster" (p. 39). The witness testified that she had an agreement with the claimant that he would repay her for his medical expenses that resulted from the accident.

At the conclusion of the hearing, outside the presence of the parties, the WCLJ issued a decision on the record. The WCLJ found the claimant's testimony credible, that the claimant was employed by Mary Plese, she told him what to do, and she paid him. The WCLJ found J. Coffey to be the general contractor based upon the permits pulled and that WCL 56 was applicable. The WCLJ found that Ms. Plese had no workers' compensation insurance from July 3, 2014, to October 3, 2014.

In her application for administrative review, Mary Plese argued that the claimant was an independent contractor and not her employee.

In rebuttal, the carrier argued that the WCLJ decision was correct in all respects and should be affirmed.

LEGAL ANALYSIS

Employer/Employee Relationship

Pursuant to the Fair Play Act, there is a presumption of employment in the construction industry. The Fair Play Act provides that any person performing services for a construction contractor is presumed to be an employee, unless that person qualifies as an "independent contractor" as defined by Labor Law § 861-c(1) or as "a separate business entity" as defined by Labor Law § 861-c(2).

In this context, an "independent contractor" is a person who is working under circumstances that meet all of the following criteria: "(a) the individual is free from control and direction in performing the job, both under his or her contract and in fact; (b) the service must be performed outside the usual course of business for which the service is performed; and (c) the individual is customarily engaged in an independently established trade, occupation, profession, or business that is similar to the service at issue" (Labor Law § 861-c[1]).

A "separate business entity" is any entity (which also can be an individual worker) that meets every one of 12 specific criteria that are listed in Labor Law § 861-c(2). A separate business entity is deemed to be a contractor and is subject to all of the provisions of Labor Law Article 25-B.

Here, the Full Board finds that the Fair Play Act applied in this matter. The term "contractor" is broadly defined in the Fair Play Act to include, "any sole proprietor, partnership, firm, corporation, limited liability company, association or other legal entity permitted to do business within the state who engages in construction work," (Labor Law § 861-b[2]-[3]) and construction is defined as constructing, reconstructing, altering, maintaining, moving, rehabilitating, repairing, renovating or demolition of any building, structure, or improvement, or relating to the excavation of or other development or improvement to land (Labor Law § 861-b[1]). The Fair Play Act requires that a claimant be employed by a "contractor" to come within the protection of the Act. A review of the record in this matter indicates that there was sufficient evidence to support that the alleged employer was a "contractor" as defined in the Fair Play Act, who was engaged in construction, and who hired the claimant to perform demolition work at her property.

Pursuant to WCL 2(4), persons engaged in casual employment, such as yard work, household chores, making repairs to or painting, in and about a one family owner-occupied residence are excluded from coverage. Whether the employment was "in and about a one family owner-occupied residence" and whether the work was "casual" are issues of fact for the Board's resolution (Matter of Hill v Thompson, 61 NY2d 1018 [1984]). In light of the testimony of Mary Plese that "Six of us bought that so three new graduates could live in the apartments," and because she does not reside at the premises in question, the "casual employment" provision of WCL § 2(4) is clearly inapplicable.

Finally, the Full Board finds that the record must be further developed to determine if the property at issue is being run as a sole proprietorship or a partnership, and to issue penalties for the failure to have workers' compensation insurance.

WCL § 56

WCL § 56 provides: "A contractor, the subject of whose contract is, involves or includes a hazardous employment, who subcontracts all or any part of such contract shall, in any case of injury or death to any employee, arising out of and in the course of such hazardous employment, be liable for and pay compensation to such employee or persons entitled to compensation on the death of such employee...unless the subcontractor primarily liable for such compensation or payments into such special funds has secured compensation therefore as provided in this chapter." In Matter of Minnaugh v Topper & Griggs, Inc., (69 AD2d 965 [1979]), the court wrote that the "purpose of [WCL § 56], in our view, is to protect an injured employee and place liability on the insured contractor or subcontractor nearest to the uninsured employer in the chain of subcontractors. However, in situations, where an owner contracts directly with others to perform work, the owner is not a contractor within the meaning of WCL § 56" (see Matter of Griffin v New York State Department of Commerce, 141 AD2d 961 [1988]).

The Full Board finds that there is insufficient evidence in the record to support the finding that J. Coffey was liable pursuant to WCL § 56. The record reflects that the claimant was hired and worked for the owner(s) of the property, and there is no evidence that the claimant contracted with J. Coffey, the general contractor, or any other contractor at the premises. Therefore, WCL § 56 does not apply.

CONCLUSION

ACCORDINGLY, the WCLJ decision filed July 20, 2015, is MODIFIED to find that J. Coffey is not liable pursuant to WCL § 56, to establish the claim under the Fair Play Act, and to return the case to the trial calendar for further development of the record as to the identity of the employer against whom penalties for lack of insurance will be assessed. The case is continued.