Opinion
No. 982 C.D. 2012
03-28-2013
Eyal Cohen, Deceased, c/o Maryanna Cohen, Petitioner v. Workers' Compensation Appeal Board (Getty Petroleum Marketing Co., Inc.), Respondent
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE LEAVITT
Maryanna Cohen (Claimant) petitions for review of an adjudication of the Workers' Compensation Appeal Board (Board) denying her fatal claim petition for the reason that her late husband, Eyal Cohen (Decedent), was not acting in the course and scope of employment at the time of his fatal motorcycle accident. In doing so, the Board affirmed the decision of the Workers' Compensation Judge (WCJ), who heard the matter upon a reassignment from another WCJ. Claimant argues that this reassignment resulted in a decision that was not reasoned and, thus, erroneous. Discerning no error in the Board's adjudication, we affirm.
On August 5, 2008, Claimant filed a fatal claim petition pursuant to the Pennsylvania Workers' Compensation Act (Act) alleging that Decedent, her husband, died in a work-related motor vehicle accident while employed by Getty Petroleum Marketing Company, Inc. (Getty). Getty denied that Decedent was its employee, and the matter was assigned to WCJ Peter Perry.
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§1-1041.4, 2501-2708.
In her deposition, Claimant stated that Decedent operated a Getty gasoline filling station that also provided motor vehicle maintenance and repair services. On Saturday, August 6, 2005, Decedent left for work at approximately 8:20 a.m., but he died before reaching the station when his motorcycle collided with an automobile. Claimant explained that she did not know if Decedent was going directly to the service station or stopping first at a Pep Boys auto parts store, which was located several blocks from the service station. Reproduced Record at 208a (R.R. ___). In either case, he would pass the Pep Boys store on his way to work, and the accident occurred before reaching either location.
Claimant also testified live before WCJ Perry. She reiterated that on the morning of the accident, she had not discussed her husband's planned route with him. She did not know whether he was going directly to work or first stopping at Pep Boys.
Ronen Hajbi, Decedent's cousin, also testified live before WCJ Perry. Hajbi worked at the service station for Decedent, not for Getty. He pumped gasoline and helped Decedent with automotive repair work. On the day of the accident, there were two vehicles in the shop. One was scheduled for major repairs and the other for a tune-up. Hajbi understood that Decedent was going to purchase the parts needed for the tune-up on his way to work on the day of the accident.
Hajbi was not permitted to testify as to what Decedent actually said to him because it was determined to be impermissible hearsay.
Albert Pobirski, who is Claimant's brother and tax accountant, testified. He helped Decedent obtain a tax employee identification number for his service station business, EMS Auto, Inc. However, he did not have any information about Decedent's relationship with Getty. Pobirski prepared Claimant's federal and state personal tax returns. Decedent's IRS Form 1099 for 2005 showed $8,004.29 in nonemployee compensation paid by Gasway, Inc. Supplemental Reproduced Record at 41b (S.R.R. ___). Pobirski assumed that most of Decedent's income was derived from EMS Auto, Inc., and Pobirski did not do tax work for EMS Auto, Inc.
The record also includes Decedent's IRS Form 1099 for 2004, showing nonemployee compensation of $18,852.02 paid by Gasway, Inc. S.R.R. 40b.
Getty provided a series of documents. They included: the incorporation of EMS Auto, Inc., on February 11, 2004, listing Decedent as President; Decedent's declaration to waive any and all workers' compensation benefits due to his ownership interest in a Subchapter S corporation; Hajbi's written waiver of any and all workers' compensation benefits based upon his 5% interest in a Subchapter S corporation; a certification dated February 26, 2004, accepting Decedent's waiver of workers' compensation coverage because he had established that he was a sole proprietor without any employees; the retail gasoline station lease agreement; and the lessee commission contract.
This declaration was signed by Decedent. However, Hajbi testified that he did not have any interest in EMS Auto, Inc.
Paul Gold, who worked for Getty, testified about the lease agreement between Decedent and Getty, which owned the real property where Decedent's business was located. The lease governed the sale of petroleum products; it allowed motor vehicle repairs but otherwise did not address that part of the business. Getty did not share in the revenue or profits of the motor vehicle maintenance and repair business. The lease between Decedent and Getty spelled this out:
Lessee understands that Lessee is an independent business person and is to conduct Lessee's business in Lessee's own name and at Lessee's own cost and expense. Lessee shall not assume or create any obligation or responsibility on behalf of or in the name of Company, or bind Company in any manner or make any representation or commitment on behalf of Company.R.R. 342a, paragraph 11. The lease was executed on March 4, 2004. Under the terms of the lease, Decedent paid monthly rent to Getty and was responsible for utilities. Getty retained title to the gasoline and paid Decedent a commission based on the amount of gasoline he sold.
Gold testified that Getty requires proof of workers' compensation coverage on persons working at a lessee's station. If this is not done, Getty charges a monthly penalty of $98.00. Decedent paid a penalty until sometime in 2004 when he presented documentation that he had no employees and was eligible to waive coverage as a sole proprietor.
In 2010, after the record closed, but before a decision was rendered, the case was reassigned to a new WCJ, Aida Harris. The reassignment order stated that the parties could request to submit additional evidence. Getty requested that the record be opened for the stated reason that Claimant had stated in her post-hearing brief that the monthly $98.00 payment was a workers' compensation premium. WCJ Harris granted the request and also offered to allow Claimant to offer more evidence.
Michael Lewis, a vice-president and general counsel for Getty, testified before WCJ Harris. He explained that Getty did not provide workers' compensation on or for Decedent. The lease provided that Getty would charge a $98.00 monthly penalty if the lessee failed to provide documentation demonstrating compliance with the Act. The lease authorized Getty, if it so chose, to charge an additional amount to procure workers' compensation coverage. However, Getty never did this. It charged the $98.00 monthly penalty until Decedent provided Getty with the documentation needed to waive coverage.
Lewis explained that Getty does not provide workers' compensation to its lessees or their employees. The lessee has to make the purchase in his own name or waive coverage as a sole proprietor. Although the lease gave Getty the right to purchase coverage on behalf of a lessee, it has never done so. It was Getty's practice to terminate the lease where the lessee did not meet its obligations with respect to workers' compensation insurance.
Noting that Hajbi stated his belief that Decedent was on his way to a Pep Boys store to buy parts when the accident occurred, Lewis reiterated that Getty had no interest in Decedent's automobile maintenance business and derived no benefit from it. Accordingly, if Decedent was on a work-related errand when the accident occurred, then it was on behalf of EMS Auto, Inc., not Getty. Under the lease, Decedent could spend as much or as little time servicing vehicles as he wished, and it was his choice whether to hire employees to help with any part of the business. Lewis explained that Getty's sole interest was in the sale of gasoline. Getty provided the station and the gasoline, and Decedent sold it. Getty set the retail price of the gasoline, and Decedent earned a commission based on the number of gallons sold.
Claimant then testified. She reiterated her prior testimony, but offered one new contention. She asserted that on the day of the accident, Decedent was going to Pep Boys to purchase parts because he told her of this intent the morning of the accident. Claimant was asked why she did not mention this conversation in her prior testimony. She explained that she replays conversations with her late husband in her head, and this caused her to remember it.
WCJ Harris found Claimant credible, with the exception of her testimony that Decedent planned to stop at Pep Boys on his way to work. WCJ Harris found Hajbi credible, with the exception of his belief that Decedent planned to obtain parts at Pep Boys on his way to work. She accepted the testimony of Pobirski, Gold and Lewis. She found that at the time of the accident, Decedent was the owner and employee of EMS Auto, Inc., which was responsible for providing workers' compensation coverage for its employees. Decedent had waived coverage as a sole proprietor. WCJ Harris found that Decedent was not an employee of Getty. In any case, Decedent was not acting in the course and scope of his employment at the time of the accident; rather, he was commuting to work when that accident occurred. He was not on a special mission for Getty.
WCJ Harris denied the fatal claim petition. Claimant appealed to the Board, asserting a denial of equal protection. She contended that WCJ Harris could not discredit the testimony of Hajbi, who had testified before another factfinder, i.e., WCJ Perry.
The Board agreed with WCJ Harris that Claimant failed to establish that Decedent was an employee of Getty. It did not address Claimant's equal protection issue, explaining that an administrative agency does not have jurisdiction to determine constitutional claims. Claimant then petitioned for this Court's review.
On appeal, Claimant raises two issues. First, she claims that Getty retained the power to direct and control Decedent's business, making Decedent its employee. Second, she claims it was error for WCJ Harris to credit the testimony of Lewis based on his demeanor and to reject the testimony of Hajbi, without having the opportunity to observe his testimony. This resulted in WCJ Harris' decision not being a reasoned decision.
Our scope of review of an order of the Board is limited to determining whether the necessary findings of fact are supported by substantial evidence, whether constitutional rights were violated or an error of law was committed. City of Philadelphia v. Workers' Compensation Appeal Board (Brown), 830 A.2d 649, 653 n.2 (Pa. Cmwlth. 2003). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Mrs. Smith's Frozen Foods Company v. Workmen's Compensation Appeal Board (Clouser), 539 A.2d 11, 14 (Pa. Cmwlth. 1988).
Claimant asserts that the lack of a reasoned decision was unconstitutional; however, the Claimant's brief does not develop the constitutional issue in any way.
We begin with Claimant's contention that Decedent was an employee of Getty. It is the claimant that bears the burden of establishing that an employer/employee relationship existed. American Road Lines v. Workers' Compensation Appeal Board (Royal), 39 A.3d 603, 610 (Pa. Cmwlth. 2012). The following factors are considered:
(1) control of manner the work is done; (2) responsibility for result only; (3) terms of agreement between the parties; (4) nature of the work/occupation; (5) skill required for performance; (6) whether one is engaged in a distinct occupation or business; (7) which party supplies the tools/equipment; (8) whether payment is by time or by the job; (9) whether work is part of the regular business of employer; and (10) the right to terminate employment.Id. at 611. While none of the factors is dispositive, "[t]he key factor is whether the alleged employer had the right to control the work to be done, and the manner in which work is performed." Id. The existence of an employer/employee relationship is a question of law determined on the basis of the facts found in an individual case. Stillman v Workmen's Compensation Appeal Board (CBR Enterprises), 569 A.2d 983, 986 (Pa. Cmwlth. 1990).
Claimant testified that she was unaware of the terms of Decedent's lease with Getty. Her witnesses, Hajbi and Pobirski, also testified that they had no knowledge of the contractual relationship between Decedent and Getty. The only evidence on this issue came from Getty. Claimant argues that the lease made Decedent an employee of Getty.
In support, Claimant notes that the lease gave Getty the right to fire Decedent by terminating the lease; the right to determine the hours the service station remained open; the right to demand that only certain products be sold; the right to set the price of the gasoline; the right to enter the station at any time for inspection and the right to make employees wear a Getty uniform. She also argues that Decedent's waiver of workers' compensation coverage was not voluntary, but compelled by Getty to advance its "carefully orchestrated scheme to make the Decedent an independent contractor." Claimant's Brief at 18.
Getty counters that the record is clear that Decedent was not its employee. Rather, Decedent was the owner and employee of EMS Auto, Inc. and had elected to waive workers' compensation insurance. Decedent, not Getty, hired Hajbi. Getty issued an IRS Form 1099 to report Decedent's nonemployee earnings. Claimant misapprehends the lease provisions she cites in her argument and the lease as a whole. Decedent had the opportunity to negotiate the terms of the lease and, in fact, negotiated shorter hours of operation than is set forth in Getty's boilerplate contract. Getty notes that the lease explicitly makes the lessee an independent contractor, who conducts business in lessee's name, and it forbids the lessee from imposing liabilities on Getty. R.R. 342a. Finally, Getty notes that it can terminate a lease only where the lessee violates the terms of the contract, violates the law or declares bankruptcy.
Normally, lessees are expected to be open to midnight; Decedent's station was, by the lease, open to 10:00 p.m.
The record supports the Board's conclusion that Decedent worked as a sole proprietor, not an employee of Getty. The terms of the lease, the tax records and Decedent's written waivers all support the WCJ's relevant findings of fact. The Board did not err in affirming the WCJ's decision.
In her second issue, Claimant argues that WCJ Harris did not issue a reasoned decision. Claimant asserts that under Daniels v. Workers' Compensation Appeal Board (Tristate Transport), 574 Pa. 61, 828 A.2d 1043 (2003), a WCJ who never sees a witness testify live cannot make credibility determinations. Getty counters that Claimant gives too broad a read to Daniels. Claimant could have had Hajbi testify live before WCJ Harris had she so desired. In any case, Hajbi's testimony would be relevant only were Decedent found to be Getty's employee.
As a general rule, commuting to and from work is not considered to be an activity in the course and scope of employment. Peterson v. Workmen's Compensation Appeal Board (PRN Nursing Agency), 528 Pa. 279, 284, 597 A.2d 1116, 1119 (1991). Instead, one must show that transportation was included in the work agreement; the employee was on a special assignment for the employer; or that special circumstances show the employee was furthering the business of the employer. Leisure Line v. Workers' Compensation Appeal Board (Walker), 986 A.2d 901, 906 (Pa. Cmwlth. 2009). By proving that Decedent was on his way to Pep Boys, not the station, claimant would show that he was on a work-related errand when he died.
Claimant's reliance on Daniels is misplaced. Daniels addressed the requirement in Section 422(a) of the Act that a WCJ issue a reasoned decision. The Supreme Court explained that when a WCJ is evaluating the credibility of a witness that has testified at hearing, a determination may be made on the assessment of the demeanor of the witness. However, when the WCJ has not heard the witness testify, he must articulate an actual objective basis for his credibility determination in order for the decision to be reasoned. Daniels did not hold that a WCJ must see every witness in order to make a credibility finding.
Section 422(a) provides, in relevant part, as follows:
All parties to an adjudicatory proceeding are entitled to a reasoned decision containing findings of fact and conclusions of law based upon the evidence as a whole which clearly and concisely states and explains the rationale for the decisions so that all can determine why and how a particular result was reached. The workers' compensation judge shall specify the evidence upon which the workers' compensation judge relies and state the reasons for accepting it in conformity with this section. When faced with conflicting evidence, the workers' compensation judge must adequately explain the reasons for rejecting or discrediting competent evidence. Uncontroverted evidence may not be rejected for no reason or for an irrational reason; the workers' compensation judge must identify that evidence and explain adequately the reasons for its rejection. The adjudication shall provide the basis for meaningful appellate review.
WCJ Harris found Lewis, who testified before her, credible because of his demeanor and because his testimony was consistent with the documents of record. Claimant was found credible, with the exception of her claim that Decedent had informed her of his plans to go to Pep Boys. WCJ Harris rejected this testimony because it was contradicted by Claimant's prior testimony. Similarly, Hajbi was found credible, with the exception of his "inference" that Decedent had planned to stop at Pep Boys on the way to work because it was based on hearsay and not supported by other evidence of record. In short, the WCJ fully explained her credibility decisions, which is all she was required to do under Daniels.
In any case, Hajbi's rejected testimony relates to the issue of whether Decedent was in the course and scope of his employment at the time of the motorcycle accident. Because we have determined that the Board did not err in concluding that Decedent was not an employee of Getty, Hajbi's testimony has no further relevance to the outcome of the case. The errand, if it was one, was on behalf of EMS Auto, Inc., not Getty.
Accordingly, the order of the Board is affirmed.
/s/_________
MARY HANNAH LEAVITT, Judge ORDER
AND NOW, this 28th day of March, 2013, the order of the Workers' Compensation Appeal Board, dated April 24, 2012, is AFFIRMED.
/s/_________
MARY HANNAH LEAVITT, Judge
77 P.S. §834 (emphasis added).