Opinion
BOARD NO. 053413-93
Filed: June 26, 1996
REVIEWING BOARD DECISION
(Judges Wilson, McCarthy, and Fischel)
Alan S. Pierce, Esq., for the employee
James F. White, Esq., for the insurer
Both parties appeal from an administrative judge's decision that ordered the insurer to pay a closed period of § 34 weekly benefits for temporary total incapacity and medical benefits pursuant to §§ 18, 34 and 30. We affirm the decision.
The parties stipulated that Lynn Shelter Associates/HOME, a non-profit organization, entered into a contract for services with Anthony Prezioso. (Dec. 2.) Mr. Prezioso enlisted the aid of Rodney Suffreti, the claimant, to perform the said contract. (Dec. 5.) The claimant injured his right thumb at the job site, a house owned by Lynn Shelter/HOME, on December 30, 1993, while constructing a half wall for a stairway. (Dec. 4-5.) As a result, the claimant was incapacitated from the date of the injury to February 16, 1994. (Dec. 2.) Although Mr. Prezioso was uninsured at the time of the accident, Lynn Shelter/HOME was insured by American Policyholders. (Dec. 2.)
Mr. Suffreti filed a claim for § 34 benefits against HOME. A conference on the complaint was held before an administrative judge and three days later, on July 8, 1994, the administrative judge issued an order denying the claim. After a hearing de novo on the claimant's appeal of the conference order, the administrative judge determined that the claimant was an employee of Mr. Prezioso, performing work that was part of Lynn Shelter/HOME's business, and thus entitled to benefits from American Policyholders pursuant to G.L.c. 152, § 18. (Dec. 9.) We have the case on appeal by both parties.
The insurer first contends that the claimant was an independent contractor and not an employee of the independent contractor, Mr. Prezioso. We summarily affirm the decision as to this issue. The judge's conclusion that the claimant was Mr. Prezioso's employee is well supported by his subsidiary findings, which, in turn, are firmly grounded in the evidence. The insurer argues as well that the purpose of the contract between Mr. Prezioso and Lynn Shelter/HOME, the construction of a stairway and a half wall, was merely ancillary and incidental to Lynn Shelter/HOME's business efforts and thus § 18 liability for the claimant's injury does not attach. Having conducted a careful review of the decision, the record on appeal, the parties' briefs and the relevant case law, we affirm the decision as to this issue as well.
Section 18 provides in relevant part:
If an insured person enters into a contract, written or oral, with an independent contractor to do such person's work, or if such a contractor enters into a contract with a sub-contractor to do all or any part of the work comprised in such contract with the insured, and the insurer would, if such work were executed by employees immediately employed by the insured, be liable to pay compensation under this chapter to those employees, the insurer shall pay to such employees any compensation which would be payable to them under this chapter if the independent or sub-contractors were insured persons . . . . This section shall not apply to any contract of an independent or sub-contractor which is merely ancillary and incidental to, and is no part of or process in, the trade or business carried on by the insured, nor to any case where the injury occurred elsewhere than on, in or about the premises on which the contractor has undertaken to execute the work for the insured or which are under the control or management of the insured.
The judge made the following findings of significance to the issue of whether the work performed by Mr. Prezioso and the claimant was "part of or process in" the business of Lynn Shelter/HOME, rather than "merely ancillary and incidental" thereto, within the meaning of § 18: Lynn Shelter/HOME, a non-profit organization providing various modes of assistance to the homeless, owned two properties and leased others, all of which were used as shelter space. Lynn Shelter/HOME employed twenty-six people at the time of the subject injury, including counselors, social workers, and one maintenance worker. The maintenance worker on occasion did some painting and minor carpentry work. Lynn Shelter/HOME entered into agreements with independent contractors when carpentry work for renovation was required, the subject contract with Mr. Prezioso being one of these. (Dec. 3.) The judge further found:
The mission of Lynn Shelter Association/HOME in great part was to provide shelter for homeless individuals. This involved the purchase and lease of real property for shelter space . . . . [C]arpentry work was often necessary to make the various premises suitable for their stated purpose, namely, the sheltering of homeless people. This activity, I find, is substantially and directly associated with the stated mission of Lynn Shelter/HOME and is not merely ancillary or incidental to their main function. I also find that it is indeed an integral part of the business carried on by the insured. Thus, I find that this case falls directly under the provisions of Section 18 of the Act and find the insurer, American Policyholders, liable for the benefits claimed by the employee.
(Dec. 7.)
The judge applied the correct standard for his § 18 analysis. The claimant must establish that the contractor for whom he worked, Mr. Prezioso, was engaged in part of the business of the insured Lynn Shelter/HOME. Tindall v. Denholm McKay Co., 347 Mass. 100, 106 (1964). Our standard for reviewing the judge's determination of this issue is limited. The § 18 issue at hand "is one of law where the record supports the conclusion either that the work plainly is, or plainly is not, part of the principal employer's [insured's] trade or business." Poirier v. Plymouth, 374 Mass. 206, 219 (1978) (emphasis added). Where the subject work is not susceptible to being characterized as "plainly" part of the insured's business or not, the question is one of fact for the administrative judge to answer. See Afienko v. Harvard Club of Boston, 365 Mass. 320, 325 (1974). We will not substitute our judgement for that of the judge in this case, which presents facts that could support either conclusion. We therefore affirm.
Courts have examined various factors in determining whether repair work is within the scope of § 18, being "part of or process in" the insured's business, rather than "merely ancillary and incidental" to it.
[M]aintenance and repair work `which [is] required only occasionally and involve[s] extensive alterations . . . beyond the competence of [the insured employer's] regular staff, may be found to be `merely ancillary and incidental' to the business of the insured employer.' L. Locke, Workmen's Compensation § 154, at 188 (1968), and cases cited. The two guidelines provided by this formulation are thus that (1) the work in question be of a nonroutine nature and that (2) an expertise be required to perform it.
Poirier, supra, at 218. The Poirier court continued, setting out another formulation for the analysis:
`The character and nature of the business must be determined, and if the work done by an independent contractor is really a branch or department of that business or a process in the business, it constitutes a part of the business itself. If it is customary for those engaged in a similar business to perform the work by their own employees in the ordinary course of the business or if, whatever the custom is, one so engaged usually has such work performed by his own employees, then such work may be found to be a part of his business.'
Id., quoting Cannon v. Crowley, 318 Mass. 373, 375 (1945).
Applying the above formulations to the facts found by the judge, (Dec. 3), we conclude that the work performed by the claimant cannot "plainly" be said to be "merely ancillary and incidental" to the insured's business. Carpentry work on the insured's buildings, while sometimes involving extensive alterations, was "often necessary." (Dec. 7.) It was not "of a nonroutine nature." See Poirier, supra. And although the subject work involved an expertise that the insured's own maintenance worker did not possess, our review of the record indicates that said maintenance worker never worked at the property where the accident occurred, in any event. (Tr. 22.) We do not think that the judge was impelled to draw an inference that the work was "merely ancillary" simply because the insured did not have a worker on staff to do the work. Public policy would run counter to such a formulation, in any event.
Case law largely supports our determination that the judge's conclusion be affirmed. In Poirier, supra, the court reasoned that the claimant's highly specialized repair work was "undertaken only occasionally," namely three times in thirteen years, in affirming the lower court's ruling that the subject work was "ancillary." Id. at 218-219. The judge in the instant case determined that such carpentry work as the subject work was performed "often." (Dec. 7.) Cf. Meehan v. Gordon, 307 Mass. 59, 62 (1940) (court affirmed, holding against the claimant, and reasoning that "[m]aking alterations in buildings does not appear to have been part of or process in the business of the [insured] gas company. There was no evidence that the gas companyhabitually performed such work.") (emphasis added). In Cozzo v. Atlantic Refining Co., 299 Mass. 260 (1938), the court affirmed the lower court, holding that construction work for the insured was part of its business, where the evidence tended to show that the insured's building operations "constituted an important part of its activities carried on in the regular course of its business . . . ."Id. at 267. See MacAleese's Case, 301 Mass. 25, 26-27 (1938) (court affirmed, likening an electrician's work at the insured to "the constant keeping of the manufacturing plant in operating condition," holding it to be part of business). But see Corbett's Case, 270 Mass. 162, 166 (1930) (court upheld single member's determination that contracted work "an accumulation of ordinary day to day repairs that were usually done at different times by employees of the Company" was not part of business carried on by insured).
The court in Cannon v. Crowley, 318 Mass. 373 (1945), considered the claimant's argument that the contracted work of transporting equipment for an excavation company was part of its business. The court reasoned, in reversing the lower court and holding against the claimant in a construction/transportation case:
For instance, the occasional alteration of a building or the construction of a new one is ancillary and incidental to a manufacturing or banking business, but the alteration and construction of buildings would be a part of the business of a realty corporation engaged in the development of land and erection of buildings . . . .
Id. at 377. The judge found in the case at hand, on competent evidence, that the insured was engaged in "the purchase or lease of real property for shelter space." (Dec. 7.) Our review of the record also indicates that the insured was actively endeavoring to enter the below-market-rate rental market. (Tr. 19-20.) The described business of the insured seems to fall on the side of the realty corporation, as opposed to the banking business, in the above-quoted citation. See Willard v. Bancroft Realty Co., 262 Mass. 133 (1928), in which the court affirmed the lower court, holding that welding and metal work were an essential part of the construction business of the insured construction company. Id. at 135. Such work, the court reasoned,
"[Lynn Shelter/HOME] go about their business in terms of looking for properties that they can purchase and then move people from the shelter to these new properties at a substantially reduced rent.
Due to the fact that much of homelessness is caused by economic homelessness and affordibility, so rather than . . . accepting . . . a profit derived from it, we're able to lower the rent for people well below market rent so people will have the opportunity to move from a shelter into their own home."
is not rendered ancillary or incidental by the fact that it is done by a special method in a particular case. Nor is the construction of a hotel building or an addition to one, ancillary or incidental, no part or process in the business of the defendant corporation. One of the purposes for which it was formed was that very thing.
Id. (emphasis added).
We affirm the judge's finding of § 18 liability against the insurer. We cannot say that this case "plainly" falls on either side of the litigious boundary between inclusion in and exclusion from the insured's business.
Each case must be judged by the pertinent principles of law as applied to the facts that could be found upon the evidence and the permissible inferences from those facts. Those facts and inferences vary in different cases. The decision ordinarily but not always rests in the domain of fact.
Cannon, supra at 377. The instant decision rests in the domain of fact, into which we do not trespass.
Finally, we summarily affirm the judge's assignment of the average weekly wage, the subject of the claimant's appeal. There was evidence upon which the judge could properly find the average weekly wage to be what he found it to be. See Tr. 46-49, 58-59; G. L. c. 152, § 1 (1).
So ordered.
______________________ Sara Holmes Wilson Administrative Law Judge
______________________ Carolynn N. Fischel Administrative Law Judge
______________________ William A. McCarthy Administrative Law Judge
Filed: June 26, 1996