Petition for Writ of Certiorari — Wilkinson v. Palmetto State State Transportation Transportation Co Co (No. 09-241)

Supreme Court brief2009

Ask Donna

What actually matters in this document.

Text

Supregne Cou Us.

io (|) o9- Regn

_ No. _. _OFRICE ofc wt tt

Jn The

Supreme Court of the United States

Lira ANN WILKINSON (SURVIVING SPOUSE) FOR

Scott R. WILKINSON (DECEASED EMPLOYEE),

Petitioner,

PALMETTO STATE TRANSPORTATION Co., EMPLOYER,

AND CANAL INSURANCE Co., CARRIER,

Respondents.

On Petition for Writ of Certiorari to

The Supreme Court of South Carolina

PETITION FOR WRIT OF CERTIORARI

KATHRYN WILLIAMS

Counsel of Record

KATHRYN WILLIAMS, P.A.

P.O. Box 10693

GREENVILLE, SC 29603

(864) 235-6254

Altorney for Petittoner

August 25, 2009

Becker Gallagher + Cincinnati, OH + Washington, D.C. - 800.890 S001

QUESTIONS PRESENTED

1. Did the Supreme Court of South Carolina

violate petitioner’s right to due process by addressing

an issue not presented on appeal, by reversing itself on

that issue without allowing Petitioner an opportunity

to address the issue, and by announcing a new

standard without remanding the claim for a hearing to

give Petitioner an opportunity to present evidence to

meet the new standard?

TABLE OF CONTENTS

QUESTIONS PRESENTED ..................

TABLE OF AUPE veneer ge css. .ss.,

OPINIONS Meee www...

JURISDIG Tie eee eee.

CONSTITUTIONAL PROVISIONS INVOLVED .

STATEMENT OF THE CASE ................

REASONS FOR GRANTING THE WRIT .......

THE SUPREME COURT OF SOUTH

CAROLINA VIOLATED PETITIONER’S

RIGHT TO DUE PROCESS BY

ADDRESSiNG AN ISSUE NOT

PRESENTED ON APPEAL, BY

REVERSING ITSELF ON THAT ISSUE

WITHOUT ALLOWING PETITIONER AN

OPPORTUNITY TO ADDRESS THE

ISSUE, AND BY ANNOUNCING A NEW

STANDARD WITHOUT REMANDING THE

CLAIM FOR A HEARING TO GIVE

PETITIONER AN OPPORTUNITY TO

PRESENT EVIDENCE TO MEET THE

NEW Sie ee... .....

CONCLUBIIN eww.

APPENDIX

Appendix A: South Carolina Supreme Court

Opinson, Biay 4, FIO wc accu eens enayves la

Appendix B: South Carolina Court of Appeals

Opinion, November 20, 2006 ............. l6a

Appendix C: South Carolina Court of Common

Pleas Order, September 25, 2005 ......... 30a

Appendix D: Appellate Panel Decision and

Order, September 28, 2004 .............. 46a

Appendix E: South Carolina Workers’

Compensation Commission Order, February 27,

Pe re re ney ey SF tu 50a

Appendix F: South Carolina Supreme Court

Order denying rehearing, May 28, 2009 .... 75a

TABLE OF AUTHORITIES

American Mfrs. Mut. Ins. Co. v. Sullivan,

OB UTS. GOCE oi ck ec ee eee wea D

Armstrong v. Manzo,

S80 U.S. 456 (2965) . 6. ce ce ce eee §

Chavis v. Watkins,

180 S.E.2d 648 (S.C. 1971) ............... 12

Dawkins v. Jordan,

534 S.E.2d 700 (8.C. 2000) ............ passim

Ham v. Mullins Lumber Co..,

7 ee 11 te. FOO) Cg os cc ees 7,8

Hamdi v. Rumsfeld,

ee Ge ey CD wi ce ee aes. 6, 7

Holden v. Hardy,

ER ee... 7

Joint Anti-Fascist Comm. v. McGrath,

ee Us Be ee ge es ee ee 7

Kilgore Group, Inc. v. S.C. Emp. Sec. Comm'n,

437 S.B.20 46 (S.C. 1995) ........---.000- 1]

Lankford v. Idaho,

ee a, Be Ca) os i es ee 6, 7, 31

Logan v. Zimmerman Brush Co.,

ERR eo ao) +: a 5

Mathews v. Eldridge,

OTE U.S. SES CASTE) 2c ee ees &, 6, 7, 13

Mullane v. Centrai Hanover Bank & Tr. Co.,

ee Ries CRD og vce tcc ee ce seeeves 5

Nelson v. Yellow Cab Co.,

664 8.5.20 110 (S.C. 2002) ..........26. 9,10

Paschal v. Price,

670 S.E.2d 374 (S.C. Ct.App. 2008)... .... 9,10

S.C. Workers’ Comp. Comm’n v. Ray Covington

Realtors, Inc.,

459 3.5.26 G02 (S.C. 1985) .... 2 ccc es 11

Tharpe v. G.E. Moore Co.,

5703.3. 26 SOT (E.C. 1970)... wi ceeen. 11

Constitutions

t) 2. Geet. penn. 34.83. . ke es wc eee 1

ees © Pe oko he a ee eee 1

ee ar eas CO) 6 an os ne 08 ee ees 1

Rules and Regulations

BR ae. ie ea ]

Treatises

3 Arthur Larson & Lex K. Larson, Larson’s Workers’

Compensation Law, §§ 61.04 (2000) ........ 3,9

]

OPINIONS BELOW

The opinion of the South Carolina Supreme Court,

dated May 4, 2009, is officially reported at Wilkinson

v. Palmetto State Transp. Co., 676 S.EB.2d 700 (2009)

and is reproduced in Appendix A, infra, at pp. la-15a.

The opinion of the South Carolina Court of Appeals,

dated November 20, 2006, is officially reported at

Wilkinson v. Palmetto State Transp. Co., 638 S.E.2d

109 (2009) and is reproduced in Appendix B, infra, at

pp. 16a-29a. The opinion of the circuit court for

Greenville County is reproduced in Appendix C, infra,

at pp. 30a-45a. The award and orders of the South

Carolina Workers’ Compensation Commission are

reproduced in Appendix D, infra, at pp. 46a-49a, and

at Appendix FE, infra, at pp. 50a-74a.

JURISDICTION

The judgment of the Supreme Court of South

Carolina was entered on May 4, 2009. A timely

netition for refearing was denied on May 28, 2009.

See Appendix I’, pp. 75a-76a. The jurisdiction of this

Court is invoked under 28 U.S.C. § 1257. This

petition is timely under 28 U.S.C. § 2101(c) and

Supreme Court Rule 13.1 because it is being filed

within 90 days of the entry of the denial of the petition

for rehearing.

CONSTITUTIONAL PROVISION INVOLVED

The constitutional prov'sion involved in this case is

Amendment 14, Section 1 of the United States

Constitution:

Section 1. All persons born or naturalized in

the United States, and subject to the

jurisdiction thereof, are citizens of the United

States and of the State wherein they reside. No

State shall make or enforce any law which shall

abridge the privileges or immunities of citizens

of the United States; nor shall any State deprive

any person of life, liberty, or property, without

due process of law; nor deny to any person

within its jurisdiction the equal protection of

the laws.

STATEMENT OF THE CASE

This case arises from a claim made under the South

Carolina Workers’ Compensation Act. While workers’

compensation is under norma! circumstances solely a

state concern, the South Carolina Supreme Court’s

decision in this case violated Wilkinson’s right to due

process guaranteed under the United States

Constitution.

The South Carolina Workers’ Compensation

Commission found that Wilkinson was entitled to

death benefits under the Act based in part on a

standard of proof adopted by the South Carolina

Supreme Court in an earlier, unrelated case that

turned on a similar issue. See Appendix D, infra, at

pp. 46a-49a, and Appendix E, infra, at pp. 50a-74a.

See also Dawkins v. Jordan, 534 S.E.2d 700 (S.C.

2000). In Dawkins, the Court reiterated four factors

normally relied on in determining whether the

employer sufficiently controlled the injured worker

1) direct evidence of the right or exercise of control; 2)

furnishing of equipment; 3) right to fire; and 4) method

of payment — and then stated that

“[FJor the most part, any single factor is not

merely indicative of, but, in practice, virtually

proof of, the employment relation; while, in the

opposite direction, contrary evidence is as to

any one factor at best only mildly persuasive

evidence of contractorship, and sometimes is of

almost no such force at all.”

Dawkins, 5348.E.2d at 703 (citations omitted (quoting

3 Arthur Larson & Lex K. Larson, Larson’s Workers’

Compensation Law, §§ 61.04 (2000)).

Based on Dawkins, the Commission’s award was

affirmed by the circuit court for Greenville County and

the South Carolina Court of Appeals. See Appendix C,

infra, at pp. 30a-45a, and Appendix B, infra, at pp.

16a-29a. However, the state Supreme Court reversed

the Commission’s award. See Appendix A, infra, at pp.

Ina-18a, Though the standard of proof was not

challenged by any party, and Petitioner was given no

notice of the issue to be addressed, the Supreme Court

reversed the standard of proof it had previously

adopted in Dawkins and adopted a new standard of

proof. Specifically, the Court stated that

We overrule the approach approved in Dawkins

v. Jordan, 341 S.C. 434, 439, 534 S.B.2d 700,

703 (2000) that the presence of “any single

factor is not merely indicative of, but, in

practice, virtually proof of, the employment

relation.” Consistent with pre-Dawkins’ case

law, the common law factors-right or exercise of

control, method of payment, furnishing of

equipment and right to fire-should be evaluated

in an evenhanded manner in determining

whether the questioned relationship is one of

employment or independent contractor.

See Appendix A, p. 15a.

Utilizing this newly announced standard, the

Supreme Court reversed the Commission and denied

Wilkinson’s claim without affording her the

uvpportunity to address the change in standard or to

present additional evidence in an attempt to meet the

newly announced standard.

Wilkinson petitioned for rehearing according to the

Supreme Court’s rules, and in that petition specifically

contended that the state Supreme Court had violated

her right to due process under the law, but the Court

summarily denied the petition. See Appendix F, pp.

75a-76a.

The federal question involved in this case arises

directly from the United States Constitution, and

specifically, the Fourteenth Amendment to the

Constitution, which provides that a State shall not

“deprive any person of life, liberty, or property,

without due process of law” Here, the Supreme Court

of South Carolina, unquestionably a state actor, has

deprived Petitioner of her property, a claim for benefits

under the South Carolina Workers’ Compensation Act,

without “due process of law” in that the Court reached

an issue that was not before it without notice to

Petitioner and, after changing the standard of proof,

failed to give Petitioner an opportunity to meet that

standard.

REASONS FOR GRANTING THE WRIT

Under the Fourteenth Amendment, the first

question is whether Petitioner “has been deprived of a

protected interest in ‘property’ or ‘liberty.” American

Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 59 (1999).

There is now little doubt that there is a property

interest in a claim such as the one in this case

involving a state workers’ compensation claim. See

Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982).

See also Sullivan, 526 U.S. at 62 (J. Ginsburg,

concurring).

“Only after finding the deprivation of a protected

interest do we look to see if the State’s procedures

comport with due process.” Sullivan, 526 U.S. at 59.

This Court has clearly held that “(t]he fundamental

requirement of due process is the opportunity to be

heard ‘at a meaningful time and in a meaningful

manner.” Mathews v. Eldridge, 424 U.S. 319, 335

(1976)(Armstrong v. Manzo, 380 U.S. 454, 552 (1965)).

Further, “laln elementary and _ fundamental

requirement of due process in any proceeding which is

to be accorded finality is notice reasonably calculated,

under all the circumstances, to apprise interested

parties of the pendency of the action and afford them

an opportunity to present their objections.” Armstrong

v. Manzo, 380 U.S. 454, 550 (1965)(quoting Mullane v.

Central Ilanover Bank & Tr. Co., 339 U.S. 306, 314

(1950)). Due process requires notice of the specific

issue involved and a fair opportunity to address the

assertions. Hamdi v. Rumsfeld, 542 U.S. 507, 533

(2004). See also Lankford v. Idaho, 500 U.S. 110

(1991).

Identification of the specific dictates of due

process generally requires consideration of

three distinct factors: First, the private interest

that will be affected by the official action;

second, the risk of an erroneous deprivation of

such interest through the procedures used, and

the probable value, if any, of additional or

substitute procedural safeguards; and finally,

the Government’s interest, including the

function involved and the fiscal and

administrative burdens that the additional or

substitute procedural requirement would entail.

Mathews v. Eldridge, 424 U.S. 319, 335 (1976).

THE SUPREME COURT OF SOUTH

CAROLINA VIOLATED PETITIONER’S

RIGHT TO DUE PROCESS BY ADDRESSING

AN ISSUE NOT PRESENTED ON APPEAL

WITHOUT NOTICE TO PETITIONER, BY

REVERSING ITSELF ON THAT ISSUE

WITHOUT ALLOWING PETITIONER AN

OPPORTUNITY TO ADDRESS THE ISSUE,

AND BY ANNOUNCING A NEW STANDARD

WITHOUT REMANDING THE CLAIM FOR A

HEARING TO GIVE PETITIONER AN

OPPORTUNITY TO PRESENT EVIDENCE TO

MEET THE NEW STANDARD.

As stated above, due process requires that a party

be given notice and an opportunity to be heard on any

issue to be met at hearing, trial, or appeal. Hamdi.

“The essence of due process is the requirement that ‘a

person in jeopardy of serious loss (be given) notice of

the case against him and opportunity to meet it.”

Mathews v. Eldridge, 424 U.S. 319, 335 (1976)(quoting

Joint Anti-Fascist Comm. v. McGrath, 341 U.S. 123,

171-172 (1951)(Frankfurter, J., concurring)). “Notice

of issues to be resolved by the adversary process is a

fundamental characteristic of fair procedure,” and

“lIwlithout such notice, the Court is denied the benefit

of the adversary process.” Lankford v. Idaho, 500 U.S.

110, 126-27 (1991)QGudge’s silence following the State’s

response to the presentencing order had the practical

effect of concealing from the parties the principal issue

to be decided at the hearing). “{OJur cases have

repeatedly emphasized the importance of giving the

parties sufficient notice to enable them to identify the

issues on which a decision may turn.” Jd. at p. 126, fn.

oe.

These principles were earlier recognized by the

Supreme Court of South Carolina in a case where the

Workers’ Compensation Commission did just what the

Court has done in this case — decided an issue the

parties did not bring before it. See Ham v. Mullins

Lumber Co.,7S.E.2d 712 (S.C. 1940). The Ham Court

specifically noted that “the necessity of due notice and

an opportunity of being heard is described as among

the ‘immutable principles of justice which inhere in the

very idea of free government... .” Ham, 7S.E.2d at

717 (quoting Holden v. Hardy, 169 U.S. 366, 389

(1898))

The South Carolina Supreme Court ignored Ham

and violated Petitioner’s right to due process in

multiple respects. The Court ignored the fact that

neither Petitioner nor Respondents challenged the

Court’s decision in Dawkins v. Jordan, 534 S.E.2d 700

(S.C. 2000), and then changed a substantive rule of

law without giving Petitioner notice or an opportunity

to address the change.

In Dawkins, which was also a dispute concerning

whether an injured worker was an employee or an

independent contracter, the Court reiterated four

factors normally relied on in determining an

employment relationship:

The general test applied is that of control by the

employer. It is not the actual control then

exercised, but whether there exists the right

and authority to control and direct the

particular work or undertaking, as to the

manner or means of its accomplishment. There

are four elements which determine the right of

control: 1) direct evidence of the right or

exercise of control; 2) furnishing of equipment;

3) right to fire; and 4) method of payment.

Dawkins, 534 S.E.2d at 703 (citations omitted).

Relying on a well-known and heavily-relied upon

treatise in the workers’ compensation setting, the

Dawkins Court announced a method for determining

whether an injured worker had met these factors:

“(Flor the most part, any single factor is not

merely indicative of, but, in practice, virtually

proof of, the employment relation; while, in the

opposite direction, contrary evidence is as to

any one factor at best only mildly persuasive

evidence of contractorship, and sometimes is of

almost no such force at all.”

Id. (quoting 3 Arthur Larson & Lex K. Larson,

Larson’s Workers’ Compensation Law, §§ 61.04 (2000)).

Applying this new standard, the Court determined

that the injured worker in Dawkins was an employee.

South Carolina’s courts continued to follow the

Dawkins standard in employee/independent contractor

cases. See e.g. Nelson v. Yellow Cab Co., 564 S.E.2d

110 (S.C. 2002); Paschal vu. Price, 670 S.E.2d 374 (S.C.

Ct.App. 2008).

Accordingly, Petitioner addressed this case to the

Commission based on the Dawkins standard, and

neither party to this case ever challenged that

standard or argued that a different standard should

apply. Neither the Commission nor the lower

appellate courts which reviewed the case ever

questioned the standard or intimated that a different

standard should apply. Therefore, whether the

Dawkins “framework” should apply to the

circumstances of Petitioner’s claim or whether the

“framework” improperly skews the employee/

independent contractor analysis was not previously at

tssue in the case, and Petitioner had no notice of the

issue prior to the Court’s ruling.

In that ruling, the South Carolina Supreme Court

stated as follows:

We overrule Dawkins’ analytical framework, for

it most assuredly skews the analysis to a

finding of employment. We return to our

jurisprudence that evaluates the four factors

with equal force in both directions. FN3

FNS. We overrule post-Dawkins

appellate court decisions of this state to

the extent those decisions relied on

Dawkins’ claimant-friendly approach.

Those cases include Nelson v. Yellow Cab

Co., 349 S.C. 589, 564 S.E.2d 110 (2002)

and Paschal v. Price, 380 S.C. 419, 670

S.E.2d 374 (Ct.App.2008). We take ro

position with respect to the proper result

in such cases under the pre-Dawkins’

evenhanded and balanced approach. .. .

We reverse the court of appeals and find

Wilkinson was an independent contractor for

purposes of workers’ compensation. As such,

his estate is not entitled to benefits. We

overrule the approach approved in Dawkins v.

Jordan, 341 S.C. 434, 439, 534 S.E.2d 700, 703

(2000) that the presence of “any single factor is

not merely indicative of, but, in practice,

virtually proof of, the employment relation.”

Consistent with pre-Dawkins’ case law, the

common law factors-right or exercise of control,

method of payment, furnishing of equipment

and right to fire-should be evaluated in an

evenhanded manner in determining whether

the questioned relationship is one of

employment or independent contractor.

See Appendix A, pp. 5a-6a, 15a.

Because Petitioner was not given notice that the

Court was considering this change in the standard of

proof on this issue, she was not given the opportunity

to address the Court concerning the propriety of the

change. The issue was never briefed or argued by the

parties. In the words of Lankford, Petitioner was not

given notice sufficient to enable her to identify and

address the issues on which the Supreme Court’s

decision turned, and the issue was effectively

concealed from her. Furthermore, the Court was

denied the benefit of the adversary process.

Given the opportunity, Petitioner would have

pointed out to the Court that while the Court describes

the change as a “return” to prior jurisprudence, South

Carolina has in fact never actually given the four

factors equal weight but has instead consistently

focused on one or two dispositive factors, which is

essentially what Professor Larson was describing in

the analysis this Court referred to in Dawkins. See

e.g. S.C. Workers’ Comp. Comm’n v. Ray Covington

Realtors, Inc., 459 S.E.2d 302 (S.C. 1995)(the

“dispositive question is appellant’s ‘right and authority

to control and direct [Chewning’s] particular work or

undertaking, as to the manner or means of its

accomplishment); 7’harpe v. G.E. Moore Co., 174

S.E.2d 397 (S.C. 1970)(turned on the “direct evidence

of the right to or exercise of control” factor); Kilgore

Group, Inc. v. S.C. Emp. Sec. Comm’n, 437 S.E.2d 48

(S.C. 1993)(turned on “right of control” and the “right

to fire” factors); Chavis v. Watkins, 180 S.E.2d 648

(S.C. 1971)(the Court referred to the four factor test

but did not discuss evidence concerning each of the

four factors, the Court rather focused only on the

“right to control” and the “method of payment” factors).

These are, of course, the very cases the Court cited in

stating that “{[wlJe return to our jurisprudence that

evaluates the four factors with equal force in both

directions.” See Appendix A, p. 6a. The Court is

actuaJly returning to jurisprudence that never existed

in the manner it describes.’

The Court further violated Petitioner’s right to due

process by failing to remand the claim to the

Commission for a new hearing. Petitioner necessarily

relied on the Dawkins framework when conducting

discovery and presenting evidence to the Hearing

' The effect of the Court’s ruling on Petitioner's case and future

employee/independent contractor cases involving truckers is

overwhelming. Because of the impact of any written contract,

which will invariably state the parties intend for the relationship

to be that of an independent contractor, and the Federal

regulations governing the trucking industry, the Court’s change

in the standard of proof will ikely make it nearly impossible for

injured truck drivers to prove that they were in fact operating as

employees and not independent contractors. See ey. Appendix A,

pp. 8a-9a (“We agree that the strong regulatory presence

concerning motor carriers reflects control by the government, not

the motor carrier”) While purportedly attempting to fix a

situation which “skews the analysis toa finding of employment,”

the Court has skewed the analysis firmly and decidedly toward a

finding of an independent contractor relationship. And most

significantly, it has done so by circumventing the adversary

process and failing to give Petitioner an opportunity to address

the issue

Commissioner at the original trial of the case. ‘The

presentation of evidence to the Commissioner would

have been very different had Petitioner known that the

Supreme Court would apply another, more difficult,

standard. Under these circumstances, Petitioner was

deprived of an opportunity to meet deficiencies in the

record created by the Court’s change in the standard

of proof. As stated by this Court in Mathews v.

Eldridge, “|t]he essence of due process is_ the

requirement that ‘a person . .. (be given) notice of the

case against him and opportunity to meet it.”

Mathews, 424 U.S. at 335. At a minimum, due process

requires that Petitioner be afforded a hearing giving

her an opportunity to present evidence under the new

standard.

In this case, the South Carolina Supreme Court

ignored its earlier jurisprudence and deprived

Petitioner of her claim to workers’ compensation

benefits without due process of law as is required by

the United States Constitution. The South Carolina

Supreme Court’s decisions to address an issue not

presented to it by the parties, to overturn Dawkins and

implement a new standard of proof on _ the

employee/independent contractor issue, and to reverse

the Commission without giving Petitioner notice of the

issue and allowing her the opportunity to address it

before the Court or before the Commission at a hearing

means that she did not receive a hearing “in a

meaningful manner.”

CONCLUSION

For the foregoing reasons, the writ of certiorari

should be granted and the judgment of the Supreme

Court of South Carolina reversed.

Respectfully submitted,

Kathryn Williams

Kathryn Williams, P.A.

P.O. Box 10693

Greenville, SC 29603

(864) 235-6254

Attorney for Petitioner

APPENDIX

APPENDIX A

THE STATE OF SOUTH CAROLINA

In The Supreme Court

Opinion No. 26646

Heard January 22, 2009 —- Filed May 4, 2009

for Scott R. Wilkinson (deceased),

Claimant, )

Respondent, )

)

v. )

)

Palmetto State Transportation Company,

Employer, and Canal Insurance Company, _ )

Carrier,

Petitioners.

ON WRIT OF CERTIORARI TO THE

COURT OF APPEALS

Appeal From Pickens County

John C. Few, Circuit Court Judge

REVERSED

Duke K. McCall, Jr., of Leatherwood, Walker, Todd &

Mann, of Greenville, for Petitioners.

Kathryn Williams, of Greenville, for Respondent.

JUSTICE KITTREDGE: This’ workers’

compensation case involves the jurisdictional question

of whether the claimant was an employee or

independent contractor. We granted a writ of certiorari

to review the court of appeals decision holding the

claimant was an employee. Wilkinson ex rel. Wilkinson

v. Palmetto State Transp. Co., 371 S.C. 365, 63858.E.2d

109 (Ct. App. 2006). We reverse, and hold the claimant

was an_ independent contractor for workers’

compensation purposes. In connection with our

jurisprudence in evaluating whether a claimant is an

employee or an independent contractor for workers’

compensation purposes, we overrule the _ test

announced in Dawkins v. Jordan, 341 S.C. 434, 439,

534 S.E.2d 700, 703 (2000).’

Scott R. Wilkinson was a long-haul truck driver for

Palmetto State Transportation Company. After a

period of admitted employment, Wilkinson opted to

alter his relationship with Palmetto, and the parties

entered into a formal independent contractor

arrangement. The detailed contract was honored by

Wilkinson and Palmetto, including the provision giving

Wilkinson sole authority over “the means and methods

of the performance of all transportation services.” In

resolving this jurisdictional question, we view the

evidence as clearly preponderating in favor of an

independent contractor relationship.

'In fairness to the court of appeals, the circuit court and workers

compensation commission, We are in essence reversing ourselve:

Palmetto is an interstate motor carrier. Wilkinson

began as an employee for Palmetto, as a long-haul

truck driver, in January of 1998. About a year later,

Wilkinson and Palmetto agreed to alter their

employment relationship to that of an independent

contractor. To this end, Wilkinson purchased a tractor

and the parties executed an “Equipment Lease

Contract.” The contract sets forth in detail the

respective rights and responsibilities of the parties.

Of particular relevance in determining the nature

of the parties’ relationship are the following contract

features. Wilkinson and Palmetto intended “to create

the relationship of CARRIER and INDEPENDENT

CONTRACTOR and not an EMPLOYER-EMPLOYEIE

relationship.” The parties negotiated an increased rate

per mile. Wilkinson was solely responsible for all

expenses associated with acquiring, financing,

maintaining and insuring the tractor. Wilkinson

assumed further responsibility for “the means and

methods of the performance of all transportation

services,’ including, if necessary, hiring and

supervising other drivers for the leased tractor. In this

regard, the obligation for withholding and employment

taxes fell to Wilkinson. Wilkinson also agreed “to carry

Workers Compensation coverage in the limits

statutory [sic] within the State of South Carolina.”

Wilkinson ultimately complied with this contract

provision by purchasing an occupational accident

policy from Zurich American Insurance Company,

which provided for a lump sum of $50,000 and monthly

payments of $2000 for 100 months, in the event of

death.’ Termination of the contract required thirty

days’ notice, and a wrongful termination entitled the

non-breaching party to recover damages.

Wilkinson died on May 16, 2002, in a motor vehicle

accident while driving his tractor for Palmetto. The

Zurich policy was paid to Wilkinson’s spouse, Lea Ann.

Lea Ann also filed a workers’ compensation claim,

contending that her husband was Palmetto’s employee.

Palmetto, through its workers’ compensation

insurance carrier, defended on the basis Wilkinson

was an independent contractor. The workers’

compensation commission, circuit court and court of

appeals found that Wilkinson was an employee, and

therefore his spouse was entitled to workers’

compensation benefits. The basis for this finding of

compensability comes from the employee/independent

contractor test announced in Dawkins v. Jordan,

which we now overrule.

II.

We are presented with the question whether

Wilkinson was, at the time of his fatal accident, an

employee or independent contractor. Because the

question is jurisdictional, the Court may take its own

view of the preponderance of the evidence. S.C.

Workers’ Comp. Comm'n v. Ray Covington Realtors,

Inc., 318 S.C. 546, 547, 459 S.E.2d 302, 303 (1995)

This appeal raises no issue with respect to the amount of

insurance coverage and the limits available under our workers’

compensation laws

Under settled law, the determination of whether a

claimant is an employee or independent contractor

focuses on the issue of control, specifically whether the

purported employer had the right to control the

claimant in the performance of his work. Ray

Covington Realtors, 318S.C. at 547, 4598.E.2d at 303;

Chavis v. Watkins, 2568.C. 30, 32, 180 S.E.2d 648, 649

(1971). In evaluating the right of control, the Court

examines four factors which serve as a means of

analyzing the work relationship as a whole: (1) direct

evidence of the right or exercise of control; (2)

furnishing of equipment; (3) method of payment; (4)

right to fire. Ray Covington Realtors, 318 S.C. at 548,

459 S.E.2d at 303; Chavis, 256 S.C. at 32, 180 S.E.2d

at 649; Tharpe v. G.E. Moore Co., Inc., 254 S.C. 196,

200, 174 S.E.2d 397, 399 (1970); see also Dawkins v.

Jordan, 341 S.C. 434, 439, 534 S.E.2d 700, 703 (2000).

In Dawkins, this Court took the additional step of

imposing a framework for weighing the standard

factors in a manner that favored, unduly we now

believe, a finding of employment:

[Flor the most part, any single factor is not

merely indicative of, but, in practice, virtually

proof of, the employment relation; while, in the

opposite direction, contrary evidence is as to

any one factor at best only mildly persuasive

evidence of contractorship, and sometimes is of

almost no such force at all.

Id. at 439, 534 S.E.2d at 703 (quoting Arthur Larson &

Lex K Larson, 3 LARSON’S WORKERS’ COMPENSATION

LAW § 61.04 (2000)). We overrule Dawkins’ analytical

framework, for it most assuredly skews the analysis to

a finding of employment. We return to. our

jurisprudence that evaluates the four factors with

equal force in both directions.* See Ray Covington

Realtors, 318 S.C. at 547-48, 459 S.E.2d at 308;

Chavis, 256 S.C. at 32, 180 S.E.2d at 649; Tharpe, 254

S.C. at 198-200, 174 S.E.2d at 398-99.

We are persuaded the four factors preponderate in

favor of a finding that Wilkinson was an independent

contractor. In evaluating the four factors, we are

guided initially by the parties’ independent contractor

agreement. But more importantly, we are guided by

the parties’ conduct, which mirrored the terms of the

contract. See Kilgore Group, Inc. v. S.C. Employment

Sec. Comm’n, 313 S.C. 65, 68-69, 437 S.E.2d 48, 50

(1993) (noting that “in determining the nature of [the

parties’] relationship,” the contract “has considerable

weight,” but recognizing that “language in the contract

merely declaring the relationship is that of an

employer/independent contractor is not dispositive”).

This Court remains sensitive to the general

principle sanctioned by the Legislature that workers’

compensation laws are to be construed liberally in

favor of coverage. That principle, however, does not go

so far as to justify an analytical framework that

preordains the result. Moreover, that principle should

* We overrule post-Lawkins appellate court decisions of this state

to the extent those decisions relied on Dawkins’ claimant-friendly

approach. Those cases include Nelson v. Yellow Cab Co., 349 S.C.

589, 564 S.E.2d 110 (2002) and Paschal v. Price, 380 S.C. 419, 670

S.E.2d 374 (Ct. App. 2008). We take no position with respect to

the proper result im such cases under the pre-Dawkins’

evenhanded and balanced approach.

not trump an unchallenged independent contractor

arrangement where the parties’ conduct follows the

agreement in every material respect. Materiality, in

this context, 1s measured by the factors of right or

exercise of control, method of payment, furnishing of

equipment and right to fire. The policy considerations

favoring a finding of compensability are further

diminished where, as here, the independent contractor

procures workers’ compensation coverage or its

functional! equivalent.

1. Direct Evidence of the Right or Exercise of Control

It is not uncommon in the long-haul trucking

industry for carriers to utilize drivers who own and

operate their own tractors, known as owner-operators.

These arrangements must be carefully scrutinized to

ensure that the actual relationship between the

trucking company and the purported independent

contractor truly reflects the parties’ stated agreement.

We are sensitive to the unequal bargaining power that

may exist between the trucking company and the

driver. In this regard, it naturally follows that a

trucking company, with a desire to avoid a workers’

compensation claim, may be tempted to have “its cake

and eat it, too.” The result would be an ostensible

independent contractor arrangement where the

trucking company exercises almost complete control

over the method and manner of the transportation

Services.

Cognizant of these concerns, we have reviewed the

actual relationship between Wilkinson and Palmetto.

Palmetto utilizes approximately eighty drivers in its

business, the vast majority of whom are employees.

Wilkinson started as an employee, but desired to drive

his own tractor and become an owner-operator. He did

so, as reflected in the parties’ contract.

As noted above, the contract provided that

Wilkinson “shall determine the means and methods of

the performance of all transportation services.” We

find that, true to the contract, Wilkinson exercised the

right of control as to the transportation services. The

fact that Palmetto contacted Wilkinson for potential

assignments and provided the pickup location does not

change the result. Wilkinson retained the right to

refuse any assignment. If Wilkinson agreed to an

assignment and made the pickup, he exercised

complete control over the delivery and chose his travel

routes without direction from Palmetto. The nature of

the relationship between Wilkinson and Palmetto is

incompatible with that of an employee-employer.

Concerning the right and exercise of control, this factor

favors a finding of an independent contractor

relationship.

Before moving to the next factor, we address two

matters which at first glance appear to evidence

Palmetto’s right of control. First is the presence of a

global positioning satellite (GPS) system in each

tractor. The record establishes, however, that GPS

monitoring was for the benefit of Palmetto customers

tracking shipment of goods, not Palmetto’s exercise of

control over drivers. Second is the presence of

governmental regulatory controls affecting the

transportation of goods in interstate commerce. The

parties’ contract required Wilkinson to operate “the

equipment in accordance with all applicable

regulations.” We agree with the Pennsylvania

Supreme Court that requiring a worker to comply with

the law is not evidence of control by the putative

employer.

{[Rjestrictions upon a workers’ [sic] manner and

means of performance that spring from

government regulation (rather than company

initiatives) do not necessarily support a

conclusion of employment. status. Indeed,

employer efforts to ensure the workers’

compliance with government regulations, even

when those efforts restrict the manner and

means of performance, do not weigh in favor of

employee status. “The employer cannot evade

the law ... and in requiring compliance with

the law he is not controlling the driver. It is the

law that controls the driver.”

Universal Am-Can, Ltd. v. Workers’ Comp. Appeal Bd. .,

762 A.2d 328, 335 (Pa. 2000) (citations omitted).

We agree that the strong regulatory presence

concerning motor carriers reflects control by the

government, not the motor carrier."

2. Furnishing of Equipment

Wilkinson relies on the presence of Palmetto’s

insignia on the outside of the tractor, together with the

display of Palmetto’s Department of Transportation

motor carrier number, as proof of an employment

relationship. Even if Wilkinson’s reliance on the

Palmetto insignia and motor carrier identification

number were a factor in his favor, it would be far from

*The federal regulatory scheme is discussed in more detail below.

10a

dispositive. Universal Am-Can, 762 A.2d at 332 (noting

that “[t]he presence of a carrier’s insignia on the

outside of a rig is merely one of the many factors to be

considered when determining employee/independent

contractor status and does not command a conclusion

of employee status”). The placement of a motor

carriers insignia and identification number on the

tractor is required by federal regulations. 49 C.F .R.

§ 376.11(c)(1) (2008); 49 C.F_R. § 390.21 (2008).

We do not give controlling weight to the presence of

Palmetto’s insignia and identification number on

Wilkinson’s tractor. Again, we view the presence of

Palmetto’s insignia and identification number on the

tractor as governmental control, not carrier control. On

balance, we find the factor of “furrishing of

equipment” points to on independent contractor

relationship. We make this finding primarily because

Wilkinson owned his own tractor and paid for all costs

associated with the tractor.°

3. Method of Payment

Wilkinson was paid per mile, with an increase in

the rate when he transitioned from an employee to an

independent contractor. The method of payment was

entirely consistent with Wilkinson’s independent

contractor status. Palmetto furnished “1099” forms to

Wilkinson, who in turn filed tax returns as a sole

proprietor, specifically an “over the road truckelr].”

——S _

° Wilkinson assumed responsibility for all costs, including fuel, oil,

repairs, insurance, road taxes, fuel taxes, mileage taxes, and any

weight violations, with the caveat that he would be reimbursed for

weight violations if he picked up a sealed trailer

lla

Wilkinson’s tax returns include forms for his business

expenses and self-employment taxes. The method of

payment bears no indicia of an employment

relationship.

4. Right to Fire

This factor is the most difficult to evaluate for two

reasons. One, unlike the other three factors, Wilkinson

and Palmetto never had a need to confront this issue.

Next is the recognition that a right of termination, in

some form, exists in an independent contractor

arrangement. The critical inquiry is the term “fire,” for

it embraces the employment relationship.

We are left with only the contract terms, and each

party makes a strong argument. Wilkinson contends

that the testimony of Palmetto’s representative reflects

a belief that Wilkinson could essentially be fired at

will. Palmetto presented a host of reasons it believed

it could terminate its relationship with Wilkinson.

Those reasons (which never materialized) included a

“consistent” refusal to haul loads and perceived poor

work performance.

Palmetto counters that the “right to fire” does not

exist under the parties’ contract. According to

Palmetto, the contract defined the terms under which

the parties could terminate the relationship. Under

the contract, either party could terminate the contract

upon thirty days’ notice. The agreement further

provided that, “liJn the event either party commits a

material breach of any term of this Agreement; . .. the

other party shall have the right to terminate this

Agreement immediately and hold the party

committing the breach liable for damages.”

12a

We find Palmetto did not have a “right to fire”

Wilkinson. The termination of the parties’ relationship

was controlled by their agreement. The termination

provisions, when viewed in the context of the

agreement as a whole, leads to a finding of an

independent contractor arrangement.

We believe it helpful to address a related area of

law, specifically the existence of federal law in the

trucking industry. Although the parties raise no issue

concerning the federal law, an overview of certain

federal regulations serves to support our ultimate

determination as well as inform the narrow reach of

our decision.

Congress provides in 49 U.S.C.A. § 14102(a) (West

2007) that the “Secretary lof Transportation] may

require a motor carrier . . . that uses motor vehicles

not owned by it . . . to—(4) have control of and be

responsible for operating those motor vehicles in

compliance with requirements prescribed by the

Secretary on safety of operations and equipment, and

with other applicable law as if the motor vehicles were

owned by the motor carrier.” The Secretary of

Transportation, through the Federal Motor Carrier

Safety Administration, has promulgated regulations

addressing a carrier’s lease of equipment from an

owner-operator.

For example, 49 C.¥.R. § 376.12(c)(1) (2008) states

that the “lease lof equipment by the carrier] shall

provide that the authorized carrier lessee shall have

exclusive possession, control, and use of the equipment

for the duration of the lease. The lease shall further

L3a

provide that the authorized carrier lessee shall assume

complete responsibility for the operation of the

equipment for the duration of the lease.”® This

regulation, and others, reflects the regulatory goal of

promoting highway safety. Indiana Refrigerator Lines,

Inc. v. Dalton, 516 F.2d 795, 796 (6th Cir. 1975)

(discussing the federal regulatory goal of promoting

highway safety in general, specifically including

preventing carriers from avoiding safety standards by

the practice of leasing equipment from non-regulated

carriers).

As a result of a motor carrier’s general duty for the

safe operation of leased equipment, our finding today

of an independent contractor relationship between

Wilkinson and Palmetto is necessarily limited to the

workers’ compensation context. Moreover, federal law

is not intended to affect a state court’s determination

of the relationship between a carrier and a lessor of

equipment under workers’ compensation laws. 49

C.F.R. § 376.12(c)(4) (2008) (providing that imposing

ultimate responsibility on a carrier under federal law

is not “intended to affect whether the lessor or driver

° As noted, we are presented with no issue concerning the effect of

federal law on the contract between Wilkinson and Palmetto.

Although the contract assigns to Wilkinson the responsibility of

“maintaining the equipment” and “operating the equipment in

accordance with all applicable regulations,” the agreement also

states that Palmetto’s “business of providing motor carrier

transportation services to the public is subject to regulation by the

Federal Government acting through the Interstate Commerce

Commission and the Department of Transportation, and by

various state and local governments.” The contract provides in the

ensuing section that Wilkinson’s responsibilities are “subject in

each case only to any regulatory requirements which may be

placed on [Palmetto] by various governmental agencies.”

l4da

provided by the lessor is an independent contractor or

an employee of the authorized carrier lessee”). We find

the comment to subsection (c)(4) of the federal

regulation instructive:

While most courts have correctly interpreted

the appropriate scope of the control regulation

and have held that the type of control required

by the regulation does not affect “employment”

status, it has been shown here that some courts

and State workers’ compensation and

employment agencies have relied on our current

control regulation and have held the language

to be prima facie evidence of an employer-

employee relationship. .. .

We conclude that adopting the proposed

amendment will reinforce our view of the

neutral effect of the control regulation and place

our stated view squarely before any court or

agency asked to interpret the regulation’s

impact. ... By presenting a clear statement of

the neutrality of the regulation, we hope to

bring a halt to erroneous assertions about the

effect and intent of the control regulation,

saving both the factfinders and the carriers

time and expense.

Petition to Amend Lease and Interchange of Vehicle

Regulations, 8 I.C.C.2d 669, 671 (1992).

The tederal regulations may, therefore, not be

viewed as controlling when a state court is charged

with assessing whether the relationship between a

motor carrier and a lessor of equipment is one of

employment or independent contractor for workers’

l5a

compensation purposes. In the workers’ compensation

setting, we properly make the determination under our

common law framework.

III.

We reverse the court of appeals and find Wilkinson

was an independent contractor for purposes of

workers’ compensation. As such, his estate is not

entitled to benefits. We overrule the approach

approved in Dawkins v. Jordan, 3418.C. 434, 439, 534

S.E.2d 700, 703 (2000) that the presence of “any single

factor is not merely indicative of, but, in practice,

virtually proof of, the employment relation.”

Consistent with pre-Dawkins’ case law, the common

law factors—right or exercise of control, method of

payment, furnishing of equipment and right to

fire—should be evaluated in an evenhanded manner in

determining whether the questioned relationship is

one of employment or independent contractor. We

emphasize the narrow reach of our decision today, as

we analyze the employment versus independent

contractor question for purposes of workers’

compensation only. Having found that Wilkinson was

an independent contractor for workers’ compensation

purposes, we need not reach the remaining issues. See

Futch v. McAllister Towing of Georgetown, Inc., 335

S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (recognizing

that an appellate court need not address remaining

issues when resolution of one issue is dispositive).

REVERSED.

TOAL, C.J., WALLER, PLEICONES JJ., and

Acting Justice James E. Moore, concur.

16a

APPENDIX B

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Opinion No. 4179

Submitted October 1, 2006 —

Filed November 20, 2006

Lea Ann Wilkinson (surviving spouse)

for Scott R. Wilkinson (deceased employee),

Respondent,

Vv.

Palmetto State Transp. Co., Employer,

and Canal Insurance Co., Carrier,

Appellants.

Appeal From Pickens County

John C. Few, Circuit Court Judge

AFFIRMED

Duke K. McCall, Jr., of Greenville, for Appellants.

Kathryn Williams, of Greenville, for Respondent.

WILLIAMS, J.: Palmetto State Transportation

Company and its carrier, Canal Insurance Company

(jointly referred to as Palmetto), appeal a circuit court

l7a

order affirming the Workers’ Compensation

Commission’s (Commission) award of benefits to Scott

Wilkinson’s dependents. Palmetto argues the trial

court erred in affirming the Commission’s: (1) finding

that an employer/employee relationship existed

between Palmetto and Scott; (2) denial of a motion to

include additional evidence; (3) finding that an

occupational disability policy purchased by Scott is a

collateral source; (4) denial of a motion to join Zurich

American Insurance Company (Zurich), the provider of

Scott’s occupational disability policy, as a party

defendant; and (5) denying the testimony of Gary

Smith, Palmetto’s expert. We affirm.

FACTS

On May 16, 2002, while driving a transfer truck,

Scott Wilkinson was involved in a fatal accident in

Virginia.

Scott’s spouse, Lea Ann Wilkinson, contends that

during the time of the accident, Scott was an employee

of Palmetto. As such, she and the couple’s son are

entitled to death benefits from Palmetto’s workers’

compensation carrier under the Workers’

Compensation Act. Palmetto argues that at the time of

his death, Scott was an independent contractor and

not an employee; therefore, Lea Ann is not entitled to

receive benefits from Palmetto. To support this

argument, Palmetto contends in 1998, Scott was hired

as an employee, but in May 1999 and again in 2000,

the parties signed a contract in which Scott was

named as an independent contractor and Palmetto as

the carrier.

LSa

Palmetto further avers that even if this Court were

to find an employer/employee relationship existed,

Palmetto’s liability should be offset by any benefits

paid to Lea Ann by the occupational disability policy

Scott purchased from Zurich. Lea Ann argues this

policy is wholly a collateral source; therefore, Palmetto

is not entitled to receive any credit from payments

made by Zurich.

On February 27, 2004, the Commissioner found an

employer/employee relationship existed between Scott

and Palmetto at the time of his death, and Lea Ann

and the couple’s child were entitled to receive death

benefits under Palmetto’s workers’ compensation

policy. In addition, the Commissioner held that Scott’s

occupational disability policy constituted a collateral

source. Thus, Palmetto was not entitled to receive

credit for benefits paid from that policy, nor could

Palmetto receive benefits directly from that policy.

Prior to this ruling, Palmetto filed a motion to add

Zurich as an additional party referencing the

occupational disability policy purchased by Scott. In

addition, Palmetto filed a motion to include additional

evidence. The Commissioner denied both motions.

Consequently, Palmetto appealed to the Full

Commission, asserting that the Commissioner erred in

denying these motions. On September 28, 2004, the

Commission’s Appellate Panel affirmed and adopted

the Commissioner’s order. On September 25, 2005,

Palmetto appealed to the circuit court, which affirmed

the Commission. Palmetto now appeals to this Court.

19a

STANDARD OF REVIEW

The Administrative Procedures Act applies to

appeals from decisions of the Commission. Lark v. Bi-

Lo, Inc., 276 S.C. 130, 134-35, 276 S.1.2d 304, 306

(1981). In an appeal from the Commission, neither this

Court nor the circuit court may substitute its judgment

for that of the Commission as to the weight of the

evidence on questions of fact, but it may reverse when

the decision is affected by an error of law. Corbin v.

Kohler Co., 351 S.C. 613, 617, 571 S.k.2d 92, 95 (Ct.

App. 2002).

“Any review of the [C]lommission’s factual findings

is governed by the substantial evidence standard.”

Lockridge v. Santens of Am., Inc., 344 S.C. 511, 515,

544 S.E.2d 842, 844 (Ct. App. 2001). Accordingly, we

limit review to deciding whether the Commuission’s

decision is unsupported by substantial evidence or is

controlled by some error of law. Corbin, 351 S.C. at

617, 571 S.E.2d at 95.

“Substantial evidence is evidence that, in viewing

the record as a whole, would allow reasonable minds to

reach the same conclusion that the full commission

reached.” Lockridge, 344 S.C. at 515, 544 S.E.2d at

844. “The ‘possibility of drawing two inconsistent

conclusions from the evidence does not prevent an

administrative agency’s finding from being supported

by substantial evidence.” Lee v. Harborside Café, 350

S.C. 74, 78, 564 S.E.2d 354, 356 (Ct. App. 2002)

(quoting Palmetto Alliance, Inc. v. S.C. Pub. Serv.

Comm'n, 282 S.C. 430, 432, 319 S.FE.2d 695, 696

(1984)).

20a

However, if any factual issue before’ the

Commission involves a jurisdictional question, this

Court is not bound by the Commission’s findings of

fact; but it can take its own view of the preponderance

of the evidence on that issue. Wilson v. Georgetown

County, 316 S.C. 92, 94, 447 S.E.2d 841, 842 (1994).

LAW/ANALYSIS

A. Employer/employee relationship

Palmetto initially argues the trial court and the

Commission erred in concluding that an

employer/employee relationship existed between

Palmetto and Scott. We disagree.

Unless an employment relationship’ existed

between the parties at the time of the alleged injury,

an award cannot be granted. Alewine_v. Tobin

Quarries, 206 S.C. 103, 109, 33 S.E.2d 81, 83 (1945).

Whether such a relationship exists is a jurisdictional

question; therefore, this Court can take its own view of

the preponderance of the evidence. S.C. Workers’

Comp. Comm’n v. Ray Covington Realtors, Inc., 318

S.C. 546, 547, 459 S_E.2d 302, 303 (1995). However,

doubts of jurisdiction are to be resolved in favor of

inclusion rather than exclusion. Horton v. Baruch, 217

S.C. 48, 56, 59 S.E.2d 545, 548 (1950).

Palmetto places great weight on the agreement the

parties signed in May 1999 and again in 2000, iv.

which Scott was named as an independent contractor

and Palmetto as the carrier. However, Palmetto

forgets neither the descriptions of relationships as set

forth in the parties’ contract, nor the language in the

contract declaring the parties to be that of independent

Zila

contractor/carricr is binding on this Court. Kilgore

Group Inc. v. S.C. Employment Sec. Comm’n, 313 S.C.

65, 69, 437 S.E.2d 48, 50 (1993). Rather, the

determination of whether the worker is an employee or

independent contractor is a_ fact-specific matter

resolved by applying certain established principles.

Nelson v. Yellow Cab Co., 349 S.C. 589, 594 564 S.E.2d

110, 112-13 (2002).

The test to determine whether a claimant is an

employee or an independent contractor is if “the

alleged employer has the right and authority to control

and direct the particular work or undertaking, as to

the manner or means of its accomplishment.” S.C.

Workers’ Comp. Comm’n v. Ray Covington Realtors,

Inc., 318 S.C. 546, 547, 459 S.E.2d 302, 303 (1995)

(internal quotes omitted). Four factors determine the

right of control.

They are: (1) direct evidence of right to or exercise

of control, (2) method of payment, (3) furnishing of

equipment, and (4) right to fire. Tharpe v. G.E. Moore

Co., 2548.C. 196, 200, 174 S.E.2d 397, 399 (1970). The

presence of any one of the factors is sufficient proof of

an employer/employee relationship; on the other hang,

the absence of any one of the factors is at most mild

influential evidence of contractorship. Dawkins _v.

Jordan, 341 S.C. 434, 439, 534 S.E.2d 700, 703 (2000).

In analyzing these factors, the Court recognizes

that the Workers’ Compensation Act favors the

inclusion of employers and employees and not their

exclusion. Horton, 217 S.C. at 56, 59 S.E.2d at 548.

With this introduction in mind, we now turn our

attention to these four factors.

22a

The first factor is whether direct evidence exists of

the right to, or the actual exercise of, control. If an

alleged employer has the right to control and sets out

the manner in which the work is to be accomplished,

this is direct evidence of an employer/employee

relationship. Young v. Warr, 252 8.C. 179, 189-90, 165

S.E.2d 797, 802 (1959). Palmetto contends it lacked

control over Scott because Scott could refuse loads and

consequently worked on his own schedule. We find this

argument to be without merit.

Palmetto exercised its control over Scott by

requiring Scott to exclusively carry its loads. When

Scott carried a load for Palmetto, he was instructed on

when and where to pick up the load as well! as how and

when to deliver the load. Moreover, Palmetto required

Scott to apply the company logo to his truck. This is

sufficient evidence to prove that Palmetto not only had

the right to control Scott but exercised this control. See

Nelson v. Yellow Cab Co., 349 S.C. 589, 597-98, 564

S.£.2d 110, 114 (2002) (Cab company had the right of

control even when the cab driver could work as littie as

he wanted, drove the cab in any part of the city he

chose, and could set his own schedule.).

‘The second factor for consideration is the method of

payment; this factor indicates a lack of an

employer/employee relationship. Like other employed

drivers, Palmetto paid Scott by the mile. However,

unlike other employed drivers, Scott’s rate per mile

was higher, and Palmetto made no deductions for

either social security or income taxes. Moreover, unlike

other employed drivers, Scott had to pay various

expenses such as fuel costs, service fees, and toll fees.

These facts indicate that Scott was not paid like other

employed drivers.

23a

The third factor is whether Palmetto furnished

Scott’s equipment; this factor indicates that Scott was

an employee. Although Scott purchased his own

tractor, Palmetto supplied the trailer. In addition,

Palmetto prohibited Scott from using the tractor to

carry loads for any other company. Moreover, Scott

drove a truck bearing the Palmetto logo.

Like all of Palmetto’s drivers, Palmetto required

Scott to carry a global] positioning system (GPS) in his

truck. Palmetto’s safety and maintenance director,

Dennis Mersereau, testified that by employing this

system, Palmctto would be able to determine Scott’s

location anytime. These facts show that Palmetto

supplied equipment to Scott.

The final factor is Palmetto’s right to fire, which

indicates that Scott was not an _ independent

contractor. The unconditional power to terminate the

alleged employer/employee relationship, without

liability, is consistent with an employer/employee

relationship. Tharpe v. G.F.. Moore Co., 254 S.C. 196,

201, 174 S.E.2d 397, 399 (1970). There were many

circumstances in which Palmetto could fire Scott.

For example, Mr. Mersereau testified Scott was

required tc work exclusively for Palmetto, and if he

were to transport loads for another company, he would

be terminated. Mr. Mersereau also testified that even

though Scott could refuse loads, if he refused too

many, Scott would be terminated. Palmetto could end

the relationship if it did not approve of the manner in

which Scott performed his work. Additionally, Scott,

like any other employee, could terminate his position

with Palmetto at will.

24a

Keeping in mind the Workers’ Compensation Act

favors the inclusion of employers and employees and

not their exclusion, and the presence of any one of the

factors is sufficient proof of an employer/employee

relationship, we hold an _ ecmployer/employee

relationship existed between Scott and Palmetto.

B. Motion to include additional evidence

Palmetto next argues the Commission and the trial

court erred by not allowing Palmetto to suppJement

the record with additional evidence. We disagree.

For additions! evidence to be introduced, the

moving party must establish that the additional

evidence sought to be introduced “was not known to

the moving party at the time of the first hearing, [or]

by reasonable diligence the new evidence could not

have been secured, and the discovery of the new

evidence is being brought to attention of the

Commission immediately upon its discovery.” 23AS.C.

Code Ann. Regs. 67-707 (Supp. 2005). Additionally, the

admission or exclusion of evidence is within the sound

discretion of the Commission. Holcombe v. Dan River

Mills/Woodside Div., 286 S.C 223, 225-26, 333 S.E.2d

338, 340 (Ct. App. 1985).

By motion, Palmetto sought to introduce into the

record its own additional business records and an

affidavit from Mr. Mersereau.

Although the hearing in this matter occurred

during August 2003, the business records were created

during or before May 2002. Thus, the records were in

existence prior to the hearing and could have been

discovered prior to the hearing with due diligence.

25a

Likewise, Mr. Mersereau’s affidavit is exclusively

based on evidence that existed prior to the hearing and

that could have been discovered and submitted prior to

the hearing with due diligence.

Additionally, the records sought to be admitted

were subpoenaed by the claimant during June 2002,

and Palmetto failed to produce the records claiming

that they did not exist. Based on Palmetto’s failure the

trial court concluded that allowing the untimely

inclusion of the records would prejudice the claimant.

We agree.

C. Occupational disability policy

Palmetto next argues the Commission and the trial

court erred in holding Scott’s occupational disability

policy was a collateral source. We disagree.

Palmetto argues it should receive credit for any

payments made to Lea Ann by the occupational

disability policy Scott purchased through Zurich. Lea

Ann argues the Zurich policy is a wholly collateral

source; therefore, Palmetto should not be able to

receive credit for payments made by Zurich.

The collateral source rule states that compensation

from an independent source will not reduce the

payment for which another party is liable to the

injured party. Atkinson v. Orkin Extermination Co.,

Inc., 361 S.C. 156, 172, 604 S.F.2d 385, 393 (2004).

Unfortunately, an exhausti''e search of South Carolina

law has failed to yield an answer to whether an

occupational disability policy would be considered a

collateral source. However, North Carolina courts have

addressed this issue. Our courts give great weight to

26a

North Carolina’s decisions in workers’ compensation

cases because South Carolina adopted large portions of

North Carolina’s workers’ compensation legislation.

Munn v. Nucor Steel, Div. of Nucor Corp., 336 S.C. 28,

31, 513 S.E.2d 289, 290 (Ct. App. 1999); See Anderson

v. Baptist Med. Ctr. Center, 343 S.C. 487, 496-97, 541

S.E.2d 526, 530 (2001).

North Carolina courts have ruled that an employer

is entitled to receive credit only for any payments

made by the employer to the injured employee which

were not payable when made. Jenkins v. Piedmont

Aviation Servs., 557 S.E.2d 104, 108-109 (N.C. App.

2001) (emphasis added). This credit is inapplicable to

all other payments the employee may receive from

outside sources. Id.

It is undisputed that Scott paid all of the premiums

for the Zurich policy, and Palmetto did not contribute

in any way to the premiums. Therefore, Palmetto

should not receive any credit for payments made by

Zurich.

Additionally, it flies in the face of equity to grant

Palmetto a windfall benefit by allowing it to take

credit against any sums Lea Ann received from other

sources. This is especially true im light of the fact that

Scott paid all the premiums, and Palmetto contributed

in no way to the Zurich policy.

For these reasons, we hold that Palmetto is not

entitled to receive credit for any payments made by

Zurich.

27a

D. Motion to join Zurich

Palmetto next contends the Commission and the

trial court erred in not allowing it to add Zurich as a

party defendant. Palmetto argues two alternative

grounds for this contention. First, the Zurich policy

was a workers’ compensation policy, and second,

Zurich would reimburse Palmetto for any benefits

Palmetto paid. We disagree.

The Zurich policy states: “This Policy is not

intended to provide coverage for Workers’

Compensation benefits.” As noted above, the Zurich

policy was an outside source. As such, Palmetto is not

entitled to receive any reimbursement for payments

made by Zurich.

{n support of its second contention, Palmetto places

great weight on a clause in Zurich’s policy, which

would allow Palmetto to receive benefits from Zurich

if Palmetto its determined liable for workers’

compensation benefits'. However, this clause has no

binding effect on this Court.

The parties are free to contract as they wish, but

this freedom is not absolute. Statutory provisions that

are applicable to a contract become part of that

contract. Boyd v. State Farm Mut. Auto. Ins. Co., 260

S.C. 316, 319, 195 S.E.2d 706, 707 (1973). Ifa contract

' The clause states: “If a Covered person is determined by a court

of law ... to be covered under workers’ compensation for a

Covered Loss, any benefits for which the Covered person is

eligible are payable to the person who was determined to be the

”

Covered Person’s employer. .

28a

provision contravenes an applicable statute, that

provision is invalid, and the statute prevails. Id.

Under the Workers’ Compensation Act, an

agreement between an employee and employer for the

employee to pay any portion of premiums for benefits

required by the Workers’ Compensation Act is invalid.

See S.C. Code Ann. § 42-5-200 (1976). Additionally, no

contract between an employee and employer or an

employee and a third party can operate to relieve the

obligations created under the Workers’ Compensation

Act. See S.C. Code Ann. § 42-1-610 (1976).

As already established, Scott was an employee of

Palmetto at the time of his death, and any credit

received by Palmetto from the Zurich pclicy, for which

Scott alone paid the premiums would have the effect of

replacing the workers’ compensation benefits Palmetto

is required to pay under the Workers’ Compensation

Act. Permitting Palmetto to recover these payments

would be contrary to South Carolina law, and any

provision of the Zurich policy that would allow such

payment would violate the Workers’ Compensation Act

and therefore would be void.

The Zurich policy has no bearing on the workers’

compensation claims asserted by Scott’s dependents.

As such, it is unnecessary to add Zurich as a party

defendant because it has no interest in the matter.

E. Testimony of Gary Smith, Palmetto’s expert

Palmetto’s final argument is that tne Commission

and the trial court erred in not allowing the testimony

of Gary Smith. We disagree.

29a

Palmetto sought to introduce Smith’s testimony to

show the construction, purpose, and effect of the

Zurich policy. Specifically, through Smith, Palmetto

wished to show that if Palmetto is liable for workers’

compensation benefits, the Zurich policy would

reimburse Palmetto.

Smith’s testimony was unnecessary because the

Zurich policy has no effect on the _ workers’

compensation benefits sought, and the policy provides

no credit or benefits to Palmetto. Thus, the trial court

did not err in excluding Smith’s testimony.

CONCLUSION

Accordingly, the circuit court’s decision is

AFFIRMED.’

GOOLSBY and BEATTY, J-l.. concur.

“ We decide this case without oral arguments pursuant to Rule

215, SCACR

30a

APPENDIX C

STATE OF SOUTH CAROLINA

COUNTY OF PICKENS

IN THE COURT OF COMMON PLEAS

THIRTEENTH JUDICIAL CIRCUIT

C.A. NO. 2004-CP-39-1566

WCC File No. 0113326

[Filed September 25, 2005}

Lea Ann Wilkinson (surviving spouse)

for Scott R. Wilkinson (deceased employee),

Claimant/Respondent,

Vs.

Palmetto State Transp. Co., Employer,

and Canal Insurance Co., Carrier,

Defendants/Appellant s.

i t

ORDER

This is an appeal from the Workers’ Compensation

Commission. Lea Ann Wilkinson (“claimant”) seeks

death benefits as a result ofa fatal crash her husband,

Scott Wilkinson, was involved in while driving a

transfer truck in Virginia on May 16, 2002. Ms.

3la

Wilkinson maintains that her husband was a direct

employee of Palmetto State Transportation Company

at the time of his accident and that she and the

couple’s son are accordingly entitled to death benefits

from Palmetto’s workers’ compensation carrier under

the Workers’ Compensation Act. Palmetto and their

carrier, Canal Insurance Company (together

“defendants”), contend that they are not liable for such

benefits, as they allege Scott Wilkinson was an

independent contractor at the time of his death and

was not an employee. Defendants also contend that if

Scott Wilkinson is found to be an employee of

Palmetto, they are entitled to receive benefits from or

to receive credit for any benefits paid to Ms. Wilkinson

under an occupational disability policy her husband

purchased from Zurich American Insurance Company.

Ms. Wilkinson rather contends that the occupational

disability policy is a wholly collateral source and that

defendants are not entitled to receive benefits from

that policy or take credit for benefits paid under that

policy.

Prior to the hearing, defendants filed a Motion to

Add Additional Party seeking to add Zurich American

Insurance Company as a party based on the

aforementioned occupational disability policy

purchased by Scott Wilson. Zurich replied and opposed

the Motion. By Order dated April 28, 20038,

Commissioner Childs denied defendants’ Motion to

Add Additional Party. Defendants later renewed their

Motion before the Hearing Commissioner, but he

refused to overrule Commissioner Childs

determination and also denied the Motion.

Following the hearing, defendants filed a Motion to

Include Additional Fvidence, which was opposed by

32a

claimant. The Hearing Commissioner denied the

Motion.

By Order dated February 27, 2004, the Hearing

Commissioner found an _ employee/employer

relationship existed between Scott Wilkinson and

Palmetto at the time of death and that his dependents,

his wife and only child, are entitled to death benefits

under Palmetto’s workers’ compensation policy. As an

alternative ground, the Commissioner found that a

statutory employee/employer relationship existed

between the parties due to the fact that Palmetto

contracted with Scott Wilkinson to perform work

which is a part of its trade, business, or occupation. He

also found that Scott Wilkinson was covered under

Palmetto’s workers’ compensation policy due the

deduction of a workers’ compensation premium from

his pay in the week prior to his death. Finally, the

Commissioner found that the Occupational Accident

policy Scott Wilkinson purchased from Zurich

American Insurance Company is a collateral source

and that defendants are not entitled to receive credit

for benefits paid under that policy or to receive

benefits directly from that policy.

Defendants appealed to the Full Commission

contending the Commissioner erred in finding Scott

Wilkinson was an employee of Palmetto at that time of

his death, in finding the collateral source rule prevents

Zurich’s policy from providing benefits to defendants,

in denying defendants’ Motion to Include Additional

Evidence, and in denying defendants’ motion to add

Zurich as a party to the claim. However, by Order

dated September 28, 2004, the Commission’s Appellate

Panel affirmed and adopted the Hearing

Commissioner's Order.

33a

Defendants now appeal to this Court.

SCOPE OF REVIEW

The Circuit Court, sitting as an Appellate Court in

workers’ compensation appeals, may only overturn a

conclusion of the Workers’ Compensation Commission

if that conclusion is “clearly erroneous in view of the

reliable, probative and substantial evidence on the

whole record.” Lark v. Bi-Lo, Inc.,276S.C. 130, , 276

S.E.2d 304, 306 (1981). See also Rodney v. Michelin

Tire Corp., 320 S.C. 515, 466 S.E.2d 357 (1996); S.C.

Code Ann. § 1-23-380 (2001). The Lark court went on

to explain that

“(sjubstantial evidence” is not a mere scintilla of

evidence nor the evidence viewed blindly from

one side of the case, but is evidence which,

considering the record as a whole, would allow

reasonable minds to reach the conclusion that

the administrative agency reached or must have

reached in order to justify its action. .. . [T]he

possibility of drawing two inconsistent

conclusions from the evidence does not prevent

an administrative agency’s finding from being

supported by substantial evidence.

Lark, 276S.E.2d at 306-07. Furthermore, a court “may

reverse where the decision is affected by an error of

S.6b.2d 74 (Ct.App.1996). However, when the

Commission’s jurisdiction is at issue, the reviewing

court is not bound by the Commission’s findings of fact

upon which jurisdiction is dependent and may

substitute its own judgment for that of the

Commission as to the weight of the evidence on

34a

questions of fact. Wilson v. Georgetown Co., 316 S.C.

92, 447 S.E.2d 841 (1994).

ANALYSIS

Defendants appeal to this Court contending that

the Commission erred in finding that = an

employee/employer relationship existed between the

parties, in finding that the Occupational Accident

policy is a collateral source for which defendants are

not entitled to receive credit, in excluding the

testimony of Gary Smith and denying the motion for

inclusion of additional evidence, and in denying the

motion to add Zurich as an additional party. Because

I find no error in the Commission’s decisions and find

all decisions to be supported by substantial evidence in

the record, I affirm the Order of the Commission on all

iSSues.

Employee/employer relationship. Defendants

first contend the Commission erred in finding that an

employee/employer relationship existed between Scott

Wilkinson and Palmetto contending that the

relationship does not satisfy the four factors of the

control test. I disagree.

The existence of an employment relationship hinges

on “the right and authority to control and direct the

particular work or undertaking, as to the manner or

means of its accomplishment.” Spivey v. D.G. Constr.

Cae., 221 SL. WW, , 467 S.E.2d 117, 119

(Ct.App.1996). In determining which party exercises

the right to control, our courts have generally

evaluated four factors: (1) direct evidence of the right

or exercise of control; (2) method of payment; (3)

furnishing of equipment; and (4) the right to fire. Id.;

3Da

Tharpe v. G.E. Moore Co., 254 S.C. 196, 200, 174

S.E.2d 397, 399 (1970). “[Alny single factor is not

merely indicative of, but, in practice, virtually proof of,

the employment relation; while in the opposite

direction, contrary evidence is as to any one factor at

best only mildly persuasive evidence of contractorship,

and sometimes is of almost no such force at all.”

Dawkins v. Jordan, 341 S.C. 434, 439, 534 S.E.2d 700,

703 (2000). Furthermore, when making this analysis,

it should be remembered that “South Carolina’s policy

is to resolve jurisdictional doubts in favor of the

inclusion of employers and employees under the

Workers’ Compensation Act.” Spivey, 467 S.E.2d at

119. Ofcourse, titles or descriptions of the relationship

used by the parties or language in a contract declaring

the relationship to be that of an employer/independent

contractor is not dispositive of the issue. Nelson v.

Yellow Cab Co., 349 S.C. 589, 564 S.E.2d 110 (2002).

Concerning the right or exercise of control, our

courts have held that “[i]t is not the actual control then

exercised, but whether there exists the right and

authority to contro! and direct the particular work or

undertaking, as to the manner or means of its

accomplishment.” Chavis v. Watkins, 256 S.C. 30, _,

180 S.E.2d 648, 649 (1971). An employer’s

determination of the hours worked and of the manner

in which the work is to be done and the required use of

uniforms is direct evidence of the right or exercise of

control. Nelson; South Carolina Workers’ Comp.

Comm'n v. Ray Covington Realtors, Inc., 318 S.C. 546,

549, 459 S.E.2d 302, 303 (1995); Crim v. Decorator’s

Supply, 291 S.C. 198, 352 S.E.2d 520 (Ct.App.1987).

Requiring a worker to work exclusively for an

employer is direct evidence of the right or exercise of

control by that employer. Crim. The fact that a driver

36a

can choose when to drive is not dispositive if the

employer controls the method and means of his driving

when he chooses to drive. Nelson.

Here, Ms. Wilkinson testified that her husband

went to work every day when Palmetto told him to do

so. (tr. p. 17, lines 1-4) Dennis Mersereau, Palmetto’s

safety and human resources director, testified that

Palmetto told Scott Wilkinson when he worked, told

him when and where to pick up and deliver loads, and

required him to use the Palmetto logo on his truck,

which is substantially similar to requiring uniforms.

(tr. p. 75, line 23-p. 76, line 4; p. 80, line 24-p. 81, line

17) In addition, Palmetto required that Scott

Wilkinson, and all their other drivers, carry global

positioning equipment in his truck, and Mr. Mersereau

testified that this equipment could be used to

determine where Wilkinson was at all times. (tr. p. 21,

line 11-p. 22, line 2; p. 82, line 10-p. 83, line 14; p. 94,

line 25-p. 95, line 15) Furthermore, Ms. Wilkinson

testified and Mr. Mersereau confirmed that Scott

Wilkinson was required to work solely for Palmetto

and would be terminated if he transported loads for

any other company. (tr. p. 17, lines 1-10; p. 22, lines

3-8; p. 71, lines 3-8; p. 76, line 5-22; p. 78, line 12-p.82,

line 5) While the evidence shows that Scott Wilkinson

could technically refuse loads that Palmetto offered to

him, Mr. Mersereau testified that he could be fired if

he refused too many loads and that once he accepted a

load, he was required to run the load in accordance

with Palmetto’s instructions. (p. 76, line 23-p. 79, line

10; p. 80, line 9-p. 82, line 5)

Concerning the right to fire, our courts have held

that the most important factor to consider with regard

to the existence of an employment relationship is the

37a

right to fire, as “[t]he power to fire, it is often said, is

the power to contro] . . . [and] [t]he absolute right to

terminate the relationship without liability is not

consistent with the concept of independent. contract.”

Tharpe, 174 S.E.2d at 399. Here, Mr. Mersereau

testified that there were many situations in which

Palmetto could terminate Scott Wilkinson’s

employment. For instance, he could be fired if he was

found to be working for or running loads for another

company, if he consistently refused loads, or if the

company did not like the way he performed some task.

(tr. p. 76, line 5-p. 80, line 7; p. 81, line 18-p. 83, line

14) He also admitted that there was no penalty for

termination or breach of the contractual agreement.

(tr. p. 71, line 3-p. 72, line 9) In fact, Mersereau

admitted that Scott Wilkinson’s relationship with

Palmetto remained almost identical to that of the

directly-employed drivers, in that he could terminate

the contract at any time just as a direct employee

could quit at any time, Palmetto could terminate the

contract at any time just as a direct employee could

quit at any time, and both Wilkinson and other direct

employees risked termination if they refused to carry

an offered load. (tr. p. 76, line 5-p. 80, line 7; p. 94,

lines 9-24)

Concerning then method of payment, Ms.

Wilkinson testified that her husband was paid by the

mile before he signed the separate agreement in May

1999 and that he continued to be paid by the mile after

he signed the agreement. While he was paid a higher

mileage rate under the agreement, he had to pay

various expenses, such as fuel costs, out of his own

pocket, and the net result was virtually identical to his

pay prior to the agreement. (Tr. p. 14, lines 13-18; p.

18, lines 6-16; p. 62, line 12-p. 63, line 6; p. 85, line

38a

22-p. 87, line 5; p. 88, line 16-p. 89, line 2; p. 101, line

16-p. 108, line 9; Claimant’s Exhibits #2, 3;

Defendants’ Exhibit #2) In addition, Wilkinson was

allowed to continue to purchase medical insurance

under the company’s plan, just as he did before signing

the agreement. (tr. p. 97, line 25-p. 99, line 8)

Concerning the furnishing of equipment, while

Scott Wilkinson purchased and drove his own tractor,

Palmetto leased it from him under the agreement and

prevented him from using it to carry loads for any

other company. Though Wilkinson paid for his fuel and

licenses out of his own pocket, Palmetto supplied the

trailer that he pulled and the logos and global

positioning system on his truck. While Wilkinson was

required to have his own Department of

Transportation number, he used Palmetto’s

Department of Transportation number while carrying

their loads and was not allowed to carry loads tor

anyone else. (tr. p. 62, lines 19-p. 63, line 6; p. 65, line

12-p. 66, line €; p. 75, line 23-p. 76, line 4; p. 82, lines

6-24)

The above evidence clearly shows that an

employee/employer relationship existed between

Palmetto aud Scott Wilkinson at the time of his death.

Despite the parties designation of Wilkinson as an

independent contractor, Palmetto retained the right to

control Wilkinson and did in fact exercise control over

Wilkinson, as primarily evidenced by their refusal to

allow him to work for any other company while

working for Palmetto. Palmetto further retained the

right to terminate Wilkinson at any time, paid him in

much the same manner as they paid him prior to the

separate agreement, and provided a substantial part

39a

of the equipment he needed to perform his job. The

Commission’s Order must be affirmed on this issue.

Occupational Accident policy as collateral

source. Defendants next contend that the Commission

erred in finding that the Occupational Accident policy

purchased by Scott Wilkinson is a collateral source and

that defendants are not entitled to take advantage of

its existence in any way. I again disagree.

Our Supreme Court has specifically heJd that the

Workers’ Compensation Act does not authorize an

employer or carrier to not pay benefits under the Act

or to offset benefits owed under the Act because an

injured worker received sums from a collateral source.

McLeod v. South Carolina Ins. Co., 272 S.C. 254, 251

5.£.2d 193 (1979). See also Johnston v. Aiken Auto

parts, 311 S.C. 285, 428 S.E.2d 737

(Ct.App.1993)(tortfeasor has no right to mitigation of

damages because of payments or compensation

received by the injured person from a source wholly

independent of the wrongdoer; law does not

differentiate between the nature of the benefit, so long

as it did not come from the defendant); Estate of

Ratenni v. Grainger, 298 S.C. 276, 379 S.E.2d 890

(1989 collateral source rule prevents defendant from

offsetting its hability for insurance proceeds received

by injured party as a result of a premium paid by the

injured party).

Though South Carolina’s courts have not

considered the effect of occupational disability policy

like the one found here, the North Carolina Supreme

Court has held that an employer and its workers’

compensation insurance carrier are not entitled to

credit for payments made under such a policy, even if

40a

the employer paid the policy premiums. Ashe v.

Barnes, 121 S.E.2d 549 (N.C. 1961). While North

Carolina has since statutorily provided that the

employer may receive credit for mnon-workers’

compensation disability payments funded by an

employer, its legislature and courts have expressly

limited the credit to employer-funded benefits. N.C.

Gen. Stat. § 97-42 (2003); Jenkins v. Piedmont

Aviation Serv., 557 S.E.2d 104 (N.C. Ct.App. 2001). It

follows then that an employer cannot, under any

circumstances, take credit for benefits paid under a

separate insurance policy for which the employee alone

paid the premiums. Other jurisdictions have reached

this conclusion. See Griffin v. North Dakota Workers’

Comp. v. Bureau, 466 N.W.2d 148 (N.D. 1991); Jewel

Tea Co. v. Florida Indus. Comm/’n, 235 So.2d 289 (Fla.

1970).

Here, it is undisputed that Scott Wilkinson paid all

of the premiums for the occupational disability policy

he obtained from Zurich, and Palmetto did not

contribute to the plicy or premiums in any way. (tr. p.

20, lines 4-15; p. 67, lines 14-16) Therefore, Palmetto

is clearly not entitled to receive any credit for the

occupational disability policy in this claim.

Defendants argurrent that the collateral source

rule does not apply because defendants cannot be

considered a “tortfeasor” and because the workers’

compensation system is a “no-fault” system lacks

merit, as our courts have clearly held that the

principle applies to the workers compensation system.

See McLeod.

Furthermore, since Scott Wilkinson has been

shown to have been an employee of Paimetto at the

4la

time of his death, any credit or benefits received by

Paimetto from the occupational disability policy

funded by Scott Wilkinson would, in effect, be

replacing workers’ compensation benefits Palmetto is

statutorily required to provide to his dependents. If

that were to occur, Scott Wilkinson would, in effect,

have funded his own _ workers’ compensation

premiums, and such a result is contrary to South

Carolina law. See S.C. Code Ann. § 42-5-200

(2004)(agreement by employee to pay any portion of

premium for benefits required b the Act is not vatid,

and employer who makes a deduction for such purpose

from employee’s pay shall be guilty of misdemeanor);

S.C. Code Ann. § 42-1-610 (2004)(no contract,

agreement, rule, regulation or other device shall in any

manner operate to relieve employer of any obligation

created under the Act). See_also Jewel Tea Co. v.

Florida Indus. Comm’n, 235 So.2d 289 (Fla.

1970)(based on statute identical to § 42-5-200,

employer not allowed to credit or receipt of benefits

from employee-funded insurance policy); Ashe _v.

Barnes, 121 S.E.2d 549 (N.C. 1961)(based in part on

statute identical to § 42-1-610, employer not allowed to

credit or receipt of benefits from employee-funded

insurance policy).

The Commission clearly committed no error in

finding that the Occupational Accident policy Scott

Wilkinson purchased from Zurich is a collateral source

and that defendants are not entitled to receive credit

for benefits paid under that policy or to receive

benefits directly from that policy. Because these

findings are supported by substantial evidence and are

not affected by any error of law, the Commission’s

Order must be affirmed on this issue.

42a

Denial of Motion to Include Additional

Evidence. Defendants next contend that the

Commission erred in denying their Motion to Include

Additional E ‘idence and thereby denied them due

process, I disagree.

Under the Commission’s rule, the moving party

must establish that the new evidence is of the same

nature and character required for granting a new trial

and show:

(1) The evidence sought to be introduced is

not evidence of a cumulative or

impeaching character but would likely

have produced a different result had the

evidence been procurable at the first

hearing; and

(2) The evidence was not known to the

moving party at the time of the first

hearing, by reasonable diligence the new

evidence could not have been secured,

and the discovery of the new evidence is

being brought to the attention of the

Commission immediately upon its

discovery.

S.C. Code Reg. § 67-707 (C)(2004)(emphasis added).

See also Ancrum v. Low Country Steaks, 317S.C. 188,

452 S.E.2d 609 (Ct.App.1995); Bettis v. Busbee, 283

S.C. 502, 323 S.E.2d 536 (Ct.App.1984). Furthermore,

the admission or exclusion of evidence is a matter

within the sound discretion of the Commission.

Holcombe v. Dan River Mills/Woodside Div., 286 S.C.

223, 333 S.E.2d 338 (Ct.App.1985).

43a

Here, the additional evidence defendants sought to

have admitted into the record following the hearing

consists of business records from Palmetto, which are

purported to be records of payments made to Scott or

Lea Ann Wilkinson, and additional testimony in the

form of an affidavit from a representative of Palmetto,

Dennis Mersereau. On their face, the purported

payment records indicate that they were created on or

before May 23, 2002, and thus, they were in existence

prior to the hearing in this matter on August 28, 2003

and could have been discovered and submitted prior to

the hearing with due diligence. Similarly, Mr.

Mersereau’s affidavit is based solely on evidence that

Was in existence prior to the hearing that could have

been discovered and submitted prior to the hearing

with due diligence.

Furthermore, the record shows that claimant

subpoenaed records from defendants on June 21, 2002,

including records of payments made in the 52 weeks

prior to and subsequent to the injury by accident.

While defendants responded, additional

correspondence from claimant indicates that they

included no records of payments made. Defendants

then provided some pay records, but the records which

were the subject of defendants’ Motion were not

included. Defendants represented to claimant through

their failure to produce these records that the records

did not exist, and claimant would be prejudiced by

their untimely inclusion into the record, as she has not

had the opportunity to investigate the validity of the

records or to elicit testimony from the creators of the

documents as to their validity and effect.

Defendants failed to provide the records in question

in response to valid discovery requests and failed to

44a

comply with the Commission’s regulations concerning

the timely submission of documentary evidence prior

to the hearing. Therefore, the Commission did not

abuse its discretion is refusing to accept the records

into evidence, and it’s decision is affirmed.

Denial of Motion to Join Zurich as a party and

the testimony of Gary Smith. Defendants finally

contend that the Commission erred in denying their

Motion to add Zurich, the company which provided

Scott Wilkinson’s Occupational Accident policy, as a

party and erred in refusing to allow a proffer of the

testimony of Gary Smith. I disagree.

On its face, the Zurich policy clearly states that it

is not a workers’ compensation policy and provides no

benefits as required by workers’ compensation law.

Furthermore, the Zurich policy is a wholly collateral

source from which defendants may not receive benefits

and for which they may not receive credit for benefits

paid, as such receipt or credit would be contrary to

law. See McLeod; S.C. Code Ann. §§ 42-1-610, 42-5-200

(2004). While the Zurich policy contains a clause that

would appear to require its benefits to be paid to

defendants in the event defendants are determined to

be lable for workers’ compensation benefits, this is a

private policy paid for and owned by Scott Wilkinson

and such ‘provision would in effect have Wilkinson

paying his own workers’ compensation premium in

violation of section 42-5-200. Therefore, the clause is

not controlling. Jordan v. Aetna Cas. & Sur. Co., 264

S.C. 294, 214 S.E.2d 818 (1975)(to the extent a policy

provision conflicts with an applicable statutory

provision, the statute prevails).

45a

Furthermore, the Court takes judicial notice of the

fact that the parties herein and Zurich are currently

engaged in a separate civil action arising from the

Occupational! Accident policy. Whether Zurich should

have been added as a party has no bearing on the

question of whether Scott Wilkinson was an employee

of Palmetto, and in the absence of any statute clearly

depriving the Circuit Court of jurisdiction to construe

the Occupational Accident policy and determine the

parties rights under its terms, the Commission

committed no error in refusing to join Zurich as a

party in the workers’ compensation claim.

As to the issue of the proffer of the testimony of

Gary Smith, defendants argument is curious, as the

record clearly shows that the Hearing Commissioner

did allow this testimony into the record as proffer. (tr.

p. 35, line 25-p. 61, line 3) However, in hght of the

above, it is clear that such testimony was not needed

as the Zurich policy has no effect here and provides no

relevant benefits or offset of benefits.

For the foregoing reasons, the Commission’s Order

in this matter is affirmed on all issues.

IT IS SO ORDERED.

/s/

John C. Few

Judge, Thirteenth Judicial Circuit

Dated: 9/25/05

46a

APPENDIX D

APPELLATE PANEL DECISION AND ORDER

OF THE

SOUTH CAROLINA WORKERS’

COMPENSATION COMMISSION

W.C. FILE NO. 0208317

[September 28, 2004]

LEA ANN WILKINSON (surviving spouse)

for, SCOTT R. WILKINSON (deceased),

EMPLOYEE,

CLAIMANT,

-VS-

PALMETTO STATE TRANSPORTATION CO.,

EMPLOYER,

AND

CANAL, INSURANCE CoO.,

INSURER,

DEFENDANT,

— — — — — — ~- — —— — — _— — — — — — — —

AFFIRMED

Ala

Appellate Panel Review held in Columbia, South

Carolina, on July 28, 2004, timely and properly served

upon all parties of interest.

Appellate Panel Decision and Order filed

September 28, 2004

APPEARANCES:

Respondent/Claimant represented by

LAW OFFICE OF KATHRYN WILLIAMS with

Kathryn Williams appearing.

Appellant/Defendant represented by

LEATHERWOOD, WALKER, TODD & MANN

with Duke K. McCall, Jr. appearing.

STATEMENT OF CASE

The parties were heard by Commissioner G. Bryan

Lyndon on August 28, 2003, in Pickens, South

Carolina. As a result of said hearing, the single

Commissioner issued an Order dated February 27,

2004, from which the Appellant takes this appeal.

Within the statutory period, counsel for the

Defendant filed an Application for Review in the case

setting forth their assignments of error, copies of

which were furnished to all interested parties prior to

oral argument presented before the Appellate Panel on

July 28, 2004.

Pursuant toS.C.Code Ann. 42-17-50 (1985), we, the

Appellate Panel, have reviewed the Award and

weighed the evidence as presented at the initial

48a

hearing. We have also considered all issues raised in

the briefs of the Appellant(s) and Respondent(s).

After careful review in the instant case, the

Appellate Panel of the South Carolina Workers’

Compensation Commission has determined that all of

the Hearing Commissioner’s Findings of Fact and

Rulings of Law are correct as stated. We find that such

Findings of Fact and Conclusions of Law are hereby

included in this Order by reference, and by such

reference the requirements of Baldwin v. James River

Corporation, 304 SC 485, 405 SEK2d 4, as well as

Sections 42-17-40 and 1-23-350 of the South Carolina

Code of Laws have been met.’ Accordingly, the

Findings of Fact and Conclusions of Law set forth in

the Single Commissioner’s Order shall become, and

hereby are, the law of the case and, therefore, the

Order is sustained in its entirety. The Hearing

Commissioner’s decision is incorporated by reference

as if set forth verbatim herein.

ORDER

The Order of the Single Commissioncr from which

this appeal has been taken is hereby affirmed by the

Panel and same shall constitute the final Decision and

Order of the South Carolina Workers’ Compensation

Commission.”

See also D. SHIPLEY, SOUTH CAROLINA ADMINISTRATIVE

LAW at 5-109 (1983).

*It should be noted that the findings of fact and conclusion of law

as contained in the single commissioner=s order are specifically

referenced and included in toto in the Aorder@ portion of this

decision so as to comply with the requirements of Baldwin v.

49a

S.C. WORKERS’ COMPENSATION

COMMISSION

/s/

Lisa D. Chavis, Commissioner

For the Appellate Panel

CONCUR: /s/J. Michelle Childs

/s/ GBL

f- sk sh

a, ee

[Certificate of Service omitted in

printing of this appendix]

James River Corporation, 304 SC 485, 405 SE 2d 4, as well as the

Administrative Procedures Act of the State of South Carolina. In

the interest of brevity they have not been repeated in the body of

this order

APPENDIX E

ORDER

of the

SOUTH CAROLINA WORKERS’

COMPENSATION COMMISSION

File No.: 0208317

[Filed February 27, 2004]

Lea Ann Wilkinson (surviving spouse

) )

for Scott R. Wilkinson (deceased), )

)

Claimant, )

)

VS. )

)

Palmetto State Transportation Co, )

)

Employer, and }

)

Canal Insurance Co., )

)

Carrier, Defendants. )

)

Hearing: Held in Pickens, South Carolina on

August 28, 2003.

Appearances: Kathryn Williams, esq. of Kathryn

Williams, P.A. for claimant.

Purpose:

Decision

& Order:

Filed:

Hla

Duke K. McCall, Jr., Esq. of

Leatherwood, Walker, Todd & Mann,

P.C. for defendants.

To determine issues as set forth on the

Forms 52 and 53.

G. Bryan Lyndon, Commissioner

February 27, 2004

APA SUBMISSIONS

By claimant:

APA #1

APA #2

APA #3

APA #4

APA #5

Accident report, Commonwealth of Virginia,

Department of State Police, dated 6/9/99,

consisting of 2 pages (pages 1-2).

Report of Chief Medical Examiner,

Commonwealth of Virginia, Department of

Health, dated 8/6/02, consisting of 8 pages

(pages 3-10).

Certificate of Death, Commonwealth of

Virginia, Department of Health, dated

5/22/02, consisting of 1 page (page 11).

License and Certificate of Marriage, State of

South Carolina, dated 2/27/93, consisting of

1 page (page 12).

Certificate of Live Birth, State of South

Carolina, Department of Health &

APA #6

APA #7

APA #8

APA #9

APA #10

APA #11

Environmental Control, dated 12/30/99,

consisting of 1 page (page 13).

Funeral Arrangement Agreement and

Receipt, Mackey Mortuary, dated 5/20/02,

consisting of 3 pages (pages 14-16).

Settlement sheet for check dated 5/10/02,

consisting of 3 pages (pages 17-19).

Employment records related to provision of

health insurance, dated 2/11/99 througn

3/15/02, consisting of 8 pages (page 20-27).

Current Benefits Employee Summary, dated

5/9/02, consisting of 1 page (page 28).

Correspondence from Carolina Insurance

Consultants, Inc. to Palmetto State

Transportation Co., withattachments, dated

5/16/02, consisting of 7 pages (pages 29-35).

Equipment-GPS _ history, dated 5/17/02,

consisting of 5 pages (pages 36-40).

By defendants:

APA #1

APA #2

Letters from Gary Smith, Division of

Coverage & Compliance, Workers’

Compensation Commission to Duke K.

McCall, Jr. and ‘Thomas P. Bellinger, dated

10/15/02, consisting of 7 pages (pages 1-6).

Excluded by Commissioner, but accepted

into the record as proffer (pages 7-44).

APA #3

APA #4

APA #5

APA #6

APA #7

53a

Equipment Lease Contract #070300 signed

by Scott Wilkinson and Palmetto State

‘transportation Co., dated 7/3/00, consisting

of 8 pages (pages 45-52).

Cab car registration for Scott Wilkinson,

South Carolina Department of Public Safety,

dated 4/3/00, consisting of 1 page (page 53).

Fixcluded by Commissioner, but accepted

into the record as proffer (pages 54-68).

Check register of Palmetto State

Transportation Co. for check to Scott

Wilkinson, dated 1/4/02 through 5/24/02,

consisting of 1 page (page 69).

Investigative repc:tis of Steven K. Byce of

Legal Investigations, dated 7/21/08,

consisting of 8 pages (pages 70-77).

EXHIBITS

By claimant:

# 1

Settlement sheet for check dated 5/17/02,

consisting of 2 pages.

2000 Federal tax return for Scutt & Lea Ann

Wilkinson.

2001 Federal tax return for Scott & Lea Ann

Wilkinson.

5da

By defendants:

#I Occupational Accident Insurance Policy

issued by Zurich American Insurance

Sompany (also proffered, see defendants’

APA #2 above).

#2 (proffer, see defendants’ ADA #5 above)

#3 1999 Federal] tax return for Scott & Lea Ann

Wilkinson.

#4 1999 Equipment Lease Contract signed by

Scott Wilkinson and Palmetto State

Transportation Co.

STIPULATIONS

Counsel for all parties stipulated at the hearing to

the following issues:

A. The purpose of the hearing is to determine the

issues set forth in the hearing notice, issues

pled in the Forms 52 and 53, and any other

‘ssues which may timely come before the

Commissioner.

2. Notice of the hearing was timely and properly

served upon all parties of interest.

3. Venue, set in Pickens County, is proper.

4. Claimant, the deceased worker’s spouse, seeks

death benefits under the South Carolina

Workers’ Compensation Act based on accidental!

injury resulting in the death of her husband on

55a

May 16, 2002 while he was allegedly employed

by Palmetto State Transportation Company

and, therefore, the South Carolina Workers’

Compensation Commission has jurisdiction of

the case.

The Commission’s file and the Hearing

Commissioner’s notes are a part of the record of

this case, with the exception of self-serving

declarations and unstipulated medical reports.

Scott Wilkinson was a direct employee of

Palmetto State Transportation Company when

he began working for the company as a

truck-driver in January 1998.

Scott Wilkinson earned profit of $51,087.00 on

income of $146,074.00 in 2001 entitling him to

a compensation rate of $549.42, the maximum

compensation rate for injury by accident

occurring in 2002.

DECEASED’S BIOGRAPHICAL

INFORMATION

Male

Work History: Before starting work with Palmetto in

January of 1998, claimant was a

long-haul truck driver for Southeast

Motor Freight and Corporate Express

56a

STATEMENT OF THE CASE

Lea Ann Wilkinson, the deceased worker’s spouse

(“claimant’), seeks death benefits as a result of a fatal

motor vehicle accident her husband was involved in on

May 16, 2002 while driving a truck for Palmetto State

Transportation Company. She contends that she and

her minor son, Tyler, are entitled to benefits as her

husband’s sole dependents. She also seeks a finding

that an occupational accident policy her husband

purchased from Zurich American Insurance Company

is a collateral source and that defendants are not

entitled to receive credit for benefits paid under that

policy. Claimant presented a motion for the

Commission to appoint her guardian ad litem for son,

and the motion was granted.

Palmetto and its workers’ compensation carrier,

Canal Insurance Company (together “defendants”),

deny that claimant is entitled to benefits because they

contend claimant’s husband was not an employee but

was an independent contractor. However, if the claim

is found compensable, defendants seek credit for

benefits paid to claimant under the Zurich

occupational accident policy, contending that the policy

is not a collateral source since it was required under

her husband’s contract with Palmetto ana Palmetto

agreed to forego a payroll surcharge for workers’

compensation insurance based on the existence of that

policy.

Defendants also renewed their motion to add

Zurich as a party to this claim; however, the

Commissioner denied the motion on the basis of

Commissioner Childs previous consideration and

denial of the same motion by Order dated April 28,

57a

2003. Based on the Commissioner’s ruling on this

issue, claimant objected to defendants’ ADA

submissions #2 and 5 and to one of defendants’ listed

witnesses. The evidence, including the testimony of

defendants’ witness, was excluded, but presented into

the record as proffer.

EVIDENCE OF THE CASE

Claimant testified that she is Scott Wilkinson’s

widow. She stated that she married Scott in February

1993 and that they had one child, a son named Tyler,

in December 1999. Claimant testified that her

husband had not been previously married and had no

other children. While his parents and two siblings are

still living, claimant stated that her husband provided

no financial support to them or anyone other than her

and Tyler. Scott Wilkinson was 35 years old at the

time of his death.

Claimant testified that her husband became a

direct employee of Palmetto in 1997 or 1998. His work

involved long-distance truck driving, and he was paid

according to the number of miles he drove. In addition,

he received medical insurance benefits for their family.

Then in the summer of 1999, her husband personally

purchased his truck and signed a separate agreement

with Palmetto leasing the vehicle back to the company.

However, claimant testified that to her knowledge and

observation, nothing about her husband's work

changed except the manner in which he was paid. She

stated that he still went to work for Palmetto every

day when he was told to do so, still carried general

cargo that Palmetto assigned to him, was still not

allowed to carry loads for any other company, and was

still subject to termination by Palmetto. In addition,

Palmetto required that he carry global positioning

satellite (“GPS”) equipment in his tractor that allowed

Palmetto to know where he was at all times. Claimant

testified that she prepared her and her husband’s tax

returns every year and knew what and how he was

paid. She stated that after signing the separate

agreement, he continued to be paid for his services to

the company based on the number of miles he drove

and continued to receive his pay by direct deposit. The

only difference was that after the agreement her

husband paid his own fuel expenses from the pay he

received.

Claimant also testified that a weekly deduction was

taken from her husband’s check for a_ workers’

compensation premium after the separate agreement

was signed until approximately July 2001. In July

2001, her husband purchased an occupational accident

policy from Zurich. She stated that he personally paid

the premium for this policy, and Palmetto never paid

anything for the policy. Claimant testified that the last

settlement sheet her husband received before his

death setting out his pay and expenses for the May 10,

2002 pay period reflects a deduction for a workers’

compensation premium and that this premium

deduction was never refunded.

Dennis Mersereau, Palmetto’s safety and

maintenance director, testified that Palmetto is a

trucking company and is in the business of hauling

goods over the road by truck. At the time of the

hearing, the company employed some 74 company

drivers and seven owner-operators. He stated that

loads are assigned to the company drivers first and

that owner-operators are given the overflow work, but

he admitted that both company drivers and

59a

owner-operators are performing a necessary part of

Palmetto’s business.

Mr. Mersereau stated that the deceased was a

direct employee of the company when he started

working for Palmetto in 1998 but that he became an

owner-operator in May 1999. He testified that, as a

direct employee of Palmetto to May 1999, Scott

Wilkinson was required to drive a truck with the

company logo attached, to pick up loads where

Palmetto told him to do so, and to deliver loads

according to Valmetto’s instructions. He was not

allowed to use the truck that was provided to him to

haul loads for another company. Palmetto controlled

when he worked and had the right to terminate his

employment at any time. As a direct employee, if Scott

Wilkinson refused a load that was assigned to him, he

would be terminated.

However, Mr. Mersereau also testified that after

the deceased became an owner-operator, he still

continued to drive a truck with the Palmetto company

logo on it. He was still required to haul loads

exclusively for lalmetto, and if he ran a job for

someone else, even on his own time, his relationship

with Palmetto could be terminated. While Scott

Wilkinson could refuse a particular load that Palmetto

offered to him, his relationship with Palmetto could be

terminated if he consistently refused loads. When he

took a load that Palmetto offered to him, he had to run

it in accordance with Palmetto’s instructions, Palmetto

continued to tell him what to do and where to go, and

they required him to carry GPS equipment in his

tractor with which the company could determine

where he was at any time. Mr. Mersereau testified

that the deceased could have’ terminated his

60a

relationship with Palmetto at any time, just as he

could have quit at any time as a direct employee, and

Palmetto could terminate the relationship at any time,

just as they could fire a direct employee at any time. In

fact, Mr. Mersereau testified that Palmetto could

terminate their contract with Scott Wilkinson at any

time if they did not like the way that he did something

or the way that he worked.

Mr. Mersereau testified that Palmetto does not

require owner-operators to carry occupational

disability policies, but does require that they have

workers’ compensation coverage. If an owner-operator

does not have their own workers’ compensation

coverage, Palmetto extends coverage under its own

workers’ compensation policy and deducts a weekly

amount from payroll to cover the related premium. Mr.

Mersereau testified that a workers’ compensation

premium was deducted from the deceased's pay until

he disclosed that he had purchased an occupational!

accident policy from Zurich. He stated that if an

owner-operator produces a policy like the Zurich

policy, Palmetto treats that as workers’ compensation

coverage and ceases to make the premium deductions

from payroll. Mr. Mersereau testified that he did not

personally accept the Zurich policy from the deceased

and had no personal knowledge that the policy

specifically states that it is not a_ workers’

compensation policy and is not intended to satisfy

workers’ compensation laws. He further admitted that

scott Wilkinson paid all premiums for the Zurich

occupational accident policy without contribution from

Palmetto

Mr. Mersereau testified that direct employees of

Palmetto are provided certain fringe benefits, such as

bla

health insurance for employees and their families, and

that such fringe benefits are not offered to

owner-operators. llowever, he admitted that Palmetto

did continue to offer such benefits to Scott Wilkinson

and one other direct employee who became

owner-operators.

Mr. Mersereau acknowledged that the settlement

sheet for the pay period dated May 10, 2002 is a record

of weekly payments and deductions generated by

Palmetto. He testified that the deduction for workers’

compensation premium made on that date is simply a

mistake and would be corrected on a subsequent

settlement sheet. Hlowever, when shown a copy of the

subsequent and final settlement sheet, Mr. Mersereau

admitted that a correction did not appear.

Based on all the evidence presented, including my

observations of the witnesses, I make the following

findings:

FINDINGS OF FACT

l. Scott Wilkinson died as a result of injuries

sustained in a motor vehicle collision § in

Mecklenburg County, Virginia. This finding is

based on all the evidence, including claimant's

testimony and police and medical records

submitted into the record.

2 At the time of his death, Scott Wilkinson was

hauling goods for Palmetto State

Transportation Company. This finding 1s based

on all the evidence, including claimant’s

testimony, the testimony of Dennis Mersereau,

and records submitted into the record

62a

Palmetto State Transportation Company is a

trucking company and is in the business of

hauling goods over the road by truck. This

finding is based on all the evidence, including

the testimony of Dennis Mersereau.

Palmetto State Transportation Company has 74

drivers which the company considers to be

direct employees and seven other drivers which

the company considers to be owner-operators.

This finding is based on all the evidence,

including the testimony of Dennis Mersereau.

All drivers, whether considered by Palmetto to

be direct employees or owner-operators, are

performing a necessary part of Palmetto’s

business. This finding is based on all the

evidence, including the testimony of Dennis

Mersereau.

At the time of his death, an employee/employer

relationship existed between Scott Wilkinson

and Palmetto State Transportation Company.

This finding is based on all the evidence,

including claimant’s testimony, the testimony of

Dennis Mersereau, and records submitted into

the record.

a. Scott Wilkinson was a direct employee of

Palmetto when he was first hired in January

1998. This finding is based on the parties’

stipulation and all the evidence, including

claimant’s testimony and the testimony of

Dennis Mersereau.

63a

b. In May 1999, Scott Wilkinson personally

purchased his tractor and signed an

Equipment Lease Contract with Palmetto

(renewed in July 2000), after which

Palmetto considered him to be = an

owner-operatu. and not an employee. This

finding is based on all the evidence,

including claimant’s’ testimony, the

testimony of Dennis Mersereau, and records

submitted into the record.

c. Despite the May 1999 agreement and Scott

Wilkinson’s subsequent designation as a

non-employce owner-operator, Palmetto

continued to reserve the right to contro] and

did in fact control Scott Wilkinson’s work.

1) Before and after the May 1999

agreement, Palmetto scheduled when

Scott Wilkinson worked.

While Scott Wilkinson could refuse loads

that Paimetto offered to him after the

May 1999 agreement, if he chose to

accept a load, he was required to haul

and deliver the load in accordance with

Palmetto’s instructions, just as he was

prior to the May 1999 agreement.

3) Before and after the fay 1999

agreement, Palmetto required Scott

Wilkinson to drive a truck bearing the

Palmetto logo.

4) Before and after the May 1999

agreement, Palmetto required Scott

64a

Wilkinson to carry global positioning

satellite equipment in his tractor that

could be used to determine his location at

any time.

5) Before and after the May 1999

agreement, Palmetto required Scott

Wilkinson to work solely for Palmetto.

This finding is based on all the evidence,

including claimant’s' testimony, the

testimony of Dennis Mersereau, and records

submitted into the record.

Despite the May 1999 agreement and Scott

Wilkinson’s subsequent designation as

non-employee owner-operator, Palmetto

continued to reserve the right to terminate

Scott Wilkinson at any time without penalty

and he retained the right to quit at any time

without penalty.

1) Before and_ after the May 1999

agreement, Palmetto reserved the mght

to terminate Scott Wilkinson if he was

found to be working for or transporting

loads for any other company.

2) Before and after the May 1999

agreement, Palmetto reserved the right

to terminate Scott Wilkinson if he

consistently refused loads that were

offered to him.

3) Before and after the May 1999

agreement, Palmetto reserved the right

65a

to terminate Scott Wilkinson if the

company did not like the way he

performed some task.

This finding is bused on all the evidence,

including ciaimant’s testimony, the

testimony of Dennis Mersereau, and records

submitted into the record.

Despite the May 1999 agreement and Scott

Wilkinson’s subsequent designation as a

non-employee owner-operator, Falmetto

continued to pay him by much the same

method as they paid him before the

agreement.

1) Before and after the May 1999

agreement, Palmetto paid Scott

Wilkinsen every week.

2) Before and after the May 1999

agreement, Palmetto paid Scott

Wilkinson according to the number of

miles he drove for the company.

3) While Palmetto paid Scott Wilkinson a

higher mileage raie after the May 1999

agreement was signed, the net result was

virtually identical to his pay prior to the

agreement since he had to pay various

expenses, such as fuel costs and repairs,

out of his own pocket.

4) Before and after the May 1999

agreement, Palmetto provided Scott

66a

Wilkinson and his wife and child with

group health insurance benefits.

This finding is based on all the evidence,

including claimant’s testimony; the

testimony of Dennis Mersereau; and the pay,

tax, and other records submitted into the

record.

Despite the May 1999 agreement and Scott

Wilkinson’s subsequent designation as a

non-employee owner-operator, Palmetto

continued to provide to Scott Wilkinson the

equipment he needea to perform his work.

1) While Palmetto provided the tractor

Scott Wilkinson drove before the May

1999 agreement and he purchased and

drove his own tractor after the May 1999

agreement, Palmetto leased the vehicle

from him under the agreement and

prevented him from using it to haul loads

for any other company.

2) Before and after the May 1999

agreement, Palmetto supplied Scott

Wilkinson with the trailer that he used to

haul goods.

3) Before and after the May 1999

agreement, Palmetto supplied Scott

Wilkinson with company logos and

required that they be attached to his

tractor at all times.

67a

4) Before and after the May 1999

agreement, Palmetto supplied Scott

Wilkinson with global positioning system

equipment and_ required that’ the

equipment be used at all times.

This finding is based on all the evidence,

including claimant’s testimony, the

testimony of Dennis Mersereau, and records

sub»:.itted into the record.

Palmetto State Transportation Company

deducted a workers’ compensation premium

from Scott Wilkinson’s pay in the week prior to

his death, and while this premium deduction

may have been a mistake on Palmetto’s pan,

there is no evidence that the mistake was ever

corrected. This finding is based on all the

evidence, including claimant’s testimony, the

testimony of Dennis Mersereau, and records

submitted into the record.

Scott Wilkinson sustained injury by accident

arising out of and in the course of his

employment with Palmetto State

Transportation Company on May 16, 2002

resulting in his death. This finding is based on

all the evidence, including claimant’s testimony

and police and medical records submitted into

the record.

Scott Wilkinson was married to claimant, Lea

Ann Wilkinson, at the time of his death, and he

had never been married to anyone else. This

finding is based on al the evidence, including

10.

13.

14.

68a

claimant’s testimony and reports and records

submitted into the record.

Scott Wilkinson had one child, Tyler Wilkinson,

at the time of his death, and he never fathered

any other children. This finding is based on all

the evidence, including claimant’s testimony

and reports and records submitted into the

record.

Tyler Wilkinson is a minor under the age of

eighteen. This finding is based on all the

evidence, including claimant’s testimony and

records submitted into the record.

Scott Wilkinson’s parents and two siblings are

still living, but none of them were dependent on

him at the time of his death. This finding is

based on all the evidence, including claimant’s

testimony and records submitted into the

record.

Scott Wilkinson’s sole dependents at the time of

his death were his wife, Lea Ann Wilkinson,

and his son, Tyler Wilkinson. This finding is

based on all the evidence, including claimant’s

testimony and reports and records submitted

into the record.

Scott Wilkinson earned profit of $51,087.00 on

income of $146,074.00 in 2001 entitling him to

a compensation rate of $549.42, the maximum

compensation rate for injury by accident

occurring in 2002. This finding is be +d on all

the evidence on the record, inclu..ng the

15.

16.

69a

parties’ stipulation and pay and tax information

submitted into the record.

Scott Wilkinson was covered under an

Occupational Accident policy issued by Zurich

American Insurance Company at the time of his

death. This finding is based on all the evidence,

including claimant’s' testimony, the

Occupational Accident policy, and other records

submitted into the record.

Scott Wilkinson paid all of the premiums for the

Occupational Accident policy he obtained from

Zurich, and Palmetto State Transportation

Company did not contribute to the policy or

premiums in any way. This finding is based on

all the evidence, including claimant’s testimony,

the testimony of Dennis Mersereau, and records

submitted into the record.

RULINGS OF LAW

Under S.C. Code Ann. §§ 42-1-130 to -150, the

South Carolina Workers’ Compensation

Commission has jurisdiction over claimant’s

claim for benefits. See also Crim v. Decorator’s

Supply, 291 S.C. 193, 352 S.E.2d 520

(Ct.App.1987)(Commission has subject matter

jurisdiction where employee/employer

relationship existed at the time of accident).

Under 8.C. Code Ann. §§ 42-1-130 to -150, an

employee/employer relationship existed between

Scott Wilkinson and Palmetto State

Transportation Company at the time of Scott

Wilkinson’s death. See also Spivey v. D.G.

70a

Constr. Co., 321 S.C. 19, 467 S.E.2d 117

(Ct.App.1996)(existence of employment

relationship hinges on right and authority to

control and direct the work as to the manner or

means of its accomplishment, which is

evaluated through direct evidence of the right or

exercise of control, method of payment,

furnishing of equipment, and right to fire.);

Nelson v. Yellow Cab Co., 349 S.C. 589, 564

S.E.2d 110 (2002)(fact that cab driver could

choose when to drive his cab was not dispositive

of the control issue, since employer controlled

the method and means of his driving when he

chose to drive); South Carolina Work. Comp.

Comm ’n v. Ray Covington Realtors, Inc., 318

S.C. 546, 459 S.E.2d 302 (1995)(employer’s

determination of hours worked and manner in

which work is to be done is direct evidence of

right or exercise of control); Tharpe v. G.E.

Moore Co., 254 S.C. 196, 174 S.E.2d 397

(1970)(power to fire is power to control and

absolute right to terminate relationship without

liability is inconsistent with concept of

independent contract); Crim v. Decorator’s

Supply, 291 S.C. 1938, 352 S.E.2d 520

(Ct.App.1987)(requirement that worker work

exclusively for employer is direct evidence of

right or exercise of control).

The May 1999 agreement between Palmetto

State Transportation Company and _ Scott

Wilkinson (and the subsequent agreement of

July 2000) and the titles used by the parties to

describe their relationship are not dispositive of

the form of the relationship or of the issues of

control or the right to fire. Nelson v. Yellow Cab

Tila

Co., 349 S.C. 589, 564 S.E.2d 110 (2002). See

also S.C. Code Ann. § 42-1-460 (contract

between employer and employee presumed to be

subject to the Workers’ Compensation Act); S.C.

Code Ann. §42-1-610 (no contract, agreement,

rule, regulation, or other device shall operate to

relieve an employer of an obligation created by

the Act); S.C. Code Ann. § 42-1-620 (no

agreement by an employee to waive rights to

compensation under Act shall be valid).

As an alternative ground under S.C. Code Ann.

§ 42-1-400 and to the extent Scott Wilkinson

may be considered a subcontractor of Palmetto

State Transportation Company under the May

1999 agreement, Palmetto contracted with Scott

Wilkinson to perform work which is a part of its

trade, business, or occupation and therefore is

his statutory employer and is liable to pay

benefits under the Act as if he was directly

employed by Palmetto.

As an alternative ground and to the extent Scott

Wilkinson may be considered a subcontractor of

Palmetto State Transportation Company under

the May 1999 agreement, Scott Wilkinson was

covered under Palmetto’s workers’

compensation policy at the time of his death due

to Palmetto’s deduction of a _ workers’

compensation insurance premium from his pay

the week before his death. Harris v. Criterion

Ins. Co., 281 S.E.2d 878 (Va. 1981)(mistaken

acceptance of a premium can reinstate the

underlying insurance policy or give rise to an

estoppel if the sum is not refunded within a

reasonable time). See _ also Gordon v. Colonial

10.

72a

Ins. Co. of California, 342 S.C. 152, 536 S.F.2d

376 (Ct.App.2000).

Under S.C. Code Ann. § 42-1-160, Scott

Wilkinson sustained injury by accident arising

out of and in the course of his employment with

Palmetto State Transportation Company on

May 16, 2002 resulting in his death.

Under S.C. Code Ann. § 42-1-40 and S.C. Code

Reg. 67-1603, Scott Wilkinson’s average weekly

wage was such that the compensation rate for

this claim is $549.42.

Under S.C. Code Ann. §§ 42-9-290, Scott

Wilkinson’s dependants are entitled to and

defendants Palmetto State Transportation

Company and Canal Insurance Company are

responsible for payment of 500 weeks

compensation at the rate of $549.42 per week

and burial expenses up to but not exceeding

$2,500.00.

Under S.C. Code Ann. §§ 42-1-70, -175 and

§§ 42-9-110, -130, Scott Wilkinson’s sole

dependents at the time of his death, his

surviving spouse, Lea Ann Wilkinson, and his

minor son, Tyler Wilkinson, are each entitled to

one-half of the benefits awarded herein.

Under S.C. Code Ann. §§ 42-15-55, Tyler

Wilkinson’s mother, Lea Ann Wilkinson, is

appointed his guardian ad /item for the purpose

of this claim.

73a

11. Under S.C. Code Ann. §§ 42-9-320, payment of

benefits to Tyler Wilkinson in this claim must

be made to a person appointed for that purpose

by the probate court.

12. The Occupational Accident policy Scott

Wilkinson purchased from Zurich American

Insurance Company is a collateral source and,

therefore, Palmetto State Transportation

Company and Canal Insurance Company are

not entitled to receive credit for benefits paid

under that policy or to receive benefits directly

from that policy. McLeod v. S.C. Ins. Co., 272

S.C. 254, 251S.E.2d 193 (1979). See also Estate

of Ratenni v. Grainger, 298 S.C. 276, 379 S.E.2d

890 (1989 )(collateral source rule prevents

defendant from offsetting its liability for

insurance proceeds received by injured party as

a result of a premium paid by the injured

party).

ORDER

It is ordered that defendants Palmetto State

Transportation Company and Canal _ Insurance

Company shall pay death benefits in the amount of

$549.42 per week for a total of 500 weeks to Scott

Wilkinson’s sole dependents, Lea Ann Wilkinson and

Tyler Wilkinson, in equal shares and shall reimburse

burial expenses up to but not exceeding $2,500.00.

No hearing costs are assessed in this instance.

74a

S.C. Workers’ Compensation Commission

/s/

G. Bryan Lyndon, Commissioner

Date:

re *€

[Certificate of Service omitted from

printing of this appendix]

APPENDIX F

THE SUPREME COURT OF SOUTH CAROLINA

DANIEL E. SHEAROUSE Post Office Box 11330

Clerk of Court Columbia, South

Carolina 29211

BRENDA F. SHEALY (803) 734-1080

Chief Deputy Clerk Fax (803) 734-1499

May 28, 2009

Kathryn Williams, Esquire

P.O. Box 10693

Greenville, SC 29603

Re: Wilkinson, Lea v. Palmetto State Trans

Dear Counsel:

The Court has issued the following Order on your

Petition for Rehearing in the above matter

“Petition for Rehearing is denied

s/ Jean H. Toal C.J

s/ John H. Waller, Jr. J

s/ Costa M. Pleicones J

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.