MWCC NO. 97 12036-G-0951
BOBBY MURPHREE CLAIMANT
vs.
RICHARD C. MURPHREE
EMPLOYER
AND
MISSISSIPPI CASUALTY INSURANCE COMPANY
CARRIER
REPRESENTING CLAIMANT :
Hon. John T. Wakeland, Attorney at Law, Jackson,
Mississippi
REPRESENTING DEFENDANT :
Hon. James T. Bell, Attorney at Law, Jackson,
Mississippi
Hon. Gary K. Jones, Attorney at Law, Jackson,
Mississippi
The Commission heard the above styled cause on November 29, 1999, in the offices of the Mississippi Workers' Compensation Commission in Jackson, Mississippi, on the Employer\Carrier's "Petition for Review" by Full Commission and the Claimant's "Cross Petition for Review" by Full Commission.
Having heard the arguments offered on behalf of the parties and having thoroughly studied the record and the applicable law, the Commission affirms the "Order of the Administrative Judge" dated August 30, 1999.
SO ORDERED, the 21st day of January, 2000.
MISSISSIPPI WORKERS' COMPENSATION COMMISSION
BY: Mike Marsh
Barney Schoby
COMMISSIONERS
COMMISSIONER BOLTON, DISSENTING
I feel I must dissent from the majority opinion in this case. The threshold question is whether Dr. Ricky Murphree and Mr. Bobby Murphree enjoyed an employer-employee relationship at the time of Bobby Murphree's injury. Although Dr. Ricky Murphree has made a gallant effort to establish himself as his brother's employer, thereby causing his brother's injuries to be compensable under the Workers' Compensation Act, he has in my opinion failed.
Ricky Murphree is a chiropractor in business in Greenwood, Mississippi. His brother, Bobby, is a minister who works part-time as a carpenter. Bobby Murphree testified that he has considered himself a full-time minister for the past 20 years. He further testified that for the past 15 - 20 years he has done small construction jobs and additions on the side.
Sometime prior to the date of Bobby Murphree's injury, April 2, 1997, Ricky Murphree commenced an addition to his chiropractic clinic. The initial construction work was done by Aldren Murphree, another brother of Dr. Murphree. Before the job could be completed, however, Aldren Murphree died. Bobby Murphree was then brought in to help complete the project.
Ricky Murphree testified that he had not paid Aldren anything for his labor, leading one to believe that he certainly did not consider him an employee, or even an independent contractor. On the other hand, there was much testimony from Bobby and Ricky attempting to establish that Bobby was an employee of his brother 1 . Holding the issue of credibility in abeyance for the time being, the question becomes whether Bobby was an employee of his brother Ricky or whether he was an independent contractor. I believe he was an independent contractor.
First, let's consider the evidence produced at the hearing which points away from an employer/employee relationship. The one check received by Bobby Murphree from his brother Ricky states "labor" on the memo line. It does not state "wages. " There was no withholding for federal or state taxes. While this, in itself, is not necessarily determinative of the issue, it is nonetheless convincing when considered in combination with other facts which suggest there was not an employer/employee relationship between the Murphree brothers on this project.
Ricky Murphree had a payroll account from which he paid himself and his employees. Bobby's one check was not paid out of that account. Ricky Murphree regularly filed with the Mississippi Employment Security Commission Form UI-3, Employer's Quarterly Wage and Contribution Report, which lists all his employees. In 1997, the only reports in evidence, Bobby Murphree was never listed as an employee. In testimony at trial, Bobby stated that he had never received a W-2 or a 1099 from his brother. Ricky provided his other employees with such. Bobby testified that on his federal income tax return he reported the payment he received from Ricky as income from business rather than wages 2 . All of this evidence indicates rather clearly to me that Dr. Murphree and his brother, who were both familiar with the ways of business, never intended to establish an employer/employee relationship.
Next, we must look to the Law and the tests established by the courts to determine if Bobby, nevertheless, were the employee of his brother or if he were an independent contractor. Under the Workers' Compensation Act, independent contractors are specifically excluded from the definition of employee, and independent contractors are further defined as "one who undertakes to produce a given result without being in any way controlled as to the methods by which he attains the result." Miss. Code Ann. § 71-3-3 (d), (r) (Rev. 1 995). In applying this definition of independent contractor, the Court has developed two primary tests to be used in determining this issue. The first is the control test and the second is the relative nature of the work test.
In the first, four principle factors should be considered and applied to the facts. They are (1) direct evidence of the right or exercise of control; (2) method of payment; (3) furnishing of equipment; and (4) the right to fire. Boyd v. Crosby Lumber & Manufacturing Company , 25 0 Miss. 433, 166 So.2d 106 (1964) cited in Cooks v. Neely Lumber Company , 275 So.2d 386, 388 (Miss. 1973).
Taking these four factors on an item by item basis, Bobby Murphree fails the test as an employee. Although the testimony showed that Ricky Murphree went outside every few hours to see how things were going, there is no testimony that he told his brother how to frame the building, how to construct the joists, or how to do any of the other countless tasks which are necessary in the construction of a building. Bobby Murphree testified that the agreed upon amount and period for payment was customary for all his carpentry jobs. There was nothing unique or different about this job. Although Ricky Murphree furnished the materials, Bobby furnished his hand tools. There was no testimony that Ricky furnished any equipment to Bobby. The fourth element is the right to fire. Certainly, Ricky had the right to terminate the working relationship with his brother at will, but Bobby likewise enjoyed this same right. The owner's right to fire at will is almost always present and by itself, this element does nothing to overcome the persuasive force of the other factors just mentioned which point overwhelmingly in favor of an owner-independent contractor relationship.
Next we look to the "relative nature of the work" test. Its elements are (1) the character of the claimant's work; (2) it's relationship to the employer's business; (3) and whether the duration is sufficient to amount to the hiring of continuing services as distinguished from contracting for the completion of a particular job. 1 Larson, Larson's Workers' Compensation §43.52, cited in Boyd v. Crosby Lumber & Manufacturing Company , 250 M iss. 433, 166 So.2d 106, 110 (1964).
Bobby is a carpenter. It is a trade that requires a high degree of skill. He testified that he was an apprentice for a number of his 12 years at Conn Construction before he became a seasoned carpenter. It is also patently obvious that carpentry has no relation to the business of a chiropractic clinic even if the expansion of the clinic by the carpenter will allow the chiropractor to better serve his patients.
The third element of the relative nature of the work test looks to whether or not the job is on-going or is limited to the completion of a particular job. Bobby Murphree was hired to complete the addition to the chiropractic clinic that his brother Aldren had started. There is no evidence that either Bobby or Ricky intended Bobby to do more than that. Even adding the testimony that Bobby Murphree over the past years had done small jobs on some of his brother's rental property, this does not amount to the hiring of continuing services as distinguished from contracting for the completion of a particular job, and hence does not create an employer/employee relationship.
In the end, I feel my fellow Commissioners incorrectly concluded there was an employer-employee relationship between the brothers Murphree at the time of the accident in question. A clearer case of owner- independent contractor could hardly be established, and for that reason, I would reverse the Administrative Judge's Order and deny this claim for benefits.
Beverly Bolton
COMMISSIONER
MWCC No. 97 12036-G-0951
ATTEST:
Brenda H. Goolsby, Secretary
___________________________
MWCC NO. 97 12036-G-0951-A
BOBBY MURPHREE CLAIMANT
vs.
DR. PICKY MURPHREE
EMPLOYER
AND
MS CASUALTY INSURANCE COMPANY
CARRIER
APPEARING FOR THE CLAIMANT :
John T. Wakeland, Esquire, Jackson, Mississippi
APPEARING FOR THE EMPLOYER :
James D. Bell, Esquire, Madison, Mississippi
APPEARING FOR THE CARRIER :
Gary K. Jones, Esquire, Jackson, Mississippi
The claimant Bobby Murphree filed a petition to
controvert alleging that on April 2, 1997, he received a work-related injury
to his back and feet. The employer did not answer the petition to controvert.
The carrier answered, however, and admitted that Mr. Murphree had an accident
and serious physical injuries but denied liability for the accident, contending
that Mr. Murphree was not an employee of Dr. Ricky Murphree. Neither the
employer nor carrier paid any workers' compensation benefits, either disability
or medical. A hearing was held in the Leflore County Courthouse in Greenwood,
Mississippi, on July 28, 1999.
The issues to be resolved by the Administrative Judge are as follows:
1. Whether an employer-employee relationship existed between Dr. Ricky Murphree and his brother Bobby Murphree, or whether Bobby Murphree was an independent contractor when he did carpentry/construction work for Dr. Murphree; and
2. If there were an employer-employee relationship
between the two Murphree brothers, whether the carrier is liable under
the workers' compensation policy that the carrier wrote and issued covering
Dr. Murphree's clinic.
Bobby Murphree is fifty-four years old and a resident of Charleston, Mississippi. He completed high school in Charleston and received a diploma Mr. Murphree has been a minister for twenty years, and currently he is the pastor of the Church of God of Prophecy in Charleston. Before he became a minister, he worked about twelve years for Conn Construction Company in Columbus as a carpenter building houses.
In addition to the ministry, Mr. Murphree has been doing small construction jobs on the side for fifteen or twenty years, doing repair work and additions to residences and businesses. He said he typically hires out by the hour or the day, depending on the job, and he has never had written contracts for his jobs. He has done a lot of small repair jobs for his brother, Dr. Ricky Murphree, through the years. Dr. Murphree, a chiropractor, owns rental property.
Sometime in 1997, Dr. Murphree asked his brother to "hire to him by the day" to put an addition on his chiropractic clinic in Greenwood. Dr. Murphree gave him a sketch of what he wanted done to the building; there were no professional blueprints.
Mr. Murphree said they established his wage at $150.00 a day to be paid weekly. Dr. Murphree oversaw the job site and furnished the equipment and supplies for the addition. Bobby Murphree provided his hand tools. Dr. Murphree hired and paid other workers on the job site. Bobby Murphree had no part in the hiring of the other construction workers and did not know them before the job.
After about a week on the job, on April 2, 1997, Mr. Murphree had an accident. He was standing on a plate on top of a 12-foot wall with a tape in one hand and a pencil in the other. He fell, landing on his feet on the concrete. He sprained his back, sprained his ankles, and broke both his heel bones. He received medical treatment from Dr. W. E. Anderson, II, orthopaedic surgeon in Greenwood. Later, on July 20, 1999, he also consulted Dr. Walter R. Shelton, orthopaedic surgeon in Jackson.
On April 2, 1997, the day of the accident, Dr. Murphree wrote a check to Bobby Murphree in the amount of $ 1,000.00, on an account headed "Dr. Rick C. Murphree." Dr. Murphree indicated on the check that the money was for "labor." (Exhibit 4). Bobby Murphree said he included that $ 1,000.00 on Schedule C of his income tax return for 1997.
Bobby Murphree has an accountant prepare his tax returns. On his 1995 and 1996 income tax returns, Mr. M urphree's occupation is stated to be "Minister/carptr." (Exhibit 9). On the Schedule C, profit or loss from business form, his principal business is said to be "Sub-contract/carpenter work." He said the CPA typed in those titles. In 1996, on his Schedule C for carpentry work, he reported gross income of $6,104.00, and in 1995 he reported gross income of $6,926.00.
Since the accident on April 2, 1997, Mr. Murphree has been unable to do any construction work. He said he has constant pain and has difficulty walking, especially on an unleveled surface. He is in need of additional medical care, probably an expensive operation to his heels.
After the injury, Mr. Murphree preached from a wheel chair. His church has appointed his wife assistant pastor to help him maintain his duties as minister of the church. Since the accident, he has been unable to discharge the full duties of his ministry for his church.
Dr. Richard C. (Ricky) Murphree testified that he originally hired his other brother, Aldren Murphree, to be in charge of the building project at the chiropractic clinic. Aldren Murphree developed cancer and subsequently died. After Aldren got sick, Dr. Murphree called in Bobby to build the addition for him. Dr. Murphree agreed to pay Bobby by the day at the rate of $150.00 a day, and he said he had the right to terminate Bobby. The foundation had been poured when Bobby Murphree started work.
Dr. Murphree hired two or three other carpenters and one helper at the same time as Bobby. One of the workers was a patient, and the others he hired from the street. One had come to him looking for work. Some of them worked three or four weeks.
Dr. Murphree furnished all building materials other than the hand tools, and he oversaw the work. He made the decisions about every detail, and he supervised and inspected the construction work every few hours between patients. He obtained the building permit from the City of Greenwood.
The addition took six to eight months from beginning to end, with some breaks. Most days there were two or three people working on the addition. Dr. Murphree paid by check, usually on a construction account. The reason he did not use a construction account check to pay Bobby Murphree on April 2, 1997, was because he did not have checks for the construction account at that time. Dr. Murphree said the $ 1,000.00 check to his brother was for 6-2/3 days of work.
The chiropractic clinic building is owned by Rick C. Murphree individually. Richard C. Murphree, P.A. owns the addition which is as big as or bigger than the original building. Dr. Murphree said he borrowed the money for the addition in the name of Richard C. Murphree, P.A., at the request of his bank.
Dr. Murphree has workers' compensation insurance coverage for his clinic. Richard C. Murphree, P.A. is named as the insured under the workers' compensation insurance policy with NIS Casualty Insurance Company. Dr. Murphree said that when he applied for workers' compensation insurance in 1993, he had two employees. Dr. Murphree understood that any employees he added to his practice would be covered under his workers' compensation policy. For the year from November 17, 1996, through November 17, 1997, Dr. Murphree paid premiums for "clerical office employees" only. His insurance agent asked for coverage of clerical workers only and described the business as "a general chiropractic clinic." (Exhibit 7).
Dr. Murphree's records indicate that in 1997, he issued payroll checks to himself and ten other people. He issued W-2 forms to these same people. He issued 1099 forms to three additional people. He explained that these various employees were office staff, therapists, insurance clerks, and janitorial workers.
Dr. Murphree said his agent obtains the insurance for him. He has always used the same insurance agent, Billy Ray Champion at Farm Bureau in Charleston. Dr. Murphree said the agent completed the "Employer's First Report of Industrial Injury" which is marked in this case as Exhibit 5. Mr. Murphree carries liability insurance as well. He explained that he told his agent he wanted "zero exposure," and he thought he was covered for every possibility.
The medical records of Dr. W. E. Anderson, II, orthopaedic surgeon in Greenwood, were received into evidence. Dr. Anderson treated Bobby Murphree for bilateral heel fractures, examining him first on April 2, 1997. On November 3, 1997, Dr. Anderson said that Bobby would not be able to return to work for three to six months because of the serious bilateral heel fractures. On March 18, 1998, Dr. Anderson noted:
After carefully considering the pleadings, pretrial statements, lay and medical evidence, the demeanor of the witnesses at the hearing, and the applicable law, the Administrative Judge finds as follows:
1. On April 2, 1997, the claimant, Bobby Murphree, received a serious injury to both his heels while he was working on a building addition at his brother's chiropractic clinic.
2. Bobby Murphree's average weekly wage was $117.38, figur ed from his 1996 tax return, Schedule C for carpentry work, using the gross profit he reported for the fifty-two weeks of 1996 as the closest and fairest measure of his average weekly wage as a carpenter, a part-time occupation. His 1997 income tax figures are not in evidence, and using $150.00 a day times five or $750.00 a week does not fairly reflect his regular carpentry income.
3. Because of the accident of April 2, 1997, the claimant was temporarily totally disabled from April 2,1997, until March 18, 1998, when Dr. Anderson assigned a permanent impairment rating, indicating the claimant had reached maximum medical improvement.
4. The parties stipulated that the extent of permanent occupational disability resulting from the accident of April 2, 1997, if any, is an Issue to be resolved at a later date.
5. On April 2, 1997, Bobby Murphree was an employee of his brother, Dr. Rick Murphree, and an employee-employer relationship existed between them. In the Mississippi Workers' Compensation Act ("Act"), "employee" is defined as follows:
By way of contrast, "Independent contractor" is defined as follows:
The question of whether a specific claimant is an employee or an independent contractor has traditionally turned on the issue of control or, more particularly, the right of control of the owner/employer over the worker/contractor. The four principal factors under the "control test" are (1) direct evidence of right or exercise of control of the details of the work done; (2) method of payment, (3) the furnishing of equipment; and (4) the right to fire. Georgia-Pacific Corporation v. Crosby , 393 So.2d 1348 (Miss. 1981); Boyd v. Crosby Lumber & Manufacturing Company , 250 Miss. 433, 166 So.2d 106 (1964). Other guides have been listed by Vardaman Dunn in his Mississippi Workers' Compensation 153-54, § 130 (3d ed. 1982) (footnotes omitted), in regard to the actions of the employer:
2. Whether he has the power to fix the price in payment for the work, or vitally controls the manner and time of payment.
3. Whether he furnishes the means and appliances for the work.
4. Whether he has control of the premises.
10. Whether he is obliged to pay the wages of said employees.
(c) The skill required of the one employed in the particular occupation;
(d) Whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
(e) The length of time for which the person is employed;
(f) The method of payment;
(g) Whether or not the work is an integral part of the regular business of the employer.
In the case of Bobby Murphree, the application of the control test supports t he employment relationship. Dr. Rick Murphree hired Bobby and paid him by the day, payment by time being a clear indicator toward employer-employee status, as opposed to by the job. The number of days was unspecified and unknown, but it was to be for a number of weeks or months, and during this time Bobby Murphree did not hold himself out to the public as performing an independent carpentry business but devoted all his carpentry time to the business of building an addition to Dr. Murphree's clinic.
Dr. Murphree testified that he had complete control over the details of the construction project which he had designed himself, and he supervised the job and the workers constantly, going out to the addition between patients, and he had the right to control the activities of Bobby Murphree. Dr. Murphree hired all the workers and had the power to fire any of the workers at any time. Dr. Murphree supplied all the materials; the work was done on his premises.
The carrier has contended that Bobby Murphree was not an employee of Dr. Murphree but an independent contractor because what Bobby was doing at the time of his injury was not a regular part of Dr. Murphree's regular business, that is, professional chiropractic services. But having a large, new addition to his clinic was a significant factor in Dr. Murphree's carrying on of his chiropractic business and his continuing delivery of professional chiropractic services.
6. The carrier is liable for workers' compensation benefits to Bobby Murphree under Dr. Rick Murphree's policy of workers' compensation insurance. It is true that the policy of insurance specifies "clerical workers" only, but that statement of classification on the policy relates to the assigning of rates and figuring of premiums to be collected from the insured. In no way does it outweigh the full-coverage status of the Mississippi Workers' Compensation Act, that is, in Mississippi Code Annotated § 71-3-5, that
When workers' compensation coverage is el ective, an employer may pick or choose which category of employees to insure and select other employees who will not be covered. Otherwise, that is, when coverage under the Act is not elective, an employer is responsible for coverage of all "workers or operatives regularly in the same business or in or about the same establishment under any contract of hire, expres s or implied." Mississippi Code Annotated § 71-3-5.
No insurance policy may limit coverage beyond that specified in the Act. Mississippi Code Annotated § 71-3-77 (1) (1992), provides
Our Workers' Compensation Act has been termed a "full-coverage" statutory scheme by the Supreme Court of Mississippi. In Donald v. Whatley , 346 So.2d 898 (Miss. 1977), Gerald Donald was an employer engaged in the pulpwood business, and he had a policy of workers' compensation insurance covering "tie, post or pole yards including drivers." 346 So.2d 898, 899. Mr. Donald contracted with a building contractor to build a residence for himself When the residence was two-thirds complete, he terminated the contract with the building contractor. Mr. Donald continued the building himself, however, using the workers who had been doing the construction work, with one of the carpenters keeping time on the others. Mr. Donald paid the workers union wages every Friday, and he furnished all the supplies except carpenter equipment.
One of the workers fell from the roof of Mr. Donald's house and was severely injured. The Commission awarded the injured worker workers' compensation benefits, and the Circuit Court and Supreme Court affirmed. Mr. Donald had stated at the hearing before the Commission that he intended the workers' compensation insurance policy to cover all of his employees, and the Commission and courts found that the policy had the effect of covering all of Mr. Donald's employees in any activity which was within the purview of the Act. Referring to Mississippi Code Annotated § 71-3-5, the Court stated:
In his treatise, 9 Larson's Workers ' Compensation Law , § 93. 10 , Professor Larson explained that under most workers' compensation acts, either by statute or court interpretation, the law dictates what is minimum coverage under the act regardless of what the carrier and employer may agree.
IT IS THEREFORE ORDERED that the employer and carrier pay workers' compensation benefits, to the claimant as follows:
1. Temporary total disability benefits at the rate of $78.25 per week beginning April 2, 1997, and continuing until March 18, 1998;
2. Penalties and interest on all due and unpaid compensation benefits;
3. Provide medical services and supplies as required by the nature of the claimant's injury and the process of his recovery therefrom pursuant to Mississippi Code Annotated § 71-3-15 (1995), General Rule 12, and the Medical Fee Schedule.
IT IS FURTHER ORDERED that the issue of whether Bobby Murphree has suffered a permanent disability as a result of the injury of April 2, 1997, be resolved at a later date, according to the agreement of the parties herein.
SO ORDERED , this the 30th day of August, 1999.
LINDA A. THOMPSON
ADMINISTRATIVE JUDGE
ATTEST:
Brenda H. Goolsby, Secretary
___________________________
1. Part of that testimony stated that Bobby and Ricky had decided that Bobby would be paid $150 per day, paid weekly, as was usual on Bobby's other jobs. However, the first and only paycheck Bobby received was for $1,000, the equivalent of 6 2/3 days pay. The check was dated coincidentally on the same day as the accident, Wednesday, April 2, 1997.
2. Q:
Did you include that $1,000 on Schedule C of your income tax return?
A:
Sure did.