Gerry Axelson v. Pifer Construction, Inc., Erie Insurance Exchange, & The Uninsured Employers' Fund
2120163
Va. Ct. App.Aug 22, 2017Background
- Gerry Axelson was injured falling at a worksite and sought workers’ compensation benefits against Pifer Construction, 31, LLC, and Generation Builders (Axelson’s single-member LLC).
- Generation Builders had fewer than three employees and was dismissed from the claim as not subject to the Act; dispute focused on whether Axelson was employed individually or only as Generation Builders’ managing member.
- Deputy commissioner found Axelson acted solely as Generation Builders’ managing member/employee and denied benefits, concluding 31, LLC was not Axelson’s statutory employer because Generation Builders was not in the same trade.
- The full Commission affirmed on different grounds: relying on Intermodal to require claimants be employees of an uninsured subcontractor, and finding Axelson had not made the (1)(n) election required for single-member LLC members to be employees, so Generation Builders would have insurance if he had elected.
- Axelson later argued (first raised in a Motion to Vacate) he qualified as an employee under Code § 65.2-101(1)(a); the Commission denied the motion, and the Court of Appeals deferred to the Commission’s factual finding that Axelson was not an employee under either (1)(a) or (1)(n).
- Procedurally, Axelson failed to name 31, LLC in his notice of appeal; the Court held the Commission’s order was final as to 31, LLC, dismissed the Uninsured Employers’ Fund from the appeal, but proceeded on the appeal against Pifer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether statutory-employer doctrine requires claimant to be an employee of an uninsured subcontractor | Axelson challenged Commission’s interpretation but did not prevail on this ground on appeal | Fund/31, LLC argued claimant must prove he was employee of subcontractor; Commission relied on Intermodal to require employee status of the subcontractor (not merely subcontractor entity) | Court did not decide this issue because it found Axelson was not an employee of Generation Builders; the Court left the question unresolved |
| Whether a single-member LLC member can be an "employee" under Code § 65.2-101(1)(a) (instead of only by election under (1)(n)) | Axelson argued Commission failed to consider (1)(a) and that he could be an employee under that general definition | Commission and appellees argued (1)(n) requires election and notice for single-member LLCs; Commission found Axelson did not qualify under either (1)(a) or (1)(n) | Court affirmed: Commission’s factual finding that Axelson was not an employee under (1)(a) is supported by credible evidence (no control, payroll, tax withholding, or wages shown) |
| Whether appellant’s failure to name 31, LLC in the notice of appeal requires dismissal of parties | Axelson did not name 31, LLC; Fund remained as appellee below | Appellees argued 31, LLC was a necessary party and appeal should be dismissed as to it and the Fund | Court held the appeal is final as to 31, LLC (Axelson failed to timely appeal), dismissed the Uninsured Employers’ Fund from the appeal, but proceeded against Pifer |
Key Cases Cited
- Intermodal Servs., Inc. v. Smith, 234 Va. 596 (Virginia 1988) (statutory-employer doctrine interpreted to apply to employees of subcontractors, not to change status of subcontractor itself)
- Dillon Constr. & Accident Fund Ins. Co. v. Carter, 55 Va. App. 426 (Va. Ct. App.) (2009) (determination whether facts bring person within "employee" is a question of fact; factors distinguishing employee from independent contractor)
- Creative Designs Tattooing Assocs. v. Est. of Parrish, 56 Va. App. 299 (Va. Ct. App.) (2010) (what constitutes an employee under the Act is a question of law)
- Manassas Ice & Fuel Co. v. Farrar, 13 Va. App. 227 (Va. Ct. App.) (1991) (Commission's factual findings supported by credible evidence are binding on appellate court)