LOGGINS v. PHILLIPS DRYWALL

Claimant appeals from a decision of the Administrative Law Judge filed March 26, 1996 finding that the claimant failed to prove by a preponderance of the evidence that he was an employee of Phillips Drywall or that as a partnership he elected for coverage under the Arkansas Workers' Compensation law. Based upon our de novo review of the entire record, we find that the claimant has failed to meet his burden of proof. Therefore, we affirm the decision of the Administrative Law Judge.

Donnie Loggins is a partner in the partnership Donnie Loggins Drywall. In April of 1992, claimant was hired as Donnie Loggins Drywall to hang drywall for Phillips Drywall on a motel job in Branson, Missouri. The agreement between Phillips Drywall and claimant was for claimant to receive six cents per foot for hanging drywall. Claimant's job at Donnie Loggins Drywall was only to hang the drywall. Phillips contracted with others to finish the drywall. The evidence reveals that claimant worked on several more motels and several homes for Phillips Drywall when ultimately on August 18, 1994 claimant sustained an injury when he fell.

Claimant's partner in Donnie Loggins Drywall was his father, Michael Loggins. Depending on the jobs, claimant and his father would either hang the drywall themselves or they would employ helpers. Phillips Drywall only paid Donnie Loggins Drywall six cents per foot hung based upon all the work performed by Donnie Loggins, his father, and the workers' hired by Donnie Loggins Drywall. Donnie Loggins Drywall was responsible for paying its workers, claimant and claimant's father out of the money received from Phillips Drywall. At the end of the year, Donnie Loggins Drywall received a Form 1099 from Phillips Drywall. Donnie Loggins never received W-2's nor were any withholdings deducted from the payments received by Donnie Loggins Drywall.

The primary issue in this case is whether claimant was an employee of Phillips Drywall or an independent contractor at the time of his injury. There are many factors to be considered in determining whether an injured person is an employee or an independent contractor for purposes of workers' compensation coverage. Several of these factors are: (1) The right to terminate the employment without liability; (2) the method of payment, whether by time, job, piece of other unit of measurement; (3) the right to control the means and method by which the work is done; (4) the furnishing, or the obligation to furnish, the necessary tools, equipment and materials; (5) whether the person employed is engaged in a distinct occupation or business; (6) the skills required in a particular occupation; (7) whether the employer is in business; (8) whether the work is an integral part of the regular business of the employer; and (9) the length of time for which the person is employed. Franklin v. Ark. Kraft, Inc., 5 Ark. App. 264, 635 S.W.2d 286 (1982).

In our opinion, the evidence clearly shows that claimant was an independent contractor at the time of his injury. The financial agreement between claimant and Phillips Drywall is highly indicative of an independent contractor relationship. Claimant was paid by the foot for completed drywall by Phillips Drywall; no income taxes or social security taxes were deducted from claimant's payments; claimant received an IRS Form 1099 at the end of each year; and claimant hired his own helpers and paid them from the money he received from Phillips Drywall. Moreover, claimant's 1992 tax statements reflect that he received money from Tom Jolley Construction Company, Donnie Loggins Drywall, Mudslingers, Inc., Potts Construction Co., and Phillips Drywall. Claimant held himself out as a contractor and paid taxes under the business name of Donnie Loggins Drywall.

Although the evidence reflects that Phillips Drywall did have the right to control the claimant's activities to some extent, this is not necessarily conclusive of an employee-employer relationship. When contracting with another, one has the right to control as much of the details of the work as is necessary to assure that the end result is what he bargained for and the existence of this right is not indicative of an employment relationship. See Larson's Workmen's Compensation Law, § 44.2 (1993). Consequently, the evidence pertaining to the right to control or the exercise of control is insufficient in this case to be probative of an employment relationship.

Likewise, when the other factors set forth inFranklin are reviewed, it is clear that the claimant was an independent contractor and not an employee. Claimant had his own equipment and tools while Mr. Phillips furnished the sheetrock and nails for the project. It is common for a prime contractor to supply the necessary materials for a job when the contract between the prime contractor and independent contractor is merely for the work to be done, not the material used in the work. There was testimony that Mr. Phillips had the right to terminate his relationship with claimant if he was not satisfied with claimant's work.

These factors coupled with the strong evidence regarding the financial agreement between Donnie Loggins and Phillips Drywall clearly indicate that claimant was an independent contractor at the time of his injury. Accordingly, we find that claimant has failed to prove that he was an employee of Phillips Drywall at the time of his injury.

Claimant argues that respondent's payment of workers' compensation premiums to cover unidentified employees operate to provide coverage for claimant. However, this is not the law. While we acknowledge that if respondent had withheld a portion of the contract price out of payment to Donnie Loggins to cover workers' compensation premiums, the carrier and, thus, respondent would be liable for claimant's injury, there is no evidence that this occurred in this claim. Liggett Construction Co. v. Griffen, 4 Ark. App. 247, 629 S.W.2d 316 (1982). Likewise, if one of claimant's helpers had sustained an injury and if it were proven that claimant was an uninsured subcontractor, the prime contractor would be responsible for the injury of claimant's helper. Id. However, neither of these scenarios are applicable to the facts in this case. There is simply no evidence that respondent withheld any workers' compensation premiums out of the contract price respondent paid to claimant. Accordingly, claimant's argument must fail.

Based upon our de novo review of the entire record, we find that the claimant has failed to prove by a preponderance of the evidence that he was an employee of Phillips Drywall as opposed to an independent contractor. Therefore, we affirm the decision of the Administrative Law Judge denying and dismissing this claim.

IT IS SO ORDERED.