CLAIM NO. E702846
Before the Arkansas Workers’ Compensation Commission
OPINION FILED MARCH 12, 2004
Upon review before the FULL COMMISSION, Little Rock, Pulaski County, Arkansas.
Claimant represented by HONORABLE KENNETH E. BUCKNER, Attorney at Law, Pine Bluff, Arkansas.
Respondent No. 1 represented by HONORABLE WILLIAM C. FRYE and HONORABLE ANDREW L. CALDWELL, Attorneys at Law, Little Rock, Arkansas.
Respondent No. 2 represented by HONORABLE RICHARD SMITH, Attorney at Law, Little Rock, Arkansas.
Decision of Administrative Law Judge: Affirmed in part and reversed in part.
OPINION AND ORDER
The Arkansas Forestry Commission and Public Employee Claims appeal from the decision of the Administrative Law Judge filed June 30, 2003, finding that the claimant was an employee of Riddell Flying Service, an uninsured employer, and finding that the Arkansas Forestry Commission was a prime contractor with Riddell Flying Service being a subcontractor, thus rendering the Arkansas Forestry Commission liable for workers’ compensation benefits to the claimant pursuant to A.C.A. § 11-9-402. Based upon our de novo review of the entire record, and without giving the benefit of the doubt to any of the parties, we find that the decision of the Administrative Law Judge must be affirmed in part and reversed in part. Specifically, we find that the Administrative Law Judge correctly found that the claimant was an employee of Riddell Flying Service, that the claimant sustained a compensable injury, and that the claimant is entitled to medical and temporary total disability benefits from the date of his injury through a date yet to be determined. However, we find that the Administrative Law Judge erred in finding that the Arkansas Forestry Commission was a prime contractor and therefore liable for workers’ compensation benefits to the claimant.
The parties stipulated that the claimant sustained serious injuries when he crashed the airplane he was flying on April 9, 1995. The parties further stipulated that the claimant earned sufficient wages to entitle him to the maximum compensation benefit rate in the event the claimant was found to be an employee entitled to workers’ compensation benefits.
The only issues for determination at the hearing held on April 4, 2003, were whether the claimant was an employee or an independent contractor of Riddell Flying Service and whether Riddell Flying Service was a subcontractor of The Arkansas Forestry Commission.
With regard to the claimant’s employment status, we find that the administrative Law Judge correctly found that the claimant was an employee of Riddell Flying Service, and that this finding should be affirmed. In this regard, the record reflects that Riddell Flying Service was in the business of flying airplanes for crop dusting and selling new and used airplanes. In 1995, Riddell Flying Service bid on and was awarded a state contract to provide firebombing services over an area of the state that had been previously declared a state of emergency due to severe ice storms in 1994 and granted Federal Emergency Management Agency money. As Riddell Flying Service had never performed such services before, Mr. Riddell solicited the help of Burl Shears, owner of Western Pilot Services out of Phoenix, Arizona. Mr. Shears has provided firefighting services on state and federal contracts for a number of years. Mr. Shears and Mr. Riddell arranged for Mr. Shears to receive one third of the contract money in exchange for Mr. Shears supervising the performance of the contract and providing one pilot and one airplane. As the contract called for three pilots and three airplanes, it was up to Mr. Riddell to provide the additional pilots and planes. Mr. Riddell made arrangements with Mooney Easley to fly one of Riddell’s planes. Riddell testified that he considered Mr. Easley to be an independent contractor. In addition the exhibits reflect that Mr. Easley received a federal 1099 form and that he was not listed as an employee on the Employer’s Quarterly Contribution and Wage Report. Mr. Riddell contacted the claimant and made arrangements for the claimant to be the third pilot and to fly one of Mr. Riddell’s planes. Like Mr. Easley, the claimant received a federal 1099 form from Riddell Flying Service and he was not listed as an employee on the Employer’s Quarterly Contribution and Wage Report. Claimant was paid $500.00 per week to be on standby and an additional $75.00 per actual flight hour. In addition, claimant’s out-of-town expenses were paid by Riddell Flying Service. While this manner of pay is indicative of an independent contractor relationship, payment is not the only factor for determination when examining the relationship between the parties.
The determination of whether, at the time of an injury, an individual was an independent contractor or an employee depends on the facts of the case. Franklin v. Arkansas Kraft, Inc., 5 Ark. App. 264, 635 S.W.2d 286
(1982). The resolution of whether an individual is an independent contractor or an employee requires an analysis of the factors related to the employer’s right to control and of factors related to the relationship of the work to the asserted employer’s business. In making a determination, the Commission must look at the factors outlined in D. B.Griffen Warehouse, Inc. v. Sanders, 336 Ark. 456, 986 S.W.2d 836 (1999) citing § 220 of the Restatement (Second) of Agency:
the extent of control which, by the agreement, the master may exercise over the details of the work;
whether or not the one employed is engaged in a distinct occupation or business;
the kind of occupation, with reference to whether in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
the skill required in the particular occupation;
whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
the length of time for which the person is employed;
the method of payment, whether by the time or by the job;
whether or not the work is a part of the regular business of the employer;
whether or not the parties believe they are creating the relation of master and servant; and whether the principal is or is not in business.
See also Aloha Pools Spas, Inc. v. Wausau, 342 Ark. 398, 39 S.W.3d 440 (2000).
These are not all of the factors which may conceivably be relevant in a given case, and it may not be necessary for the Commission to consider all of these factors in some cases. The relative weight to be given to the various factors must be determined by the Commission. Franklin, supra. However, the Arkansas Supreme Court has stated that the “right of control” is the principal factor in determining whether the relationship is one of agency or independent contractor. Sanders, supra.
The evidence reflects that the only thing the claimant provided with regard to this work was his expertise and training as a pilot and a few tools. Unlike Mr. Shears, the claimant did not have his own plane; he did not supply his own fuel; he did not supply his own radio. The claimant did not even supply his own helmet. While the claimant was a certified pilot, he was not engaged in a distinct occupation. Rather, the claimant was a pilot for hire and he left his previous occupation to go to work for Riddell Flying Service on this contract in hopes of getting more air time. Riddell Flying Service is in the distinct business of providing agricultural flying services. As part of this business, Riddell Flying Service bid on and was awarded a contract to supply aerial fire suppression. In fulfilment of this contract, claimant was hired and directed by Riddell Flying Service.
With regard to the right to control, the evidence reflects that the claimant was controlled by Riddell Flying Services. While it is true that the claimant took control of the airplane he was flying, the claimant’s activities were clearly controlled by Riddell Flying Service and Mr. Shears as directed by the Arkansas Forestry Commission. The claimant was directed where to fly, and when to commence firebombing. The claimant was not free to fly when he wanted, but had to remain on standby and fly to a designated area when instructed. We find that the right to control claimant’s work was maintained by Riddell Flying Service. Accordingly, for those reasons stated above, we find that the claimant was an employee of Riddell Flying Service on April 9, 1995, when he sustained injuries within the definition of compensable injuries as found in A.C.A. §11-9-102.
With regard to claimant and Riddell Flying Services argument that Riddell Flying Service was a subcontractor of the Arkansas Forestry Commission and therefore rendering the Arkansas Forestry Commission liable for the workers’ compensation benefits owed by an uninsured subcontractor, we find that the Administrative Law Judge erred as a matter of law. A.C.A. § 11-9-402 provides:
(a) Where a subcontractor fails to secure compensation required by this chapter, the prime contractor shall be liable for compensation to the employees of the subcontractor.
In order for the Arkansas Forestry Commission to be a prime contractor, the Arkansas Forestry Commission must be contractually obligated to a third party for the work being done by Riddell Flying Service. See. Bailey v. Simmons, 6 Ark. App. 193, 639 S.W.2d 526 (1982);Sloan v. Voluntary Ambulance Service, 37 Ark. App. 138, 826 S.W.2d 296
(1992); and Benefield Real Estate v. Mitchell, 269 Ark. 607, 599 S.W.2d 445
(Ct.App. 1980).
The evidence reflects that the Arkansas Forestry Commission was granted funds by the Federal Emergency Management Agency to mitigate the unusual fire hazard created by the ice storms of February 1994. There is no evidence that the Wildfire Abatement Plan is a contract between the Arkansas Forestry Commission and the Federal Emergency Management Agency. Thus, there is no evidence that the Arkansas Forestry Commission was contractually obligated to the Federal Emergency Management Agency with regard to the work the Forestry Commission contracted for Riddell Flying Service to perform. Therefore, we find that an essential element of creating a prime contractor, subcontractor relationship is missing. While Riddell Flying Service is a contractor to the Arkansas Forestry Commission, the Arkansas Forestry Commission is not contracted with a third party for the fire abatement program. In accordance with the Wildfire Abatement Plan, coordination and cooperation between the state and federal government were necessary to carry out the full extent of this program; however, the record is void of any evidence of a contractual obligation between these two governmental bodies regarding this program. The Wildfire Abatement Plan is not a contract between the Arkansas Forestry Commission and another entity, but merely a written plan for wildfire abatement.
The mere fact that the Arkansas Forestry Commission maintained certain control over the manner in which the contract was carried out by Riddell Flying Service does not render the Forestry Commission a prime contractor. The contract clearly sets forth the duties and responsibilities of the parties and states that Forestry Commission would have a supervisor responsible for the administration of the contract. Moreover, the contract states that the contractor, Riddell Flying Service” shall be directly responsible to this person, or his designee, in all matters concerning performance, dispatch, response standards and readiness levels . . .” The evidence reflects that this supervisor was Doug Grimmett, and that Mr. Grimmett was in direct contact with Burl Shears, the primary contact person for Riddell Flying Service. Consequently, we cannot find that this control as specified in the contract entered into between the state of Arkansas and Riddell Flying Service rendered the Arkansas Forestry Commission a prime contractor and Riddell Flying Services a subcontractor. Rather all evidence of record clearly indicates that Riddell Flying Service was the contractor to the Forestry Commission and that the Forestry Commission was not a contractor to anyone.
Therefore, for those reasons set forth herein, we affirm in part and reverse in part the decision of the Administrative Law Judge.
IT IS SO ORDERED.
___________________________________ OLAN W. REEVES, Chairman
___________________________________ KAREN H. McKINNEY, Commissioner
Commissioner Turner concurs in part and dissents in part.
CONCURRING AND DISSENTING OPINION
SHELBY W. TURNER, Commissioner
I concur with the opinion of the majority finding that claimant was an employee of Respondent No. 1, Riddell Flying Service (RFS), at the time of the accident. However, I must respectfully dissent from the finding that Arkansas Forestry Commission (AFC) was not a prime contractor.
It is really undisputed that RFS was uninsured and had a contract with AFC to provide fire suppression services by using airplanes to drop water on wildfires. The extent of claimant’s injuries and the benefits to which he is entitled are likewise not in dispute. Thus, the primary issue is whether AFC was a prime contractor and therefore liable for benefits as claimant’s statutory employer. I would affirm the Administrative Law Judge’s finding that AFC was a prime contractor.
A prime contractor is one “contractually obligated to a third person for the work being performed by the independent contractor.” Bailey v.Simmons, 6 Ark. App. 193, 639 S.W.2d 526 (1982).
The Federal Emergency Management Agency (FEMA) released funds apparently through a grant to employ firefighting aircraft to perform services pursuant to the Wildfire Abatement Plan. If AFC was contractually obligated to FEMA and/or the U.S. Forest Service (USFS), then it was a prime contractor.
The parties stipulated to the following testimony by Robert J. McFarland, retired Deputy State Forester:
4. The “Wildfire Abatement Plan” (Respondent 2, Exhibit 1, Page 1-27), was an intra-agency fire abatement plan prepared by the USFS and AFC. Because of increased hazards from ice storms, the abatement plan was drafted to facilitate release of federal emergency management funds to supplement existing fire fighting options.
5. Pursuant to ACA § 15-31-106(9), an office of state purchasing contract form was modified by the AFC for the purposes of contracting for aerial fire suppression service and said contract was awarded to Riddell Flying Services on 1/31/95, to expire on 4/30/95. (Respondent 2, Exhibit 1, Pgs. 25-52)
In my opinion, the Wildfire Abatement Plan is in fact a contract and AFC was contractually obligated to the federal government for the performance of the Plan.
The Wildfire Abatement Plan provides, in part, the following:
* * *
On March 7, 1994, representatives from the US Forest Service (USFS), Arkansas Forestry Commission (AFC), Arkansas Office of Emergency Services (OES) and FEMA met in Monticello. As a result of this meeting, FEMA tasked the USFS to perform a damage assessment and draft a plan of action for fire suppression measures required within the declared counties of Arkansas.
* * *
The Arkansas Forestry Commission maintains a cooperative agreement with the US Forest Service that has provisions for the exchange of suppression resources on a reciprocal or reimbursable basis. This can be implemented on the request of designated parties listed in the agreement, and remains effective until cancelled or released by the requesting party. By using this agreement to obtain aerial suppression support resources, the Arkansas Forestry Commission can avoid costly contracting costs and personnel training.
When requested through the agreement, the AFC is only charged “time worked” on the fire by the aircraft, and the cost of personnel assigned to manage those aircraft. When used through the agreement, the aircraft operates under the requirements of the Forest Service contracts, to which the state operation must comply. In the case of a helicopter for example, it is a Forest Service requirement that a manager be assigned to that ship prior to its leaving the home base. That manager is responsible for the management of the helicopter as well as assisting with dispatch operations and suppression work.
* * *
US Department of Agriculture (USDA) and Department of the Interior (USDI) have several vendors under contract, either on a call when needed basis, or for an extended period. By using USDA/USDI aircraft specifications for contracting aircraft, a safe level of operations and reliability can be expected. These aircraft are inspected annually to ensure they meet the specifications and are airworthy. These specifications include pilot, aircraft, aircraft equipment, and communication requirements.
* * *
Additionally, the contract between AFC and RFS mentions the contractual relationship with the federal government.
* * *
In the event of non-performance of contractual obligation by the contractor [RFS] or his agents which results in the determination by Federal authorities of non-compliance with Federal regulations and standards, the contractor [RFS] will be liable to the State in full for all penalties, sanctions and disallowances assessed against the State [by the federal government].
* * *
USFS and/or FEMA released federal funds in the form of a grant to AFC in order to carry out the Wildfire Abatement Plan. If AFC failed to follow the requirements of the Wildfire Abatement Plan, it goes without saying that FEMA would not disburse the funds, would seek reimbursement for funds spent in violation of the Plan, or impose other appropriate sanctions. AFC was certainly not allowed to spend these funds in any manner it chose. AFC was obligated to perform under the Wildfire Abatement Plan in consideration of receipt of the grant monies. AFC subcontracted part of this contract to RFS. Thus, AFC was a prime contractor and liable for claimant’s injuries since RFS was an uninsured subcontractor. Accordingly, the opinion of the Administrative Law Judge should be affirmed in its entirety.
For the foregoing reasons, I concur in part and respectfully dissent in part.
_______________________________ SHELBY W. TURNER, Commissioner