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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
JOHN ROBERTSON, Employee, Plaintiff, v. HAGOOD HOMES, INC.,
Employer, VILLANOVA INSURANCE COMPANY, Carrier, and/or ERIC
SCHUETTE, d/b/a PRECISION HOME BUILDERS, non-insured, Employer,
and/or JIM McGUIRT, Employer, Defendants
Filed: 2 September 2003
1. Workers' Compensation-_failure to obtain certificate of insurance--general
contractor a statutory employer of subcontractor
The Industrial Commission did not err in a workers' compensation case by holding in
effect that defendant general contractor may become the statutory employee of defendant
subcontractor and therefore liable for payment of workers' compensation benefits to plaintiff
injured employee of a sub-subcontractor under N.C.G.S. § 97-19, because: (1) the general
contractor failed to comply with N.C.G.S. § 97-19, which requires obtaining a certificate of
insurance from its subcontractor; (2) relieving defendants of liability would relegate plaintiff for
compensation protection to small subcontractors who fail to carry workers' compensation
insurance; (3) any other result would defy the explicit purpose of N.C.G.S. § 97-19 by permitting
general contractors to circumvent the law and to insulate themselves from liability simply by
interposing an additional layer of subcontractors; and (4) the chain of liability extends from the
immediate employer of the injured employee up the chain to the first responsible contractor who
has the ability to pay.
2. Workers' Compensation--notice of insurance cancellation--subletting work through
series of contracts
Although defendants contend the Industrial Commission erred in a workers'
compensation case by finding that it was more likely than not that defendant general contractor
had received notice that defendant subcontractor's workers' compensation insurance was
cancelled, the issue of notification is irrelevant on the facts of this case because: (1) defendant
failed to comply with N.C.G.S. § 97-19 by failing to obtain a certificate of insurance when it
sublet the contract; (2) defendants' act of requiring a certificate for the first contract that they
sublet to defendant subcontractor was insufficient to demonstrate compliance with N.C.G.S. §
97-19 with regard to the later contract; and (3) having chosen voluntarily to sublet a series of
individual contracts, defendants were required by N.C.G.S. § 97-19 to obtain a certificate for
each separate contract.
Judge TYSON concurring in a separate opinion.
Appeal by defendants from opinion and award entered 4 June
2002 by the North Carolina Industrial Commission. Heard in the
Court of Appeals 11 June 2003.
Jones Martin Parris & Tessener Law Offices PLLC, by Tamara R.
Nance, for plaintiff-appellee.
Marshall, Williams & Gorham, L.L.P., by Ronald H. Woodruff andF. Murphy Averitt, III, for defendants-appellants.
Eric Schuette, pro se.
James L. McGuirt, pro se.
Defendants (Hagood Homes Inc. and Villanova Insurance Company)
appeal an opinion of the Industrial Commission awarding plaintiff
(John Robertson) medical benefits, temporary total disability, and
partial disability compensation. For the reasons that follow, we
The relevant facts as found by the Industrial Commission are
summarized as follows. Jim Kenny, president of defendant Hagood,
and Eric Schuette, d/b/a Precision Home Builders, began working
together in March 1999. The terms of the first contract they
negotiated provided that Hagood, general contractor for a house
construction job, would subcontract the framing of the house to
Schuette. The property was located at Lot 15 in the Magnolia
Green Subdivision, and when Hagood sublet the Lot 15 framing
contract to Schuette, Kenny required Schuette to provide a
certificate of workers' compensation insurance. Accordingly,
Schuette had his insurance agency fax Hagood a copy of a
certificate of insurance stating that Schuette was insured under a
policy in effect from 16 March 1999 until 16 March 2000. Following
completion of the framing for Lot 15, Hagood and Schuette entered
into several additional contracts concerning different properties.
In each of these, Hagood was the general contractor for a building
construction project, and Schuette subcontracted part of the
contract. Hagood did not request or obtain a certificate ofworkers' compensation insurance when it sublet any of these
The instant case arises from one of the contracts between
Hagood and Schuette for which Hagood failed to obtain a certificate
of workers' compensation. In fall 1999, Hagood, general contractor
for a home construction project, subcontracted the framing to
Schuette. In October 1999, Schuette subcontracted the framing to
Jim McGuirt. Plaintiff was employed by McGuirt as a framer helper.
When Schuette sublet the framing contract to McGuirt, Schuette
agreed to provide workers' compensation insurance, and withheld
$1,000 from the contract fee for this purpose. However, at the
time Schuette negotiated this deal with McGuirt, Schuette knew his
workers' compensation insurance had already been canceled for
nonpayment of premiums.
On 26 October 1999, while working as a framing helper for
McGuirt, plaintiff fell from a ladder and sustained injuries. At
the time of this accident, neither McGuirt nor Schuette had
workers' compensation insurance. On 1 December 1999, plaintiff
filed a claim seeking workers' compensation and medical benefits
from defendants. Hagood denied liability, and a hearing was held
before a deputy commissioner of the Industrial Commission. The
deputy commissioner issued an opinion and award on 31 May 2001,
determining that defendants were liable for payment of plaintiff's
workers' compensation and medical expenses. Defendants appealed to
the Full Commission, which issued its opinion and award on 4 June
2002. The Industrial Commission generally affirmed the deputy
commissioner's opinion and awarded plaintiff temporary totaldisability, medical benefits, and partial disability compensation.
From this order, defendants appeal.
'Appellate review of opinions and awards of the Industrial
Commission is strictly limited to the discovery and correction of
errors.' McAninch v. Buncombe County Schools,
347 N.C. 126,
131, 489 S.E.2d 375, 378 (1997) (quoting Godley v. County of Pitt
306 N.C. 357, 359-60, 293 S.E.2d 167, 169 (1982)). Thus:
[j]urisdiction of appellate courts on appeal
from an award of the Industrial Commission is
limited to the questions (1) whether there was
competent evidence before the Commission to
support its findings and (2) whether such
findings support its legal conclusions. . . .
[F]indings of fact made by the Commission are
conclusive on appeal when supported by
competent evidence . . . even though there is
evidence to support a contrary finding of
McLean v. Roadway Express,
307 N.C. 99, 102, 296 S.E.2d 456, 458
(1982) (citation omitted). In the present case, the only findings
of fact to which defendants assigned error were findings number
nine and sixteen, stating that Hagood had likely received notice of
the cancellation of Schuette's workers' compensation insurance.
Because defendants failed to assign error to any of the
Commission's [other] findings of fact . . . these findings are
conclusively established on appeal. Johnson v. Herbie's Place
157 N.C. App. 168, 180, 579 S.E.2d 110, 118 (2003) (citation
omitted). The Commission's conclusions of law, however, are
reviewed de novo. See Shingleton v. Kobacker Grp.
, 148 N.C. App.
667, 670, 559 S.E.2d 277, 280 (2002) (question of law is subjectto de novo
review) (citation omitted).
 The primary issue raised by this appeal is whether,
pursuant to N.C.G.S. § 97-19 (2001), a general contractor may
become the statutory employer of a subsubcontractor and therefore
liable for payment of workers' compensation benefits to the injured
employee of a subsubcontractor. Resolution of this issue requires
analysis of G.S. § 97-19, which states in relevant part that:
Any principal contractor, intermediate
contractor, or subcontractor who shall sublet
any contract . . . without requiring from such
subcontractor or obtaining from the Industrial
Commission a certificate, . . . stating that
such subcontractor has complied with G.S.
97-93 hereof, shall be liable, . . . to the
same extent as such subcontractor would be . .
. for the payment of compensation and other
benefits under this Article. . . . If the
principal contractor . . . shall obtain such
certificate at the time of subletting such
contract . . . he [is not] liable . . . for
compensation. . . .
Defendants argue that the Industrial Commission erred by concluding
that under G.S. § 97-19 they are liable to plaintiff for workers'
compensation benefits. We disagree.
In its opinion and award, the Industrial Commission made the
following pertinent conclusions of law:
1. Plaintiff sustained a compensable injury by
accident . . . arising out of and in the
course of his employment with defendant Jim
McGirt on October 26, 1999. N.C.G.S. § 97-
2. Jim McGirt employed plaintiff . . . and was
uninsured. . . . Jim McGirt paid Eirk [sic]
Schuette for workers' compensation insurance.
N.C.G.S. § 97-2; [§] 97-19.
3. Eric Schuette . . . the next sub-
contractor in the chain of sub-contractors,was responsible for plaintiff's workers'
compensation insurance. N.C.G.S. § 97-19.
4. Because Eric Schuette . . . was non-insured
. . . liability is assumed by Hagood Homes,
Inc., the general contractor in the line of
sub-contractors. . . . The chain of liability
extends from the immediate employer of the
injured employee up the chain to the first
responsible contractor who has the ability to
pay. . . .
10. Because Eric Schuette . . . had no valid
workers' compensation insurance, Hagood Homes
shall be liable for all compensation and
medical treatment. N.C.G.S. § 97-19; [§] 97-
29; [§] 97-25.
Defendants argue that in order for G.S. § 97-19 to apply a
general contractor must contract directly with a subcontractor or
a subcontractor must contract with a lower tier subcontractor.
Defendants note that G.S. § 97-19 does not explicitly address the
issue of what should happen in a case where, as here, the
subcontractor contracts with a sub-subcontractor to perform work.
Defendants contend liability may not be imposed upon a general
contractor who did not contract directly with the subsubcontractor,
because the general contractor and subsubcontractor are not in
privity. On this basis, defendants assert that they are relieved
of liability. We disagree, and conclude that if the general
contractor fails to comply with G.S. § 97-19 by obtaining a
certificate of insurance from its subcontractor, then G.S. § 97-19
may be applied to an injured employee of a subsubcontractor of the
In Deese v. Lawn & Tree Expert Co., 306 N.C. 275, 277-78, 293
S.E.2d 140, 142-43 (1982), the North Carolina Supreme Court noted
that the Court has interpreted the statutory provisions of North
Carolina's workers' compensation law on many occasions[, and has]. . . been wisely guided by several sound rules of statutory
construction[.] Four of the principles articulated in Deese may
be summarized as follows: (1) the workers' compensation statutes
should be liberally construed whenever possible to avoid denying
benefits based on narrow interpretations of its provisions; (2)
appellate courts may not expand upon the ordinary meaning of the
terms used by the legislature; (3) appellate courts should avoid
adding a provision to a statute that has been omitted, which [it]
believes ought to have been embraced; and (4) the legislative
intent may be determined by consideration of the language,
purposes and spirit of the workers' compensation act. Id.
(citations omitted). In addition, the Deese Court stated another
principle of significance in the present case:
[F]inally, the Industrial Commission's legal
interpretation of a particular provision is
persuasive, although not binding, and should
be accorded some weight on appeal and not idly
cast aside, since that administrative body
hears and decides all questions arising under
the Act in the first instance.
Id. We shall endeavor to adhere to these principles in our
interpretation of G.S. § 97-19.
We first note that the language of the statute does not
prohibit its application to employees of a subsubcontractor.
Rather, the statute refers somewhat expansively to any principal
contractor, intermediate contractor, or subcontractor. We also
agree with the Industrial Commission that, if the legislature had
intended G.S. § 97-19 to apply only to those who with whom the
general contractor has contracted directly, there would be no need
of the following provision of N.C.G.S. § 97-19: Every claim . . . shall be instituted against
all parties liable for payment, and said
Commission, in its award, shall fix the order
in which said parties shall be exhausted,
beginning with the immediate employer.
Moreover, our review of the statute and its interpretive case law
compels the conclusion that it was enacted to address situations
precisely like the one presented herein:
The manifest purpose of this statute, . . . is
to protect employees . . . by imposing
ultimate liability on principal contractors,
intermediate contractors, or subcontractors[.]
. . . It is also the obvious aim of the
statute to forestall evasion of the [Workers']
Compensation Act by those who might be tempted
to subdivide their regular operations with the
workers, thus relegating them for compensation
protection to small subcontractors, who fail
to carry, or if small enough may not even be
required to carry, compensation insurance.
Greene v. Spivey, 236 N.C. 435, 443, 73 S.E.2d 488, 494 (1952)
(citation omitted). In the present case, to relieve defendants of
liability would, as described in Greene, relegate [plaintiff] for
compensation protection to small subcontractors who fail to carry
workers' compensation insurance. The statute's purpose was also
addressed in Cook v. Norvell-Mackorell Real Estate Co., 99 N.C.
App. 307, 310, 392 S.E.2d 758, 759-60 (1990), in which this Court
noted that G.S. § 97-19 is the so-called 'statutory employer' or
'contractor under' statute and that the statute:
was enacted by the Legislature to deliberately
bring specific categories of conceded
nonemployees within the coverage of the Act .
. . and to prevent principal contractors,
intermediate contractors, and sub-contractors
from relieving themselves of liability under
the Act by doing through sub-contractors what
they would otherwise do through the agency of
(citing Larson, The Law of Workmen's Compensation, vol. 1C § 49.00et seq.) (emphasis added) (citations omitted). We conclude that in
the present case, the legislative intent and purpose of G.S. § 97-
19 would be served by imposing liability upon defendants. We
further conclude that any other result would defy the explicit
purpose of G.S. § 97-19, by permitting general contractors to
circumvent the law and to insulate themselves from liability simply
by interposing an additional layer of subcontractors.
Additionally, we observe that when appellate courts in other
jurisdictions have interpreted similar statutes, they generally
have concluded that the statute may be applied to employees of a
subsubcontractor, even if the general contractor did not enter into
a contract with the claimant's employer. In Brogno v. W & J
Associates, Ltd., 698 A.2d 191, 195 (R.I. 1997), the Rhode Island
Supreme Court summarized rulings from several sister-states in
which workers' compensation statutes were construed to make the
general contractor the statutory employer for the employees of a
sub-subcontractor where the general contractor had failed to
require proof of insurance from the subcontractor. This is
exactly the situation presented in the case sub judice. The Brogno
Court also observed that:
the common denominator discernible [among the
states adopting this interpretation] . . . is
a clearly expressed legislative intention to
provide relief to an injured employee when the
general contractor . . . failed to obtain
written documentation from [subcontractor]
assuring that it had workers' compensation
Id. Similar conclusions have been reached in Mississippi and
Pennsylvania. See Crowe v. Brasfield & Gorrie Contractor, 688 So.
2d 752, 757 (Miss. 1996) (where subsubcontractor does not haveworkers' compensation insurance, the injured employee could ascend
the hierarchy to get workers' compensation coverage from the
subcontractor immediately above his employer or further up until he
received coverage); see McCarthy v. Dan Lepore & Sons Co., Inc.,
724 A.2d 938, 941 (Pa. Super. Ct. 1998), appeal denied, 560 Pa.
707, 743 A.2d 921 (1999):
[T]he key element of statutory employer status
is the vertical relationship between the
general contractor, the subcontractor, and the
sub-subcontractor, whose employee was injured.
. . . [B]y virtue of the vertical
relationship, all of the contractors up the
ladder remain potentially liable under the Act
for payment of the injured employee's workers'
compensation benefits. . . .
(emphasis added) (citation omitted). A Utah case held that:
'In the increasingly common situation
displaying a hierarchy of principal
contractors upon subcontractors upon
sub-subcontractors, if an employee of the
lowest subcontractor on the totem pole is
injured, there is no practical reason for
reaching up the hierarchy any further than the
first insured contractor.'
Jacobsen v. Industrial Comm'n of Utah, 738 P.2d 658, 661 (Utah Ct.
App. 1987) (quoting 1C A. Larson, Workmen's Compensation Law, §
49.14 (1986)) (emphasis added) . The same conclusion was reached
in New York:
[O]ur concern is whether [the workers'
compensation statute] was intended to extend
liability to a subcontractor that is twice
removed from the uninsured employer. We are
of the opinion that it was so intended. The
purpose of the statute, in our view, is to
protect an injured employee and place
liability on the insured contractor or
subcontractor nearest to the uninsured
employer in the chain of subcontractors. A
contrary conclusion would frustrate the true
intent of the statute[.]
Minnaugh v. Topper & Griggs, Inc., 69 A.D.2d 965, 966, 416 N.Y.S.2d
348, 349 (N.Y. App. Div. 3d Dep't. 1979) (emphasis added).
Finally, from Tennessee:
The injured employee was an employee of a
sub-contractor under the sub-contractor . . .
. In other words, as between the parties in
this case it is a stepping stone. . . . [T]he
primary responsibility is on first the
employer of the injured employee, then if that
employer can't pay him, he must take it a step
up. There is no connection between this
injured employee and the sub-contractor and
the general contractor. They are only
connected by reason of the statute.
Tayloe Paper Co. v. Jameson, 211 Tenn. 232, 239, 364 S.W.2d 882,
Thus, appellate courts in other jurisdictions have concluded
that more than one employer in a contractor subcontractor employer
pyramid may qualify as an injured worker's statutory employer[.]
Selle v. Boeing Co., 17 Kan. App. 2d 543, 543, 840 P.2d 542, 542
(1992). These decisions employ a variety of metaphors to describe
relationships among general contractor, subcontractors, and
subsubcontractors. However, regardless of whether the parties are
characterized as a chain, a ladder, a totem pole, a pyramid,
stepping stones, or simply a hierarchy, the stated conclusion is
the same as that reached by the Industrial Commission in the
instant case: that the chain of liability extends from the
immediate employer of the injured employee up the chain to the
first responsible contractor who has the ability to pay. Further,
we agree with the Rhode Island Supreme Court:
To hold otherwise would be to permit general
contractors and construction managers to be
relieved of responsibility merely by ensuring
that the project is sub-subcontracted out. . .. [O]ur holding ensures that both general
contractors and [subcontractors] require
written proof of workers' compensation
insurance which in turn will ensure that
subcontractors require the same from the
sub-subcontractors, and so on down the line.
Brogno v. W & J Associates, Ltd., 698 A.2d 191, 194 (R.I. 1997).
While clearly not precedent for this Court, these holdings from
other jurisdictions are persuasive.
Defendants also argue that imposing workers' compensation
liability upon them is improper because, even if they are deemed to
be plaintiff's statutory employer, they would still be subject to
a tort suit by plaintiff. Defendants misstate the law in this
regard. See, e.g., Rich v. R.L. Casey, Inc., 118 N.C. App. 156,
158-59, 454 S.E.2d 666, 667 (where defendant, as a principal
contractor, is plaintiff's statutory employer defendant is
entitled to benefit from exclusivity provisions of workers'
compensation law, and workers' compensation benefits available to
plaintiff through defendant's workers' compensation carrier
constitute plaintiff's exclusive remedy), disc. review denied,
340 N.C. 360, 458 S.E.2d 190 (1995) .
We conclude that the Industrial Commission did not err by
concluding that on the facts of this case G.S. § 97-19 may be
applied to defendants to impose liability for plaintiff's workers'
compensation benefits and compensation.
 Defendants also argue that the Industrial Commission erred
by finding that it was more likely than not that Hagood had
received notice that Schuette's workers' compensation insurance was
cancelled. Because we conclude that the issue of notification isirrelevant on the facts of this case, we are not required to
resolve this question.
G.S. § 97-19, which addresses certain obligations and
responsibilities attendant upon the parties' execution of
contracts, is written in terms of individual contracts and
subcontracts (Any principal contractor, intermediate contractor,
or subcontractor who shall sublet any contract
for the performance
of any work) (emphasis added). In this vein, the statute provides
that a general contractor who obtains a certificate of compliance
with workers' compensation at the time of subletting such
contract is relieved of liability as regards employees injured in
the performance of the contract. In that situation, the issue of
notification to the general contractor regarding termination of the
subcontractor's workers' compensation insurance may be relevant:
[The general contractor] complied with
N.C.G.S. § 97-19 by obtaining a certificate of
insurance, at the time of subletting its
contract to [subcontractor]
, . . . and
thereafter in good faith relied on its
purported validity in the absence of notice of
cancellation prior to the expiration of the
policy period. . . . [The general contractor]
did not have knowledge of the cancellation
prior to plaintiff's injury. Accordingly, we
conclude that the Commission's findings
support the conclusion that [general
contractor] was not a statutory employe[r].
Patterson v. Markham & Associates,
123 N.C. App. 448, 453-54, 474
S.E.2d 400, 403, disc. review denied,
344 N.C. 474, 478 S.E.2d 5
(1996). Based upon Patterson
and G.S. § 97-19, it appears that a
general contractor who obtains a certificate of workers'
compensation insurance is entitled to rely upon its validity until
the earlier of (1) the completion of the contract, or (2)notification that the insurance was cancelled. However, in the
case sub judice
, it is undisputed that defendant Hagood failed to
comply with G.S. § 97-19 when it subcontracted framing to Schuette
for the job on which plaintiff was injured. As Hagood failed to
obtain a certificate of insurance when it sublet the contract,
notification of the cancellation of Schuette's workers'
compensation insurance is irrelevant.
Nor was the defendant's act of requiring a certificate for the
first contract that they sublet to Schuette sufficient to
demonstrate compliance with G.S. § 97-19 as regards the later
contract. In Southerland v. B.V. Hedrick Gravel & Sand Co.
N.C. 739, 483 S.E.2d 150 (1997), the North Carolina Supreme Court
upheld the Industrial Commission's conclusion that to comply with
G.S. § 97-19 a general contractor must actually obtain
Defendants' argument that by contracting with
plaintiff to the effect that plaintiff shall
furnish a certificate of insurance, defendants
required from plaintiff a certificate of
insurance and therefore satisfied N.C.G.S. §
97-19, . . . [although] defendants [n]ever
actually received a certificate . . . is
without merit. The . . . word 'require' in
this instance means in fact actually obtain a
at 741, 483 S.E.2d at 151. In the instant case, it is
uncontroverted that defendants neither requested nor obtained a
certificate for the contract at issue.
Finally, we observe that defendant Hagood was free to execute
a contract with Schuette that sublet several jobs in a single
contract. Or, if defendants wished to secure Schuette's assistance
with framing on an as needed basis, they might have hiredSchuette as an employee. Indeed, after finishing the job at issue
herein, Schuette went to work for Hagood as an employee. However,
in the present case, defendants chose to structure their business
relationship by executing a series of individual contracts for
separate construction projects. Having chosen voluntarily to
sublet a series of individual contracts, defendants were required
by G.S. § 97-19 to obtain a certificate for each separate contract.
For the reasons discussed above, we conclude that the
Industrial Commission's findings of fact were supported by
competent evidence, and that they support its conclusions of law.
We further conclude that the Industrial Commission did not err by
concluding that defendants are liable for plaintiff's workers'
compensation benefits. Accordingly, the opinion and award of the
Industrial Commission is
Judge MARTIN concurs.
Judge TYSON concurs in the result with separate opinion.
TYSON, Judge concurring.
I concur with the result of the majority's opinion which
affirms the opinion and award of the North Carolina Industrial
Commission (Commission). I agree with the majority's
determination that N.C. Gen. Stat. § 97-19 provides liability to
the general contractor when an employee of the subcontractor is
injured under these facts. The majority's discussion and focus on
out of state statutes and case law is not germane to the resolution
of this case. The language of North Carolina's statute and case
law is sufficient to impose liability on the general contractorunless there is a defense.
N.C. Gen. Stat. § 97-19 provides a defense to the general
contractor's liability. If the principal contractor, intermediate
contractor or subcontractor shall obtain such certificate
[verifying workers' compensation insurance] at the time of
subletting such contract to subcontractor
, he shall not thereafter
be held liable to any employee of such subcontractor for
compensation or other benefits under this Article. N.C. Gen.
Stat. § 97-19. Under the statute, a contractor is entitled to a
defense from liability if, at the time of subletting the contract
covering the job in which the employee was injured, the contractor
had obtained a certificate of insurance. If there is one contract
with multiple houses, only one certificate covering the period of
work need be obtained. However, if there are separate and distinct
contracts, the statute requires a new certificate be issued at the
time of subletting each contract.
James Kenny, president of Hagood Homes, testified that when he
received the certificate of insurance for Precision Homes he had
only one verbal contract with [Precision Homes] at that time for
one house. (t 69). The certificate of insurance specifically
stated that it was provided for Lot 15 Magnolia Greens. Kenny
acknowledged that he did not request subsequent certificates of
insurance for the later jobs. Eric Schuette, owner of Precision
Homes, testified that each house was a separate verbal contract
between Precision Homes and Hagood Homes.
The Commission found:
6. Schuette and Hagood Home began working
together in March of 1999. At that time,Schuette and Jim Kenny, president of Hagood
Homes, entered into a verbal contract for
Schuette to frame a house on Lot 15 in the
Magnolia Green subdivision. That was the only
house contracted for at that time. ... The
certificate [of insurance], provided in
discovery, had a notation at the bottom that
it was for Lot 15 Magnolia Green, and that the
policy was to be effective for the period from
March 16, 1999 to March 16, 2000.
7. Schuette completed the house on Lot 15, and
then over the next six months entered into
separate verbal contracts with Jim Kenny to do
four more houses. Each house was a new verbal
contract. The evidence is uncontradicted that
Jim Kenny did not request a new certificate of
insurance at the time each new contract was
entered into with Schuette. Had Kenny asked
for a certificate of insurance at the time the
contract on the house plaintiff was injured at
was sublet, Schuette would not have been able
to provide one, because his insurance had been
Neither of these findings of fact are contested and they are
binding on appeal. There is competent evidence in the record to
support the findings of the Commission that Hagood Homes and
Precision Homes entered into separate contracts. Because the
contracts were separate and Hagood did not request nor receive a
subsequent certificate of insurance at the time of subcontracting
the house where plaintiff was injured, Hagood cannot defend under
N.C. Gen. Stat. § 97-19 on the grounds that he (1) received a
certificate of insurance for the first house and (2) did not
receive notice of the cancellation of the insurance.
Hagood Homes does not have a defense under N.C. Gen. Stat. §
97-19 to the imposition of liability for the injury by accident of
plaintiff. I vote to affirm the Commission's order.
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