Appeal by defendants from Opinion and Award entered 4 August
2006 by the North Carolina Industrial Commission. Heard in the
Court of Appeals 24 April 2007.
The Law Firm of Hutchens, Senter & Britton, by William L.
Senter, for plaintiff-appellee.
Huggins, Pounds and Davis, L.L.P., by Dallas M. Pounds and
Jennifer H. Webb, for defendants-appellants.
Durden Home Improvement PTR, a partnership, d/b/a Durden Home
Improvement (DHI), and Robert Lee Durden, Sr. (Mr. Durden),
Robert Lee Durden, Jr. (Robert), Terry Durden (Terry) and Jerry
Lynn Durden (Jerry) in their partnership capacity and
individually (defendants) appeal from an Opinion and Award of the
North Carolina Industrial Commission (the Commission) orderingdefendants to pay compensation, medical expenses and attorneys'
fees to David Oscar Britt (plaintiff) and remanding to determine
penalties for failing to maintain workers' compensation insurance.
In 1982, Mr. Durden formed Durden Home Improvement as a
family-operated home improvement business. The business operated
as a sole proprietorship until 1998 when Mr. Durden transferred
ownership of the business to his wife and their son, Terry, due to
Mr. Durden's poor health. Mr. Durden testified that he believed
the business was incorporated in 1998, however, no incorporation
documents were produced during discovery and defendants stipulated
at the hearing that the corporation had been dissolved. At one
time, while Mr. Durden owned the business, he maintained a workers'
compensation insurance policy. However, in 1998, Mr. Durden
cancelled the policy after he was advised by an insurance agent
that the business was not required to carry workers' compensation
insurance because it did not employ three or more regular
On 28 January 2003, Jerry, Robert and Terry, Mr. Durden's
sons, entered into a partnership agreement and named the
partnership Durden Home Improvement PTR (DHI). During 2003, DHI
employed Chris Durden, Dan Caulder, Robert Britt and Timothy Miller
in addition to the partnership members. The amount of compensation
received by each employee during 2003 ranged from $605.00 to
$13,660.00. Mr. Durden testified that the partnership usually
employed between one and three individuals in addition to familymembers. He also testified that the additional employees worked
sporadically, sometimes working for a week or two or three weeks
or sometimes for one day.
The Commission heard conflicting testimony regarding
plaintiff's employment with defendants. Plaintiff testified that
Mr. Durden approached him about working as a crew leader for DHI.
According to plaintiff, Mr. Durden offered him a position working
five days per week as an overseer and offered to pay him one
hundred dollars per day. According to Mr. Durden, plaintiff was
not hired to work for DHI. Plaintiff was hired to work personally
for him to help him with home improvement projects at his home.
Also, Mr. Durden stated that he offered to pay plaintiff one
hundred dollars per day, but he did not specify the number of days
that he needed plaintiff's help.
On 5 August 2003, the first day of the home improvement
project, plaintiff was injured when the scaffolding he was standing
on fell backwards. Plaintiff fell approximately eight feet and
suffered a fracture in his right ankle.
On 17 October 2003, plaintiff filed a workers' compensation
claim with the Commission. The claim was denied on the basis that
defendants were not covered by a workers' compensation carrier.
Plaintiff requested a hearing before the Commission. On 28 July
2005, Deputy Commissioner George R. Hall, III dismissed plaintiff's
claim for lack of jurisdiction concluding that DHI was not required
to carry workers' compensation insurance because DHI did notregularly employ three or more employees. Plaintiff appealed to
the Full Commission.
On 4 August 2006, the Full Commission reversed the denial of
benefits to the plaintiff and found that during the 2003 calendar
year, defendants regularly employed three or more employees and
therefore defendants were required to carry workers' compensation
insurance. Defendants appeal.
As an initial matter, the record on appeal does not comply
with Rule 9(b)(4) of the North Carolina Rules of Appellate
Procedure. N.C.R. App. P. 9(b)(4) (2007). This rule requires the
pages to the record on appeal be numbered consecutively. However,
despite this rule violation, we exercise our discretion to decide
the case on the merits. See N.C.R. App. P. 2 (2007); Welch
Contr'g, Inc. v. N.C. Dep't. of Transp., 175 N.C. App. 45, 49-50,
622 S.E.2d 691, 694 (2005) (exercising discretion to decide case on
the merits though there were appellate rule violations).
I. Jurisdiction Under the Workers' Compensation Act
Defendants argue the Commission erred by concluding the
defendants were subject and bound by the Workers' Compensation Act
because the evidence failed to show defendants regularly employed
three or more employees. We disagree.
Generally, [t]he standard of review on appeal to this Court
from an award by the Commission is whether there is any competent
evidence in the record to support the Commission's findings and
whether those findings support the Commission's conclusions of
law. Oliver v. Lane Co.
, 143 N.C. App. 167, 170, 544 S.E.2d 606,608 (2001). However, when an appellate court reviews findings of
jurisdictional fact entered by the Commission, the reviewing court
is required to make its own independent findings of . . .
jurisdictional fact from its consideration of all the evidence in
the record. Perkins v. Arkansas Trucking Servs., Inc.
, 351 N.C.
634, 637, 528 S.E.2d 902, 904 (2000) (internal quotations omitted).
Pursuant to N.C. Gen. Stat. § 97-2(1), an employer is subject
to the provisions of the Workers' Compensation Act (the Act) if
three or more employees are regularly employed. N.C. Gen. Stat.
§ 97-2(1) (2005). In order for defendants to be subject to the
Act, evidence showing that defendants regularly employed three or
more individuals must affirmatively appear in the record. Durham
, 59 N.C. App. 165, 170, 296 S.E.2d 3, 6 (1982); Chadwick
v. Department of Conservation and Development
, 219 N.C. 766, 767,
14 S.E.2d 842, 843 (1941). If defendant did not 'regularly
employ' [three] or more employees, he is not subject to and bound
by the Act. Patterson v. L.M. Parker & Co.
, 2 N.C. App. 43, 48,
162 S.E.2d 571, 574 (1968). However, [i]f the defendant had
[three] or more 'regularly employed' employees, the fact that he
fell below the minimum requirement on the actual date of injury
would not preclude coverage. Id.
Although there is no statutory
definition of regularly employed, this Court stated in Patterson
the term 'regularly employed' connotes employment of the same
number of persons throughout the period with some constancy. Id.,
2 N.C. App. at 48-49, 162 S.E.2d at 575.
In this case, there is competent evidence to support a finding
that during the year 2003, DHI employed three or more individuals.
DHI's accountant, Dexter McClain (Mr. McClain), testified DHI
employed Chris Durden, David Caulder and Timothy Miller during
2003. Although Mr. Durden testified that he hired plaintiff to
work for him and not for DHI, plaintiff submitted testimony that he
was paid for the work he performed on the date of the injury by a
DHI business check and supported his testimony with a copy of the
check. The evidence presented indicates that DHI regularly
employed three or more individuals and was subject to the
requirements of the Workers' Compensation Act. N.C. Gen. Stat. §
97-2(1) (2005). Therefore, the Commission's finding that DHI
regularly employed three or more employees is supported by
competent evidence in the record. Id.
II. Plaintiff's Weekly Wage
Defendants next argue the Commission erred by determining the
amount of plaintiff's average weekly wage.
North Carolina General Statute § 97-2(5) (2005) provides in
Average weekly wages shall mean the earnings
of the injured employee in the employment in
which he was working at the time of the injury
during the period of 52 weeks immediately
preceding the date of the injury . . . divided
by 52; . . . Where the employment prior to the
injury extended over a period of fewer than 52
weeks, the method of dividing the earnings
during that period by the number of weeks and
parts thereof during which the employee earned
wages shall be followed; provided, results
fair and just to both parties will be thereby
obtained. Where, by reason of a shortness of
time during which the employee has been in theemployment of his employer or the casual
nature or terms of his employment, it is
impractical to compute the average weekly
wages as above defined, regard shall be had to
the average weekly amount which during the 52
weeks previous to the injury was being earned
by a person of the same grade and character
employed in the same class of employment in
the same locality or community.
The primary intent of the N.C. Gen. Stat. § 97-2(5) is to
make certain that the results reached are fair and just to both
parties. Loch v. Entertainment Partners
, 148 N.C. App. 106, 110,
557 S.E.2d 182, 185 (2001). Our North Carolina Supreme Court has
held that, when calculating an employee's average weekly wage, the
average weekly wage should be based upon the injured employee's
earning capacity. Derebery v. Pitt County Fire Marshall
, 318 N.C.
192, 197, 347 S.E.2d 814, 817 (1986). Thus, the average weekly
wage is determined by calculating 'the amount which the injured
employee would be earning were it not for the injury.' Loch
N.C. App. at 111, 557 S.E.2d at 185 (quoting N.C. Gen. Stat. §
In this case, the Commission determined plaintiff's average
weekly wage based upon the agreement between plaintiff and Mr.
Durden. According to the agreement, plaintiff was hired to work
five days per week and receive pay at the rate of $100.00 per day.
Although plaintiff was unable to complete a week of work because of
his injuries, the Commission appropriately calculated plaintiff's
average weekly wage by determining the amount plaintiff would be
earning but for his injury. According to plaintiff's agreement
with Mr. Durden, plaintiff would have earned $500.00 per week forhis work with DHI. Thus, the Commission's finding that plaintiff's
weekly wage amounted to $500.00 was supported by competent evidence
in the record. The Commission did not err in calculating
plaintiff's weekly wage and this assignment of error is overruled.
The order of the Commission is affirmed.
Judge TYSON concurs.
Judge WYNN concurs in the result only.
Report per Rule 30(e).
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