                    COURT OF APPEALS OF VIRGINIA


Present: Chief Judge Fitzpatrick, Judges Elder and Agee
Argued at Salem, Virginia


JAMES E. BERGER
                                            MEMORANDUM OPINION * BY
v.   Record No. 2293-01-3          CHIEF JUDGE JOHANNA L. FITZPATRICK
                                                 APRIL 2, 2002
DALTON LUMBER CORPORATION AND
 WOOD PRODUCTS OF VIRGINIA GROUP
 SELF-INSURANCE ASSOCIATION


          FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION

            Robert E. Evans for appellant.

            Richard D. Lucas (Lucas & Associates, on
            brief), for appellees.


     James E. Berger (claimant) contends the Workers'

Compensation Commission (commission) erred in finding that

Dalton Lumber Corporation (Dalton) was not his statutory

employer pursuant to Code § 65.2-302(A). 1    Finding no error, we

affirm the commission's decision.


     * Pursuant to Code § 17.1-413 this opinion is not
designated for publication.
     1
         Code § 65.2-302(A) provides:

            When any person (referred to in this section
            as "owner") undertakes to perform or execute
            any work which is a part of his trade,
            business or occupation and contracts with
            any other person (referred to in this
            section as "subcontractor") for the
            execution or performance by or under such
            subcontractor of the whole or any part of
            the work undertaken by such owner, the owner
                                  I.

     We view the evidence in the light most favorable to the

employer, who prevailed below.     See Westmoreland Coal v.

Russell, 31 Va. App. 16, 20, 520 S.E.2d 839, 841 (1999).       The

commission's factual findings are conclusive and binding on this

Court when those findings are based on credible evidence.        See

Code § 65.2-706; James v. Capitol Steel Constr. Co., 8 Va. App.

512, 515, 382 S.E.2d 487, 488 (1989).    "The fact that there is

contrary evidence in the record is of no consequence."        Wagner

Enters., Inc. v. Brooks, 12 Va. App. 890, 894, 407 S.E.2d 32, 35

(1991).

     So viewed, claimant sustained a compensable left eye injury

on March 29, 2000 while working for Fred Robinson who built

utility sheds on Dalton's property.

     Dalton is a "planer mill" that purchases logs and rough cut

lumber to plane into finished lumber for resale.    After the logs

and rough cut lumber are planed into finished lumber they are

graded for resale.   A certain amount of the planed rough cut

lumber is not finished lumber quality and is graded below resale

finished lumber.   Dalton found that this waste lumber could be

used to build utility sheds for its customers and the profit


          shall be liable to pay to any worker
          employed in the work any compensation under
          this title which he would have been liable
          to pay if the worker had been immediately
          employed by him.


                                 - 2 -
from the sale of the utility sheds would offset the cost of the

waste lumber.    Dalton contracted with an individual to build

this type of shed on its property with the waste lumber.      When

this individual ceased to build the sheds, Robinson undertook

this work.    Neither shed builder was an employee of Dalton.

     Claimant worked full-time for another employer in an

unrelated business and worked part-time for Robinson building

utility sheds for a few hours in the morning.    The utility sheds

were built in an open work shed on Dalton's property.       Robinson

provided the tools and the knowledge of how to build the sheds.

Dalton provided the materials and paid Robinson a certain amount

per completed shed depending on size.    Robinson paid claimant

$40 per completed shed.    Dalton posted orders for sheds of

certain sizes and specifications on a board in the work shed.

Once a utility shed was completed, Dalton would remove it,

deliver it to the customer or place it for sale on its property.

     It is undisputed that claimant was an employee of Robinson

and that Robinson was not required by statute to provide

workers' compensation insurance for him.    The deputy

commissioner found that Dalton was not claimant's statutory

employer.    The commission affirmed that finding and stated:

             In reaching this conclusion, we note the
             evidence establishes that Dalton Lumber,
             with the exception of one occasion after the
             claimant's injury, has not engaged in the
             trade, business or occupation of building
             sheds. While Dalton provided the materials
             and a location on its premises, without some

                                 - 3 -
          nexus that it was actually involved in the
          building of sheds or that building sheds was
          an integral part of its operation, no
          statutory employer relationship existed with
          Mr. Robinson and the claimant.

Claimant appealed that decision.

                                II.

     Appellant's sole issue on appeal is that the commission

erred in finding Dalton was not his statutory employer.   He

argues that the manufacture of the utility sheds was an integral

part of Dalton's trade, business and occupation because Dalton

was involved in every aspect of the manufacture except the

actual physical assembly of the sheds.

     We note that "the issue whether a person is a statutory

employee presents a mixed question of law and fact which must be

resolved in light of the facts and circumstances of each case."

Cooke v. Skyline Swannanoa, 226 Va. 154, 156, 307 S.E.2d 246,

247 (1983).   The Supreme Court has stated:

          [T]he test is not one of whether the
          subcontractor's activity is useful,
          necessary, or even absolutely indispensable
          to the statutory employer's business, since,
          after all, this could be said of practically
          any repair, construction or transportation
          service. The test (except in cases where
          the work is obviously a subcontracted
          fraction of a main contract) is whether this
          indispensable activity is, in that business,
          normally carried on through employees rather
          than independent contractors.

Shell Oil Co. v. Leftwich, 212 Va. 715, 722, 187 S.E.2d 162, 167

(1972).


                               - 4 -
     In Cinnamon v. International Business Machines Corp., 238

Va. 471, 384 S.E.2d 618 (1989), the Supreme Court extended the

"Shell Oil" test delineating each prong of the test.

          One, the so-called "normal-work test",
          relates to the determination of
          statutory-employer status as defined in [now
          Code § 65.2-302(A)]. As the language of
          th[e] statute makes clear, that prong
          relates to an owner who engages an
          independent contractor to perform certain
          work. If the work out of which the
          industrial accident arose is, in the
          language of Shell Oil, work "normally
          carried on through [the owner's] employees
          rather than independent contractors", it is,
          in the language of the statute, a "part of
          [the owner's] trade, business or
          occupation". In such case, the owner is the
          statutory employer of the injured worker,
          whether directly employed by the independent
          contractor or by a subcontractor.

Id. at 476, 384 S.E.2d at 622 (internal citations omitted).     The

second prong of the test is inapplicable to the instant case. 2

     In this case, the commission applied the Shell Oil test and

found "[i]n the current case, while the sale of sheds may be

part of Dalton's occupation and business, there is no evidence

that the actual manufacturing was work which it undertook."

(Emphasis added.)   The Shell Oil test and Code § 65.2-302(A)

require that the work performed by the injured claimant be part

of the trade or business of the alleged statutory employer and


     2
       The second prong of the test, an exception to the first
and sometimes labeled the "subcontracted-fraction test," relates
to the determination of statutory-employer status as defined in
Code § 65.2-302(B). See Cinnamon, 238 Va. at 476, 384 S.E.2d at
620.

                               - 5 -
as such the work must "normally [be] carried on through

employees."   The evidence proved that Dalton's business was to

plane lumber for resale.   It did not, except on one occasion

after claimant's injury, build any utility sheds.   Dalton

requested the size and specific type of utility shed to be

built, sold the utility sheds, delivered the utility sheds to

customers and made a profit from the sale of the utility sheds,

but it did not build the utility sheds.

     The commission's finding, that Dalton was not claimant's

statutory employer, is supported by credible evidence and within

the first prong of the Shell Oil test.

     For the foregoing reasons, we hold that Dalton was not

claimant's statutory employer, and the decision of the

commission is affirmed.

                                                          Affirmed.




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