                    COURT OF APPEALS OF VIRGINIA


Present: Chief Judge Fitzpatrick, Judges Willis and Bumgardner
Argued at Salem, Virginia


GLENWOOD EDWARD JOHNSON
                                      MEMORANDUM OPINION * BY
v.       Record No. 0907-98-3   CHIEF JUDGE JOHANNA L. FITZPATRICK
                                         JANUARY 12, 1999
M S CARRIERS, INC. and
 UNINSURED EMPLOYERS' FUND


         FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION
           George L. Townsend (Chandler, Franklin &
           O'Bryan, on briefs), for appellant.

           Thomas G. Bell, Jr. (Timberlake, Smith,
           Thomas & Moses, on brief), for appellee M S
           Carriers, Inc.

           No brief or argument for appellee Uninsured
           Employers' Fund.



     In this workers' compensation case, Glenwood E. Johnson

(claimant) appeals the commission's decision declining

jurisdiction because employer did not have three or more

employees regularly in service within Virginia.    Claimant also

appeals the commission's finding that employer's "all-state"

endorsement provision in its out-of-state workers' compensation

policy did not subject it to the jurisdiction of the commission.

 Finding no error, we affirm the commission's decision.

                                 I.

     "Under familiar principles, we view the evidence in the

light most favorable to the party prevailing below.   The
     *
      Pursuant to Code § 17.1-413, recodifying Code § 17-116.010,
this opinion is not designated for publication.
commission's findings of fact will be upheld on appeal if they

are supported by credible evidence."   Uninsured Employer's Fund

v. Clark, 26 Va. App. 277, 280, 494 S.E.2d 474, 475 (1998).

     So viewed, the evidence established that claimant, a

resident of Virginia, was employed as an over-the-road (OTR)

truck driver for employer beginning on July 19, 1994.   While

employer's headquarters is located in Memphis, Tennessee,

claimant drove routes nationwide, including occasional deliveries

in Virginia.   Claimant estimated that approximately twice per

month he would unload or pick-up a load in Virginia, although he

was dispatched out of Tennessee.
     Employer presented evidence that it is subject to the

workers' compensation laws of Tennessee and that its insurance

policy contains an "all-state" endorsement provision, covering

claims made in states other than Tennessee.   Employer concedes

that it has two employees regularly in service in Virginia.

These include Gary Santolla (Santolla), a driver recruiter in

Dublin, Virginia, and an unidentified local driver in Richmond,

Virginia.   While the company has several other OTR drivers who

reside in Virginia, these employees are all dispatched from

Tennessee and travel nationwide.

     Employer owns terminals in Texas, Tennessee, Georgia, Ohio

and West Virginia.   The company does not own any facilities in

Virginia.   However, it leases an office building in Dublin, where

Santolla works, and maintains "drop yards" in both Dublin and



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Chester, where no employees work but loads are frequently picked

up and dropped off.   More than three OTR drivers use the drop

yards in Virginia.

     Based upon this evidence, the commission held that it lacked

jurisdiction over the claim. The commission wrote:
               Upon consideration of the cases and from
          this record, we find the Deputy Commissioner
          correctly determined the Commission does not
          have jurisdiction over this claim because the
          employer had "regularly in service less than
          three employees in the same business within
          the Commonwealth" pursuant to Code
          § 65.2-101(2)(h). We agree that "regularly
          in service" implies more than occasional
          pick-ups and drop-offs or merely driving
          through Virginia. We further agree that in
          view of this finding, the "all-states"
          endorsement carried by the employer on its
          workers' compensation policy does not subject
          the employer to jurisdiction.

                                II.

     On appeal, claimant contends that the commission erred in

holding that employer had less than three employees regularly in

service within the Commonwealth.   He argues that credible

evidence does not support the commission's finding because on any

given day, employer dispatched an OTR driver to unload or pick-up

a load in Virginia.   Accordingly, claimant concludes, employer

collectively had three employees working within the Commonwealth.

We disagree.

     "[O]nce an employee proves that his or her injury occurred

while employed in Virginia, an employer has the burden of

producing sufficient evidence upon which the commission can find




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that the employer employed less than three employees regularly in

service in Virginia."   Craddock Moving & Storage Co. v. Settles,

16 Va. App. 1, 2, 427 S.E.2d 428, 429 (1993), aff'd per curium,

247 Va. 165, 440 S.E.2d 613 (1994).

     "Whether a person is an `employee' and whether an employer

has three or more employees `regularly in service' are pivotal

determinations in deciding if an employer is subject to the Act."

Cotman v. Green, 4 Va. App. 256, 258, 356 S.E.2d 447, 448 (1987).

Both full-time and part-time employees who are regularly

employed to carry out the trade or business of the employer must

be counted in determining the number of employees "regularly in

service" to employer.   See id. at 258-59, 356 S.E.2d at 448.

"[A]ny person hired by the employer to work in the usual course

of the employer's business is an `employee' under the Act

regardless of how often or for low long he may be employed.     Id.

at 258, 356 S.E.2d at 448 (citing Hoffer Bros. v. Smith, 148 Va.

220, 226, 138 S.E. 474, 476 (1927)).

     In the present case, credible evidence supports the

commission's finding that employer did not fall within the

purview of the Act.   It is undisputed that employer has two

employees, Santolla and an unidentified local driver, who work on

a regular basis within the Commonwealth.   However, the other

various OTR drivers, delivering loads in Virginia and stopping at

the "drop yards" on any given day, do not constitute the third

necessary employee.   We conclude that this evidence is not



                               - 4 -
sufficient to establish the required basis of regularity of a

single employee under the Act.    Like the commission, we agree

that "`regularly in service' implies more that occasional

pick-ups and drop-offs or merely driving through Virginia."

Accordingly, we affirm the commission's decision. 1

                                                         Affirmed.




     1
      Claimant also argues that employer's insurance policy
containing an "all-state" endorsement provision subjects employer
to the jurisdiction of the commission. This argument is without
merit. The "all-state" endorsement does not create an obligation
in Virginia, and employer is not required to maintain coverage
since it did not have three employees regularly in service in
Virginia. See Thompson v. Graebel Van Lines, No. 0676-88-4 (Va.
Ct. App. Mar. 16, 1989).




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