           IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Cargill Meats and Sedgwick          :
Claims Services,                    : No. 363 C.D. 2016
                                    : Submitted: October 7, 2016
                        Petitioners :
                                    :
                 v.                 :
                                    :
Workers’ Compensation               :
Appeal Board (Heffner),             :
                                    :
                        Respondent :


BEFORE:       HONORABLE P. KEVIN BROBSON, Judge
              HONORABLE MICHAEL H. WOJCIK, Judge
              HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE WOJCIK                                            FILED: December 29, 2016


              Cargill Meats (Cargill) and its insurer, Sedgwick Claims Services
(Insurer), petition for review of the order of the Workers’ Compensation Appeal
Board (Board) insofar as it reversed a workers’ compensation judge’s (WCJ)
denial of the petition of the Uninsured Employers Guaranty Fund (UEGF) to join
Cargill as Carl Heffner’s (Claimant) statutory employer under Section 302(a) of
the Pennsylvania Workers’ Compensation Act (Act).1 We affirm.

       1
          Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §461. Section 302(a) states, in
relevant part:

                     A contractor who subcontracts all or any part of a contract
              and his insurer shall be liable for the payment of compensation to
              the employes of the subcontractor unless the subcontractor
(Footnote continued on next page…)
             In March 2014, Claimant filed a claim petition alleging that he
suffered a disabling cardiac injury on February 18, 2014, due to heavy exertion
activity at the Cargill plant in Wyalusing, Pennsylvania while in the course and
scope of his employment as a truck driver for Dunmore Repair & Sales
(Employer). Employer filed an answer to the petition denying all of the material
allegations raised therein.
             In April 2014, Claimant filed a claim petition against UEGF alleging
that Employer did not maintain workers’ compensation insurance coverage and
was not approved as self-insured at the time of the work-related injury. In June
2014, UEGF filed a petition to join Cargill as an additional employer.
             Before the WCJ, Cargill stipulated that it: (1) has its own trucking
distribution network; (2) uses its trucking distribution network to transport its
products from, among other places, its Wyalusing facility; (3) routinely utilizes the
services of outside trucking companies to handle its excess transportation needs for
its products, including its Wyalusing facility; and (4) entered into a contract with
Ronald Wickwire representing Employer to transport products from its Wyalusing
facility. Reproduced Record (R.R.) at 173a, 185a.


(continued…)

             primarily liable for the payment of such compensation has secured
             its payment as provided for in this act. Any contractor or his
             insurer who shall become liable hereunder for such compensation
             may recover the amount thereof paid and any necessary expenses
             from the subcontractor primarily liable therefore.

                     For purposes of this subsection, a person who contracts
             with another . . . to have work performed of a kind which is a
             regular or recurrent part of the business . . . of such person shall be
             deemed a contractor, and such other person a subcontractor.


                                               2
             The contract was executed by Cargill as “Shipper” and Ronald
Wickwire d/b/a Employer as “Carrier;” required Carrier to secure and pay for
workers’ compensation insurance and any other legally required insurance; and
was “non-exclusive” in that Carrier was free to accept and transport freight from
companies other than Cargill. R.R. at 174a, 179a-180a, 181a, 182a, 185a.
Additionally, the contract stated that “Carrier shall be an independent contractor
and shall not be or act as an agent or employee of Shipper,” and that “Shipper
exercises no control or supervision over the employees of Carrier and disavows
any right to do so and Shipper in no way directs the operations of Carrier or the
manner of its performance.” Id. at 181a.
             Claimant testified that on February 18, 2014, he was at Cargill’s meat
packing plant to drop his trailer and to pick up another for delivery to Boston. R.R.
at 46a-47a. He stated that he parked at the loading dock next to another of
Employer’s drivers and that the other driver had trouble closing the doors of his
trailer. Id. at 48a-49a. He testified that while helping to close the doors of the
other truck, the other driver pulled away from the loading dock, which caused
Claimant to run behind the truck while holding on to the doors.          Id. at 52a.
Claimant stated that he ran as fast as he could until he was out of breath and could
not run any more, and that he began to feel ill after closing the doors of the other
truck. Id. at 52a, 75a-77a. Claimant testified that he contacted Ron Wickwire,
reporting that he thought that he was having a heart attack, and staff from Cargill
went to his aid and contacted an ambulance. Id. at 54a-55a. He stated that he was
transported by ambulance to a high school from which he was flown by helicopter
to a hospital in Sayre where a stent was placed in his artery. Id. at 55a-57a.
Claimant testified that he did not have any prior heart problems and that he


                                           3
continues to receive cardiac treatment and suffer effects from his condition. Id. at
59a-61a, 62a, 63a-64a.            He stated that he was supposed to undergo cardiac
rehabilitation, but he lost his insurance because Employer went out of business
shortly after his work injury. Id. at 61a-62a. Claimant also testified regarding the
wages that he was paid by Employer.
                 Ronald Wickwire testified that he was Employer’s sole owner and that
it was a sole proprietorship. R.R. at 106a-107a. He stated that the business closed
in March 2014, and that its workers’ compensation insurance was cancelled for
nonpayment the preceding November.                    Id. at 107a, 129a.       He identified the
contract with Cargill and stated that 60% to 65% of Employer’s business was
hauling for Cargill. Id. at 114a-116a. He acknowledged that a fictitious name
filing with the Pennsylvania Department of State lists his wife, Twyla Wickwire,
as Employer’s owner. Id. at 142a-143a, 146a, 149a.2
                 Kevin Olsen, M.D., a board certified cardiologist testified by
deposition. He stated that he began treating Claimant on February 24, 2014. N.T.
8/14/143 at 6.        Dr. Olsen opined that, based on Claimant’s history, physical
examination, and the results of diagnostic studies and surgical interventions,
Claimant suffered a work-related heart attack on February 18, 2014, in the course
of his employment as a truck driver. Id. at 10-11. He diagnosed Claimant with
preexisting high blood pressure and coronary artery disease, and stated that
Claimant underwent surgery for the work-related heart attack, and that he
performed a second angioplasty. Id. at 7, 10, 12. He opined that Claimant has

       2
          UEGF also filed a petition to join Twyla Wickwire as an additional defendant, but that
petition is not at issue in the instant appeal.

       3
           “N.T. 8/14/14” refers to the transcript of Dr. Olsen’s deposition testimony.


                                                  4
coronary artery disease and suffered the heart attack precipitated by extreme
emotional and physical stress and duress at the time of injury. Id. at 8, 11, 17. Dr.
Olsen further opined that Claimant is disabled and unable to work and will need to
continue medications and possibly physical therapy or cardiac rehabilitation. Id. at
17, 18.
             In his decision, the WCJ deemed Claimant’s testimony credible and
accepted it as fact. R.R. at 187a. The WCJ deemed Wickwire’s testimony credible
and accepted it as fact to the extent that he acknowledged Claimant’s status as an
employee of Employer and confirmed the contract between Employer and Cargill;
the WCJ rejected his testimony that Twyla Wickwire was not Employer’s owner.
Id. The WCJ also deemed Dr. Olsen’s testimony credible and persuasive and
accepted as fact “that Claimant suffered an acute myocardial infarction on
February 18, 2014 in the course of employment with [Employer] for which
Claimant underwent surgery . . . and that Claimant remains disabled as a result of
the February 18, 2014 incident.” Id. Further, the WCJ found that Claimant was an
employee of Employer on the date of injury earning an average weekly wage of
$1,333.04 with a corresponding compensation rate of $888.69. Id.
             However, with respect to UEGF’s joinder petition, the WCJ found:

             The evidence of record viewed as a whole fails to
             establish that the joined Defendant, Cargill acted as
             Claimant’s statutory employer. In arriving at this
             conclusion, this Judge notes that at all times up to and
             including the date of injury, [Employer] had entered into
             a non-exclusive contract for freight transportation
             services with Cargill. At all times relevant to these
             proceedings, [Employer] operated as an independent
             contractor.    Cargill’s relationship with [Employer]
             consisted exclusively of that of a Shipper and a Carrier.
R.R. at 187a (emphasis in original).

                                         5
              As a result, the WCJ concluded:               the evidence establishes that
Claimant suffered a compensable work-related injury in the nature of a heart attack
while working for Employer on February 18, 2014, which resulted in ongoing
medical treatment and temporary total disability from that day forward; based on
those findings and the record evidence, Cargill does not meet the definition of a
statutory employer; Employer is responsible for payment of benefits for Claimant’s
work-related injury and did not carry workers’ compensation insurance as of the
date of injury; and timely notice having been provided, UEGF is responsible for
the payment of Claimant’s temporary total disability benefits and reasonable and
necessary medical costs and legal fees that were incurred. R.R. at 188a.
              Accordingly, the WCJ issued an order: granting the claim and UEGF
claim petitions; denying UEGF’s joinder petition; and directing UEGF to pay
Claimant temporary total disability benefits, all reasonable and necessary medical
expenses, and litigation costs. R.R. at 189a.
              UEGF appealed to the Board, arguing that the WCJ erred in failing to
find that Cargill was Claimant’s statutory employer.4 The Board initially noted
that in determining which entity is a statutory employer under Section 302(b) of
the Act, 77 P.S. §462, courts generally apply the five-part test set forth by the
Supreme Court in McDonald v. Levinson Steel Co., 153 A. 424, 426 (Pa. 1930).5


       4
          Claimant filed a cross-appeal, alleging that the WCJ erred in finding that the second
procedure was performed to address his pre-existing coronary artery disease and not his work-
related injury and erred in not ordering Employer to reimburse a valid subrogation lien of his
private health insurer. However, these claims are not at issue in this appeal.

       5
          The McDonald opinion states that the following five elements are essential to establish
a statutory employer’s liability: (1) an employer who is under contract with an owner or one in
the position of the owner; (2) premises occupied by or under the control of such employer; (3) a
(Footnote continued on next page…)
                                               6
However, the Board also noted that in Six L’s Packing Co. v. Workers’
Compensation Appeal Board (Williamson), 44 A.3d 1148, 1157 (Pa. 2012), the
Supreme Court held that the McDonald test does not apply to claims under Section
302(a). As the Board explained:

              Section 302(a) provides that a contractor who
              subcontracts all or any part of a contract will be liable for
              the payment of workers’ compensation benefits to
              employees of the subcontractor, in the event the
              subcontractor fails to maintain workers’ compensation
              insurance. 77 P.S. §461. Any entity in any industry, is
              considered to be a contractor for purposes of Section
              302(a) if it contracts with another “to have work
              performed of a kind which is a regular or recurrent part
              of the business, occupation, profession or trade.” Id.
              The party that is contracted with, in such a situation, is
              presumed to be a subcontractor. Id.

                     Based on Cargill’s Stipulation and the credible
              testimonial and documentary evidence of record, it is
              clear that contracting with outside trucking companies to
              haul its freight, including beef from the Wyalusing
              facility, is a regular and recurrent part of Cargill’s
              business. In fact, transporting freight from its facilities is
              such a regular and recurrent part of Cargill’s business
              that it has even secured its own trucking distribution
              network and prepared generic form contracts to use with
              the numerous outside trucking companies it uses to
              supplement the distribution network. Thus, it cannot be
              disputed that the work Cargill contracted with
              [Employer] to perform, i.e., transport beef, is work that is
              a regular and recurrent part of Cargill’s business.
              Accordingly, under Section 302(a) of the Act, Cargill is


(continued…)

subcontract made by such employer; (4) part of the employer’s regular business is entrusted to
such subcontractor; and (5) the claimant is an employee of such subcontractor.


                                              7
             Claimant’s statutory employer. 77 P.S. §461. See also
             Six L’s, 44 A.3d at 1158.
R.R. at 212a-213a (emphasis added).
             The Board rejected the WCJ’s reliance on the non-exclusive contract
between Cargill and Employer, explaining that “the substantial credible evidence
of record establishes that Cargill maintains its own dedicated hauling fleet to
transport its products,” and that “Cargill routinely engages the services of outside
transportation companies, like [Employer], to ship [its] excess production” because
the dedicated fleet “is insufficient to meet Cargill’s production capacity and
subsequent shipping demands.” R.R. at 213a. The Board determined that “[i]n
light of these undisputed facts, the fact that the contract is non-exclusive does not
support a conclusion that [Employer] is an independent contractor” and “supports
the conclusion that subcontracting with third-party transportation companies is a
significant, regular, and recurrent part of Cargill’s business.” Id. at 213a-214a.
             The Board also rejected Cargill’s argument that Six L’s is
distinguishable “because in Six L’s, the trucker was hauling tomatoes to a process
plant, while in the matter at hand, [Employer] was not delivering unfinished
products between Cargill locations as part of processing the product, but was
delivering a finished product to customers through a private hauler.” R.R. at 214a.
The Board explained that “[t]his is a distinction without a difference” as the Court
in Six L’s found that “because Six L’s contracted with a trucking company to have
work performed of a kind that was a regular and recurrent part of Six L’s business,
Six L’s was the claimant’s statutory employer under Section 302(a),” and that
“[s]uch is the case here” because “Cargill contracted with [Employer] to have work
performed of a kind that was a regular and recurrent part of its business . . . .” Id.
Accordingly, the Board reversed that portion of the WCJ’s decision concluding

                                          8
that Cargill was not Claimant’s statutory employer under Section 302(a) of the Act
at the time that he suffered his work-related injury. Id. at 214a, 216a.6
              Cargill’s sole claim on appeal7, 8 is that the Board erred in determining
that it was Claimant’s statutory employer under Section 302(a) at the time of his
injury. Specifically, Cargill asserts that the holding in Six L’s should be limited to
cases where the statutory subcontractor performs services that are required to
complete the manufacture of a finished product, which in this case is the slaughter
of cows and the processing of beef. Cargill contends that Claimant was injured
when he was in the course of transporting a finished product from Cargill’s facility
to its customers, which is not a regular, recurrent, or integral part of its business
within the ambit of Section 302(a). We disagree.
              Section 302(a) provides, in relevant part, that “[f]or purposes of this
subsection, a person who contracts with another . . . to have work performed of a
kind which is a regular or recurrent part of the business . . . of such person shall be
deemed a contractor, and such other person a subcontractor.” 77 P.S. §461. In Six
L’s, the Supreme Court held that where transporting produce from its warehouse to
its processing facility was a regular and recurring part of a produce company’s

       6
           The Board also rejected Claimant’s allegations of WCJ error and affirmed the
remainder of the WCJ’s decision. These portions of the Board’s opinion and order are not at
issue in this appeal.

       7
         UEGF filed a notice of intervention in Cargill’s appeal and a brief in support of the
Board’s opinion. Claimant did not file a brief in this appeal.

       8
          This Court’s review is limited to determining whether an error of law was committed,
whether necessary findings of fact are supported by substantial evidence, or whether
constitutional rights were violated. Saladworks, LLC v. Workers’ Compensation Appeal Board
(Gaudioso), 124 A.3d 790, 796 n. 6 (Pa. Cmwlth. 2015), appeal granted, 135 A.3d 1016 (Pa.
2016).


                                              9
business, and the company subcontracted with a harvesting and hauling company
to perform these services, the produce company was secondarily liable as the
statutory employer under Section 302(a) of a driver for the uninsured harvesting
and hauling company who was injured in a vehicle accident. 44 A.3d at 1158-59.
See also Zwick v. Workers’ Compensation Appeal Board (Popchocoj), 106 A.3d
251, 255 (Pa. Cmwlth. 2014) (holding that a licensed realtor whose business
included construction rehabilitation work on residential properties for resale, who
subcontracted with a worker to perform construction rehabilitation work, was a
statutory employer under Section 302(a) when the worker was injured while
installing flooring).
              As noted above, in this case, Cargill stipulated that it has its own
trucking distribution network; that it uses this trucking distribution network to
transport its products from, among other places, its Wyalusing facility where
Claimant was injured; that it routinely uses the services of outside trucking
companies such as Employer to handle its excess transportation needs for its
products including its Wyalusing facility; and that it entered into a contract with
Employer to transport products from its Wyalusing facility. R.R. at 173a, 185a.
Based on these facts, the Board correctly concluded that the transportation of the
finished meat product to Cargill customers from Cargill facilities is a “regular or
recurrent part” of Cargill’s business9 and that the Supreme Court’s holding in Six

       9
          Additionally, Claimant testified regarding Cargill’s transportation of its finished
product, in relevant part, as follows:

              Q.     Okay, well, I mean, I’ve never been a truck driver so –
              A.     Yeah, that was my primary duty to pick up this load in
              Pennsylvania and to deliver it in Boston at a certain point in time
              by a specific point in time.
(Footnote continued on next page…)
                                              10
(continued…)


              Q.      Right. So you would – the trailer was backed up and all
              you did was take the cap part and hook it up to that trailer at
              Cargill right?
              A.      When I got to Cargill I dropped my empty trailer in the lot.
              I had an empty.

              Q.    Okay.
              A.    So I dropped it up in the lot and then I went to the gate and
              checked in with the guard and went to the docks.
                    I backed underneath the trailer, hooked it up and then Mr.
              Brown showed up.

              Q.     In terms of the place you were at Cargill I have Wyalusing?
              A.     Wyalusing.

                                              ***

              Q.     Was this your primary loading and unloading facility or did
              you have any others?
              A.     Ah . . . that was primarily where I went to get loaded for
              beef. Usually it was a drop and hook.
                     I would only have to drop my empty hook a loaded one and
              go. On this particular night production was late and loading the
              beef patties that needed to go –

              Q.      But you didn’t load the beef into the trailer on that date at
              Cargill correct?
              A.      No, I did not.

              Q.     You were just waiting for Cargill employees to do that?
              A.     Right.

R.R. at 71a-73a.

              Likewise, Wickwire testified, in pertinent part, as follows:

              Q.     What was your understanding of Cargill’s business?
              A.     My understanding of what, ma’am?
(Footnote continued on next page…)
                                               11
(continued…)


           Q.     Of Cargill’s business. What did they do?
           A.     Slaughtered cows for meat.

           Q.     And what was your part of Cargill’s business? What were
           they asking you to do?
           A.     Haul the meat to the customers.

                                          ***

           Q.      All you did was show up, they would fill up the truck and
           they would give you a packaging slip and you would deliver it, is
           that correct?
           A.      Yes.

           Q.     Then you would be paid in accordance with the contract
           when it was delivered; is that correct?
           A.     Yes.

                                          ***

           Q.    It was your testimony, Mr. Wickwire, that Cargill had its
           own beef hauler; correct?
           A.    Yes. Uh-huh (yes).

           Q.      So they had their own dedicated hauler, and then they had
           enough work that they had to use you as an overflow hauler; is that
           correct?
           A.      Oh, they used many, many carriers.

           Q.     Okay. So they had their own dedicated hauler and then
           they used other companies to haul the beef as well; is that correct?
           A.     Yes, ma’am.

           Q.     Okay. And Cargill subcontracted that hauling work –
           hauling load work to you and other companies; correct?
           A.     Yes.

                                          ***
(Footnote continued on next page…)
                                           12
L’s is not distinguishable. Because Claimant was injured while performing this
“regular or recurrent part” of Cargill’s business, the Board did not err in
determining that the holding in Six L’s governs this matter and that Cargill was
Claimant’s statutory employer under Section 302(a) of the Act. See Six L’s, 44
A.3d at 1158-59 (“Viewing the statutory scheme as a whole, however, and
employing the principle of liberal construction in furtherance of the Act’s remedial
purposes, we find it to be plain enough that the Legislature meant to require
persons (including entities) contracting with others to perform work which is a
regular or recurrent part of their businesses to assure that the employees of those
others are covered by workers’ compensation insurance, on pain of assuming
secondary liability for benefits payment upon a default.”) (citations omitted).
              Accordingly, the Board’s order is affirmed.




                                        MICHAEL H. WOJCIK, Judge




(continued…)


              [WCJ]: The objection will be sustained as to use of the term
              subcontractor, in its legal sense.

R.R. at 114a-115a, 126a, 143a-144a.


                                          13
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Cargill Meats and Sedgwick          :
Claims Services,                    : No. 363 C.D. 2016
                                    :
                        Petitioners :
                                    :
                 v.                 :
                                    :
Workers’ Compensation               :
Appeal Board (Heffner),             :
                                    :
                        Respondent :


                                 ORDER


           AND NOW, this 29th day of December, 2016, the order of the
Workers’ Compensation Appeal Board dated February 9, 2016, at No. A15-0406 is
AFFIRMED.




                                   __________________________________
                                   MICHAEL H. WOJCIK, Judge
