Gonzalez v. Worrell (Lawyers Weekly No. 12-07-0649, 17 pp.) (Cheri Beasley, J.) (Sanford L. Steelman Jr., concurring in part & dissenting in part) Appealed from the Industrial Commission. N.C. App. Full-text opinion.
Holding: Where the defendant-subcontractor’s insurer could not produce the green signature card from its certified-mail cancellation of the subcontractor’s workers’ compensation policy, the insurer failed to prove that it successfully completed the process for canceling the subcontractor’s policy set out in G.S. § 58-36-105(b).
We affirm the Industrial Commission’s ruling that (1) the plaintiff has coverage under both the subcontractor’s and the general contractor’s workers’ compensation policies, (2) the subcontractor’s insurer is to pay plaintiff’s benefits, and (3) the general contractor’s insurer only becomes liable if the subcontractor’s insurer defaults.
Like G.S. § 58-36-110, the subcontractor’s policy requires that, if the insurer does not wish to renew the policy, it must provide the insured with notice of nonrenewal at least 45 days prior to the policy’s expiration date. The insurer does not contend that it sent the required notice of nonrenewal. Therefore, we uphold the Commission’s conclusion that the subcontractor’s policy did not lapse and was still effective once the subcontractor paid for the renewal.
The subcontractor’s insurer permitted the Scott Insurance Agency to sell its policies to the subcontractor for years and to bind the insurer based on those sales. Under the circumstances, the subcontractor was justified in believing that the insurer had conferred on Scott the power to accept renewal payments on its behalf. Thus, we affirm the Commission’s conclusion that the subcontractor’s policy was renewed when Scott accepted the premium payment and thus that the policy was in effect on the date of plaintiff’s accident.
The general contractor failed to get a certificate of insurance from the subcontractor specifically for the current project. Instead, the general contractor relied on a certificate of insurance that the subcontractor had produced for an earlier job. Accordingly, the Commission concluded that the general contractor became liable to the same extent as the subcontractor under G.S. § 97-19.
The general contractor’s failure to comply with § 97-19 makes this case distinguishable from Patterson v. Markham & Associates, 123 N.C. App. 448, 474 S.E.2d 400 (1996) (for a principal contractor to become a statutory employer under § 97-19, (i) the injured employee must be working for a subcontractor that is doing work for a principal contractor and (ii) the subcontractor must not have workers’ compensation insurance which covers the injured employee).
Concurrence & Dissent
(Steelman) I agree that the subcontractor had workers’ compensation insurance on the date of the accident.
However, Patterson and Rich v. R. L. Casey, Inc., 118 N.C. App. 156, 454 S.E.2d 666 (1995), clearly hold that for a principal contractor to be liable as a statutory employer under § 97-19, the subcontractor must have no worker’s compensation insurance. The certificate of insurance discussed in the statute is simply a means by which a principal contractor may protect itself from liability as a statutory employer, but is not in and of itself determinative of liability. Unless the subcontractor is not insured, there is no liability.