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Elms v. Renewal by Andersen

Court of Appeals of Maryland

July 21, 2014


Argued June 5, 2014.

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[Copyrighted Material Omitted]

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Circuit Court for Carroll County. Case No. 06-C-10-057891. Certiorari to the Court of Special Appeals (Circuit Court for Carroll County). Michael M. Galloway JUDGE.

ARGUED BY Stephen S. Winegrad (Winegrad, Hess, Friedman & Levitt, LLC of Owings Mills, MD) on brief FOR PETITIONER.

ARGUED BY Michael L. Dailey (Danielle E. Marone, Schmidt Dailey & O'Neill, LLC of Baltimore, MD) on brief FOR RESPONDENT.

ARGUED BEFORE Barbera, C.J., Harrell, Battaglia, Greene, Adkins, McDonald, Watts, JJ. Opinion by Greene, J.


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[439 Md. 386] Greene, J.

This case arises out of an appeal on the record from the Workers' Compensation Commission pursuant to Maryland Code (1991, 2008 Repl. Vol., 2013 Cum. Supp.), § 9-745 of the Labor and Employment Article.[1] Petitioner Richard A. Elms (" Elms" ) presents two issues for our review. The first is whether the Workers' Compensation Commission misconstrued [439 Md. 387] the law as applied to the facts when it concluded tat Elms was an independent contractor and not an employee of Respondent Renewal by Andersen (" Renewal" ).

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The second issue is whether the Court of Special Appeals erred when it held that a statutory employment analysis under § 9-508 of the Workers' Compensation Act must precede a common law employment analysis. We shall answer both questions in the affirmative and vacate the judgment of the Court of Special Appeals.


The facts of this case are undisputed as Elms was the only witness to appear before the Workers' Compensation Commission (" Commission" ), and, on appeal, both Elms and Renewal submitted to the Circuit Court for Carroll County a Joint Exhibit List that contained the same evidence presented to the Commission.

At the time of the accident giving rise to the instant case, Elms was a licensed home improvement contractor, who owned and operated an unincorporated home improvement business. The business traded as Elms Construction Company (" Elms Construction" ). Elms, trading as Elms Construction, provided general construction services such as window and door installations, roofing, and carpentry. Some years prior to entering into a relationship with Renewal, Elms secured workers' compensation insurance as a sole proprietor.[2] Elms, however, did not elect to include himself on the policy.[3] [439 Md. 388] Although it appears that Elms Construction had additional unidentified employees, the only named employee on Elms Construction's insurance policy was Richard W. Elms, Elms's son.

Renewal is a business that sells and installs windows and doors. In 2006, Elms began installing windows and doors for Renewal. Elms certified to Renewal that Elms Construction carried workers' compensation insurance. Renewal provided Elms with a document entitled " Installation Job Expectations," which included sections for " Code of Conduct," " Workmanship," " Performance," " Appearance," " General Expectations," and " Procedural Expectations," as well as a list of job site procedures and standards. Among other things, the instructions contained in the document required Elms and his workers to wear shirts bearing Renewal's logo, to place Renewal signs in customers' yards, to maintain neat physical appearances, and to be respectful and courteous while completing jobs for Renewal's customers.

On the first two installation jobs that Elms Construction performed for Renewal, Renewal's employees trained Elms Construction's employees in the methods and materials to be used. Subsequently, Renewal spot-checked installations completed by Elms Construction and occasionally required Elms to make corrections. Renewal also gave report cards to homeowners

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to rate Elms Construction installations, and Renewal then gave feedback to Elms. Elms believed that he was required to maintain a score of at least ninety percent from customer ratings.

Elms testified that by 2008 Elms Construction received eighty to eighty-five percent of its income from Renewal. At the same time, Elms Construction performed similar work for another home improvement business, Chandler Remodeling. [439 Md. 389] Elms testified that, on average, he worked for Renewal four days per week. Renewal scheduled all installations and provided Elms with a monthly calendar that listed the customers' names and addresses, the number of windows and doors to be installed at each location, and a time frame for each installation. Elms had no input as to the days scheduled or time allotted for each job. While working on Renewal installations, Elms Construction used its own trucks and, usually, its own tools, but Elms always obtained the supplies and materials for installations from Renewal's warehouse. He also occasionally used Renewal's tools such as a table saw and scaffolding. Renewal paid Elms Construction directly and did not withhold taxes. Renewal also did not subsidize or reimburse Elms for travel expenses, including gas. Elms Construction then paid its employees, including Elms.

On August 6, 2008, while installing a window at a Renewal customer's home, Elms fell from a ladder and injured his right foot.

Following his injury, Elms filed a workers' compensation claim with the Commission, alleging that he was Renewal's common law employee and was working for Renewal at the time of the injury. Before the Commission, Renewal argued that Elms was an independent contractor and not a covered employee for purposes of workers' compensation benefits. After a hearing on October 19, 2010, the Commission concluded that Elms was an independent contractor, rather than a common law employee of Renewal, and, therefore, not entitled to collect workers' compensation benefits under Renewal's insurance policy.

Elms filed a petition for judicial review in the Circuit Court for Carroll County pursuant to § 9-737.[4] The Circuit Court heard the appeal on the record of the Commission pursuant to [439 Md. 390] § 9-745(c).[5] In a Memorandum Opinion and Order dated March 20, 2012, the Circuit Court reversed the decision of the Commission, concluding that Elms was Renewal's common law employee and, therefore, entitled to collect workers' compensation benefits through Renewal. Thereafter, pursuant to § 9-750, Renewal appealed to the Court of Special Appeals, which vacated the judgment of the Circuit Court. The Court of Special Appeals issued its first opinion on April 5, 2013, and then, after granting a Motion for Reconsideration, issued a second opinion dated May 16, 2013. In both

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opinions, which are unreported, the intermediate appellate court held that the statutory employer provision of the Workers' Compensation Act, § 9-508, " abrogates the common law definitions of employer and employee 'when certain conditions are met'" and remanded the case to the Commission to determine " whether Renewal was a 'principal contractor,' whether [Elms Construction] was a 'subcontractor,' and whether [] Elms was [Elms Construction]'s sole proprietor under § 9-508(f)."

We granted Elms's petition for certiorari, Elms v. Renewal by Anderson, 75 A.3d 317, 75 A.3d 317 (2013), to answer the following questions:

1. Whether the Workers' Compensation Commission misconstrued the law as it applied to the facts under ยง 9-745 when it determined that ...

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