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2008-UP-293 - Kissiah v. Respiratory Products

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

William Kissiah, Plaintiff,

v.

Respiratory Products, Inc., Employer and Bridgefield Casualty Ins. Co., Carrier, Employment Staffing, Inc., Companion Property & Casualty Insurance Company, Defendants,

of whom Respiratory Products, Inc., Employer and Bridgefield Casualty Ins. Co., Carrier are the Appellants,

and  William Kissiah and Employment Staffing, Inc., Companion Property & Casualty Insurance Company are the Respondents.


Appeal From Anderson County
 Alexander S. Macaulay, Circuit Court Judge


Unpublished Opinion No. 2008-UP-293
Submitted June 1, 2008 – Filed June 5, 2008  


AFFIRMED


Roy Allen Howell, III, of Mt. Pleasant, for Appellants.

Amy V. Cofield, of Lexington and T. Lowndes Pope,  of Columbia, for Respondents.

PER CURIAM:  Respiratory Products, Inc., Employer, and Bridgefield Casualty Ins. Co., Carrier (collectively RPI) appeal the circuit court’s affirmance of the Workers’ Compensation Commission’s determination that RPI was liable for William Kissiah’s claim.[1]

FACTUAL/PROCEDURAL BACKGROUND

The only issue in this appeal is whether RPI remained liable for Kissiah’s workers’ compensation claim after it contracted with Employment Staffing, Inc. (ESI), an employee leasing company.  On May 12, 2003, Kissiah was injured while working in RPI’s Anderson office.  Shortly before his accident, RPI had entered into an agreement with ESI for ESI to lease to it part-time employees.  As part of this contract, the employment of RPI’s existing part-time employees was to transfer to ESI.  ESI memorialized their agreement in a letter dated May 2, 2003, which provided:

This is to inform you that as of 5-1-03, per our previous agreement, you have been assigned to our company.  The employees will be on ESI’s payroll effective 7am on 5-11-03.  All employees who work after this time will be the responsibility of ESI.  Our company will cover these employees for their workmans comp insurance.  . . .

Kissiah was not at work on the Friday before the contract date when the other employees completed their employment paperwork for ESI.  His accident occurred the following Monday, the first working day under the contract.  On the date of the accident, Kissiah had never heard of ESI.  He did not complete any paperwork for ESI until June 4, 2003.  He had not provided ESI with a copy of his social security card at the time of the hearing. 

ESI employee Lisa Gaines testified that if a person had not filled out an application and provided a copy of their photo identification and social security card, that person could not be an employee of ESI.  She stated ESI needed all three items to be able to pay someone.  However, she stated that if Kissiah provided ESI with his social security card, ESI would pay him for the hours he worked on May 12, but he would not be considered an employee until the time he submitted the card. 

RPI paid Kissiah one temporary total disability check after the accident but stopped paying without filing or serving a Form 15.  Although Kissiah had been out of work since the accident, he received no other payments from either RPI or ESI.  When Kissiah filed the present claim, both RPI and ESI denied liability and asserted they were not Kissiah’s employer on the date of the accident.  RPI also asserted Kissiah was injured outside the course and scope of his employment and therefore was not entitled to any benefits. 

The single commissioner held Kissiah had sustained a compensable injury by accident but had not reached maximum medical improvement.  She held he was entitled to temporary total disability benefits and continuing medical treatment.  In addition, the single commissioner found he was an employee “in limbo” between RPI and ESI and ordered both employers to split liability 50/50.  She also held RPI must pay a 25% fine on the amount of temporary total disability benefits it owed to Kissiah for improperly stopping the payment of benefits.  Both RPI and ESI appealed to the Workers’ Compensation Commission. 

The Commission affirmed the single commissioner’s ruling that Kissiah had sustained an injury by accident arising out of and in the course of his employment and was entitled to benefits.  However, it reversed the single commissioner’s division of liability and held only RPI was liable for the claim. 

The circuit court affirmed the Commission’s ruling concerning Kissiah’s entitlement to benefits.  However, it remanded the case to the Commission to rule on Kissiah’s motion to alter or amend.  In its amended order, the Commission held the proposed agreement between RPI and ESI did not affect Kissiah’s employment status.  As Kissiah failed to meet the eligibility for ESI, he remained in the employ and control of RPI on the date of his accident.  RPI appealed this ruling to the circuit court, which affirmed.  RPI then appealed to this court. 

STANDARD OF REVIEW

ESI questions whether the issue before this court is jurisdiction.  Generally, the issue of whether a claimant is an employee is jurisdictional and therefore the question on appeal is one of law.  Nelson v. Yellow Cab Co., 349 S.C. 589, 594, 564 S.E.2d 110, 112 (2002).  Thus, the appellate court can take its own view of preponderance of the evidence on the issue of jurisdiction.  Id.  However, in the present case, there is no question that Kissiah is an employee and is covered by the Workers’ Compensation Act.  The supreme court addressed the issue of whether the determination of an employee’s knowledge of a change in the ownership of the body shop where he worked, thus relieving the original employer of liability, involved jurisdiction.  Addison v. Dixie Chevrolet Co., 246 S.C. 86, 142 S.E.2d 442 (1965).  The court found:

In the case at bar there was no factual issue upon which the Commission’s jurisdiction, in the true sense of the word, depended.  It is not disputed that the respondent was an employee of Dixie Chevrolet Company and protected under its workmen’s compensation coverage at the time when Burn, its body shop foreman, took over the shop under the oral agreement before mentioned and proceeded to operate it himself, and that respondent's employment in the body shop, which had commenced, under Burn more than three years before, continued without interruption thereafter.  Interpretation of the agreement between Dixie Chevrolet Company and Burn is not involved; whether or not respondent was a statutory employee is not involved.  The seriousness of respondent’s injuries was not questioned, nor was the fact that those injuries were occasioned by accident arising out of and in the course of his employment.  The vital, and single, factual issue was whether respondent knew of and consented to the new employer-employee relationship resulting from the take-over of the body shop by Burn under the oral agreement before mentioned.  That issue was not jurisdictional; its determination by the Commission, being adequately supported by the evidence, was conclusive. 

Id. at 91-92, 142 S.E.2d at 444.

We find under Dixie, the present case does not involve a jurisdictional issue.  Accordingly, this court can reverse or modify the Commission’s decision only if the appellant’s substantial rights have been prejudiced because the decision is affected by an error of law or is clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record.  Shealy v. Aiken County, 341 S.C. 448, 454, 535 S.E.2d 438, 442 (2000); S.C. Code Ann. § 1-23-380(A)(5) (Supp. 2007).  “Substantial evidence is not a mere scintilla of evidence nor evidence viewed from one side, but such evidence, when the whole record is considered, as would allow reasonable minds to reach the conclusion the Full Commission reached.”  Shealy, 341 S.C. at 455, 535 S.E.2d at 442. 

LAW/ANALYSIS

RPI argues the circuit court erred in affirming the Commission’s decision that it was solely liable for Kissiah’s workers’ compensation claim.  We disagree. 

Section 42-1-130 defines an employee as a “person engaged in an employment under any appointment [or] contract of hire, . . . expressed or implied, oral or written . . . .”  S.C. Code Ann. § 42-1-130 (Supp. 2007).  Although no formality is required, the contract of employment is established if the parties recognize each other as employer and employee.  Shuler v. Tri-County Elec. Co-op., 374 S.C. 516, 521, 649 S.E.2d 98, 100 (Ct. App. 2007).  “Employment, like any other contract, presupposes understanding.  The new relation cannot be thrust upon the servant without knowledge or consent.”  Chavis v. Watkins, 256 S.C. 30, 34, 180 S.E.2d 648, 650 (1971) (quoting Holloway v. G. O. Cooley & Sons, 208 S.C. 234, 243, 37 S.E.2d 666, 670 (1946)).  Thus, the original employer has been held to be liable to the employee when there had been a change in the ownership and the employee had not been put on notice of the change of employer.  Addison v. Dixie Chevrolet Co., 246 S.C. 86, 91-92, 142 S.E.2d 442, 444-45 (1965); Holloway, 208 S.C. at 243, 37 S.E.2d at 671 (1946).  The employee is not chargeable with the legal consequences of the arrangement between the purchaser and seller of the business except as is known and approved by him.  Allen v. Phinney Oil Co., 241 S.C. 173, 178, 127 S.E.2d 448, 451 (1962).  The burden rested upon the employer denying liability to show that a change in the identity of his employer was made known to employee.  Chavis, 256 S.C. at 34, 180 S.E.2d at 650. 

Kissiah testified that on the date of the accident, he had never heard of ESI.  When he was at the hospital he told hospital personnel that he was an employee of RPI.  He stated no one at RPI ever told him that he was no longer an employee of RPI.  Thus, under our precedent, RPI remained liable as Kissiah’s employer for his workers’ compensation claim. 

RPI argues the statutes governing the regulation of professional employer organizations South Carolina Code Annotated Section 40-68-10 et seq. (Supp. 2007) support its claim that it is not liable for Kissiah’s claim.  It asserts that as the terms of a professional employer organization services agreement must be in writing,[2] ESI could not impose additional requirements not found in the written agreement as prerequisites of the transfer of employment.  Thus, ESI could not assert Kissiah was not its employee because he had not completed his paperwork or submitted his social security card before the accident. 

The issue of the applicability of these statutes was never raised to or ruled on by the Commission.  Therefore, it is not properly before this court.  See Smith v. NCII, Inc., 369 S.C. 236, 256, 631 S.E.2d 268, 279 (Ct. App. 2006) (“Only issues raised and ruled upon by the commission are cognizable on appeal.”). 

Furthermore, the terms of the agreement between RPI and ESI are extraneous to our decision.  As stated above, an employee is not chargeable with the legal consequences of the arrangement between employers except as is known and approved by him.  Allen v. Phinney Oil Co., 241 S.C. at 178, 127 S.E.2d at 451.  Kissiah had no knowledge of the agreement between RPI and ESI and never agreed to become an employee of ESI.  We find the Commission’s decision that Kissiah remained in the employ of RPI on the date of the accident is supported by the record.  Accordingly, we find the circuit court did not err in affirming the Commission’s decision that RPI is liable for Kissiah’s claim. 

The decision of the circuit court is

AFFIRMED. 

ANDERSON, HUFF, and KITTREDGE, JJ. concur. 


[1] We decide this case without oral argument pursuant to Rule 215, SCACR.

[2] See S.C. Code Ann. § 40-68-60 (A) (Supp. 2007) (requiring terms of a professional organization services agreement to be in a written contract).