Terry Lee Matthews v. Larry Outland,

This workers' compensation appeal has been referred to theSpecial Workers' Compensation Appeals Panel of the Supreme Court in accordance with Tennessee Code Annotated _5-6- 225(e)(3) for hearing and reporting to the Supreme Court of findings of fact and conclusions of law. The plaintiff, a logger employed by L&L Logging Co. who was injured when a tree fell on him, appeals the judgment of the trial court in which the trial court found: 1) that Waverly Wood Products, a sawmill, was not a statutory employer under Tennessee Code Annotated _ 5-6-113 and 2) the plaintiff had sustained a 1% permanent partial disability to the body as a whole. After a complete review of the entire record, the briefs of the parties, and the applicable law, we affirm the judgment of the trial court. Tenn. Code Ann. _ 5-6-225(e) (1999) Appeal as of Right; Judgment of the Circuit Court Affirmed. JAMES L. WEATHERFORD, SR.J., in which ADOLPHO A. BIRCH, JR.,J., and JOE C. LOSER, JR., SP.J., joined. Joe Bednarz and Joe Bednarz, Jr., Nashville, Tennessee, for the appellant Terry Lee Matthews. Blakeley D. Matthews and Kristen Murphy Anderson, Nashville, Tennessee, for the appellee Waverly Wood Products, Inc. MEMORANDUM OPINION Mr. Terry Lee Matthews was 34 years old at the time of trial and had an eleventh grade education. His employment history includes gunneling boats and working in fast food restaurants and construction. In the late 198's to early 199's, Mr. Matthews went to work for Mr. Larry Outland and L&L Logging Company. His job duties included cutting logs to specified lengths, working on equipment, picking up parts and doing other errands as needed for Mr. Outland. Mr. Outland had had a long history of business dealings with Mr. James Richardson. Mr. Richardson, owner of Waverly Stave Co. and Richardson Lumber Co., had been in the lumber business for many years. In August 1992, Todd Richardson, son of James Richardson, started Waverly Wood Products, Inc., a sawmill, with a loan from Richardson Lumber Co. Waverly Wood Products also leased its operating equipment from Richardson Lumber Co. Todd Richardson was the president and sole shareholder of the corporation and James Richardson was employed as secretary-treasurer receiving an annual salary of $18,. Waverly Wood Products bought logs from more than 2 different vendors. In 1993, Richardson Lumber Co. bought the property where the accident occurred and later sold it to a Jack and Margaret Johnson for $119,1 while retaining the timber rights. Richardson Lumber Co. thereafter sold the timber rights to L&L Logging Co. and LarryOutland for $44,556.6 on December 7, 1993. On December 31, 1993, L&L Logging and Mr. Outland, individually, purchased logging equipment from Richardson Logging Company for $77, via a purchase money promissory note in favor of Waverly Wood Products, Inc., and a corresponding security interest in said equipment to Richardson Lumber Co. A sub-clause in each of the financing and security documents stated that Larry Outland and L&L Logging would sell logs to Waverly Wood and repayment amounts would be calculated at $2.5 per ton of logs and pulpwood with a minimum payment of $2, per month. The subclause also provided that if such deliveries ceased, the full loan amount would be due within 3 days of the date of the last delivery. According to Mr. Outland, payment was taken out of each of his deliveries to WaverlyWood Products. It was his understanding that so long as he paid $2, per month he could sell the wood to another company and make the payments. He did not sell logs to any other company besides Waverly Wood Products in 1994. Mr. Outland saw Mr. Richardson as a creditor. Mr. Outland determined where to cut the timber and what type of trees would be cut. He had exclusive control over the hiring and firing of his employees.2 Mr. Outland provided all the equipment and set his employees' wages. He also determined to whom to sell his logs and pulpwood based upon which sawmill was "paying the most." 1The contract provided that Richardson Lumber Co. would convey title to the property via general warranty deed upon payment in full of the purchase price to be paid in monthly installments of $894.1. 2 He had fired Mr. Matthews in the past for marijuana use on the job. He later re-hired him after Mr. Matthews informed him he had stopped using marijuana. -2-