Barrv.Town & Country Properties, Inc.

Supreme Court of VirginiaSep 21, 1990
240 Va. 292 (Va. 1990)
240 Va. 292396 S.E.2d 672

46436 Record No. 891253

September 21, 1990

Present: All the Justices

Code Sec. 65.1-4.3 provides a uniform definition by which real estate salespersons and brokers can establish that they will not be deemed employees for the purposes of the Workers' Compensation Act. The trial court ruling that plaintiff is an employee as defined by the Act and consequently barred from pursuing a common-law tort action against the defendant is affirmed.

Workers' Compensation Act — Statutory Construction — Real Estate Sales Agents — Employee Defined — Contracts — Torts — Personal Injury

Plaintiff real estate agent executed an employment contract with defendant real estate broker in which they agreed that she was to be deemed an independent contractor for some, but not all, purposes. The agent was injured when she slipped and fell in a parking lot owned by the broker. She filed a motion for judgment against the broker, alleging that her injuries were caused by its negligence. The trial court dismissed the action on the grounds that Code Sec. 65.1-4.3 of the Workers' Compensation Act precluded the agent from pursuing any tort action against it. Plaintiff agent appeals.

1. Code Sec. 65.1-4 defines an employee for purposes of the Act. Code Sec. 65.1-4.3 states that for the purposes of the Act, a licensed real estate salesperson shall not be deemed an employee if certain conditions are met, including the provision that the salesperson will not be treated as an employee for federal income tax purposes.

2. Established principles of statutory construction require that when one statute speaks of a subject in a general way and another deals with a part of the same subject in a more specific manner, the two should be harmonized, if possible, and where they conflict, the latter prevails.

3. When a statute, such as Code Sec. 65.1-4.3 is clear and unambiguous, the courts cannot put upon it a construction which amounts to holding the legislature did not mean what it has actually said.

4. Under these rules of construction, plaintiff agent is an employee for purposes of the Workers' Compensation Act because her contract did not contain a provision that she was not to be treated as an employee for federal income tax purposes.

5. The trial court correctly rejected the agent's argument that she was entitled to prove that she was not an employee by relying upon the common-law definition of employee since Code Sec. 65.1-3.4 was enacted with the legislative intent of providing a uniform standard by which real estate salespersons and brokers could establish that they would not be considered employees for purposes of the Workers' Compensation Act.

Appeal from a judgment of the Circuit Court of Fairfax County. Hon. Thomas J. Middleton, Jr., judge presiding.

Affirmed.

Jack T. Burgess for appellant.

Gary B. Mims (Brault, Palmer, Grove Zimmerman, on brief), for appellee.


The dispositive issue in this appeal is whether the appellant, Lisa D. Barr, is an employee as defined by Code Sec. 65.1-4 of the Workers' Compensation Act and, consequently, barred under Sec. 65.1-40 from pursuing a common law tort action against the appellee, Town Country Properties, Inc.

Barr is a real estate agent. She executed an employment contract with Town Country Properties, Inc. and Town Country Properties, Incorporated of Maryland (Town Country), dated December 14, 1979. The contract described Town Country as a real estate broker and Lisa Barr as a real estate sales associate. Paragraph 7 of the contract, which delineated the rights and obligations of the parties, states:

Broker shall not be liable to Sales Associate for any expenses incurred by him, or for any of his acts, nor shall Sales Associate be liable to Broker for office help or expense, and Sales Associate shall have no authority to bind Broker by any promise or representation, unless specifically authorized in a particular transaction; but expenses for attorney's fees, costs, revenue stamps, title contracts, and the like which must, by reason of some necessity, be paid from the commission, or are incurred in the collection of, or the attempt to collect the commission, shall be paid by the parties in the same proportion as the commission is divided. Suits for commissions shall, agreeably to the law, be maintained only in the name of the Broker, and Sales Associate shall be construed to be a subagent only with respect to the clients and customers for whom services shall be performed, and shall otherwise be deemed to be an independent contractor and not a servant, employee or partner of Broker.

On February 25, 1986, Barr was injured when she slipped and fell in a parking lot owned by Fairfax, Ltd. and leased to Town Country. Barr filed a motion for judgment against Town Country and others, alleging that her injuries were caused by their negligence. In a motion to dismiss, Town Country argued that Code Sec. 65.1-4.3 of the Workers' Compensation Act precluded Barr from pursuing any tort action against it. The trial court considered memoranda submitted by counsel and oral argument and granted the motion to dismiss.

[1-2] Code Sec. 65.1-4, which defines an employee for purposes of the Act, states that [u]nless the context otherwise requires, 'employee' includes every person . . . in the service of another under any contract of hire or apprenticeship, written or implied except one whose employment is not in the usual course of the trade, business, occupation or profession of the employer." Code Sec. 65.1-4.3, enacted in 1984, states:

For purposes of this Act, any person who is a licensed real estate salesperson, or a licensed real estate broker associated with a real estate broker, shall not be deemed an "employee" if (i) substantially all of the salesperson's or associated broker's remuneration is derived from real estate commissions, (ii) the services of the salesperson or associated broker are performed under a written contract specifying that the salesperson is an independent contractor, and (iii) such contract includes a provision that the salesperson or associated broker will not be treated as an employee for federal income tax purposes.

We must apply the tests specified in Code Sec. 65.1-4.3 rather than the definition of employee contained in Code Sec. 65.1-4 because established principles of statutory construction require that "when one statute speaks to a subject in a general way and another deals with a part of the same subject in a more specific manner, the two should be harmonized, if possible, and where they conflict, the latter prevails." Virginia Nat. Bank v. Harris, 220 Va. 336, 340, 257 S.E.2d 867, 870 (1979).

Barr and Town Country agree that the contract complies with the tests enumerated in parts (i) and (ii) of Code Sec. 65.1-4.3. They disagree, however, whether the contract complies with part (iii). Barr argues that the phrase "shall otherwise be deemed to be an independent contractor and not a servant, employee or partner of Broker," which is contained in her contract, satisfies the statutory requirement that the contract include a provision that she will not be treated as an employee for federal income tax purposes.

We have repeatedly articulated principles of statutory construction that we must apply when a statute, such as Code Sec. 65.1-4.3, is clear and unambiguous.

While in the construction of statutes the constant endeavor of the courts is to ascertain and give effect to the intention of the legislature that intention must be gathered from the words used, unless a literal construction would involve a manifest absurdity. Where the legislature has used words of a plain and definite import the courts cannot put upon them a construction which amounts to holding the legislature did not mean what it has actually expressed.

Watkins v. Hall, 161 Va. 924, 930, 172 S.E. 445, 447 (1934).

Additionally, we must confine our inquiry to the actual words contained in the contract between Barr and Town Country. We must also assume that the legislature chose, with care, the words it used when it enacted the relevant statute, and we are bound by those words as we interpret the statute. "Courts are not permitted to rewrite statutes. This is a legislative function. The manifest intention of the legislature, clearly disclosed by its language, must be applied. There can be no departure from the words used where the intention is clear." Anderson v. Commonwealth, 182 Va. 560, 566, 29 S.E.2d 838, 841 (1944).

We hold that Barr is an employee for purposes of the Workers' Compensation Act because her contract does not contain a provision that she will not be treated as an employee for federal income tax purposes. We decline her invitation to construe the phrase in her contract that she "shall otherwise be deemed to be an independent contractor and not a servant, employee or partner of Broker" in such a manner as to satisfy the specific and unambiguous language contained in Code Sec. 65.1-4.3.

Barr argues that if her contract does not comply with Code Sec. 65.1-4.3, she is entitled to prove that she is not an employee by relying upon the common law definitions of employee. The trial court correctly rejected Barr's argument. Courts must consider the purpose of a statute and ascertain its effect on the common law. See Norfolk and W. R. Co. v. Prindel, 82 Va. 122, 130 (1886). We hold that the legislative intent underlying Code Sec. 65.1-4.3 was to provide a uniform standard by which licensed real estate salespersons and brokers could establish that they would not be considered employees for purposes of the Workers' Compensation Act.

Accordingly, we will affirm the judgment of the trial court.

Affirmed.