MARCY A. BENNER, Employee, v. ESSENTIAL NURSING SERVS., INC., UNINSURED, Employer, EZRA NYANKIRA, UNINSURED, Employer, AMOS SAMOITA, UNINSURED, Employer, THOMAS NYAGAKA, UNINSURED, Employer, CRESTVIEW NURSING HOME and AMERICAN COMPENSATION INS./RTW, Employer-Insurer, and BLUE CROSS/BLUE SHIELD OF MINN. and UNITY HOSP., Intervenors, and SPECIAL COMPENSATION FUND, Appellant.
WORKERS= COMPENSATION COURT OF APPEALS
SEPTEMBER 12, 2002
EMPLOYMENT RELATIONSHIP - JOINT EMPLOYERS. Where one of two joint employers is uninsured, primary liability for the payment of benefits to the employee rests with the insured joint employer.
Determined by Stofferahn, J., Wilson, J., and Johnson, C.J.
Compensation Judge: Gary P. Mesna.
DAVID A. STOFFERAHN, Judge
The Special Compensation Fund appeals from the decision of the compensation judge ordering it to pay benefits on behalf of an uninsured joint employer. We reverse.
Marcy Benner was working at Crestview Nursing Home when she received an injury to her right shoulder on November 6, 2000. Ms. Benner, who was working as a licensed practical nurse (LPN), was involved in a patient lift with another staff person when the patient=s weight shifted and she injured her arm.
Ms. Benner was initially seen at Noran Neurological Clinic where she had treated for a 1999 auto accident. Dr. Fred Lux, at the Noran Clinic, had a number of tests done to arrive at a diagnosis for Ms. Benner=s shoulder pain. She was referred to Dr. Randall Norgard, who saw her on January 4, 2001, and diagnosed right shoulder inpingement syndrome and possible chronic pain syndrome. On August 31, 2001, Ms. Benner had surgery performed by Dr. Norgard. The surgery was right shoulder open decompression with anterior acromioplasty, right coracoacromial ligament resection, right subdeltoid bursectomy, and right distal clavicular resection. As a result of her injury and treatment, Ms. Benner incurred medical expenses, was temporarily totally disabled from November 7, 2000 through December 31, 2000, and from August 22, 2001 through October 2, 2001, and was temporarily partially disabled from January 1, 2001 through August 21, 2001.
Ms. Benner, who was born on September 21, 1968, completed her professional education and received her certificate as an LPN in 1994. Thereafter, she worked at a number of nursing homes. In September 2000, she began working for Essential Nursing Services (Essential). She completed an application which identified her as an independent contractor. She also signed a form titled AEssential Services Inc. Contractor Policies@ indicating her willingness to abide by the company=s policies. Among other things, Ms. Benner agreed that she would provide Essential with a two hour notice if she was unable to work so that a replacement could be found. She was advised of a specific uniform to be worn and of a code of conduct to be followed which prohibited cell phone usage and gum chewing as well as some requirements to act professionally. The form obligated Ms. Benner to obtain her own professional liability insurance. No mention was made of workers= compensation coverage. Ms. Benner was paid $26.00 per hour by Essential and no deductions were taken from her checks.
Ms. Benner was assigned to work at Crestview Nursing Home (Crestview). She worked the 11:00 p.m. to 7:00 a.m. shift and worked Sunday through Thursday. At the nursing home she reported to a night supervisor who was responsible for the details of her job performance. She was given training on procedures to be followed at Crestview and reported resident care to her supervisor at Crestview. Ms. Benner worked full-time at Crestview until her injury on November 6, 2000. Ms. Benner did not have any contact with anyone from Essential other than submitting her time cards from the time she started at Crestview until after her injury.
Essential provided registered nurses, LPN=s, and nursing assistants to Crestview. No written agreement existed between Crestview and Essential. The president of Essential testified that he was asked about insurance coverage by a representative of Crestview but no specific type of insurance was identified. Crestview paid Essential an hourly rate for Ms. Benner=s services, from which Ms. Benner was paid by Essential.
Ms. Benner contacted Essential after her November 6, 2000 injury and was advised that she was not covered by workers= compensation as she was an independent contractor. Essential had no workers= compensation insurance which covered the nursing staff it sent to nursing homes. A claim petition was filed on behalf of Ms. Benner on February 20, 2001, against Essential and against the Special Compensation Fund (the Fund). An amended claimed petition was filed on May 8, 2001, adding as employers Crestview Nursing Home and Ezra Nyankira, Amos Onsare Samoita and Thomas Orori Nyagaka, the owners of Essential Nursing Services.
This matter was heard by a compensation judge on January 17, 2002. In addition to the employee=s attorney, counsel were present representing Essential, Crestview, and the Fund. Before starting the hearing, the attorneys discussed the issues with the compensation judge. The position of Essential, Crestview, and the Fund was that Ms. Benner was an independent contractor and not entitled to workers= compensation benefits.
In Findings and Order served and filed February 14, 2002, the compensation judge found Ms. Benner was not an independent contractor but was employed jointly by Essential and Crestview. The judge further determined the case was governed by the provisions of Minn. Stat. ' 176.071 and held that Essential, as a joint employer with liability for wages to the employee, was obligated to pay workers= compensation benefits to Ms. Benner. Since Essential was uninsured, the Fund was ordered to pay Ms. Benner. The Fund appeals.
The Fund appeals from the determination of the compensation judge that Essential is liable for payment of workers= compensation benefits because it was liable for payment of wages and that the Fund was to pay benefits to the employee due to Essential=s uninsured status. We reverse and hold that Crestview and its insurer are responsible for payment of benefits to the employee.
No party has appealed the determination of the compensation judge that Essential and Crestview were joint employers of Ms. Benner at the time of her injury. The evidence shows that with regard to the employment of Ms. Benner each company shared in the elements of the employment relationship. Essential did the hiring, set the pay, and made the assignments. Crestview had direct supervision on the job. Essential=s only business would appear to be providing nursing staff to nursing homes such as Crestview. Crestview incorporated the staff provided by Essential into its operations. In these circumstances, the proper relationship between the parties is one of employee and joint employers. Bilotta v. Labor Pool of St. Paul, Inc., 321 N.W.2d 888 (Minn. 1982); Danek v. Meldrum Mfg. and Engineering Company, Inc., 312 Minn. 404, 252 N.W.2d 255 (1977).
This case presents the question of which of two joint employers should pay benefits to the employee where one is uninsured. The compensation judge answered that question by referring to Minn. Stat. ' 176.071. We agree with the Fund that this section of the statute does not control this case. Minn. Stat. ' 176.071 provides for the apportionment of liability between insurers in those cases in which the employee was employed and Apaid jointly by two or more employers.@ Ms. Benner was not paid jointly by Essential and Crestview so this section does not apply given the plain language of the statute.
Past decisions have used the phrases general employer and special employer to distinguish between the two entities in a joint employment situation. However, that usage is a matter of labeling and, by itself, does not determine primary liability between the two joint employers. Both employers have a complete and total obligation to the employee. AIn such cases, the employee may look to one or to both employers for compensation since he is at the same time under a general and special employment relationship.@ Danek, 252 N.W.2d at 258. The most appropriate analogy is that of joint and several liability in personal injury cases. The Minnesota Supreme Court has stated ALiability in tort is several as well as joint and this is so, whether the tortfeasors act separately or in conjunction. Each is responsible for the whole, although the injured person may not have more than full satisfaction except as punitive damages.@ Grovquist v. Olson, 242 Minn.119,126, 64 N.W.2d. 159, 164 (1954).
In such circumstances, the issue of insurance coverage becomes relevant. The obligation of the Special Compensation Fund is to provide benefits to an employee where an employer is not insured. Minn. Stat. ' 176.183. However, this obligation does not transform the Fund into an insurance company. It has been held that the Fund Astands in the shoes of the uninsured employer.@ St. Martin v. KLA Enterprises, 269 N.W.2d 59, 60 (Minn. 1978). The Fund does not collect a premium from the employer but is financed by an assessment against all employers who pay benefits under Minn. Stat. ' 176.101 or Minn. Stat. ' 176.111. Minn. Stat. ' 176.129 subd. 3.
In the case of joint employment, when one joint employer is uninsured, it is inequitable to compel the Fund to pay benefits when the other joint employer, who also has total liability, is insured. Accordingly, we reverse the compensation judge on this issue and order that Crestview and its insurer, RTW, shall pay to the employee the workers= compensation benefits ordered by the compensation judge.
Crestview argues in its brief that even if it were ordered to pay benefits, it would still be excused from its liability because it did not receive the notice required by Minn. Stat. ' 176.041. We do not agree. Since the liability of joint employers is joint and several, the notice received by one joint employer is notice to the other. In this case, the requirements of Minn. Stat. 176.041 have been met with regard to Crestview.