MICHAEL MAHER, Employee, v. CHRIS VIGER, UNINSURED, Employer/Appellant, GREGORY BARLOW, and ARP/BERKLEY RISK ADM=RS CO., Employer-Insurer, and JERRY REEDY, UNINSURED, Employer, and HEALTHPARTNERS, INC., MN DEP=T OF HUMAN SERVS., and MERCY HOSP./ALLINA, Intervenors, and SPECIAL COMP. FUND, Cross-Appellant.
WORKERS= COMPENSATION COURT OF APPEALS
JUNE 28, 2005
EMPLOYMENT RELATIONSHIP - SUBSTANTIAL EVIDENCE. Substantial evidence supports the compensation judge=s determination that the employee was employed by the roofing contractor and that there was no joint employee or loaned employee relationship.
EMPLOYMENT RELATIONSHIP - GENERAL CONTRACTOR; STATUTES CONSTRUED - MINN. STAT. ' 176.215. The compensation judge erred in finding the house owner to be a general contractor where the owner did not obtain the building permit, did not exercise direct supervision, and did not intend to sell the property.
PENALTIES; STATUTES CONSTRUED - MINN. STAT. ' 176.183, SUBD. 2. The Special Compensation Fund is entitled to an award of penalties against the uninsured employer for benefits paid by the Fund.
Affirmed in part, reversed in part, and vacated in part.
Determined by: Stofferahn, J., Johnson, C.J., and Pederson, J.
Compensation Judge: Nancy Olson
Attorneys: Richard C. Lund, Law Offices of Donald F. Noack, Jr., Mound, MN, for the Respondent Employee. Thomas A. Klint, and Andrew J. Hippert, Babcock, Neilson, Mannella, Klint, Anoka, MN, for the Appellant. Patrick E. Mahoney, Mahoney, Dougherty and Mahoney, Minneapolis, MN, for the Respondents Employer-Insurer. Sara J. Stoltman, MN Department of Labor & Industry, St. Paul, MN, for the Cross-Appellant.
DAVID A. STOFFERAHN, Judge
Chris Viger appeals from the compensation judge=s finding that he was a general contractor of the project where Michael Maher was injured and from the determination that under Minn. Stat. ' 176.215 he was responsible for benefits to be paid to Maher. The Special Compensation Fund appeals from the compensation judge=s decision not to find Gregory Barlow liable for benefits as an employer or general contractor and also appeals from the compensation judge=s failure to apply the penalty provisions of Minn. Stat. ' 176.183. We affirm in part, reverse in part, and vacate in part.
On December 5, 2002, Michael Maher was on the roof of a house, sweeping off snow before beginning a roofing job. He slipped on the snow and fell off the roof, falling about 25 feet and landing on his feet. Maher sustained serious injuries to his lower extremities and he has not been able to work since then. The issues at hearing were whether Maher was an employee; if so, who was the employer or employers; whether the uninsured subcontractor provisions in Minn. Stat. ' 176.215 applied; and whether the Special Compensation Fund was entitled to a penalty against an uninsured employer under Minn. Stat. ' 176.183.
The roof was on a house being built at 1703 133rd Lane N.E. in Ham Lake owned by Chris Viger. Viger lived next door at 1715 133rd Lane N.E. The house at 1715 was on a double lot, and Viger had subdivided the lot so he could build a house at 1703. It was Viger=s intention to live in the house at 1703 when it was completed and he was living there as of the hearing in October 2004.
Viger testified that he acted as the general contractor for the building of his house. He contracted with Greg Barlow, the husband of Viger=s niece, to put on the siding. Viger also talked to Barlow about having Barlow roof the house, but Barlow=s quoted price for the project was more than Viger was willing to pay. Barlow told Viger that he thought he knew someone who would do the roofing job for a price acceptable to Viger. Barlow contacted Jerry Reedy, an individual with whom Barlow had worked a few times before.
Reedy agreed to do the roofing but told Barlow that he needed someone to work with him. Barlow told Reedy he would find someone and Barlow spoke with Jamie Viger, his father-in-law. Jamie Viger had run an ad in the Anoka County Shopper in October 2002, asking for siders and roofers to call him. Jamie Viger provided to Barlow the list of people who had called him. Barlow started calling people on the list and the first person he reached was Maher.
Barlow asked Maher about his roofing experience, told him where the work was to be done, and told him to be at the work site the next morning, December 5, 2002, at 8:00 a.m. Maher did not know with whom he was talking, but he told the person he would need $10.00 an hour to do the job. According to Maher, the person on the telephone agreed to that figure and then told him to report to Jerry Reedy, Ahis other employee,@ at the job site. Barlow denied referring to Reedy as his other employee and also denied agreeing to a wage of $10.00 an hour. Barlow testified that he told Maher he would have to speak with Reedy about the wage. Barlow testified that his actions were a favor for his wife=s uncle, Viger.
Maher arrived at the job site just before 8:00 the next morning. He saw a ladder and broom at the house and went up on the roof to begin sweeping off the snow. Barlow picked up Reedy that morning because Reedy had no driver=s license and Barlow drove Reedy to the house. Once there, Reedy went up on the roof also and also started sweeping off snow. About 45 minutes later, Maher fell off the roof. Maher testified that in the intervening time he and Reedy had introduced themselves to each other but had not discussed the job in any way.
Viger had purchased the roofing material necessary for the roofing job and the ladder and broom at the house belonged to Viger. Maher testified that he did not bring any tools to do the roofing and there was no evidence as to who would supply these items. There was dispute as to who obtained the necessary building permit for the roofing project and no evidence that a permit had been obtained. Both Viger and Barlow testified that they had not pulled the permit. Reedy was not present at the hearing. Barlow testified that he had nothing to do with the price Viger agreed to pay Reedy for the roofing; Viger testified that his conversations on the roofing price were with Barlow. Viger testified that he didn=t think he had met Reedy or spoken to him before Reedy starting roofing. A contract in the form of an invoice existed for the siding work done by Barlow; both Barlow and Viger claimed no knowledge of any written contract for the roofing.
Viger paid Reedy directly for the roofing project when the work was completed. Viger stated that he paid Reedy out of his business checking account because he had no personal account. Viger did business as Rainbow Construction but the nature of that business is not clear from the record. In response to a question from the compensation judge about being a contractor and whether he hired subcontractors, Viger responded Aonce in a blue moon I do, yeah. I usually do everything myself.@
Maher filed a claim petition in March 2003, alleging entitlement to various benefits as the result of his injury and naming Viger as his employer. Viger was uninsured for workers= compensation liability and the Special Compensation Fund was also named as a party. Later, an amended claim petition was filed which named Barlow as an additional employer. Barlow was insured by the Assigned Risk Plan at the time of Maher=s injury. On Barlow=s motion, Reedy was joined as an additional employer.
A hearing on the employee=s claims was held on October 5, 2004, before Compensation Judge Nancy Olson. In her December 6, 2004, Findings and Order, the compensation judge determined that:
$Viger was the general contractor for the construction of the house.
$Reedy was a subcontractor of Viger for the roofing job.
$Maher was Reedy=s employee at the time of his injury.
$Barlow was neither an employer of Maher or a contractor.
Based on these findings, the compensation judge ordered the Special Compensation Fund to pay benefits to Maher with a right of reimbursement from AMr. Reedy and/or Mr. Viger.@ The compensation judge declined to decide the Fund=s claim for a penalty under Minn. Stat. ' 176.183.
Viger appealed the findings that he was a general contractor of the house being built, that Reedy was his subcontractor, that Maher was not Barlow=s employee, that Maher was Reedy=s employee and that the Fund was entitled to any reimbursement from Viger. The Fund cross-appealed many of the same findings and also appealed the compensation judge=s failure to address its claim for penalties.
Was Reedy the employer of Maher?
The compensation judge found Maher to be Reedy=s employee. The Fund contends that the compensation judge erred in this finding and that Maher was either the employee of Barlow or the joint employee of Barlow and Reedy. Reedy was paid for the roofing project. Reedy told Barlow that he needed a helper for the project, which suggests that the helper would be Reedy=s employee. While Maher told Barlow that he needed $10 an hour to work on the job, Barlow told Maher to talk to Reedy. When he fell off the roof, Maher was engaged in work necessary for the completion of the roofing job. Not all of the indicia of an employment relationship set out in Hammes v. Suk, 291 Minn. 233, 190 N.W.2d 478, 36 W.C.D. 43 (1971) were established by the evidence but it would be unrealistic to expect more in a relationship that lasted less than an hour. We conclude that substantial evidence supports the decision of the compensation judge on this point.
Was Barlow a joint employer with Reedy of Maher?
Both Viger and the Fund argue that the compensation judge erred in failing to find that Barlow was a joint employer with Reedy of Maher or that Maher was a loaned employee of Barlow.
The concepts of joint employment and loaned employee have in common an employee who is providing services for more than one employer at the time of injury. The employee may be under the simultaneous control of both employers or the situation may be one in which one employer is a general employer who hires the employee and provides the employee to a special employer for whom the employee provides services. Bilotta v. Labor Pool of St. Paul, Inc., 321 N.W.2d 888, 35 W.C.D. 31 (Minn. 1982). If one of the employers is uninsured, benefits are paid by the other employer=s insurer. Benner v. Essential Nursing Services, Inc., 63 W.C.D. 58 (W.C.C.A. 2002).
Evidence exists in the record that could support a finding that Barlow was either a general employer or a joint employer with Reedy. That evidence, however, consists almost entirely of the testimony of Maher and that testimony is at variance with Barlow=s testimony. Finding Barlow to be an employer would require the acceptance of Maher=s testimony over that of Barlow and the compensation judge specifically found Barlow=s testimony to be more credible than that of Maher. Determination of witness credibility is uniquely within the province of the fact finder and a decision based on credibility will not be reversed by this court. Clemmer v. National Steel Pellet Co., slip op. (W.C.C.A. Dec. 13, 2004). Based on Barlow=s testimony that he was simply locating someone who would work for Reedy, that he did not agree to the employee=s wage demand, and that he received no compensation from Reedy or Viger for the roofing, we find substantial evidence that Barlow was not a joint employer or general employer of Maher.
It is true, as Viger points out in his brief, that the compensation judge did not make a specific finding on the issue of joint employment or on loaned employee. We conclude, however, that the compensation judge=s findings on the relationships among the parties would preclude a finding that Barlow was an employer and a specific finding on this issue is not necessary.
Was Viger a general contractor of Reedy?
The compensation judge determined that Viger was the general contractor for the house and that Reedy was Viger=s subcontractor. Based on this determination, the compensation judge imposed liability on Viger pursuant to Minn. Stat. ' 176.215, which provides that if a subcontractor fails to obtain appropriate insurance, the general contractor becomes liable for payment of all benefits. Viger argues that the compensation judge erred in her legal analysis of this issue.
This court has identified the factors to be considered when determining whether an entity is a general contractor under this statute:
1. Whether the alleged general contractor has assumed obligations on a contract with a third party;
2. Whether the alleged subcontractor and its employees are engaged in work upon the subject matter of the third party contract;
3. Whether the alleged general contractor has an interest in the work performed by the alleged subcontractor and its employees, including the receipt of profits from that work;
4. Whether the alleged general contractor has the right to exercise control over the work of the alleged subcontractor and its employees.
Trent v. Transport Corp. of America, 56 W.C.D. 207 (W.C.C.A. 1996).
The compensation judge did not cite Trent and did not consider any of the factors set out in that case. Instead the compensation judge focused on evidence that Viger had arranged for the work to be done on the house, that Viger had obtained permits for the work, and that Viger came by the house on a daily basis to check on the progress of the work. We note that a property owner might be expected to arrange for necessary work on his property, that Viger lived next door to the house being built and might be expected to be at the work site on a daily basis, and that there was no evidence as to who obtained the permit for the roofing job. These factors alone do not support a determination that Viger was a general contractor.
There was testimony by Barlow that he believed Viger was building a house for resale but at the time of the hearing Viger was living in the house and he testified that this had been his intention all along. There was no third party with whom Viger was contracting for the construction of the house. If the house had been built to be sold to the general public, a third party could be assumed but the evidence does not support that conclusion. We conclude, instead that Viger was simply an individual building a house for his own use who arranged for other individuals to do the work for him. This evidence does not support a determination of general contractor status under Minn. Stat. ' 176.215. Further, Viger=s statement at the hearing that he acted as the general contractor on the house has no bearing on whether he could be considered a general contractor under the statute.
As the compensation judge pointed out, there is case law which would allow a finding that a property owner is a general contractor. We do not find those cases persuasive here. Pelletier v. Chas. M. Friedheim Co., 383 N.W.2d 318 (Minn. App. 1986) dealt with a property owner who obtained the appropriate building permit and listed his company as the contractor. He was also building three housing units for resale at a profit. In Moorhead v. Grassle, 254 Minn. 103, 93 N.W.2d 678, 20 W.C.D. 305 (1958), the property owner obtained the permits, provided tools to the workers and provided direct supervision of the project. The evidence here does not fit those cases.
We conclude the compensation judge erred as a matter of law in determining that Viger was a general contractor. The compensation judge appears to have been influenced by a conclusion that Viger was a contractor but there is no evidence as to the nature and extent of that business. The compensation judge also appears to have decided this case in part on her conclusion, set out in her memorandum, that Viger was trying to get his house roofed for a price which could not be met by any roofer with workers= compensation insurance. The implication is that in some manner Viger contributed to Reedy=s lack of insurance. There is no evidence in the record to support this conclusion.
The compensation judge=s determination that Viger was a general contractor for the subcontractor, Reedy, is reversed and her order imposing liability on Viger under Minn. Stat. ' 176.215 is vacated.
Was Barlow a general contractor with regard to Reedy?
The appellants contend that even if Barlow was not Maher=s employer, Barlow should have been found to be an intermediate or general contractor for Reedy so that liability would be imposed on Barlow under Minn. Stat. ' 176.215. The appellants point to Barlow=s extensive involvement in the roofing job. He gave Reedy=s name to Viger, he arranged for Maher to work at the job site, and he provided transportation for Reedy to the job site.
There is no evidence, however, that Barlow obtained any financial benefit for his activities. Compensation for the roofing project was paid directly to Reedy by Viger. Barlow=s testimony, which was accepted by the compensation judge as credible, was that his motivation for his actions was to help his wife=s uncle. Given this evidence, we conclude that the compensation judge did not err in finding Barlow not to be a general contractor for Reedy.
Did the compensation judge err in failing to consider the Fund=s penalty claim?
The compensation judge found both Reedy and Viger responsible for Maher=s benefits. Since neither Reedy nor Viger were insured, the Fund was ordered to pay benefits to Maher. At the hearing, the Fund argued that if it was ordered to pay benefits, it was entitled to a penalty against Reedy and Viger under Minn. Stat. ' 176.183, subd. 2 of 65 percent of benefits paid. The compensation judge stated she was Anot willing to decide@ the Fund=s claim, citing to Reedy=s nonappearance and Viger=s lack of attorney representation.
On appeal, the Fund argues that the penalty award is mandatory and that the compensation judge erred in failing to consider the issue. The applicable language in the statute reads: AWhere the liable employer is found after the hearing to be not insured or self-insured as provided for in this chapter, the compensation judge shall assess and order the employer to pay all the compensation benefits to which the employee is entitled, the amount for actual and necessary disbursements expended by the Special Compensation Fund, and a penalty in the amount of 65 percent of all compensation benefits ordered to be paid.@
We agree with the Fund that this language is mandatory. Further, the compensation judge=s concern about the application of the statute to a general contractor liable under Minn. Stat. ' 176.215 does not apply given our decision that Viger and Barlow were not general contractors. The decision of the compensation judge on this issue is reversed and the Fund is awarded a penalty of 65 percent of all benefits paid to Maher on behalf of the uninsured employer Reedy.
$Maher was Reedy=s employee.
$Barlow was not Maher=s employer or a contractor under Minn. Stat. ' 176.215.
$Viger was not a contractor under Minn. Stat. ' 176.215.
$The Fund is liable on behalf of Reedy to pay workers= compensation benefits to Maher.
$The Fund is entitled to reimbursement and penalties under Minn. Stat. ' 176.183 against Reedy.
 Viger also appealed the finding that Maher was not an independent contractor but did not address that issue in his brief. That issue is waived. Minn. R. 9800.0900, subp. 2.