GAUDENCIO MACHUCA, Employee, v. REYNALDO LOPEZ, UNINSURED, Employer, and TURNER CONTRACTING, UNINSURED, Employer, and LUIS ARMANDO FERNANDEZ et al. and MINNESOTA WORKERS= COMP. ASSIGNED RISK PLAN adm'd by BERKLEY RISK ADM'RS CO., Employer-Insurer, and MAPLE LEAF REAL ESTATE, UNKNOWN, Employer, and THE LARAMAR GROUP and TWIN CITY FIRE INS. CO., Employer-Insurer, and SPECIAL COMPENSATION FUND, Appellant.
WORKERS= COMPENSATION COURT OF APPEALS
JULY 12, 2006
APPEALS - RECORD. Vacation of the compensation judge=s order for dismissal is required where the judge made no findings on factual issues and there was no record of the proceedings leading to the dismissal.
Vacated and remanded.
Determined by Rykken, J., Johnson, C.J., and Stofferahn, J.
Compensation Judge: Paul V. Vallant
Attorneys: Harlan G. Sween, Sween & Salazar, Hopkins, MN, for the Employee. Patrick E. Mahoney, Mahoney, Dougherty & Mahoney, Minneapolis, MN, for Fernandez and MARP/Berkley. Adam S. Wolkoff, Law Offices of Adam S. Wolkoff, Eagan, MN, for Laramar Group and Twin City Fire. Thaddeus Jude, Special Compensation Fund, St. Paul, MN, for the Appellant.
MIRIAM P. RYKKEN, Judge
The Special Compensation Fund appeals the compensation judge=s order dismissing parties from the proceedings. We vacate the order for dismissal and remand to the compensation judge for further consideration of the employment issues raised by the parties= motions, and for specific factual findings as to those issues.
Litigation in this matter began on January 15, 2004, with the filing of a claim petition in which the employee claimed entitlement to temporary total and permanent partial disability benefits and payment of medical expenses. The issue on appeal is whether certain parties to the litigation were properly dismissed by the compensation judge=s order of November 28, 2005.
On November 2, 2003, Gaudencio Machuca, the employee, injured his right knee when he fell off a balcony at Plymouth Square at 37th Apartments while working on a roofing crew. Based on available information provided to the compensation judge, arrangements had been made between a contracting firm or agent and the roofing crew for work on the apartment complex where the injury occurred. The available information demonstrates the multi-layered business arrangements present at that time. The owner of the apartment complex was Maple Leaf Real Estate, Ltd. Partnership; Laramar Communities, LLC, acted as the building management company and agent for the owner. Laramar Communities evidently negotiated a construction contract with Turner Contracting, and it was alleged by the parties that Turner Contracting made arrangements with Reynaldo Lopez, and potentially Luis Armando Fernandez, for a roofing crew to work on the apartment complex. The employee worked on that roofing crew at the time of his injury.
Documents provided to the compensation judge include certificates of liability insurance. A dispute arose as to who was the employee=s employer at the time of his injury, and from that dispute arose the issue of which party was liable for payment of workers= compensation benefits to which the employee may be entitled.
On January 15, 2004, the employee filed a claim petition listing Reynaldo Lopez and Turner Contracting as uninsured employers and listing the Minnesota Special Compensation Fund as the insurer. On October 18, 2004, the Fund petitioned for joinder of Luis Fernandez and his insurer, the Minnesota Workers= Compensation Assigned Risk Plan, administered by Berkley Risk Administrators. There was no objection at that time and an order for joinder was served and filed on November 30, 2004. On December 20, 2004, the Fund filed a motion to be dismissed from the matter, asserting that coverage existed and therefore the Special Compensation Fund was not a necessary party to the litigation.
Also on December 20, 2004, Mr. Fernandez and his insurer objected to their joinder and denied liability, asserting that Mr. Fernandez was neither an employer, subcontractor or general contractor at the time of the employee=s injury. On December 23, 2004, the Fund filed another motion for its dismissal from the matter. Mr. Fernandez and his insurer objected. The Fund=s motions for dismissal were denied by order served and filed January 21, 2005. The compensation judge stated in the order memorandum:
The mere fact that Luis Fernandez has been joined as a necessary party, based upon the allegations of the Special Compensation Fund, does not establish that he was the employer of Mr. Machuca on November 2, 2003. The employee and Mr. Fernandez dispute that allegation, raising an issue of fact for hearing. The Special Compensation Fund remains a necessary party.
On March 25, 2005, on the Fund=s motion, additional entities were joined as necessary parties to the proceedings: Maple Leaf Real Estate, Laramar Communities and its insurer Twin City Fire Insurance Company, and Travelers Commercial Casualty Company as insurer for Turner Contracting. On May 12, 2005, Travelers Commercial Insurance Company filed a motion for its dismissal based on the assertion that its policy covering Turner Contracting only provided workers= compensation coverage in Missouri, not Minnesota. Over the Fund=s objection, an order dismissing Travelers Insurance Company from the proceedings was served and filed on August 16, 2005.
On August 2, 2005, the Fund filed another motion for its dismissal, which was denied by an order dated August 16, 2005. In his order denying the motion for dismissal, the compensation judge stated that evidence indicated the alleged employers may have been uninsured. Also on August 16, 2005, a temporary order was issued directing the Fund to pay the employee=s wage loss benefits, permanent partial disability benefits, and medical expenses. The Fund has since entered into a settlement agreement with the employee, resolving his workers= compensation claim on a full, final and complete basis.
On October 14, 2005, Laramar Communities and Twin City Fire Insurance Company filed a motion for their dismissal; Luis Fernandez and the Minnesota Assigned Risk Plan had filed a motion for their dismissal earlier. The Special Compensation Fund objected to those motions, arguing that Laramar Communities and Mr. Fernandez, as potential employers, were necessary parties to the case and that they should remain in the litigation so that the Fund could pursue a claim for reimbursement of benefits it has paid to the employee. Although the motions were argued at a pretrial hearing held before the compensation judge on October 31, 2005, and although the parties submitted legal briefs, transcripts of deposition testimony, and other documentary evidence to the compensation judge for his consideration, no evidentiary hearing was held on the motions for dismissal and no record was made of the proceedings. On November 28, 2005, the compensation judge granted the motions and issued an order dismissing Laramar Communities, Luis Fernandez and their respective insurers from the proceedings. The Fund appeals.
In support of their motions for dismissal, the parties submitted documentary evidence, deposition testimony and oral and written arguments to the compensation judge. There was no evidentiary hearing held to address the motions for dismissal. The compensation judge made no findings on the factual issue of whether Luis Fernandez or Laramar Communities were employers, but, in his order, dismissed Laramar Communities, Luis Fernandez and their insurers from the proceedings. In his memorandum, the judge stated that:
No credible evidence has been submitted to establish that either Luis Fernandez or The Laramar Group was an employer of Gaudencio Machuca, or that they would have potential liability as a subcontractor or general contractor under Minn. Stat. ' 176.215.
The Fund asserts that documents show a potential subcontracting relationship, at the time of the employee=s injury, between the employee=s roofing crew, Mr. Lopez and/or Mr. Fernandez. The Fund also asserts that Laramar Communities could be considered a general contractor for the project on which the employee worked, citing to deposition testimony provided by a representative from Laramar concerning Laramar=s role on the construction project.
The exhibits presented with the motions include evidence which could support the compensation judge=s decision or the Fund=s allegations. Resolution of the employment issues requires factual determinations of whether Luis Fernandez or Laramar Communities could be considered to have had an employment relationship with the employee. The compensation judge made no findings to support his decision to dismiss Luis Fernandez and Laramar Communities from this matter. Further, there was no record made of the proceedings leading to the order for dismissal. Without findings or a record for review, we are unable to determine whether the judge=s decision is clearly erroneous or unsupported by substantial evidence in the record as a whole. See Minn. Stat. ' 176.421, subd. 6; Zuehlke v. Penrose Oil Co., slip op. (W.C.C.A. Jan. 24, 2001).
We cannot perform our appellate review function until a record is created and factual findings are made. Therefore, under the circumstances presented here, we vacate the compensation judge=s order for dismissal. We remand the case to the Office of Administrative Hearings for further consideration of the employment issues raised by the parties= motions, and for specific factual findings as to those issues.
 The following background information was taken from exhibits provided with motions brought by the parties, as there is no record from an evidentiary hearing and there have been no fact findings made in this matter.
 The documents submitted to the compensation judge identify Laramar as either Laramar Communities, LLC, or Laramar Group, LLC.
 But for certain exceptions, the Special Compensation Fund is charged with paying workers= compensation benefits to an employee who sustains an injury arising out of and in the course of employment while in the employ of an employer who is not insured or self-insured for workers= compensation liability. Minn. Stat. ' 176.183, subd. 1.