DEBRA E. LENTZ, Deceased Employee, by DANIEL LENTZ, Petitioner/Appellant, v. WALTER ZEREBKO and KATHY ZEREBKO, individually, and d/b/a ZEREBKO ZOO TRAN, UNINSURED, Employers, and LITTLE FALLS GRANITE WORKS, INC., GRAND ITASCA CLINIC & HOSP., and ROWE FUNERAL HOME, Intervenors, and SPECIAL COMP. FUND.
WORKERS’ COMPENSATION COURT OF APPEALS
DECEMBER 9, 2008
EXCLUSIONS FROM COVERAGE - FAMILY FARM. The evidence establishes that the deceased employee was not employed by a family farm at the time of death and the petitioner is entitled to workers’ compensation benefits.
Determined by: Stofferahn, J., Johnson, C.J., and Wilson, J.
Compensation Judge: Jerome G. Arnold
Attorneys: Ronald R. Envall, Cuzzo & Engvall, Duluth, MN, for the Petitioner. James F. Clark, Clark Law Office, Hibbing, MN, for the Respondents.
DAVID A. STOFFERAHN, Judge
The employee’s death on August 17, 2005, arose out of and in the course of her employment with Walter and Kathy Zerebko. The compensation judge decided that the employee was employed by a family farm as defined by Minn. Stat. § 176.011, subd. 11a, and that her death was excluded from workers’ compensation coverage by Minn. Stat. § 176.041, subd.1. The petitioner appeals. We reverse.
Walter and Kathy Zerebko live on a farm in Itasca County near Bovey, Minnesota. The farm has been in Mr. Zerebko’s family for a number of years and he acquired the farm in 1996. Initially, the Zerebkos raised beef cattle, but they found that this activity did not provide sufficient income, so they looked for ways to supplement their income. Walter Zerebko had previously been involved in a business in which he had transported exotic animals under the business name of Zerebko Zoo Tran. Using that business name, the Zerebkos started operating a petting zoo.
The petting zoo was operated between April and October and usually began its season with a fair in Texas. The petting zoo would also appear at some of the county fairs in Minnesota and then county and regional fairs in the southern and southwestern states. In 2005, the petting zoo exhibited baby animals, consisting of a zebra, pigmy goats, a camel, a wallaby, yaks, fallow deer, a llama, donkeys, a bison, miniature horses, and miniature cattle. In addition to the petting zoo, at these fairs the Zerebkos operated a pony ride and, at least in some years, a rock climbing wall and a bungee jump.
While the Zerebkos were on tour with the petting zoo, there were still animals on the farm. Debra Lentz was hired by the Zerebkos to care for these animals in their absence. Ms. Lentz was also employed by the U.S. Postal Service and did her work for the Zerebkos before and after her work as a letter carrier. When the Zerebkos were gone, the animals on the farm were usually in pastures or pens and Ms. Lentz would make sure the animals were fed. Also, she sometimes helped load and unload animals when the Zerebkos left or returned with the petting zoo. Ms. Lentz also used a high-pressure water hose to clean gates and enclosures used in the petting zoo.
Michael Kilbourn lived near the Zerebko farm and had worked for them from time to time. On August 17, 2005, he received a telephone call from Walter Zerebko who was with the petting zoo at a county fair in Martin County, Minnesota. He was told by Mr. Zerebko that a neighbor had called to report that a bison had gotten out and was on her property and he was asked by Mr. Zerebko to check out the situation. Bison and cattle had previously gotten out of their pens, left the farm, and ended up on a neighbor’s property.
Mr. Kilbourn got a ride from another individual, identified in the record only as Sonny, and together they went to the Zerebko farm. They drove around the farm and did not see anything out of the ordinary, but a neighbor told them that there had been bison and cows in her front yard that morning. When Mr. Kilbourn was at the Zerebko farm, he saw Ms. Lentz feeding goats in their pen. She pointed out to Mr. Kilbourn a gate that was down and said that was where the bison had gotten out. Mr. Kilbourn and Sonny fixed the gate and returned to where Ms. Lentz was working. Mr. Kilbourn saw that Ms. Lentz had a bucket of grain and a partial bag of grain. She was trying to lure an adult male bison known as Max into his corral. As she was doing so, the bison suddenly charged and attacked her, causing fatal injuries. Ultimately, in order to recover the employee’s body, the animal had to be destroyed by the Itasca County Sheriff’s Office.
At the time of her death, Ms. Lentz was married to Dennis Lentz. She also had a son, Jeffrey Lint, who lived with her and her husband. Jeffrey had been born on December 12, 1985, graduated from high school in June 2005, and attended a technical college on a full-time basis from August 2005 to May 2007.
Dennis Lentz filed a claim petition for dependency benefits in October 2006 against Walter and Kathy Zerebko. The Zerebkos responded that the employee was employed on a family farm and that her death was excluded from workers’ compensation coverage by Minn. Stat. § 176.041, subd. 1. Because the Zerebkos had no insurance, the Special Compensation Fund was subsequently added as a party, although the Zerebkos were represented by private counsel at the hearing.
The petitioner’s claims were heard by Compensation Judge Jerome Arnold on May 14, 2008. There were a number of issues at hearing, including whether Ms. Lentz was in the course and scope of her employment when she was killed, Ms. Lentz’s wage on the date of death, and the dependency status of her husband and son. The primary issue, however, was whether the Zerebko operation was a family farm within the meaning of the statute.
The evidence produced at the hearing was that, in large part, the animals on the farm were breeding stock which served as a source for the babies exhibited in the petting zoo. There was also evidence that some animals, especially the miniature cattle, were sold for meat, either through livestock auction sales or by having livestock dressed and butchered for resale to local customers. Walter Zerebko also testified that he would be approached from time to time by people at the fairs who would ask about buying ponies or other animals and that some animal sales were done in this way.
The farm and petting zoo were not treated by the Zerebkos as separate business operations. The Zerebkos maintained one checkbook and one set of records. All income from the farm and petting zoo were reported on one tax return. The petting zoo/pony rides/climbing wall/bungee jump produced income in two ways. The Zerebkos would receive an appearance fee from a fair board in the amount of $3,500 to $5,000. In addition, customers would also pay for the use of these attractions.
The Zerebko federal tax returns for 2004 and 2005 were introduced into evidence. Schedule F, Profit or Loss from Farming, filed with the 2004 return showed gross income of $85,723. There are spaces on the schedule in which income from “sales of livestock bought for resale” and income from “sales of livestock, grains, and other products you raised” can be entered. There were no entries in those spaces. Instead, the income source was identified as “other income” and not further specified. The 2005 return was virtually the same, except that the gross income shown was just over $102,000. Walter Zerebko testified that he did not prepare the returns himself, but instead presented the supporting records to an accountant, who prepared the returns. The accountant did not testify and the business records upon which the returns were prepared were not introduced into evidence.
Records from the U.S. Department of Agriculture [USDA] were also put into evidence. The USDA’s involvement arose out of the application of the Animal Welfare Act (7 U.S.C. § 2131, et seq.), which applies to animals used for exhibition purposes, but does not apply to animals used for food or fiber. An animal exhibitor must be licensed by the USDA and must comply with regulations set out by that agency. The USDA license application filed by the Zerebkos requested a license as an exhibitor rather than as a breeder or dealer. After Ms. Lentz’s death, the USDA conducted an investigation into the circumstances surrounding the incident. As the result of the investigation, the USDA issued an official warning to the Zerebkos based on a determination that the Zerebkos had violated the provisions of 9 CFR 3.131(b)(1), dealing with the handling of animals, and 9 CFR 3.125(a), dealing with the structural strength of enclosures.
The compensation judge issued his findings and order on June 5, 2008. He determined that Ms. Lentz’s death was within the course and scope of her employment with the Zerebkos, that her spouse and son were dependents as defined by the statute, and that her weekly wage on the date of death was $679.12 from her employment with the Zerebkos and the U.S. Postal Service. On the family farm issue, the compensation judge concluded that the Zerebkos had two operations: a family farm and a petting zoo. He concluded the petting zoo was a non-farm operation, but that Ms. Lentz was employed as a farm laborer on the farm and the farm was a family farm under the statute. The petitioner’s claims were denied. The petitioner appeals.
The only issue on appeal is whether Debra Lentz was employed by a family farm at the time of her death. If so, her work-related death is excluded from workers’ compensation coverage under Minn. Stat. § 176.041, subd.1. The question of the application of the family farm exemption is “a conclusion of law, or at least, a mixed issue of fact and law.” Meyering v. Wessels, 383 N.W.2d 670, 672, 38 W.C.D. 482, 484 (Minn. 1986). As such, it is considered by this court de novo. Heidtke v. Zimmerman Seed, slip op. (W.C.C.A. July 15, 2002); Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993).
The workers’ compensation statute as it was first enacted in 1913 excluded farm laborers from coverage. General Statutes 1913, Chapter 84A, section 8202. In 1923 the exclusion was limited by language that stated farm laborers did not include employees of commercial threshers and balers. Minnesota Statutes, Chapter 23A, section 4326 (1923). The statute remained unchanged for the next 50 years until it was amended in 1973 by replacing “farm laborers” with “persons employed by family farms.” Minn. Stat. § 176.041, subd. 1 (1973). In 1977 the legislature added Minn. Stat. § 176.011, subd. 11a, to define a family farm as a farm operation paying less than $2,000 in cash wages. Presently, Minn. Stat. § 176.041, subd.1, excludes from coverage a “person employed by a family farm as defined by section 176.011, subdivision 11a.” That section defines a family farm as a “farm operation” which pays less than $8,000.00 in cash wages to farm laborers.
The compensation judge concluded that the Zerebko business operation consisted of two separate and distinct businesses: a family farm and a petting zoo. The compensation judge further concluded that Debra Lentz was employed by the family farm operation and was excluded from workers’ compensation coverage under the statute. On appeal, the petitioner argues the compensation judge erred in his conclusion. We agree.
There is no evidence the Zerebkos had two separate and distinct business operations in August 2005. The Zerebkos maintained one checkbook and one set of business records and did not list any business operation other than Zerebko Zoo Tran on their tax return. Testimony by the Zerebkos at the hearing was that their business operation was a “single entity.” The Zerebkos also argue on appeal that there were not separate business operations. They contend that their business is a family farm and that the petting zoo is part of the farm operation and simply supplements the farm income.
The compensation judge cited Tucker v. Newman, 217 Minn. 473, 14 N.W.2d 767, 13 W.C.D. 202 (1944) as authority for his conclusion. The issue in Tucker, however, was whether the employee’s work duties were those of a farm laborer. The court determined that the employee’s duties of tending to mink and fox which were being raised for pelts was not agricultural labor, basing its determination in large part on definitions of agricultural labor set out in the 1941 Minnesota unemployment statue. The court’s conclusion of separate businesses followed from this determination. The Tucker decision does not mandate a conclusion that the Zerebkos operated two separate and distinct businesses in the face of uncontroverted evidence to the contrary.
The question for this court is whether this business - - farm and petting zoo together - - is a family farm as defined in the statute. The statute has two parts to its definition: (1) a “farm operation” and (2) paying less than $8,000.00 in wages. There appears to be agreement among the parties that the Zerebkos paid less than $8,000.00 in cash wages. The issue is whether the business is a farm operation. “In common usage, the phrase ‘family farm’ connotes the operation of a farm by one or more family members who reside on the farm or who are actually engaged in farming it.” Meyering, N.W.2d at 673, W.C.D. at 486. In Minn. Stat. § 500.24, subd. 2(a), farming is defined as “the production of (1) agricultural products; (2) livestock or livestock products; (3) milk or milk products; or (4) fruit or other horticultural products.”
The evidence presented of farming activity at the hearing was minimal. The Zerebkos bred some animals, primarily to produce babies to be shown in the petting zoo. There was no evidence that there was any type of breeding program to produce animals for sale. When the animals were too old for the petting zoo, they were culled from the farm. Some were butchered and sold for meat, but there is no evidence that the Zerebkos advertised meat sales or conducted such sales on a regular basis. Sales of animals were done on happenstance. There were no advertisements of animals for sale or even any signs advising of sales at the fairs. Sales of animals occurred when the Zerebkos were approached by potential customers, generally when the Zerebkos were operating the petting zoo or the pony ride.
The evidence documented income from these activities of about $10,000 for 2004 and 2005. For the same period, the Zerebkos reported income on their tax returns of more than $185,000. The tax returns also identified the source of the income not as income from the sale of livestock but as “other income.” The business records which were the basis for these returns and which could have provided more information on the source of income were not introduced at the hearing.
The primary business activity of the Zerebkos was to exhibit exotic animals at regional fairs in Minnesota and other states. To conduct this activity, they were licensed by the USDA and subject to rules that regulated how that activity was conducted and how they had to maintain their physical facility. The Zerebkos were even investigated by the USDA over the circumstances of Ms. Lentz’s death. This business activity does not meet the common understanding of a farm.
In considering whether the Zerebko business was a family farm, we also look at Ms. Lentz’s duties. She had no role in breeding or selling livestock, she worked at the farm only when the Zerebkos were absent with the petting zoo, and the animals she cared for were the breeding stock for the animals exhibited in the petting zoo. In his testimony, Walter Zerebko referred to Max, the bison that attacked the employee, as being on the farm to breed a bison-cow mixture which would be sold for meat. In his statement to the USDA, however, Mr. Zerebko advised that the reason for having bison was “for breeding purposes used to provide the facility’s petting zoo with bison calves for the season.” Ms. Lentz’s employment with the Zerebkos was necessitated by the petting zoo. If there had been no petting zoo, there would have been no work for Ms. Lentz. Simply because she performed her work for the petting zoo on the farm does not make her an employee of a family farm.
Finally, we are persuaded that the family farm exemption should not be given broad construction. The statutory history of this exemption evinces a legislative intent to restrict its application. The initial exemption, as enacted in 1913, excluded all farm laborers from coverage. The 1923 amendment restricted the definition of a farm laborer. The 1973 amendment exempted only those employees of a family farm and the 1977 amendment limited the definition of a family farm. The Minnesota Supreme Court pointed out in a footnote in Meyering that:
We have perceived an intention on the part of the legislature to retreat from the former general societal policy of excluding all farm operators from the obligation to carry workers’ compensation coverage, and to limit the exclusion only to those small family farm operators who minimally employ help for cash wages. Should our perception be erroneous, the legislature, of course, is free to clearly further define and expand on the definition of “family farm” as presently found in Minn. Stat. § 176.011, subd. 11a.
N.W.2d at 673, W.C.D. at 487.
Given these factors, we conclude that the Zerebko business operation was not a family farm as contemplated by the statute. The compensation judge’s decision is reversed. The Petitioner is entitled to workers’ compensation benefits as the result of the work- related death of the employee. The denial of the Petition for Reimbursement filed by the Special Compensation Fund is reversed as well.
 The phrase “petting zoo,” as used in this decision, also includes the pony ride, the climbing wall, and the bungee jump.
 This statutory definition is found in a chapter dealing with the use of agricultural land by business organizations. While there is nothing in the statute’s language making it applicable to workers’ compensation, the language is useful as a guide.