Scanlon v. Caille Farm, Inc.

RANA M. SCANLON, Employee, v. CAILLE FARM, INC., UNINSURED, Employer/Cross-Appellant, and MINNEAPOLIS RADIOLOGY ASSOCS., Intervenor, and SPECIAL COMPENSATION FUND, Appellant.

PRACTICE & PROCEDURE - REMAND. Where the parties fail to present evidence on an issue necessary for the determination of the appeal, the matter is remanded to the Office of Administrative Hearings for an evidentiary hearing.

Attorneys: Lorelei M. Hoyer, Minnesota Department of Labor & Industry, St. Paul, MN, for the Appellant. Katherine C. Bloomquist and J. Matthew Berner, Bloomquist & Berner, Edina, MN, for the Cross-Appellant. Philip K. Jacobson, Kelly & Jacobson, Minneapolis, MN, for the Respondent.

The Special Compensation Fund has appealed and the employer has cross-appealed from the compensation judge=s determination that the employer was not a family farm as defined by Minn. Stat. ' 176.011, subd. 11a, and that, as a result, employee=s injury was not excluded from workers= compensation coverage under Minn. Stat. ' 176.041, subd. 1b. Finding that evidence is lacking as to whether the employer paid more or less than $8,000 in cash wages in the preceding calendar year, this matter is referred to the Office of Administrative Hearings for an evidentiary hearing. The appeal of the Special Compensation Fund and the cross-appeal of the employer are stayed pending the results of that hearing.

On May 29, 2002, Rana Scanlon, the employee, sustained a personal injury arising out of and in the course and scope of her employment with Caille Farm, the employer. The employer refused the employee=s request for workers= compensation benefits, taking the position that it was a family farm as defined in Minn. Stat. ' 176.011, subd. 11a, and that, consequently, the employee=s injury was excluded from coverage under Minn. Stat. ' 176.041, subd. 1(b). Because the employer was not insured for workers= compensation, the Special Compensation Fund was added as a party pursuant to Minn. Stat. ' 176.183, subd. 2.

The employee=s claim was heard by Compensation Judge Rolf Hagen on October 15, 2003. At the beginning of the hearing, the compensation judge recited various stipulations of the parties, including AThat the employee/employer wages were less than $8,000 for the year preceding the injury.@ In his Findings and Order, the compensation judge characterized this agreement as being Athat employee=s wages were less than $8,000 during the year preceding the May 29, 2002 date of injury.@

No evidence concerning the employee=s actual wages was introduced. The employee testified that she worked between 20 and 30 hours a week and was paid an hourly wage plus commission. (T.38) One of the owners of Caille Farm, Barbara Anderson Whiteis, testified at hearing that in addition to the employee, there were other employees working at the employer=s location who cared for the horses and cleaned the stables. (T.100, T.119, T.125-126) The testimony of the other owner, Terry Whiteis, was similar. (T.134-135) No evidence was presented as to the wages paid to these other laborers. The Federal tax return filed by Caille Farm for 2001 contained a deduction of $19, 239.00 for wages paid by the corporation. (Pet. Exh. B)

In his Findings and Order, served and filed December 10, 2003, the compensation judge did not address the amount of wages paid by the employer. He determined that the employer was not a family farm and was liable for workers= compensation benefits owed to the employee. The Special Compensation Fund and the employer have separately appealed this determination arguing that the employer was a farm operation involved in raising and selling livestock and was, therefore, a family farm under the statute.

Minn. Stat. ' 176.041, subd. 1(b), excludes from workers= compensation coverage a person employed by a family farm as defined by Minn. Stat. ' 176.011, subd. 11a. That section defines a family farm as a Afarm operation which pays or is obligated to pay cash wages, exclusive of machine hire, to farm laborers for services rendered during the preceding calendar year in an amount: (1) less than $8,000. . .@^[1] (Emphasis added) A farm paying farm laborers wages for farm services which exceed this limit is not eligible for the exclusion. Wurst v. Friendschuh, 517 N.W.2d 53 (Minn. App.1994).

The parties seem to have assumed that the $8,000 in the statute refers to the wages paid to the individual employee making the workers= compensation claim. This is not correct. The statute clearly requires that the wages paid to all of an employer=s farm laborers are added together to determine if the $8,000 cap has been exceeded. Meyering v. Wessels, 383 N.W.2d 670, 38 W.C.D. 482 (Minn. 1986). Since evidence in this case clearly indicated the presence of other employees, and in light of the extent of the wage deduction listed on the employer=s tax return and the employee=s testimony that she was paid an hourly wage plus commission, we are unable to determine whether the employer met the requirement that less than $8,000.00 was paid as wages to farm laborers.

We are aware that the parties did not raise this issue on appeal. However, a party claiming the exclusion must demonstrate that it has met each of the statutory requirements for the exclusion. It is apparent that the parties made a mutual mistake of law and in the absence of further evidence and specific findings on this issue, we can not determine whether the compensation judge was correct in finding that the employer was not a family farm and was obligated to pay workers compensation benefits to the employee.

Accordingly, this matter is referred to the Office of Administrative Hearings for an evidentiary hearing in accordance with this decision pursuant to our authority under Minn. Stat. ' 176.381. The compensation judge should make specific findings as to all wages and commissions of any kind paid to any employee by the employer during the calendar year preceding the employee=s injury and thereafter through the date of injury, and determine whether the employer meets the wage cap set forth in the statute. The appeal of the Special Compensation Fund and the cross-appeal of the employer are stayed during the period of the referral.

^[1] The statute also provides for an exemption even though higher wages are paid if the family farm has obtained general liability and medical payment insurance coverage in specified amounts which provide coverage to farm laborers. The employer has not contended that this provision applies to their operation.