TIMOTHY C. OZMUN, Employee, v. OHIO CART/OMNI CART SERVS., INC., UNINSURED, Employer/Appellant, and CUB FOODS, and ROYAL INS. CO. OF AM., Employer-Insurer, and CONSULTING RADIOLOGISTS, ST. PAUL/MIDWEST RADIOLOGY, and MIDWEST SPINE AND ORTHOPEDICS, Intervenors, and SPECIAL COMP. FUND.

 

WORKERS= COMPENSATION COURT OF APPEALS

SEPTEMBER 26, 2005

 

No. WC05-145

 

HEADNOTES

 

JURISDICTION - SUBJECT MATTER.  The employee=s pre-injury agreement to be bound by Ohio workers= compensation law was not enforceable where the employee was a Minnesota resident, who was hired to perform all of his job duties in Minnesota, and who sustained the alleged work injury in Minnesota.

 

EMPLOYMENT RELATIONSHIP - DEEMED EMPLOYER; EMPLOYMENT RELATIONSHIP - JOINT EMPLOYER.  Where the entity allegedly liable for benefits as either a general contractor or a joint employer was not a party to the proceedings, no analysis as to the merits of the issue was appropriate or possible.

 

Affirmed.

 

Determined by: Wilson, J., Pederson, J., and Johnson, C.J.

Compensation Judge: Catherine A. Dallner

 

Attorneys:  Joseph T. Herbulock, Hauer, Fargione, Love, Landy & McEllistrem, Minneapolis, MN, for the Respondent.  Gregg B. Nelson, Nelson Law Offices, Inver Grove Heights, MN, for the Appellant.  Laura L. Enga, Searls & Assocs., Edina, MN, for Respondents Cub Foods and Royal Ins.  Thaddeus V. Jude, St. Paul, MN, for the Special Compensation Fund

 

 

OPINION

 

DEBRA A. WILSON, Judge

 

Ohio Cart/Omni Cart Services, Inc., appeals from the compensation judge=s decision that the state of Minnesota has jurisdiction over the employee=s workers= compensation claim and from the judge=s decision that SuperValu/Cub Foods was not a joint employer or a general contractor pursuant to Minn. Stat. ' 176.215.  We affirm.

 

BACKGROUND

 

In March of 2003, after a job interview at a Minnesota hotel, the employee, a Minnesota resident, was hired by Ohio Cart/Omni Cart Services, Inc. [Omni Cart], a business that services shopping carts and other Asupport equipment@ for grocery stores, department stores, and hardware stores.  Omni Cart is an Ohio corporation that does business essentially throughout the continental United States.  About half of its 60 to 70 employees work outside of the state of Ohio.  According to Keith Woolf, the president of Omni Cart, that company has never had an office in Minnesota but does maintain a garage in Minnesota to store equipment.

 

Around the time of his hire, the employee signed various agreements concerning the terms of his employment, including agreements indicating that he would be Abound exclusively by the Workers= Compensation Laws of Ohio@ and that he had selected the state of Ohio Aas the state of exclusive remedy@ for workers= compensation purposes.  The Ohio Bureau of Workers= Compensation apparently provides coverage for out-of-state injuries, on behalf of Ohio corporations, when agreements such as these are properly executed and filed.  It is undisputed that the Omni Cart complied with the Ohio statutory requirements to have the employee covered by the Ohio workers= compensation laws.  However, Omni Cart is not insured for purposes of liability under the Minnesota workers= compensation act.

 

After receiving some training outside of Minnesota, the employee returned to Minnesota to begin performing the job he was hired for - - to provide maintenance and repair services for shopping carts at certain Cub Foods stores in Minnesota.  Omni Cart provides the cart repair services at these Cub Foods stores pursuant to contract with SuperValu Inc., [SuperValu], a Delaware corporation, which either owns or operates the Cub Foods stores in question.  SuperValu=s agreement with Omni Cart requires Omni Cart to provide proof of workers= compensation coverage for its employees.

 

According to Don Lorimier, a SuperValu corporate director, Omni Cart services the grocery carts in designated Minnesota Cub Foods stores three or four times per year.  SuperValu gives Omni Cart general Atargets@ for servicing, taking into account weather and holidays, but it is Omni Cart that schedules the service visits with the individual stores.  Omni Cart also provides virtually all of the parts, materials, and tools necessary for the cart maintenance and repair for work, except for water, which is provided by the stores.^[1]

 

The employee was the foreman of his crew, which had two or three other workers.  The employee testified that he would receive his maintenance schedule, from Omni Cart, on a weekly basis.  The employee worked only on carts at Cub Foods stores, and only in the Twin Cities metropolitan area.  Upon arriving at a designated Cub Foods store, the employee and his crew serviced the carts specified in the schedule provided by Omni Cart.  After completing the specified maintenance, the employee or someone else on his crew would ask the store manager to sign off on a form describing the hours of work and the work performed.  Store managers did not otherwise supervise Omni Cart employees or direct the work.

 

On July 1, 2003, the employee sustained a work-related injury while performing maintenance work on shopping carts at a Cub Foods store in Maplewood, Minnesota.  The record indicates the store is owned by Maplewood East 1996 LLC, doing business as Cub Foods and Cub Foods Maplewood East^[2] [hereinafter Maplewood LLC].  The parties have stipulated that Maplewood LLC is Apartially owned by SuperValu.@

 

The employee was terminated by Omni Cart on August 3, 2003, and subsequently petitioned for Ohio workers= compensation benefits.  The parties have stipulated that Acertain limited medical benefits were paid by the Ohio Bureau of Workers= Compensation,@ and the record establishes that the employee retained counsel in Ohio for the purpose of investigating and pursuing his rights under Ohio law.  In late August 2003, the employee filed a claim petition in Minnesota, seeking Minnesota workers= compensation benefits from Omni Cart.  Later, the employee signed an affidavit, indicating that he had not realized that he was covered by Minnesota law until he retained a Minnesota attorney, and that he was Aelecting to proceed solely under Minnesota workers= compensation and [was] foregoing any claim under Ohio=s workers= compensation law.@

 

When the matter came on for hearing before the compensation judge, the primary issue was whether the employee was entitled to seek Minnesota workers= compensation benefits for the July 1, 2003, work injury.  Also at issue was whether ACub Foods@ was a general contractor or joint employer of the employee, making ACub Foods@ liable for benefits, given that Omni Cart was not insured against Minnesota workers= compensation liability.  Maplewood LCC was represented by counsel at hearing; however, the compensation judge expressly noted that SuperValu was not a party to the proceedings and that no determination would be made regarding SuperValu=s potential liability.

 

In a decision issued on February 8, 2005, the compensation judge determined that the employee was entitled to pursue his workers= compensation claim in Minnesota and that ACub Foods@ was not liable for payment of benefits either as a joint employer or as a general contractor.  Omni Cart appeals.

 

STANDARD OF REVIEW

 

On appeal, the Workers' Compensation Court of Appeals must determine whether "the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted."  Minn. Stat. ' 176.421, subd. 1 (2004).  Substantial evidence supports the findings if, in the context of the entire record, "they are supported by evidence that a reasonable mind might accept as adequate."  Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984).  Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed.  Id. at 60, 37 W.C.D. at 240.  Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, "unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.@  Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).

 

"[A] decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which [the Workers' Compensation Court of Appeals] may consider de novo."  Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), summarily aff=d (Minn. June 3, 1993).

 

DECISION

 

1.  Jurisdiction

 

It is undisputed that the employee signed documents, around the time of his hire, agreeing to be bound exclusively by Ohio law regarding workers= compensation benefits, and it is also undisputed that the employee actually received certain Ohio workers= compensation benefits following his July 1, 2003, work injury.  On appeal, Omni Cart argues that, by voluntarily signing the documents in question prior to his injury, the employee made a valid and enforceable election of both Ohio jurisdiction and Ohio workers= compensation benefits.  As such, Omni Cart asserts, the state of Minnesota has no jurisdiction over the employee=s workers= compensation claim.  We are not persuaded.

 

As a general rule, the Minnesota workers= compensation statutes apply if an employee is injured within the state of Minnesota.  Vaughn v. Nelson Brothers Constr., 520 N.W.2d 395, 397 n.2, 51 W.C.D. 159, 161 n.2 (Minn. 1994) (Agenerally the local statute will be applied if the place of injury is within the state@); Minn. Stat. ' 176.021, subd. 1 (Aexcept as excluded by this chapter all employers and employees are subject to the provisions of this chapter@).  In the present case, the employee is a Minnesota resident who was hired to work exclusively in Minnesota and who in fact sustained his work-related injury here.  As such, the employee would clearly be entitled to pursue Minnesota workers= compensation benefits, in the Minnesota workers= compensation system, id., but for his alleged election of Ohio law and benefits.  We have found no Minnesota cases directly addressing the enforceability of an employee=s agreement to be bound by another state=s workers= compensation laws.  However, after considering the terms and underlying policies of the Minnesota act, we conclude that such choice of law/choice of jurisdiction agreements may not be used to defeat Minnesota jurisdiction or an employee=s right to Minnesota benefits.

 

We note initially that the Minnesota statute expressly provides that A[a]ny agreement by any employee or dependent to take as compensation an amount less than that prescribed by this chapter is void.@  Minn. Stat. ' 176.021, subd. 4.  The statutory use of the term Avoid,@ as opposed to Avoidable,@ would seem to indicate that the legislature intended to prohibit enforcement of agreements such as those involved in the present matter.  In this particular case, the record indicates that Ohio benefits are less generous than Minnesota benefits, at least in some respects.^[3]  As such, Minn. Stat. ' 176.021, subd. 4, would on its face appear to make Avoid@ the employee=s pre-injury agreement to be bound by Ohio workers= compensation law and its related benefit structure and limitations.

 

Even without Minn. Stat. ' 176.021, subd. 4, we would hold the employee=s Ohio election of remedies agreement unenforceable.  Workers= compensation is social legislation.  Monson v. White Bear Mitsubishi, 633 N.W.2d 534, 539, 63 W.C.D. 337, 342 (Minn. 2003); Franke v. Fabcon, Inc., 509 N.W.2d 373, 376, 49 W.C.D. 520, 524 (Minn. 1993).  As explained in Larson=s treatise,

 

[T]he entire compensation system has been set up and paid for, not by the parties, but by the public.  The public has ultimately borne the costs of compensation protection in the price of the product, and it has done so for the specific purpose of avoiding having the disabled victims of industry thrown on private charity or public relief.  To this end, the public has enacted into law a scale of benefits that will forestall such destitution.

 

8 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 132.04(1)(2003).  With regard to the specific issue now before us, the treatise provides:

 

[E]xpress agreement between employer and employee that the statute of a named state shall apply is ineffective either to enlarge the applicability of that state=s statute or to diminish the applicability of the statutes of other states.  Whatever the rule may be as to questions involving commercial paper, interest, usury and the like, the rule in workers= compensation is dictated by the overriding consideration that compensation is not a private matter to be arranged between two parties; the public has a profound interest in the matter which cannot be altered by any individual agreements.  This is most obvious when such an agreement purports to destroy jurisdiction where it otherwise exists; practically every statute has emphatic prohibitions against cutting down rights or benefits by contract.

 

9 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 143.07(1) (footnote omitted).

 

The state of Minnesota has a clear substantial interest in providing a forum for and ensuring payment of Minnesota workers= compensation benefits to a Minnesota resident who is injured within this state.  It is irrelevant that the state of Ohio may also have an interest in, and jurisdiction over, a claim for benefits related to the employee=s July 2003 work injury.^[4]  Similarly, because it is the public interest, not any private interest, that is paramount in determining jurisdiction and choice of law in workers= compensation matters, it is irrelevant both that the employee agreed to be bound by Ohio law, prior to his injury, and that he pursued and received certain Ohio benefits, after his injury.^[5]  We therefore affirm the judge=s decision that the employee is entitled to pursue his workers= compensation claim in Minnesota.

 

2.  General Contractor/Joint Employer

 

As previously noted, Omni Cart is uninsured for workers= compensation purposes in Minnesota.  At hearing, the Special Compensation Fund contended that ACub Foods@ was therefore liable for payment of any benefits due as a result of the employee=s July 1, 2003, work injury, either as a joint employer of the employee, or as a general contractor pursuant to Minn. Stat. ' 176.215, subd. 1, which provides as follows:

 

Subdivision 1.  Liability for payment of compensation.  Where a subcontractor fails to comply with this chapter, the general contractor, or intermediate contractor, or subcontractor is liable for payment of all compensation due an employee of a subsequent subcontractor who is engaged in work upon the subject matter of the contract.

 

The compensation judge rejected the Fund=s position, finding that ACub Foods@ was neither a joint employer or general contractor for purposes of establishing workers= compensation liability.  On appeal, the Fund argues that the judge erred in her decision on these issues.^[6]  We find no basis to grant any relief relative to the judge=s decision as to the liability of ACub Foods.@

 

The only ACub Foods@ that is a party to this case is Maplewood East 1996 LLC, the entity that apparently owns the individual Cub Foods store where the employee=s injury took place.  However, the Fund did not argue at hearing, and they do not argue on appeal, that Maplewood LLC is either a joint employer or a general contractor.  Rather, the Fund is clearly arguing that SuperValu should be held liable as either a joint employer or a general contractor under Minn. Stat. ' 176.215, subd. 1.  The problem with this argument is, of course, that SuperValu is not a party to these proceedings.  Therefore, as noted by the compensation judge at hearing, no determination was to be made, or could be made, regarding SuperValu=s liability.

 

Part of the confusion in this case is obviously attributable to the complicated nature of relationship between SuperValu and Maplewood LLC, a relationship not fully defined in the record, and to the parties= imprecise use of the name ACub Foods.@^[7]  However, because SuperValu is the entity that the Fund seeks to have held liable, and SuperValu is not a party to the proceedings, no analysis on the merits of the Fund=s position is appropriate.  As such, we will not consider this issue further.^[8]