SAMUEL HOPP, Employee/Appellant, v. ADVANCED CONTRACTORS AND REMODELERS and AUTO-OWNERS INS. CO., Employer-Insurer/Respondents, and MAPLE GROVE HOSP., N. MEM’L HEALTH, TWIN CITIES ORTHOPEDICS, HEALTHPARTNERS, INC., MEDICA HEALTH PLANS, ANESTHESIOLOGY, P.A., LANDIS PLASTIC SURGERY, and N. MEM’L AMBULANCE, Intervenors.

The compensation judge determined Samuel Hopp was not an employee of Advanced Contractors and Remodelers (ACR) at the time he was injured on September 30, 2015, and denied his claim for workers’ compensation benefits from ACR and its insurer.  Mr. Hopp has appealed.  We affirm.

Samuel Hopp was born in 1982, and by 2015 had performed siding work in home remodeling and new construction projects for several years.  On April 9, 2015, Mr. Hopp incorporated his siding work business under the name Hopp To It (HTI).  Mr. Hopp testified he did so to increase his earnings and to allow him the freedom to work for himself.  HTI had no employees other than Mr. Hopp.  After incorporating, Mr. Hopp contacted an insurance agent to obtain workers’ compensation insurance and liability insurance for personal and corporate coverage.

In the spring of 2015, Mr. Hopp responded to an advertisement posted by ACR, which sought workers for construction projects, siding, framing, and home remodeling.  ACR utilized both employees and independent subcontractors.  ACR kept its employees busy throughout the year and used subcontractors to fill in as needed based on work volume.  ACR employees and subcontractors worked on the same jobs.  ACR paid its employees an hourly rate based on their experience through a payroll company with taxes and benefits withheld from their checks.  Subcontractors were also paid on an hourly basis, but at a higher hourly rate than ACR employees and based on biweekly invoices prepared by the subcontractor.  Mr. Hopp testified he followed the subcontractor procedure and maintained his own invoice pad.

Pay stubs showed that ACR did not withhold taxes from the compensation it paid to Mr. Hopp.  His 2015 tax return reported the ACR income with a 1099-Misc form listing “ACR nonemployee comp” and a Schedule C – Profit or Loss from Business (Sole Proprietorship).

ACR expected subcontractors to have their own workers’ compensation and liability insurance.  While Mr. Hopp was working on the ACR project in 2015, he was often asked by ACR for verification of his workers’ compensation insurance.  Mr. Hopp contacted his insurance agent and testified that he believed he was covered under a policy issued to HTI as of August 2015.

On September 30, 2015, Mr. Hopp was installing siding on the ACR project using scaffolding erected by an ACR employee.  The scaffolding collapsed and Mr. Hopp fell approximately 25 feet, landing feet first.  He suffered significant injuries to his lower extremities, including fractures in both legs requiring emergency surgery.

Mr. Hopp first reported his injury to the workers’ compensation insurer for HTI but was informed that he was not covered under the policy because it was a “shell” policy that did not provide personal coverage.  Mr. Hopp then submitted a workers’ compensation claim to ACR’s insurer.  His claim was denied on the basis that he was not an employee of ACR.  Mr. Hopp did not contest the denial by ACR’s insurer at that time.

In February 2016, Mr. Hopp and his wife sued ACR in district court in Nicollet County, alleging that his injuries were caused by the negligence of an ACR employee in installing the scaffolding that collapsed.  Mr. Hopp claimed medical expenses and entitlement to damages for his loss of past and future wages.  In the complaint, Mr. Hopp specifically alleged he was an independent contractor when he was injured.  The lawsuit settled before trial and Mr. Hopp received a payment from the liability insurer.  In October 2017, Mr. Hopp sued the insurance agent he had dealt with to obtain workers’ compensation coverage for HTI.  In this action, Mr. Hopp alleged he had been an independent contractor for ACR when he was injured, and that the agent had been negligent in failing to provide workers’ compensation insurance that would cover Mr. Hopp personally.  This suit also settled before trial.

Mr. Hopp filed his present claim for workers’ compensation benefits in September 2018, alleging he was an employee of ACR at the time of his injury and is entitled to workers’ compensation benefits from ACR’s insurer.  That claim was heard by a compensation judge on July 2, 2021.  In her Findings and Order, served and filed September 28, 2021, the compensation judge found Mr. Hopp was not an employee of ACR at the time of his injury and denied his claim. Mr. Hopp appeals.

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(3).  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 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).

The primary issue before the compensation judge was whether Mr. Hopp was an employee of ACR at the time of his injury and entitled to workers’ compensation benefits or, instead, was a self-employed independent contractor and ineligible for those benefits.  The detailed and well-written findings of the compensation judge show that she thoroughly considered the evidence and arguments of the parties.  Finding that Mr. Hopp was not an employee of ACR, she denied his claim. The issue for this court is whether that determination is supported by substantial evidence.

The parties do not dispute that Mr. Hopp failed to register as a construction contractor with the Department of Labor and Industry as required by Minn. Stat. § 326B.701.  A worker who performs services for another business, and is not registered as a contractor, is presumed to be an employee of that business under Minn. Stat. § 181.723, subd. 4, unless the nine criteria listed in that subdivision are met.^[1]

In her findings, the compensation judge discusses each of these factors in detail.  (See Findings 43-51.)  Based on her examination of the evidence, she concluded that the “preponderance of the evidence supports the finding that Mr. Hopp met all the factors pursuant to Minn. Stat. § 181.723, subd. 4, as an independent contractor of ACR on September 30, 2015.”  (Finding 52.)  The compensation judge’s determination is supported by Mr. Hopp’s own actions as set out in the record.  At the job site, he submitted his own invoices to be paid for his work.  No taxes or other deductions were taken from the amounts he received.  Even after his injury, he claimed he was an independent contractor and not an employee of ACR in the district court actions he filed against ACR and his insurance agent.  When he filed his tax returns for 2015, he stated in those documents that he was self-employed.

We see no need for this court to further detail our review of these factors, as it is clear that substantial evidence supports the compensation judge’s determination that they have been met. ^[2]

Mr. Hopp also claims he should have been awarded benefits pursuant to Minn. Stat. § 176.215, subd. 1.  That section provides that:

The compensation judge also denied Mr. Hopp’s claim based on the election of remedies provision in Minn. Stat. § 176.061, subd. 1.  That section states that when an injury “occurs under circumstances which create a legal liability for damages on the part of a party other than the employer” that is insured under chapter 176, the injured employee may “proceed . . . at law against that party to recover damages or against the employer for benefits, but not against both.”  As the compensation judge pointed out, Mr. Hopp chose to pursue a negligence action against ACR in district court.  In so doing, he made an election of remedies, and he is now barred by this statutory provision from pursuing a workers’ compensation claim against ACR.

The decision of the compensation judge is affirmed.