Weidow v. Fund

• Decision Date: 30 December 2010
• Docket Number: No. DA 10–0084.,DA 10–0084.
• Parties: Shelly WEIDOW, Petitioner and Appellee,v.UNINSURED EMPLOYERS' FUND, Respondent, Third–Party Petitioner and Appellee,v.Bradley Howard/Howard Family 1995 Trust, Third–Party Respondent and Appellant.
• Court: Montana Supreme Court

359 Mont. 77

246 P.3d 704

2010 MT 292

Shelly WEIDOW, Petitioner and Appellee,

v.UNINSURED EMPLOYERS' FUND, Respondent, Third–Party Petitioner and Appellee,

v.Bradley Howard/Howard Family 1995 Trust, Third–Party Respondent and Appellant.

No. DA 10–0084.

Supreme Court of Montana.

Submitted on Briefs Aug. 4, 2010.Decided Dec. 30, 2010.

For Appellant: G. Andrew Adamek; Browning, Kaleczyc, Berry & Hoven, Helena, Montana.For Appellee: Jonathan McDonald; Dix, Hunt & McDonald, Helena, Montana (Weidow).Justice BRIAN MORRIS delivered the Opinion of the Court.

[359 Mont. 78] ¶ 1 Bradley Howard (Howard), through the Howard Family 1995 Trust (Trust), appeals the Workers' Compensation Court's (WCC) refusal to dismiss Shelly Weidow's (Weidow) WCC petition as untimely. Howard also appeals the WCC's determination that Weidow's employment did not constitute “casual employment” as defined by § 39–71–116(6), MCA (2005). We affirm.

¶ 2 We review the following issues on appeal:

¶ 3 Did the WCC correctly deny the motion to dismiss Weidow's petition as untimely when Weidow filed the petition 69 days after the mediator's report had been issued?

¶ 4 Was Weidow engaged in “casual employment,” as defined by § 39–71–116(6), MCA (2005), when he worked on Howard's house?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 5 Weidow sustained injuries while completing work on Howard's house at the Yellowstone Club near Big Sky, Montana. Howard holds and operates much of his real and personal property, including the house where Weidow was injured, in the Trust's name. Howard serves as the sole manager of the Trust. Howard had acquired no workers' compensation insurance for Weidow at the time of the accident.

¶ 6 Howard purchased the Yellowstone Club property in 2004. Howard contracted with Brickowski/Northwest Timber Structures (Brickowski) to construct a house on the property. Brickowski hired Weidow in 2005 to complete trim work on the house. Brickowski's workers' compensation policy provided coverage for Weidow. Howard discharged Brickowski in February or March 2006.

¶ 7 Howard took over the management and development of the house. He met with the remaining subcontractors, observed their work, discussed what projects remained, and directed the order in which to complete the remaining projects. Howard also fired at least two subcontractors, hired others to finish projects, and sent two employees from Howard's California corporations to work on the house.

¶ 8 Howard also entered an oral agreement with Weidow and Weidow's brother to complete the remaining work on the house. Weidow and his brother worked about 40 hours per week on the Howard house. Howard regularly paid Weidow $33 per hour using Trust money. The brothers had contact almost daily with Howard and reported progress on the house's construction. The brothers also monitored the other subcontractors' progress on the house and reported this information to Howard. The brothers completed trim work and other “punch list” tasks, including pouring a concrete slab, fixing an uneven floor, and realigning the track on the house's dumbwaiter.

¶ 9 Howard and Weidow had discussed the need for workers' compensation coverage. Howard had asked Weidow to investigate the cost of obtaining coverage. Weidow had learned that coverage would cost about $17,000. Howard told Weidow he did not want to buy that coverage because only a few months remained on the job.

¶ 10 Weidow nevertheless understood that Howard would “take care of” the workers' compensation coverage issue. Weidow knew that Howard managed other businesses with employee payrolls and believed that he would be covered through one of those entities. Weidow worked on the house alongside two other employees of Howard's other California corporations. Howard had sent the California employees to work on the house on two occasions, once in his private jet, and once in a company truck.

¶ 11 Howard lives in Burbank, California. He manages and sells real estate through two different corporations. He manages about 70 residential and commercial properties through one of the corporations. He employs general maintenance workers and at least one real estate agent.

¶ 12 The Trust is a legally distinct entity from the two corporations that Howard operates. Howard's attorney had advised Howard to create the Trust to hold all of Howard's personal assets in order to protect them from inheritance taxes. Howard and his wife both serve as trustees. Howard pays all his personal expenses with trust money. Howard paid for the Yellowstone Club property and all its improvements, labor, and materials out of the Trust's account. Howard claimed that he had intended to use the Yellowstone Club property as a personal vacation house. Howard claimed that he never had intended to use the Yellowstone Club property as a business or rental property.

¶ 13 Weidow suffered injuries while working on the dumbwaiter in Howard's house on June 13, 2006. Howard had not obtained workers' compensation coverage for Weidow. As a result, Weidow filed a claim for benefits with the Uninsured Employers' Fund (UEF). UEF denied liability on November 22, 2006, based on its determination that Weidow's employment with Howard qualified as “casual employment” as defined in § 39–71–116(6), MCA (2005).

¶ 14 Weidow petitioned the Department of Labor & Industry (DOL) for mediation, and the parties mediated the matter on January 4, 2007. The mediator issued and mailed the report and recommendation on January 31, 2007. The mediator recommended that the parties reach a settlement that included Weidow's lost wages and medical costs.

¶ 15 Weidow notified the mediator on February 21, 2007, that he accepted the recommendation and was willing to negotiate a settlement. On the same day, UEF notified the mediator that it rejected the recommendation and would continue denying benefits. Weidow filed his petition with the WCC on April 10, 2007. Sixty-nine days had passed between the mailing of the mediator's report on January 31, 2007, and Weidow's filing with the WCC on April 10, 2007.

¶ 16 UEF moved to dismiss Weidow's petition with the WCC. UEF claimed that UEF's denial had become final pursuant to § 39–71–520(2), MCA (2005), when 60 days had passed from the mailing of the mediator's report. Weidow opposed the motion based on his understanding that § 39–71–520(2), MCA (2005), had rendered final the mediator's recommendation that Weidow receive benefits. The WCC declared § 39–71–520(2), MCA (2005), unconstitutionally vague and denied UEF's motion to dismiss Weidow's untimely petition.

¶ 17 The WCC conducted a trial in May 2009. The WCC determined that Howard's use of the Yellowstone Club property, particularly its use for advantageous tax purposes, fell within Howard's usual course of business. The WCC concluded that the “casual employment” exemption did not apply to Weidow's work on Howard's property. The WCC ordered UEF to pay medical benefits to Weidow and held Howard responsible for indemnifying UEF.

[359 Mont. 81] ¶ 18 Howard appeals the WCC's conclusion that the casual employment exemption does not apply to Weidow's employment as well as the WCC's invalidation of § 39–71–520(2), MCA (2005). UEF has not joined this appeal.

STANDARD OF REVIEW

¶ 19 We review de novo the WCC's grant or denial of a summary judgment motion. Boyd v. Zurich Am. Ins. Co., 2010 MT 52, ¶ 11, 355 Mont. 336, 227 P.3d 1026. We review the WCC's conclusions of law to determine whether they are correct. Schmill v. Liberty N.W. Ins. Corp., 2009 MT 430, ¶ 8, 354 Mont. 88, 223 P.3d 842. We review the record to determine whether substantial credible evidence supports the court's findings of fact. Id. The law in effect at the time of the employee's injury establishes the employee's substantive right to benefits. Colmore v. Uninsured Employers' Fund, 2005 MT 239, ¶ 16, 328 Mont. 441, 121 P.3d 1007.

DISCUSSION

¶ 20 Did the WCC correctly deny the motion to dismiss Weidow's petition as untimely when Weidow filed the petition 69 days after the mediator's report had been issued?

¶ 21 Section 39–71–520(2)(c), MCA (2005), provides that “[i]f a settlement is not reached through mediation and a petition is not filed within 60 days of the mailing of the mediator's report, the determination by the department is final.” The WCC declared § 39–71–520(2), MCA (2005), unconstitutionally vague because its phrase “determination by the department” possibly could have two different meanings. The WCC noted that Title 39, Chapter 71, Part 5 refers to both UEF and the mediation unit of DOL as “the department.” The WCC could not determine whether the “determination by the department” that becomes final pursuant to § 39–71–520(2), MCA (2005), referred to the mediator's recommendation favorable to Weidow, or to UEF's denial of Weidow's claim.

¶ 22 This Court generally presumes that all statutes are constitutional and attempts to construe them in a manner that gives effect to the legislature's intent if possible. Section 1–2–102, MCA; Oberson v. U.S. Forest Serv., 2007 MT 293, ¶ 14, 339 Mont. 519, 171 P.3d 715. This Court attempts to “avoid constitutional issues whenever possible.” Sunburst Sch. Dist. No. 2 v. Texaco, Inc., 2007 MT 183, ¶ 62, 338 Mont. 259, 165 P.3d 1079. The WCC need not have reached the constitutionality of the statute.

[359 Mont. 82] ¶ 23 The WCC should have applied the doctrine of equitable tolling. The WCC refused to apply the doctrine of equitable tolling based on its erroneous conclusion that it lacked jurisdiction to toll the procedural time bar in § 39–71–520(2), MCA (2005). The WCC concluded that Colmore v. Uninsured Employers' Fund, 2005 MT 239, 328 Mont. 441, 121 P.3d 1007, and Flynn v. Uninsured Employers' Fund, 2005 MT 269, 329 Mont. 122, 122 P.3d 1216, deprived it of jurisdiction to waive the time limit of § 39–71–520(2), MCA (2005). We overruled those cases in Davis v. State, 2008 MT 226, 344 Mont. 300, 187 P.3d 654, however, when we...