Jackson Constr., Inc. v. Smith
| Decision Date | 15 February 2012 |
| Docket Number | No. 30,454.,30,454. |
| Citation | 277 P.3d 470,2012 -NMCA- 033 |
| Parties | JACKSON CONSTRUCTION, INC., A New Mexico Corporation, and Paul Jackson, Qualifying Party for Jackson Construction Inc., Petitioners–Appellees, v. Glenn R. SMITH, in his capacity of Director, State of New Mexico Workers' Compensation Administration, Respondent–Appellant. |
| Court | Court of Appeals of New Mexico |
OPINION TEXT STARTS HERE
Robert M. Doughty II, P.C., Robert M. Doughty II, Alamogordo, NM, for Appellees.
Workers' Compensation Administration, Roberta Y. Baca, Assistant General Counsel, Albuquerque, NM, for Appellant.
{1} Paul Jackson is the sole owner of Jackson Construction, Inc. (JCI), a New Mexico-licensed general contractor. JCI does not employ any workers or executives other than Mr. Jackson, who serves as JCI's president and sole board member. In 2008, Mr. Jackson affirmatively elected to exempt himself from coverage by the Workers' Compensation Act (the Act). We are asked to decide in light of Mr. Jackson's election, whether JCI remains subject to the Act and must nevertheless procure workers' compensation insurance. We hold that JCI is required to do so under a plain-meaning reading of NMSA 1978, Section 52–1–6(A) (1990), which states that the Act “shall apply to all employers engaged in activities requir[ing a construction license] ... regardless of the number of employees.” (Emphasis added.) We thus reverse the district court's decision and affirm the order of the Workers' Compensation Administration (the WCA).
I. STANDARD OF REVIEW
{2} The issue on appeal concerns the scope of Section 52–1–6(A), which defines the classes of employers that are subject to the Act. We must ascertain whether the Legislature intended those classes defined in Section 52–1–6(A) to encompass construction corporations such as JCI, whose only employees are executives that have opted out of the Act's coverage. The issue is one of statutory construction, which we review de novo. Republican Party of New Mexico v. New Mexico Tax. & Rev. Dep't, 2010–NMCA–080, ¶ 8, 148 N.M. 877, 242 P.3d 444,cert. granted,2010–NMCERT–008, 148 N.M. 943, 242 P.3d 1289. Our approach to statutory construction is to first examine the plain meaning of the statute at issue. If the plain meaning is clear—“not vague, uncertain, ambiguous, or otherwise doubtful”—we apply the statute as written, without second guessing the Legislature's selection from among competing policies or differing ways of effectuating a particular legislative objective. State ex rel. Helman v. Gallegos, 117 N.M. 346, 352, 871 P.2d 1352, 1358 (1994).
II. DISCUSSIONA. The Plain Meaning of Section 52–1–6(A) Subjects JCI to the Act
{3} Section 52–1–6(A), reads as follows: “The provisions of the Workers' Compensation Act ... shall apply to employers of three or more workers; provided that act shall apply to all employers engaged in activities required to be licensed under the provisions of the Construction Industries Licensing Act ... regardless of the number of employees.” (Emphasis added.) There are two prongs to the portion of this section relevant to determining which construction entities are subject to the Act: (1) the entity must be an employer under the Act, and (2) the entity must engage in activities requiring a construction license. There appears to be no dispute that JCI meets the criteria under the second prong, in that JCI engages in activities requiring a properly maintained construction license. Accordingly, we focus our analysis on the first prong, whether or not JCI is an employer under the terms of the Act.
{4} The Act provides a definition of employer that states “ ‘employer’ includes any person or body of persons, corporate or incorporate ... employing workers under the terms of the Workers' Compensation Act.” NMSA 1978, § 52–1–15 (1989) (emphasis added). The Act then defines worker as:
As used in the Workers' Compensation Act ..., unless the context otherwise requires, “worker” means any person who has entered into the employment of or works under contract of service or apprenticeship with an employer, except a person whose employment is purely casual and not for the purpose of the employer's trade or business. The term “worker” shall include “employee” and shall include the singular and plural of both sexes.
Section 52–1–16(A). Reading Section 52–1–6(A) within the context of the provided definitions, it is apparent that for a construction employer to be subject to the Act, it must employ at least one “worker.” Applying the definition to the traditional form of third-party construction labor is straightforward enough. But applying the definitions to owners, shareholders, and executives of corporations proves more difficult. Given Section 52–1–6(A) and its one-worker requirement for construction companies, the question whether JCI is subject to the Act turns on whether Mr. Jackson can be counted as a worker. Because the Act does not itself resolve this question, we consider it to be ambiguous in this respect and must now ourselves determine when an officer, shareholder, or executive is considered a “worker” under the Act. See N.M. Dep't of Health v. Compton, 2001–NMSC–032, ¶ 18, 131 N.M. 204, 34 P.3d 593 (); see also Sunwest Bank v. Nelson, 1998–NMSC–012, ¶ 14, 125 N.M. 170, 958 P.2d 740.
{5} For guidance, we turn to Garcia v. Watson Tile Works, Inc., 111 N.M. 209, 803 P.2d 1114 (Ct.App.1990). Garcia provides an instructive framework for analyzing whether officers, shareholders or executives are counted as “workers” in determining if an employer is subject to the Act. Garcia recognized three distinct classes of personnel associated with entities potentially subject to the Act: (1) non-worker executives, (2) executive employees, and (3) workers. Id. at 210–11, 803 P.2d at 1115–1116. With respect to the first category, this Court held that non-worker executives are not to be counted in determining which employers are subject to the Act under Section 52–1–6(A). Garcia, 111 N.M. at 210, 803 P.2d at 1115. But executive employees and workers are to be counted—even when those executive employees use the opt-out provision as contained in NMSA 1978, Section 52–1–7 (2003). Garcia, 111 N.M. at 210–11, 803 P.2d at 1115–16 ().
{6} With respect to the case at bar, the record below supports the finding that Mr. Jackson is an executive employee. While the WCA's findings could be mistakenly construed to conclude that JCI had no workers—including Mr. Jackson, such an interpretation is contradicted by (1) the recitation of facts in both parties' briefs, (2) Mr. Jackson's own affirmative election form, and (3) his testimony during the administrative hearing. The WCA's brief states, “[JCI] is comprised solely of one employee, Paul Jackson[.]” JCI's brief is also in accord, stating, “Paul Jackson considers himself as the ‘executive employee’ of [JCI.]” Additionally, Mr. Jackson signed and filed an affirmative election form with the WCA establishing that “I, PAUL DOUGLAS JACKSON, am a ‘worker’ as defined in [the Act, and] I am employed by JACKSON CONSTRUCTION, INC[.]” And finally, Mr. Jackson's own testimony before the WCA maintained his position that he is the “executive employee” of JCI. Given the substantial evidence in the record and the absence of any to the contrary, we think the more accurate construction of the WCA's findings is that JCI did not employ any workers apart from Mr. Jackson. As an actual employee, Mr. Jackson would therefore not fall under the class of executives recognized in Garcia as non-workers.
{7} JCI largely agrees that Mr. Jackson is an executive employee and that a reading of the plain language of Section 52–1–6(A) in concert with Section 52–1–7 would result in Mr. Jackson being counted to determine JCI's one-worker status. JCI instead focusesits argument on two related points: (1) Mr. Jackson's affirmative election form should exempt him from being considered as JCI's worker, as a matter of policy, and (2) a reading of the plain language of the statute would contravene legislative intent and result in an absurdity (i.e. requiring entities to maintain insurance, even when their only qualifying employee has elected to forego coverage). We are not persuaded by either argument.
B. An Executive Employee Affirmative Election Does Not Exempt the Employer From Being Subject to the Act
{8} JCI's argument that Mr. Jackson's affirmative election form should exempt him from being considered as JCI's worker is based on the following two rationales: (1) the definition of employer includes an inherent requirement that qualifying workers “be covered by workers' compensation insurance,” and (2) Mr. Jackson is the sole shareholder of JCI and should be treated as a sole proprietor, rather than an employee. While we agree that the definition of employer requires that the entity “employ[ ] workers under the terms of the Workers' Compensation Act,” we disagree that the language requires that all counted workers actually be eligible for workers' compensation insurance coverage. Section 52–1–15.
{9} There are several instances in which a worker is counted to determine whether an employer is subject to the Act but is not ultimately covered under the Act's provisions. See, e.g., Howie v. Stevens, 102 N.M. 300, 302, 694 P.2d 1365, 1367 (Ct.App.1984) (), Garcia, 111 N.M....
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