Industrial Commission v. Lavach

Decision Date15 April 1968
Docket NumberNo. 23293,23293
Citation439 P.2d 359,165 Colo. 433
PartiesINDUSTRIAL COMMISSION of Colorado, Englewood Moving and Truck Rental Company, Aaron and Santa Fe Moving and Storage Company, Incorporated, Help Incorporated, and Home Indemnity Company, Plaintiffs in Error, v. Beverly A. LAVACH, Defendant in Error.
CourtColorado Supreme Court

Burnett, Watson & Horan, Denver, for plaintiffs in error, Englewood Moving and Truck Rental Co., Aaron & Santa Fe Moving & Storage Co., Inc., Help Incorporated, and Home Indemnity Co.

Duke W. Dunbar, Atty. Gen., Frank E. Hickey, Deputy Atty. Gen., Peter L. Dye, Asst. Atty. Gen., Denver, for plaintiff in error, Industrial Commission of Colorado.

Richard A. Zarlengo, Denver, for defendant in error.

MOORE, Chief Justice.

John R. Lavach died in a motor vehicle accident while returning home from his place of business on the evening of December 23, 1966. The decedent's widow Beverly A. Lavach thereafter filed a notice and claim for workmen's compensation with the Colorado Industrial Commission. The referee conducted hearings on March 3, 1967, and entered his order denying the claim for compensation. The Industrial Commission on review of the referee's order affirmed the action of the referee. On review in the district court the order of the Commission was reversed and judgment was entered directing the Commission to award full workmen's compensation benefits to the claimant. The present writ of error is directed to that judgment of the district court.

From the testimony and exhibits presented at the March 3 hearing, the following undisputed facts were established. Decedent, John Lavach, began working for his father-in-law Ralph Jerome, in the early 1950s with the understanding that he, Lavach, would eventually become part owner of Jerome's business. Jerome owned all the capital stock in three interrelated corporations: The Aaron & Santa Fe Moving & Storage Company, the Englewood Moving & Truck Rental Company, and Help, Incorporated. Jerome transferred half the corporate stock in these corporations to Mr. and Mrs. Lavach approximately three years before John Lavach's death, and on May 1, 1966, Jerome conveyed to the Lavaches his remaining fifty per cent interest. Claimant did not participate in the management of the three corporations during her husband's lifetime.

Englewood Moving & Truck Rental Company paid the decedent a monthly salary of $1250. Decedent's services for this company included delivering packaging materials to the firm's customers and preparing estimates for local moving jobs performed by the Company. For these purposes the Company provided decedent a Ford pickup truck and paid all expenses connected with operating this vehicle. Decedent's agreement with the Company antedating his acquisition of all the stock thereof further permitted him to drive the Company's truck between the office and his home in Broomfield each day at the expense of the corporation.

On the evening of December 23, 1966, decedent left the company offices in the pickup truck at 4:18 P.M. He drove four blocks south to meet his son who was temporarily employed in Denver during the Christmas holidays. He then drove to the Valley Highway and proceeded northward toward Broomfield, and the fateful accident occurred. The evidence shows that decedent occasionally delivered material for the Company en route to his Broomfield home and during evenings in the Broomfield area. However, there is nothing in the record to suggest that he intended to make any deliveries on the evening of December 23, 1966.

The Industrial Commission on these facts concluded that John Lavach was an Employee within the meaning of the Act, but that he was not engaged in the performance of services under a Contract of hire at the time of his death. It was the Commission's reasoning that, by virtue of decedent's ownership of all the stock in his employer, the corporation was merely the decedent's alter ego, and that he could not have entered into a contract of hire with himself. The Commission thus disregarded the distinct legal existence of the Englewood Moving & Truck Rental Company as a corporation to defeat this claim under the Colorado Workmen's Compensation laws.

In this jurisdiction a court in the exercise of its equity jurisdiction may disregard the corporate form where justice requires such action. In these cases, however, the party seeking to deny an individual...

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22 cases
  • Lowell Staats Min. Co., Inc. v. Pioneer Uravan, Inc.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • 19 Junio 1989
    ...from the general rule that the corporation and its shareholder are to be treated as distinct legal persons. Industrial Comm'n v. Lavach, 165 Colo. 433, 439 P.2d 359, 361 (Colo.1968). Pioneer and Uravan shared some common officers and directors. Exhibits 45, 47, 48, 49, 50, 51. Uravan and Nu......
  • Gude v. City of Lakewood, 80SA81
    • United States
    • Colorado Supreme Court
    • 2 Noviembre 1981
    ... ...         161 Colo. at 350, 421 P.2d at 739; accord, Industrial Commission v. Lavach, 165 Colo. 433, 439 P.2d 359 (1968); Contractors Heating and Supply Co. v ... ...
  • Peterson v. Trailways, Inc.
    • United States
    • U.S. District Court — District of Colorado
    • 24 Enero 1983
    ...§ 41.1.) Fink v. Montgomery Elevator Company of Colorado, 161 Colo. 342, 421 P.2d 735, 739 (1966). See also Industrial Commission v. Lavach, 165 Colo. 433, 439 P.2d 359 (1968). In keeping with the alter ego doctrine's focus on questions of equity and policy, the Colorado courts have placed ......
  • Yoder v. Honeywell Inc.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • 8 Enero 1997
    ... ... (HIS). This fact alone is not enough to justify disregarding the corporate form. See Industrial Comm'n v. Lavach, 165 Colo. 433, 439 P.2d 359, 361 (1968). Second, the three-member board of ... ...
  • Request a trial to view additional results

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