51 P.3d 979 (Ariz.App. Div. 1 2002), 1 CA-IC 01-0103, Putz v. Industrial Com'n of Arizona

Docket Nº:1 CA-IC 01-0103.
Citation:51 P.3d 979, 203 Ariz. 146
Party Name:Mike PUTZ & Pat Putz, husband and wife, dba Northern Construction, Petitioner Employer, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Ernest Day, Respondent Employee, Special Fund Division/No Insurance Section, Respondent Party in Interest.
Case Date:August 15, 2002
Court:Court of Appeals of Arizona

Page 979

51 P.3d 979 (Ariz.App. Div. 1 2002)

203 Ariz. 146

Mike PUTZ & Pat Putz, husband and wife, dba Northern Construction, Petitioner Employer,



Ernest Day, Respondent Employee, Special Fund Division/No Insurance Section, Respondent Party in Interest.

No. 1 CA-IC 01-0103.

Court of Appeals of Arizona, First Division, Department C.

Aug. 15, 2002.

As Amended Aug. 26, 2002.

Page 980

[203 Ariz. 147] Jones & Miller By Kenton D. Jones, Prescott, Attorneys for Petitioner Employer.

Laura L. McGrory, Acting Chief Counsel, The Industrial Commission of Arizona, Phoenix, Attorney for Respondent.

Taylor & Associates, P.L.L.C. By Barbara J. Callaway, Phoenix, Attorneys for Respondent Employee.

The Industrial Commission of Arizona, Special Fund Division By Paula R. Eaton, Phoenix, Attorney for Respondent Party in Interest.


HALL, Judge.

¶ 1 In this special action, petitioner employer Mike and Pat Putz, husband and wife, dba Northern Construction, request that we set aside an Industrial Commission award for compensable claim. Northern Construction asserts that the Administrative Law Judge ("ALJ") erred in determining that it was an employer subject to Arizona's Workers' Compensation Act ("Act"), Ariz.Rev.Stat. ("A.R.S.") §§ 23-901 through -1091. Because we conclude that Northern Construction does not "regularly employ" any workers, see A.R.S. § 23-902(A) (1996), and is therefore not an employer covered by the Act, we set aside the award. 1


¶ 2 Mike Putz ("Putz") is a licensed residential contractor who, doing business as Northern Construction, works in the home repair and construction trade. He gets work through an advertisement in the paper, doing a "[l]ittle bit of everything," including door, glass, and lock repair. The majority of the time he works alone, only hiring help as needed to assist him in tasks involving objects too heavy or too large for him to handle alone. He does his own bookkeeping and does not maintain a payroll or workers' compensation insurance. In 2000, Jeanette and Grenville French, then husband and wife and joint business owners, hired Northern Construction to construct a forty-by-eighty-foot prefabricated metal building.

¶ 3 Ernest Day, a retired plastic welder who hires out and barters his labor, helped construct the building after Jeanette French informed him of the opportunity to earn $100 per day helping Putz. Day expected to work approximately four days. However, he fell from a ladder on September 28, 2000, his third day at the job site, sustaining multiple broken bones and a ruptured lung.

¶ 4 The No Insurance Section of the Commission's Special Fund Division denied Day's workers' compensation claim. See A.R.S. § 23-907(B) (2000). Day then requested a hearing at which six witnesses testified: Jeanette and Grenville French, Putz, Day, Jerry Dawson, and Ralph Clayton. The parties stipulated that the only issues to be determined at the hearing were whether Day was an "employee" under the Act and whether Northern Construction was an "employer" subject to the Act.

¶ 5 At the hearing, Putz denied having any regular employees or regularly hiring extra workers. Putz estimated that during the year preceding the administrative hearing, he hired or borrowed workers for a number of hours totaling approximately thirty-two eight-hour workdays ("workdays"). He did not know if or when he would need to hire extra labor again, and continued to work by himself.

¶ 6 Dawson, a carpenter who owns his own cabinetry business, testified that he also hires himself out occasionally to others, including the Frenches and Putz. He first met Putz when he helped Putz construct a kennel for Jeannette French contemporaneously with the building. After that, Putz used Dawson on two other projects requiring more than one person. On these four projects, Dawson worked hours equivalent to twenty workdays. On these same four projects, Putz used other workers, including Day, for a total of hours equivalent to four workdays. When Dawson worked for Putz,

Page 981

[203 Ariz. 148] Dawson set his own schedule and rate of pay. He also worked other jobs and did not consider himself employed by Putz or Northern Construction.

¶ 7 The ALJ determined that the claim was compensable after finding both that Day was an employee under the Act and that Northern Construction was an employer subject to the Act. In support of his findings, the ALJ incorporated portions of Day's post-hearing memorandum.

¶ 8 Northern Construction filed this special action, questioning only the ALJ's determination that it is an employer subject to the Act. We have jurisdiction pursuant to Arizona Rule of Procedure for Special Actions 10, and A.R.S. §§ 12-120.21(A)(2) (1992) and...

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