Benavidez v. Sierra Blanca Motors

• Citation: 1996 NMSC 45,122 N.M. 209,922 P.2d 1205
• Decision Date: 11 July 1996
• Docket Number: No. 23320,23320
• Parties: Jose Ventura BENAVIDEZ, Respondent-Appellant, v. SIERRA BLANCA MOTORS, Petitioner-Appellee.
• Court: Supreme Court of New Mexico

Page 1205

922 P.2d 1205

122 N.M. 209

Jose Ventura BENAVIDEZ, Respondent-Appellant, v. SIERRA BLANCA MOTORS, Petitioner-Appellee.

No. 23320.

Supreme Court of New Mexico.

July 11, 1996.

[122 N.M. 210] Pelton & O'Brien, P.A., David L. Skinner, Albuquerque, for Petitioner-Appellee.

Warren F. Reynolds, P.A., Vernon O.M. Henning, Hobbs, for Respondent-Appellant.

OPINION

MINZNER, Justice.

Jose Ventura Benavidez, an inmate at the Roswell Correctional Center (the RCC), sought workers' compensation benefits for injuries he sustained while participating in an inmate-release program at Sierra Blanca Motors. Upon cross-motions for summary judgment, the workers' compensation judge held that Benavidez's status as a prisoner precluded his receipt of benefits and granted summary judgment in favor of Sierra Blanca. The Court of Appeals reversed the judge's grant of summary judgment to Sierra Blanca, concluding as a matter of law that Benavidez was Sierra Blanca's employee and therefore entitled to receive workers' compensation benefits. Benavidez v. Sierra Blanca Motors, 120 N.M. 837, 907 P.2d 1018 (Ct.App.), cert. granted, 120 N.M. 828, 907 P.2d 1009 (1995).

We accepted certiorari to address the question whether a prisoner participating in an inmate-release program who is injured while performing work at a private jobsite may be considered an employee of that private business entitled to workers' compensation benefits under the New Mexico Workers' Compensation Act, NMSA 1978, §§ 52-1-1 to -70 (Repl.Pamp.1991 & Cum.Supp.1995). See Scott v. City of Hobbs, 69 N.M. 330, 332, 366 P.2d 854, 856 (1961) (holding that prisoner who worked for city under ordinance requiring that judges order physically-fit prisoners to work in return for credit on fines not entitled to workers' compensation benefits for injuries sustained by him while working for city). We hold that Benavidez's status as a prisoner did not preclude the existence of an employer-employee relationship with Sierra Blanca for the purpose of receiving workers' compensation benefits. To the extent Scott is inconsistent with that holding, it is overruled.

We also hold that whether Benavidez was an employee of Sierra Blanca for the purpose of receiving workers' compensation benefits depends on the particular relationship he had with Sierra Blanca. This case was resolved on cross-motions for summary judgment, and the resulting record does not contain sufficient stipulated facts or other undisputed evidence to support determination of Benavidez's status as a matter of law. We thus affirm the Court of Appeals in reversing summary judgment in favor of Sierra Blanca, but we reverse the Court of Appeals in granting Benavidez summary judgment. We remand this cause to the Workers' Compensation Administration for further factual inquiry regarding the nature of the relationship between Benavidez and Sierra Blanca and entry of an appropriate judgment.

FACTS

Sierra Blanca Motors--a private business enterprise in Roswell, New Mexico, that sells and services automobiles--planned to demolish and prepare for remodeling one of the buildings located on its property. Sierra Blanca contacted the RCC to request the services of several inmates to work on its demolition and reconstruction crew. Benavidez was one of the prisoners who volunteered to participate in the project through the RCC's inmate work-release program.

Sierra Blanca supervised and provided equipment to the prisoners. It kept daily payroll records and paid their wages directly to the RCC, although it did not withhold payroll taxes or make any other deductions. The RCC deposited each inmate's net wages into the inmates' individual accounts after deducting the costs of each inmate's participation in the work-release program and certain costs of their confinement.

Over a month after Benavidez had been working at the jobsite, a Sierra Blanca supervisor directed him to dismantle an overhead door. While working on the door from a ladder Benavidez fell and was injured. His initial complaint requested temporary total disability, permanent partial disability, and medical benefits against both the Department of Corrections, which administers the RCC, and Sierra Blanca. However, Benavidez filed his cross-motion for summary judgment solely against Sierra Blanca.

The judge determined that the following facts were undisputed: (1) Benavidez was injured when he fell from a ladder while working on a remodeling project; (2) Sierra Blanca directed the work being performed by Benavidez; (3) Benavidez was a prisoner at the RCC on the date of the accident; (4) Benavidez was participating in a work-release program administered by the RCC on the date of the accident; and (5) Benavidez's status on the date of the accident, while engaged in the RCC work-release program, was that of a volunteer. Benavidez, 120 N.M. at 839, 907 P.2d at 1020. Based on the undisputed facts the judge concluded that Benavidez was not an employee and granted summary judgment both to Sierra Blanca and the Department.

Benavidez appealed. On appeal he conceded that he was not an employee of the Department, and the Court of Appeals affirmed the order granting summary judgment to the Department. The Court of Appeals reversed the order granting summary judgment to Sierra Blanca and denying Benavidez's cross-motion for summary judgment. The Court of Appeals distinguished Scott and, relying in part on Romero v. Shumate Constructors, Inc., 119 N.M. 58, 888 P.2d 940 (Ct.App.1994), rev'd in part and aff'd in part, Harger v. Structural Services, Inc., 121 N.M. 657, 916 P.2d 1324 (1996), held that Benavidez was an employee of Sierra Blanca and entitled to workers' compensation benefits as a matter of law. We affirm in part, reverse in part, and remand for further proceedings.

DISCUSSION

The Workers' Compensation Act provides that "every private person, firm or corporation engaged in carrying on for the purpose of business or trade within this state ... shall become liable to and shall pay to any such worker injured by accident arising out of and in the course of his employment ... compensation." Section 52-1-2. Section 52-1-16(A) defines "worker" as "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." Relying in part on Scott, Sierra Blanca argues that the requisite employment contract could not be formed as a matter of law and alternatively argues no contract was formed in fact. After discussing the relevance of Scott we consider Sierra Blanca's other arguments.

THE RELEVANCE OF SCOTT

New Mexico courts have long recognized that an essential element of establishing a contract of hire is an agreement whereby the worker receives wages in exchange for labor. Joyce v. Pecos Benedictine Monastery, 119 N.M. 764, 767, 895 P.2d 286, 289 (Ct.App.1995); Jelso v. World Balloon Corp., 97 N.M. 164, 168, 637 P.2d 846, 850 (Ct.App.1981). "[T]here must be mutual assent, express or implied." Joyce, 119 N.M. at 767, 895 P.2d at 289. Sierra Blanca argues that a valid employer-employee relationship requires mutuality lacking on these facts. Sierra Blanca reasons that Benavidez was obligated to provide labor by virtue of his status as a prisoner and that its obligation ran to the Department of Corrections. Sierra Blanca relies on Scott and analogous precedent from other jurisdictions for the proposition that Benavidez's obligation to provide labor was not voluntary.

In Scott the inmate-claimant worked for the city pursuant to an ordinance allowing a judge to order physically-fit prisoners to perform work. The inmate-claimant was not paid wages for the work performed; instead, he received monetary credit against a fine imposed for his charged crime. While working on a city street, the claimant sustained an injury and consequently sought workers' compensation benefits. This Court affirmed the denial of compensation, holding that "[s]o long as his status was that of a prisoner, there could not exist the employer-employee relationship resulting from a contract of hire as contemplated by the Act." Scott, 69 N.M. at 331, 366 P.2d at 855. The Scott Court relied on Professor Larson's workers' compensation treatise, which had stated at that time " 'a convict cannot and does not make a true contract of hire.' " Id. (quoting 1 Larson's Workmen's Compensation Law, § 47.31 (1952)).

Under the same rationale, courts have denied workers' compensation benefits to prisoners when the nature of the work relationship is not voluntary, or when other circumstances preclude the formation of a contract of hire. The Virginia Supreme Court in Commonwealth v. Woodward, 249 Va. 21, 452 S.E.2d 656, 658 (1995), denied benefits to a prisoner because prisoners "not on a work release program" are incapable of making "a true contract of hire with the authorities by whom he is confined." Likewise, in Republic-Franklin Insurance Co. v. City of Amherst, 50 Ohio St.3d 212, 553 N.E.2d 614 (1990), the Ohio Supreme Court denied benefits to an individual injured while performing community service in lieu of a jail sentence. The court held that a community-service worker cannot be considered an "employee," reasoning there is no express or implied contract of hire between the parties because one "who consents to perform community service in lieu of sentence enters into an agreement with the court, not the agency where the work is performed." Id. 553 N.E.2d at 618.

Because it is undisputed that Benavidez was a prisoner at the time of the accident, the judge might have granted Sierra Blanca summary judgment on the basis that Scott barred Benavidez's recovery. The judge might have concluded that similar authority from other jurisdictions represented the majority view. The Court of Appeals distinguished Scott on its facts. We agree that Scott is distinguishable...