Brown v. Muto
| Decision Date | 29 November 1996 |
| Docket Number | No. 95CA1985,95CA1985 |
| Citation | 943 P.2d 38 |
| Parties | Jerrell BROWN, Petitioner, v. Louis V. MUTO, d/b/a Spearhead Enterprises, and The Industrial Claims Appeals Office of the State of Colorado, Respondents. . I |
| Court | Colorado Court of Appeals |
Dawes & Harriss, P.C., Gail C. Harriss, Durango, for Petitioner.
Deitch Legal Services, Simson Unterberger, Jeffrey Deitch, Durango, for Respondent Louis V. Muto.
No Appearance for Respondent Industrial Claim Appeals Office.
Opinion by Judge ROY.
Petitioner, Jerrell Brown (claimant), seeks review of a final order of the Industrial Claim Appeals Panel, which determined that respondent, Louis V. Muto, d/b/a Spearhead Enterprises, was not obligated for workers' compensation benefits because the residential real property exemption contained in § 8-41-402(1), C.R.S. (1996 Cum.Supp.) applied to him. We affirm.
Claimant, who occasionally had been employed by respondent as a maintenance man, was injured when he fell off the roof of a barn being constructed on respondent's property. While respondent planned to construct a residence on the property, at the time of the accident, the barn was the only structure on the property. It is undisputed that respondent did not have workers' compensation coverage.
The Administrative Law Judge (ALJ) initially found that claimant was otherwise an employee of respondent and that construction of the barn was not construction of a residence. Accordingly, the ALJ awarded claimant temporary disability benefits, medical benefits, penalties, and interest.
On review, the Panel set aside this order and remanded for additional findings on the issues of whether respondent was the owner or occupant of qualified residential real property and whether claimant was "otherwise" an employee of the respondent under § 8-41-402(1).
On remand, the ALJ found that construction of the barn constituted work on respondent's private residence, since the barn was intended for private residential purposes, as distinguished from business purposes, and was located on property zoned for residential purposes where respondent's private home was to be constructed. The ALJ further found that claimant was not "otherwise an employee" of respondent at the time of the accident. Accordingly, the ALJ denied the claim for workers' compensation without prejudice.
On review, the Panel modified the order so that the dismissal was with prejudice, and in all other respects affirmed.
Section 8-41-402(1), with exceptions, treats the owner of real property who contracts for work "on and to" the property as the "statutory employer" of the contractor, subcontractor, or their employees.
The statute provides, in pertinent part, as follows:
Every person ... owning any real property or improvements thereon and contracting out any work done on and to said property to any contractor, subcontractor or person who hires or uses employees in the doing of such work shall be deemed to be an employer under the terms of articles 40 to 47 of this title.
....
Articles 40 to 47 of this title shall not apply to the owner or occupant, or both, of residential real property which meets the definition of a 'qualified residence' under section 163(h)(4)(A) of the federal 'Internal Revenue Code of 1986,' as amended, who contracts out any work done to the property, unless the person performing the work is otherwise an employee of the owner or occupant, or both, of the property.
Claimant first contends that the qualified residence property exemption applies only to "statutory employers." That is, if there is, in fact, a direct employer-employee relationship between the claimant and the owner or occupant of the qualified residence, the qualified residential property exemption of § 8-41-402(1) does not apply. We disagree.
Section 8-41-402(1) creates a legal fiction in order to extend workers' compensation benefits. The legal fiction is that contractors and subcontractors, who might otherwise be independent contractors, and their employees, are "employees" of the property owner for workers' compensation purposes while working on a real property improvement. These "employees" are "statutory employees." The statute then carves out an exemption, the "qualified residential property exemption," which is, in our view, broader than the legal fiction.
The plain language of the qualified residential property exemption is to exempt the owner or occupant of a qualified residence from the entirety of articles 40 to 47 of title 8, or the entire Workers' Compensation Act. Had the General Assembly desired to exempt only as to statutory employees, it could have done so.
Thus, we agree with the Panel that the qualified residential property exemption in § 8-41-402(1) applies to direct as well as statutory employment relationships. We conclude that the qualified residential property exemption applies to actual as well as statutory employees of the owner or occupant of qualified residential real property unless the person is otherwise an employee of the owner or occupant.
Consequently, the dispositive issue in determining whether the qualified residential property exemption of § 8-41-402(1) applies here is not whether the owner or occupant of the residential real property can be classified as the actual or statutory employer of the claimant, but whether the property meets the definition of "qualified residence" or the claimant was otherwise an employee of the owner or occupant.
With respect to the first issue, claimant contends that there was insufficient evidence to support the conclusion that respondent met his burden of proof to show that the barn was a "qualified residence" within the meaning of § 8-41-402(1). Again, we disagree.
Liability for workers' compensation benefits is dependent on the relationship of the parties at the time a claimant is injured. See Nye v. Industrial Claim Appeals Office, 883 P.2d 607 (Colo.App.1994). Thus, as the Panel held, the determination whether respondent is the owner of a qualified residence must be made as of the time of the injury. Organ v. Jorgensen, 888 P.2d 336 (Colo.App.1994).
Here, the ALJ's determination is supported by the testimony of respondent and his family as to the planned use of the barn and the ultimate construction of a primary or secondary residence on the parcel. Thus, since the ALJ's determination is supported by substantial evidence, it is binding on review. See Martinez v. Regional Transportation District, 832 P.2d 1060 (Colo.App.1992). Furthermore, claimant has failed to supply any authority that suggests that construction of the residence must precede the construction of a barn or other out-buildings for the intended use to be for private residential purposes.
With respect to the second issue, claimant asserts that the Panel erred in concluding he was not otherwise an employee of the respondent as contemplated by § 8-41-402(1). We do not address this issue. An appellate court may not consider an issue that was not first raised before the Panel. Lindner Chevrolet v. Industrial Claim Appeals Office, 914 P.2d 496 (Colo.App.1995). The ALJ...
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Thornbury v. Allen
...and the burden of proof is on the party asserting that the property meets the definition of a "qualified residence." Brown v. Muto, 943 P.2d 38 (Colo.App.1996). However, even if it is determined that Allen is the owner of a "qualified residence," Thornbury may be "otherwise an employee" of ......
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Ortega v. Ind. Claim Appeals off. of State
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