Childs v. Kalgin Island Lodge, S-3012
| Decision Date | 04 August 1989 |
| Docket Number | No. S-3012,S-3012 |
| Citation | 779 P.2d 310 |
| Parties | Donald CHILDS, Appellant, v. KALGIN ISLAND LODGE & Fireman's Fund Insurance Companies, State of Alaska, Workers' Compensation Board, Appellees. |
| Court | Alaska Supreme Court |
Ernest Z. Rehbock, Rehbock & Rehbock, Anchorage, for appellant.
Allen E. Tesche and Susan L. Daniels, Russell & Tesche, Anchorage, for appellees.
Before MATTHEWS, C.J., and RABINOWITZ, BURKE, COMPTON and MOORE, JJ.
The issue in this appeal is whether the Alaska Workers' Compensation Board (Board) applied the correct legal test in deciding that Donald Childs was not an employee of Kalgin Island Lodge (Lodge) after he performed various work-related tasks for the Lodge. Childs claims that he was injured in an auto accident while employed by the Lodge. He filed a claim under the Alaska's Workers' Compensation Act (Act), but was denied coverage by the Board. It concluded that Childs had no contract of hire with the Lodge because the formal hiring process was not complete, and no contract could be implied because no emergency situation existed.
Childs appealed to the superior court, which affirmed the Board's decision. It noted that "all steps of the interview and negotiation process must be complete" before an employee/employer relationship could be formed.
In July 1986, Childs, a professional pilot, sought employment with the Lodge as a pilot and guide. In order to obtain employment, Childs contacted Charles Tulin (Tulin), who interviews and recommends pilots to be employed by the Lodge. Even though Tulin was not the owner of the business which operated the Lodge, he apparently owned certain Lodge facilities and was the co-owner of the real property, improvements and equipment used by the Lodge, including all airplanes.
The Board found that the final hiring decisions normally rested with the Lodge's corporate president and board of directors. It is unclear, however, whether Tulin also had authority, actual or apparent, to hire Childs without their prior approval. However, it is clear from the record that Tulin's recommendations to the Lodge regarding hiring were given at least great weight and would be seriously considered. The corporate president and owner of the business was Tulin's son, Don Tulin.
On or about June 30, 1986, Tulin requested that Childs come to Tulin's law office for an interview. Following the interview, Tulin asked Childs to call him after the July 4th weekend. Childs called as instructed and was invited to lunch on July 7, 1986.
Childs testified that at lunch, Tulin offered to employ him for $3,500 per month, which he accepted. Tulin testified that no such offer was made. Tulin instructed Childs to report to his office the next day. Childs did so. At this time, Tulin informed the insurance agent for the Lodge, both by mail and by phone, that Childs should be added to the Lodge's insurance coverage. Tulin directed Childs to hand-carry the insurance agent's letter to the post office to insure prompt delivery and response, which Childs did.
Later that day, at Tulin's request, Childs drove to Lake Hood, where Tulin introduced Childs to various Lodge employees. While there, Childs assisted in loading a plane for a flight to the Lodge, pumped the plane's floats and filled it with 25 gallons of fuel. He then signed for the fuel on behalf of the Lodge. Childs testified that on this occasion, he was instructed to inspect the Lodge's planes and begin making a list of the repairs that needed to be completed for the upcoming winter. He further testified that he was instructed to begin setting up maintenance schedules for the Lodge's planes and programs for pilot selection and training. Later that day, Childs gassed and changed the oil on another of the Lodge's airplanes. He paid for the gas and oil with a Lodge check, given him by Tulin's wife.
Childs was informed by Tulin that he would accompany Tulin out to the Lodge on either July 10 or July 11. On July 10, Childs prepared gear and readied himself for the trip to the Lodge. He was told the trip would be the following day.
On July 11, 1986, Tulin introduced Childs to Don Tulin. Childs testified that he was instructed by both men to use Tulin's law office facilities to work on a marketing program for the Lodge. At this time, Childs made several phone calls in furtherance of marketing for the Lodge.
At about 4 p.m., Childs either volunteered or was asked by Tulin to go to a sporting goods store to pick up two fishing rods. The rods were to be bought with a personal check from Tulin. On the way to the store, while driving Tulin's car, Childs was involved in an auto accident and was injured. He filed a worker's compensation claim after submitting his Notice of Occupational Injury to Tulin.
After depositions and hearings, the Board denied Childs' claim. The Board based its decision on its conclusion that no express contract existed between the Lodge and Childs, because not all of the formal hiring process had been completed at the time of the accident. The Board further concluded that because no emergency situation existed during the time in question, Childs was not an emergency employee and therefore could not receive the benefits of the Act. One member of the Board dissented on the ground that Childs was in a "tryout" period and the Act's coverage should apply under the emergency exception.
Childs appealed to the superior court, which affirmed the Board's decision. The court concluded that the Board applied the correct law and that there was substantial evidence 1 to support its findings of fact. Thus, because no emergency existed and no express contract was made, no relationship existed between the parties which would entitle Childs to coverage under the Act. Therefore, the superior court concluded that workers' compensation benefits were properly denied, and the Board's decision was affirmed. Childs appeals.
To determine the issue presented before this court, we need only consider whether the Board applied the proper legal test to reach its conclusions. 2 Ostrem v. Alaska Workmen's Compensation Bd., 511 P.2d 1061, 1063 (Alaska 1973); Burgess Construction Company v. Smallwood, 623 P.2d 312, 317 (Alaska 1981). This court has consistently maintained that it will not vacate findings of the Board when supported by substantial evidence. However, if the Board's decision rests on an incorrect legal foundation, review is not so limited. Hewing v. Alaska Workmen's Compensation Bd., 512 P.2d 896, 898 (Alaska 1973). In such cases, independent review of the law is proper. Simon v. Alaska Wood Prods., 633 P.2d 252, 254 (Alaska 1981); M-K Rivers v. Schleifman, 599 P.2d 132, 134 (Alaska 1979).
The Act provides that an employee is a person employed by an employer, and an employer is, in part, "a person employing one or more persons in connection with a business or industry." 3
The Board correctly recognized that before an employee/employer relationship exists under the Act, an express or implied contract of employment must exist. Whitney-Fidalgo Seafoods, Inc. v. Beukers, 554 P.2d 250, 252 (Alaska 1976). The Board also correctly recognized that employment generally begins after a meeting of the minds has been reached between the employee and the employer, for it is at that point that a contract is formed. See 1C A. Larson, The Law of Workmen's Compensation § 47.10 (1986) (hereinafter Larson). Furthermore the Board correctly noted that volunteer work, standing alone, does not necessarily establish an employee/employer relationship for the purposes of the Act. See City of Seward v. Wisdom, 413 P.2d 931, 936-37 (Alaska 1966).
However, in applying the above law the Board incorrectly concluded that employee/employer relationships exist only when an express contract for hire is finalized by completion of the hiring process, or an implied contract is formed based on emergency circumstances. The superior court followed the same analysis.
Situations arise in which employee/employer relationships exists without either an express contract or an emergency situation. See, e.g., County of Los Angeles v. Workers' Compensation Appeals Bd., 30 Cal.3d 391, 179 Cal.Rptr. 214, 637 P.2d 681 (1981); Laeng v. Workmen's Compensation Appeals Bd., 6 Cal.3d 771, 100 Cal.Rptr. 377, 494 P.2d 1 (1972); Moore v. Gundelfinger, 56 Mich.App. 73, 223 N.W.2d 643 (1974); Smith v. Venezian Lamp Co., 5 A.D.2d 12, 168 N.Y.S.2d 764 (1957). See also 1C Larson § 47.42(b). This court has never declared that express contracts are formed only after the formal hiring process is complete, nor have we adopted the view that only emergency situations may sustain implied contracts for hire. Because it is obvious that the Board failed to apply the correct legal analysis under which an employee/employer relationship can be created, we must remand the case to the Board for consideration in light of the following.
As noted in Fjeldahl v. Homer Co-op. Ass'n, 11 Alaska 112, 135 (D. Alaska 1946), "to employ" means to make use of the services of another. "To be employed in anything means not only the act of doing it, but also to be engaged to do it; to be under contract or orders to do it." Id. (citations omitted). We agree with the holding of the New Mexico Supreme Court that mere formalization of a contract for hire is not the controlling factor in determining whether an employment contract exists. Roan v. D.W. Falls, Inc., 72 N.M. 464, 384 P.2d 896, 899 (1963). See generally 9 W. Jaeger, Williston on Contracts § 1012 (3d ed. 1967); 1 id. §§ 3, 3A, 36, 36A, 39 (3d ed. 1957).
The formation of an express contract requires an offer encompassing its essential terms, an unequivocal acceptance of the terms by the offeree, consideration and an intent to be bound. Hall v. Add-Ventures, Ltd., 695 P.2d 1081, 1087 n. 9 (Alaska 1985) (citing 1 W. Jaeger, Williston on Contracts § 64, at 211, § 72, at 235, §...
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