Colmore v. Uninsured Employers' Fund

Decision Date22 September 2005
Docket NumberNo. 04-310.,04-310.
Citation121 P.3d 1007,2005 MT 239,328 Mont. 441
PartiesRupert M. COLMORE, III, a/k/a Rupert M. Colmore, a/k/a Rupert Colmore, individually, and Colmore Management Company, LLC, as general partner, and Rupert M. Colmore, Eunice R. Colmore and First Farmers and Merchants National Bank as trustee for Mary P. Colmore, Virginia Dale Guild Colmore, and Eunice Baxter Jackson Colmore, as limited partners, in Colmore Properties, L.P. a/k/a Colmore Property Limited Partnership, Petitioners and Appellants, v. UNINSURED EMPLOYERS' FUND and Jacqueline Renee Forgey, Respondents and Respondents.
CourtMontana Supreme Court

Michael J. Lilly, Berg, Lilly & Tollefson, P.C., Bozeman, for Appellant.

Mark Cadwallader, Special Assistant Attorney General, Department of Labor and Industry, Helena, for Respondent Uninsured Employers' Fund.

Daniel B. Bidegaray and Anna M. Bidegaray, Bidegaray Law Firm, L.L.P., Bozeman, for Respondent Forgey.

WARNER, Justice.

¶ 1 Rupert M. Colmore ("Colmore") appeals from a Judgment of the Workers' Compensation Court concluding that the decedent, Douglas Forgey ("Forgey") was Colmore's employee at the time he died in a work-related accident on September 14, 2000, and that Colmore, as an uninsured employer, is required to indemnify the Uninsured Employer's Fund for death benefits paid to Forgey's beneficiaries. We affirm in part and reverse in part.

¶ 2 We address the following issues on appeal:

¶ 3 1. Did the Workers' Compensation Court err in concluding that Forgey was not a casual employee and, therefore, was entitled to Workers' Compensation benefits?

¶ 4 2. Did the Workers' Compensation Court err in determining that an error in calculation of the benefits could be corrected more than a year after benefits were determined?

I. FACTUAL AND PROCEDURAL BACKGROUND

¶ 5 Colmore is a long time resident of Tennessee. Colmore retired from farming in Tennessee in 1994. However, he still owned a 400 acre clear-cut parcel in Tennessee that he was in the process of re-planting in 2000. Prior to retiring, Colmore established a limited partnership named Colmore Properties, L.P. ("Colmore Properties"), for the purpose of:

[I]nvesting in, acquiring, developing, holding, constructing, managing, operating, leasing, subleasing, owning, selling, exchanging, or otherwise dealing in land, buildings, improvements, and any interest or rights therein for agricultural uses and management of natural resources ....

Colmore, his wife Eunice and their three daughters are limited partners of Colmore Properties. Colmore Management Company, L.L.C., is the general partner of Colmore Properties. Colmore was the "Chief Manager" of Colmore Management Company.

¶ 6 Colmore Properties acquired Poison Creek Ranch near Livingston, Montana, in August of 1997. When the ranch was initially purchased, it was primarily used for recreational purposes. The ranch consists of 680 acres and a home. The property was partially fenced, but the house and the fences were in a state of disrepair.

¶ 7 On January 1, 1998, Colmore individually leased the ranch from Colmore Properties. The purpose of the lease was described as follows:

The express purpose of this lease is for agricultural purposes only, specifically the grazing and caring of cattle, horses and livestock and the planting of feed grains and other livestock supporting crops; and the exclusive use and occupancy of the house located on the Premises.

The lease required Colmore to maintain the property as follows:

[L]essee agrees to furnish all necessary material, labor, chemicals, seeds, fertilizers, and equipment to properly apply all necessary fertilizer; treat noxious weeds; maintain the land as agricultural land; plant, grow and harvest seasonal crops on the Premises; and conduct all agricultural practices reasonably related to the growth and harvest of seasonal crops on the Premises and grazing and care of cattle, horses, and livestock, all at the Lessee's sole cost and expense. Lessee shall cultivate the Premises in a good and husbandlike manner in accordance with the best agricultural methods, and in accordance with applicable laws, including environmental laws. Lessee shall be responsible for the maintenance, care and upkeep of the property.

¶ 8 Colmore Properties paid for the repairs to the home to make it habitable for Colmore and his wife. The Colmores moved into the home in November 1998. They lived there during the summer and returned to Tennessee each year for the winter months. Colmore maintained a small farming operation at Poison Creek Ranch, planting less than an acre of wheat for the purpose of attracting birds to the ranch, and several acres of hay. Colmore pastured his wife's horses at the ranch and he allowed a neighbor to pasture his horses on the ranch in exchange for looking after the ranch during the winter months. The neighbor also gave Colmore a horse and built a corral on Colmore's property.

¶ 9 Colmore brought farm equipment with him from Tennessee including three tractors, a plow, a roller, a hay rake, and a grain drill, and the auger involved in Forgey's death. Prior to the incident in question, Colmore had not sold any livestock or crops and had not filed a Montana Income Tax Return. Colmore had not opened a Montana bank account, and handled all of his financial transactions out of his Tennessee accounts.

¶ 10 Colmore became acquainted with Forgey in 1999 when he was working at a ranch located next to the Poison Creek Ranch. In early August 2000, Forgey told Colmore that he was considering quitting his ranch job and starting his own fencing business. Forgey asked Colmore if he had any fencing work that he could do for him. Colmore said that he did not. In late August, Forgey told Colmore he had quit his job and was starting his fencing business. He asked Colmore if he could give him some work. Colmore agreed to employ Forgey for three to four weeks.

¶ 11 Colmore agreed to pay Forgey $12 per hour. He also agreed to reimburse him for any materials purchased. Forgey provided his own hand tools, but Colmore provided a tractor and an auger. Forgey began fencing for Colmore on August 10, 2000. Colmore told Forgey which sections of fence to work on and Forgey did the work. On September 14, 2000, while working on the ranch, Forgey, who was working alone, was caught in the auger and died as a result of his injuries. Colmore found his body at the worksite. Over the four weeks that Forgey worked for Colmore he earned $1800, and was paid in cash.

¶ 12 On April 30, 2001, Jacqueline Renee Forgey ("Mrs. Forgey") filed a beneficiary's claim for compensation with the Montana Department of Labor and Industry ("Department") requesting Workers' Compensation benefits for herself in connection with the death of her husband. She stated in the form, that she signed and filed, that Forgey worked for Colemore for four weeks and was paid $1,800. The Department determined that an employment relationship existed between Colmore and Forgey at the time of Forgey's death. The Department further found that Colmore was required by law to carry Workers' Compensation Insurance for Forgey. Accordingly, the Department ordered Colmore Properties to pay Workers' Compensation benefits to Mrs. Forgey.

¶ 13 As Colmore Properties failed to provide Forgey with Workers' Compensation Insurance, the Uninsured Employer's Fund ("UEF") began paying benefits to Mrs. Forgey on July 27, 2001.

¶ 14 Colmore Properties filed a Petition for Dispute Resolution with the Workers' Compensation Court ("WCC") on October 17, 2002. On February 12, 2003, the WCC held a trial to resolve the dispute. On April 18, 2003, the WCC was advised that an additional issue concerning the appropriate wage and compensation needed to be addressed. On May 1, 2003, Mrs. Forgey filed a motion to amend the wage and compensation rate paid by the UEF, thereby requesting an increase in the average weekly wage from $300 to $443. The UEF stipulated that a calculation error was made and $443 was the proper average weekly wage. Counsel for all parties submitted the issue on an agreed statement of facts and documents. The WCC directed the parties to file the agreed statement of facts and briefs for its consideration.

¶ 15 On March 4, 2004, the WCC entered its Findings of Fact, Conclusions of Law and Judgment, in which it concluded that Colmore, individually, was Forgey's employer, and that Forgey was not a "casual employee" or "independent contractor." Therefore, Colmore was required to provide Workers' Compensation Insurance to Forgey, and Mrs. Forgey was entitled to payment based on an average wage of $443 per week. Colmore's appeal is limited to the WCC's findings that Forgey was not a casual employee and the amount of the benefit payment.

II. STANDARD OF REVIEW

¶ 16 We review findings of fact to determine if they are supported by substantial, credible evidence, and we review conclusions of law to determine if they are correct. Hiett v. Missoula County Pub. Sch., 2003 MT 213, ¶ 15, 317 Mont. 95, ¶ 15, 75 P.3d 341, ¶ 15. In Workers' Compensation cases, the law in effect at the time of the claimant's injury establishes the claimant's substantive right to benefits. Hiett, ¶ 15.

III. DISCUSSION
ISSUE ONE

¶ 17 Did the Workers' Compensation Court err in concluding that Forgey was not a casual employee and, therefore, was entitled to Workers' Compensation benefits?

¶ 18 Section 39-71-401(1), MCA (1999), provides that "[e]xcept as provided in subsection (2), the Workers' Compensation Act applies to all employers, as defined in 39-71-117, and to all employees, as defined in 39-71-118." Colmore does not dispute on appeal that he is an employer as defined by § 39-71-117, MCA (1999), and that Forgey was his employee as defined by § 39-71-118, MCA (1999). However, Colmore argues that the Workers' Compensation Act ("Act") is not applicable under the facts of this case because...

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