Dewey v. Merrill, 20227

• Court: United States State Supreme Court of Idaho
• Writing for the Court: TROUT; McDEVITT
• Citation: 858 P.2d 740,124 Idaho 201
• Parties: Michael John DEWEY, Claimant-Appellant, v. Mike MERRILL, Employer, Defendant-Respondent, and Randy Castona, Employer, Defendant. Idaho Falls, April 1993 Term
• Docket Number: No. 20227,20227
• Decision Date: 26 August 1993

Page 740

858 P.2d 740 124 Idaho 201 Michael John DEWEY, Claimant-Appellant,
v.
Mike MERRILL, Employer, Defendant-Respondent,
and Randy Castona, Employer, Defendant. No. 20227. Supreme Court of Idaho, Idaho Falls, April 1993 Term.
Aug. 26, 1993.

Page 741

[124 Idaho 202] Ward, Maguire & Bybee, Pocatello, for claimant-appellant. D. Kirk Bybee, argued.

Ryan W. Boyer, Idaho Falls, for defendant-respondent.

TROUT, Justice.

I.

BACKGROUND AND PRIOR PROCEEDINGS

This is a worker's compensation case. The respondent, Mike Merrill (Merrill), is a pharmacist who was acting as a general contractor in building his own house. Merrill hired a number of subcontractors to work on the project and also organized the purchase and delivery of necessary building materials. He was not involved in the day-to-day building activities other than in a general supervisory capacity.

Merrill contracted with Randy Castona to frame the house. The contract provided that Castona would be responsible for the insurance required by law. However, Castona never procured worker's compensation insurance before beginning construction on Merrill's house. Castona hired the appellant, Michael Dewey, to work as a carpenter's helper, and on his first day of work, September 6, 1990, Dewey injured his left eye while operating a nail gun. As a result of the accident, Dewey lost his eye.

Dewey brought an action against Merrill and Castona to recover worker's compensation benefits. The Industrial Commission found that Dewey was an employee of Castona and that Dewey had a permanent partial disability of forty-five percent of the whole person. The Commission awarded

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[124 Idaho 203] Dewey $85,000.00 in benefits, medical expenses and attorney fees against Castona. ¹

The Commission found that Merrill was not liable for payment of worker's compensation benefits to Dewey because: (1) Merrill was not the statutory employer of Dewey; and (2) Merrill was exempt from liability under I.C. § 72-212(5) because the employment was not "for the sake of pecuniary gain."

II.

STANDARD OF REVIEW

The Court's review of decisions of the Industrial Commission is limited by the Idaho Constitution and prior case law. We review questions of fact only to determine if there is substantial competent evidence to support the Commission's findings, and we exercise free review over questions of law. Idaho Constitution, art. 5, § 9; Vendx Mktg. Co., Inc. v. Dep't of Employment, 122 Idaho 890, 841 P.2d 420 (1992). We are called upon here to review the Commission's conclusions that Merrill was not a statutory employer and that he was not engaged in employment for pecuniary gain. These issues are not dependent upon disputed factual findings in this instance and thus are questions of law only.

III.

MERRILL WAS A STATUTORY EMPLOYER OF DEWEY

The Commission concluded that Merrill was not a statutory employer because Merrill did not have the "right to control" Dewey. The worker's compensation statute broadens the relationship between employer and employee; it is a statutory relationship which does not require the common law element of control. Adam v. Titan Equip. Supply Corp., 93 Idaho 644, 647, 470 P.2d 409, 412 (1970); Gifford v. Nottingham, 68 Idaho 330, 337, 193 P.2d 831, 835 (1948). The "right to control" test is relevant in ascertaining whether a worker is an employee or an independent contractor for the purposes of determining worker's compensation coverage. Runcorn v. Shearer Lumber Prods., Inc., 107 Idaho 389, 392, 690 P.2d 324, 327 (1984). The test may also be useful if there needs to be a distinction made between a direct and nondirect employer. See Id. In this case the parties concede that Dewey was an employee of Castona, his direct employer, and therefore, the "right to control" test is of no assistance in determining whether Merrill was a statutory employer under I.C. § 72-102(11).

Idaho Code § 72-102(11) defines "employer" as:

any person who has expressly or impliedly hired or contracted the services of another. It includes contractors and subcontractors. It includes the owner or lessee of premises, or other person who is virtually the proprietor or operator of the business there carried on, but who, by reason of there being an independent contractor or for any other reason, is not the direct employer of the workmen there employed.

This expanded definition of "employer" was " 'designed to prevent an employer from avoiding liability under the workmen's compensation statutes by subcontracting the work to others' who may be irresponsible and not insure their...