Fetzer v. Boling, 69248

• Decision Date: 04 February 1994
• Docket Number: No. 69248,69248
• Citation: 867 P.2d 1067,19 Kan.App.2d 264
• Parties: Dan FETZER, Appellee, v. Mark BOLING d/b/a Boling Construction Co., Appellant.
• Court: Kansas Court of Appeals

Page 1067

867 P.2d 1067

19 Kan.App.2d 264

Dan FETZER, Appellee, v. Mark BOLING d/b/a Boling Construction Co., Appellant.

No. 69248.

Court of Appeals of Kansas.

Feb. 4, 1994.

Syllabus by the Court

1. K.S.A. 44-501(g) mandates that the Workers Compensation Act be liberally construed for the purpose of bringing employers and employees within the provisions of the Act to provide its protections to both.

2. Though broadly applicable by its own terms, under K.S.A. 44-505(a)(2) (Ensley), the Workers Compensation Act does not apply to employments in which the employer had a total gross annual payroll for the preceding calendar year not exceeding $10,000 for all employees and in which the employer reasonably estimates that it will not have a total gross annual payroll for the current calendar year exceeding $10,000 for all employees.

3. A claimant has the burden to prove coverage under the Workers Compensation Act with respect to K.S.A. 44-505(a)(2) (Ensley).

4. In accord with K.S.A. 44-501(g), a liberal construction of K.S.A. 44-505(a)(2) (Ensley) requires the employer's estimate to be reasonable in both manner and method, i.e., how it is made; and time, i.e., when it is made. Whether an employer's estimate of its gross annual payroll for the current calendar year is reasonable is a question of fact to be determined from the facts and circumstances of a given case.

5. Under the facts of this case, while the appellant-employer had a gross annual payroll for the preceding year of less than $10,000 and estimated at the beginning of the current calendar year that its payroll for the year would not exceed $10,000, substantial competent evidence supports the district court's finding that the appellant-employer could not have reasonably estimated, at the time of claimant's injury, that its gross annual payroll for the current calendar year would not exceed $10,000. Thus, the provisions of the Workers Compensation Act apply to the employment at issue.

Gary L. Conwell, Topeka, for appellant.

Kirk W. Lowry, of Palmer & Lowry, Topeka, for appellee.

Before GERNON, P.J., LEWIS, J., and GERALD T. ELLIOTT, District Judge, assigned.

GERALD T. ELLIOTT, District Judge, assigned:

Mark Boling d/b/a Boling Construction Co. (Boling) appeals the district court's decision that Dan Fetzer was covered by and entitled to benefits under the Kansas Workers Compensation Act. The district court's decision reversed the order of the Director of Workers Compensation which upheld the order of the Administrative Law Judge (ALJ) denying an award to Fetzer for the reason that there was no coverage afforded Fetzer under the Act. We affirm the decision of the district court.

At issue is the interpretation and application of K.S.A. 44-505(a)(2) (Ensley).

Boling, a remodeling company, began business in March of 1989, during which year it had a gross payroll of $4,133.75. Owners of similar businesses advised Mark Boling to expect a slower second year, and his insurance agent advised him that if his payroll did not exceed $10,000, he did not need workers compensation coverage. Therefore, Boling did not consider or purchase workers compensation insurance for 1990.

Boling had a gross payroll of $1,652.02 for the first quarter of 1990. Fetzer began working for Boling during the second quarter, about April 1, 1990. On June 27, 1990, Fetzer sustained an injury during the course of his employment while removing shingles from a pickup truck. During the second quarter of 1990, which ended on June 30, Boling had a gross payroll of $7,672.89. By the end of the second quarter, therefore, Boling's gross payroll totaled $9,324.91. At the time of Fetzer's injury, Boling was an ongoing business with work in progress and bids out on new projects.

Fetzer filed for workers compensation benefits, and the parties stipulated: (1) that the relationship of employer-employee existed, (2) that a written claim was timely made, (3) to claimant's average weekly wage, and (4) that the injury was a scheduled injury under K.S.A. 44-510d.

The ALJ found that at the time of Fetzer's accidental injury, the parties were not covered by the Workers Compensation Act, relying on K.S.A. 44-505(a)(2). The ALJ found that Boling did not expect a gross annual payroll of more than $10,000 in the year 1990 when that year began and that was a reasonable expectation "at the beginning of 1990." Further, the ALJ held that since Boling's estimate at the beginning of the calendar year was reasonable, coverage under the Workers Compensation Act would begin only when the $10,000 payroll threshold had been crossed and not before. Therefore, the ALJ concluded there was no coverage. The Director adopted and incorporated the findings of the ALJ and affirmed the ALJ in all respects. Fetzer filed a petition for judicial review by the district court.

The district court found that K.S.A. 44-505(a)(2) (Ensley) required Boling to monitor its payroll and that an employee would be covered when it reasonably appeared that the gross payroll in a current calendar year would exceed $10,000. The district court found that no reasonable estimate could be made in June 1990, prior to the injury, that the $10,000 threshold would not be met in the calendar year 1990 and, therefore, reversed the Director, even though the $10,000 gross payroll had not been exceeded at the time of the injury. This appeal followed.

Our scope of review is established by the Act for Judicial Review and Civil Enforcement of Agency Actions (K.S.A. 77-601 et seq.) and K.S.A. 44-556. The appellate court has unlimited review on questions of law, but on questions of fact it is limited to determining if there is substantial competent evidence to support the findings of fact of the trial court. Rodriquez v. John Russell Constr., 16 Kan.App.2d 269, 271, 826 P.2d 515 (1991). We are bound by the trial court's findings of fact that are supported by substantial competent evidence and must view the evidence in the light most favorable to the party prevailing below. See Angleton v. Starkan, Inc., 250 Kan. 711, 716, 828 P.2d 933 (1992). If substantial evidence supports the district court's factual findings, the appellate court does not reweigh the evidence or reverse the final order of the district court. Hughes v. Inland Container Corp., 247 Kan. 407, 410, 799 P.2d 1011 (1990).

In workers compensation cases, "substantial evidence" is

" 'evidence that possesses something of substance and relevant consequence or evidence that furnishes a substantial basis of fact from which the issues presented can be reasonably resolved.' [Citations omitted.] Substantial competent evidence is also defined as evidence that is relevant and that carries enough weight to allow one to conclude that the judgment is proper." 247 Kan. at 410, 799 P.2d 1011.

A workers compensation claimant has the burden of proof to establish the right to an award of compensation and to prove those conditions on which the claimant's right depends. The burden of proof is the obligation to persuade the factfinder by a preponderance of the credible evidence that a party's position is more probably true than not true on the basis of the entire record. 247 Kan. at 410, 799 P.2d 1011. With specific reference to the provisions of the Act here under consideration, this court has previously held that a claimant has the burden to prove coverage under the Act with respect to K.S.A. 44-505(a)(2) (Ensley). Brooks v. Lochner Builders, Inc., 5 Kan.App.2d 152, 154, 613 P.2d 389 (1980).

The pertinent provisions of K.S.A. 44-505(a) (Ensley) provide:

"[T]he workmen's compensation act shall apply to all employments ... except ... (2) any employment ... wherein the employer had a total gross annual...