Gonzales v. Walchuk
| Decision Date | 26 November 2002 |
| Docket Number | No. 02-008.,02-008. |
| Citation | 312 Mont. 240,59 P.3d 377,2002 MT 262 |
| Court | Montana Supreme Court |
| Parties | Norma O. GONZALES, Plaintiff and Appellant, v. Lawrence WALCHUK, Robert B. Ekblad and Phyllis Ekblad, Defendants and Respondents. |
James D. Moore, Attorney at Law, Kalispell, Montana, For Appellant.
James R. Walsh, Smith, Walsh, Clarke & Gregoire, Great Falls, Montana, For Respondent.
¶ 1 On summary judgment, the Twentieth Judicial District Court, Sanders County, concluded as a matter of law that a Certificate of Independent Contractor Exemption issued by the Montana Department of Labor and Industry is conclusive proof of a worker's status in the face of evidence that the Certificate was obtained by fraud. We reverse and remand.
¶ 2 Norma O. Gonzales fell from the roof of a carport that she was painting on September 25, 1998, sustaining severe injuries. Alleging by Complaint that Lawrence Walchuk hired her to paint a house owned by Robert and Phyllis Ekblad, Gonzales claimed that her employers failed to provide her with a safe workplace and workers' compensation insurance coverage. Walchuk denied that an employer-employee relationship existed. The Ekblads answered with the affirmative defense that Gonzales worked as an independent contractor and was unprotected by workers' compensation or the property owners' insurance.
¶ 3 Through discovery, Gonzales learned that a Certificate of Independent Contractor Exemption ("Certificate") had been issued in her name by the Montana Department of Labor and Industry a few weeks prior to the accident. She also discovered that the Ekblads are corporate officers and major shareholders in the Hot Springs Telephone Company, which was the actual lessee of the residence when the accident occurred. The Company provided the residence to Walchuk as partial compensation for his employment.
¶ 4 At the close of discovery on September 20, 2001, the parties discussed stipulating to an amendment to the pleadings to add the Hot Springs Telephone Company as a defendant and vacating the trial date set for December 10, 2001. However, four days later, before a stipulation was executed, the Respondents moved for partial summary judgment on the issue of Gonzales's status as an independent contractor. Gonzales moved the court for leave to amend the pleadings. The District Court heard oral argument on the two motions on November 13, 2001. A transcript of that hearing is not part of the record submitted to this Court on appeal. Gonzales explained by brief that she proposed to amend her Complaint not only by seeking to enjoin the Telephone Company, but by adding a claim of fraud against the Respondents and by including an independent cause of action for failure of her employers to enroll in the workers' compensation insurance program, pursuant to § 39-71-515, MCA.
¶ 5 On November 26, 2001, the District Court denied the motion to amend the pleadings and granted complete summary judgment in favor of Walchuk and the Ekblads. The court held that the Certificate issued to Gonzales by the Department of Labor and Industry provides conclusive proof of Gonzales's employment status as an independent contractor, pursuant to § 39-71-401(3)(c), MCA.
¶ 6 We rephrase the issues raised on appeal as follows:
¶ 7 1. Whether the District Court erred in granting summary judgment on the basis that issuance of a Certificate of Independent Contractor Exemption by the Department of Labor and Industry precludes an action against an employer for a work-related injury when presented with evidence that the Certificate was obtained by fraud?
¶ 8 2. Whether the District Court abused its discretion by denying Gonzales's motion for leave to amend her Complaint?
¶ 9 The standard of review for a grant of summary judgment is de novo. This Court will apply the same evaluation as the district court based upon Rule 56, M.R.Civ.P. The moving party must establish both the absence of genuine issues of material fact and entitlement to judgment as a matter of law. Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903. Once the moving party has met its burden, the opposing party must present material and substantial evidence, rather than mere conclusory or speculative statements, to raise a genuine issue of material fact. Bruner, 272 Mont. at 264, 900 P.2d at 903. Our standard of review of a question of law is whether the legal conclusions of the trial court are correct. Spain v. Montana Department of Revenue, 2002 MT 146, ¶ 20, 310 Mont. 282, ¶ 20, 49 P.3d 615, ¶ 20 (citation omitted).
¶ 10 The District Court ruled as a matter of law that the approval of Gonzales's application for an independent contractor exemption by the Department of Labor and Industry constitutes conclusive proof of Gonzales's employment status under the Montana Workers' Compensation Act. Section 39-71-401(3)(c), MCA, states:
When an application is approved by the department, it is conclusive as to the status of an independent contractor and precludes the applicant from obtaining benefits under this chapter.
Accordingly, the court found that the exemption was effective at the time of the accident and concluded that Gonzales was an independent contractor without standing to rely upon the Montana Safety Act, Title 50, ch. 71, part 2, Montana Code Annotated.
¶ 11 Gonzales presented evidence and argument before the District Court to rebut the argument that the issuance of a Certificate constitutes conclusive proof of her status. In her brief in opposition to summary judgment, she argued that she worked as an employee on the house-painting project and did not meet the statutory definition of an independent contractor. She also claimed that she neither knowingly applied for an independent contractor's exemption nor authorized her employer to seek an exemption on her behalf. Stating that she informed Walchuk that she had not previously worked as a painter before he hired her, Gonzales asserted that Walchuk fraudulently induced her to complete and sign an Independent Contractor Exemption Affidavit ("Affidavit"). Gonzales also claimed that Walchuk then submitted the sham Affidavit to the State of Montana without her knowledge or consent. Citing Moschelle v. Hulse (1980), 190 Mont. 532, 622 P.2d 155, for the proposition that fraud vitiates a contract from its inception and § 28-2-401, MCA, which states that consent is not real or free when obtained through fraud, Gonzales argued that the Respondents' fraud invalidates both her consent to execute the Affidavit and the Department's issuance of the exemption Certificate. ¶ 12 On appeal, the Respondents maintain that the District Court correctly refused to consider evidence of fraud on summary judgment after denying Gonzales's motion to amend the pleadings. Because Rule 9(b), M.R.Civ.P., requires that the circumstances constituting fraud be stated with particularity in the pleadings and Gonzales failed to allege fraud in her Complaint, the Respondents contend that the issue was not properly before the court.
¶ 13 It is well settled that "a complaint must put a defendant on notice of the facts the plaintiff intends to prove; the facts must disclose the elements necessary to make the claim; and the complaint must demand judgment for the relief the plaintiff seeks." Larson v. Green Tree Financial Corp., 1999 MT 157, ¶ 35, 295 Mont. 110, ¶ 35, 983 P.2d 357, ¶ 35 (citation omitted). The complaint must provide a defendant with notice and an opportunity to defend himself. Larson, ¶ 35.
¶ 14 Gonzales stated in her Complaint and Demand for Jury Trial that she was an employee of the Respondents within the meaning of the Workers' Compensation Act. She claimed that the Respondents not only failed to provide a safe workplace, they also failed to provide workers' compensation coverage for her. Thus, the Complaint clearly put Walchuk and the Ekblads on notice that Gonzales intended to prove that she was an employee who was injured in the course of her employment and wrongly denied workers' compensation coverage.
¶ 15 Gonzales acknowledges on appeal that she did not assert that her alleged employers fraudulently induced her to waive her rights to workers' compensation coverage as a separate claim. She first raised the issue before the District Court by brief for the purpose of avoiding the Respondents' affirmative defense that the Certificate conclusively established her status as an independent contractor. Arguing that further pleadings were not necessary to raise a defense to an affirmative defense, Gonzales cites Wheat v. Safeway Stores, Inc. (1965), 146 Mont. 105, 404 P.2d 317, where this Court clarified that our Rules of Civil Procedure do not direct a plaintiff to file a pleading in reply to an answer unless a counterclaim is asserted or unless specifically ordered to do so by the trial court. Where no responsive pleading is required or permitted, an averment in an answer, such as an affirmative defense, is considered denied or avoided, according to Rule 8(d), M.R.Civ.P.
¶ 16 In this case, the District Court did not order Gonzales to reply to the Ekblads' Answer, which raises the affirmative defense that due to Gonzales's independent contractor status, the Respondents bear no liability for her injuries. Therefore, under Rule 8, M.R.Civ.P., no further pleadings were permitted without permission of the court. The Respondents acknowledge that they were aware of Gonzales's contention that the Certificate was obtained by fraud more than a year before they filed a motion for summary judgment. The Respondents attached a copy of the Certificate to their First Request for Admissions, which Gonzales answered on August 11, 2000, with the following statement:
To continue reading
Request your trial
-
Ereth v. Cascade County
...moving party must establish both the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Gonzales v. Walchuk, 2002 MT 262, ¶ 9, 312 Mont. 240, ¶ 9, 59 P.3d 377, ¶ 9. Once the moving party has met its burden, the opposing party must, in order to raise ......
-
Collection Bureau Services, Inc. v. Morrow
...11, 317 Mont. 462, ¶ 11, 77 P.3d 1010, ¶ 11. We review a trial court's legal conclusions to determine whether they are correct. Gonzales v. Walchuk, 2002 MT 262, ¶ 9, 312 Mont. 240, ¶ 9, 59 P.3d 377, ¶ 9. Our standard of review for a question of law is plenary. In re Marriage of Robison, 20......
-
Vitullo v. INTERNATIONAL BROTH. OF ELEC. WORKERS, 01-784.
...conclusion of law. Our standard of review of a question of law is whether the legal conclusions of the trial court are correct. Gonzales v. Walchuk, 2002 MT 262, ¶ 9, 312 Mont. 240, ¶ 9, 59 P.3d 377, ¶ DISCUSSION ¶ 10 Did the District Court err when it concluded that the LMRDA preempted Vit......
-
MacKay v. State
...moving party must establish both the absence of genuine issues of material fact and entitlement to judgment as a matter of law. Gonzales v. Walchuk, 2002 MT 262, ¶ 9, 312 Mont. 240, ¶ 9, 59 P.3d 377, ¶ 9; Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903. Once the m......