Grant v. Brownfield's Orthopedic and Prosthetic Co.

• Decision Date: 07 September 1983
• Docket Number: No. 13780,13780
• Citation: Grant v. Brownfield's Orthopedic and Prosthetic Co., 671 P.2d 455, 105 Idaho 542 (Idaho 1983)
• Parties: In the Case of Thelma R. GRANT, Deceased. Robert Earl GRANT, Claimant-Appellant, v. BROWNFIELD'S ORTHOPEDIC AND PROSTHETIC COMPANY, Employer, and State Insurance Fund, Surety, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 455

671 P.2d 455

105 Idaho 542

In the Case of Thelma R. GRANT, Deceased Robert Earl GRANT, Claimant-Appellant, v. BROWNFIELD'S ORTHOPEDIC AND PROSTHETIC COMPANY, Employer, and State Insurance Fund, Surety, Defendants-Respondents.

No. 13780.

Supreme Court of Idaho.

Sept. 7, 1983.

Rehearing Denied Nov. 10, 1983.

William J. Brauner, Caldwell, for claimant-appellant.

Paul S. Boyd and Hollis A. Kitch, Boise, for defendants-respondents.

BISTLINE, Justice.

Having granted a petition for rehearing, we received additional briefing from the parties. Having reconsidered the issue presented, we now reverse.

The instant appeal arises from an order of the Industrial Commission denying benefits to claimant for the death of his wife which occurred at the annual Christmas party sponsored by her employer, Brownfield's Orthopedic and Prosthetic Company. The appeal presents us with an issue of first impression in this jurisdiction: Does the accidental death of an employee occurring at an employer-sponsored Christmas party arise out of and in the course of employment for purposes of an award of workmen's compensation benefits?

Thelma Ruth Grant had been a full time employee of Brownfield's since June, 1970. On December 21, 1977, she attended the annual Christmas party sponsored by Brownfield's with her husband, Robert Earl Grant. The party was held in the evening at Crane Creek Country Club in Boise. During the party, while eating dinner, Mrs. Grant choked on a piece of meat and died from strangulation.

Mr. Grant timely filed an application for workmen's compensation benefits, alleging that his wife's death arose out of and in the course of her employment with Brownfield's. Brownfield's and its surety denied that her death was a covered accident.

Following a hearing before referee Robert C. Youngstrom, the referee entered several findings of fact, which no one disputes, and which can be paraphrased as follows: Since 1950 Brownfield's had sponsored an annual Christmas party for its employees. The management of Brownfield's both planned the 1977 Christmas party, and arranged to pay all costs associated with the party. Brownfield's acknowledged purpose in sponsoring the party was to promote good will and morale among its employees, to foster good employee relations and to provide an opportunity to socialize and to thank the employees for their work during the year. Sometime prior to the party, a notice of the date and location of the party was posted on the premises of Brownfield's inviting all of the employees of the company to attend. The office manager subsequently ascertained the number of employees who planned to attend. Although the employees were not told that they had to attend, nine of the company's twelve employees were in attendance. The party was held in the evening, after working hours.

To reach a decision, the referee resorted to the black-letter opening paragraph from § 22.00 of the text by Larson, 1A Workmen's Compensation Law, p. 5-71 (hereinafter Larson ), to guide him in passing upon the claim:

"Recreational or social activities are within the course of employment when

"(1) they occur on the premises during a lunch or recreation period as a regular incident of the employment; or

"(2) the employer, by expressly or impliedly requiring participation or by making the activity part of the services of an employee brings the activity within the orbit of the employment; or

"(3) the employer derives substantial direct benefit from the activity beyond the intangible value of improvement in employee health and morale that is common to all kinds of recreation and social life."

R., p. 38.

In making that application to the virtually undisputed facts, the referee's conclusions of law are contained in four short sentences which, with our own arabic lettering, are as follows:

(a) "The evidence in this case does not place Ruth Grant's death in any of the categories described in the foregoing section."

(b) "The Christmas party was not on the employer's premises, nor did it take place during working hours."

(c) "There was no express or implied requirement that employees attend the party, nor was attendance at the party part of the services of the employees."

(d) "The employer did not derive a substantial direct benefit from the parties beyond the intangible value of employee morale and good will common to such social activities."

R., p. 38.

Obviously, the referee concluded that he had performed his function if he tried to but could not fit Mrs. Grant into Larson's three black-letter categories. And that was the end of it. Nothing indicates that the referee was aware that the black-letter summary lumped together employee activities which are recreational and those which are social, and, that in the paragraph immediately following the black-letter passage, the Larson text shows that its concern, as outlined in the black-letter passage, was primarily only with recreational activities:

"A comparatively recent development in the 'employment environment' is the widespread and increasing prevalence of recreational activities sponsored, encouraged or permitted in varying degrees by employers. These activities range all the way from financing a world-famous basketball team to holding a three-legged race at the company picnic. Although the cases in this field are relatively new, the principles at stake are closely analogous to those which have been discussed in connection with lunch-time injuries, going and coming, and personal comfort cases; and, on the basis of principles drawn from these fields, an attempt is made in this section to systematize the developing law on recreational activities."

Larson, § 22.00, p. 5-71 (emphasis added).

Nothing in the referee's decision indicates that he considered a subsequent passage in Larson which specifically covers social activities in and as a separate category:

"When the degree of employer involvement descends from compulsion to mere sponsorship or encouragement, the questions become closer, and it becomes necessary to consult a series of tests bearing on work-connection. The most prolific illustrations of this problem are company picnics and office parties. Among the questions to be asked are: Did the employer in fact sponsor the event? To what extent was attendance really voluntary? Was there some degree of encouragement to attend in such factors as taking a record of attendance, paying for the time spent, requiring the employee to work if he did not attend, or maintaining a known custom of attending? Did the employer finance the occasion to a substantial extent? Did the employees regard it as an employment benefit to which they were entitled as of right? Did the employer benefit from the event, not merely in a vague way through better morale and good will, but through such tangible advantages as having an opportunity to make speeches and awards?"

Larson, § 22.23, pp. 5-85 to -86 (emphasis added).

Had the referee gone beyond page 5-71 and asked himself the questions found on page 5-85, set forth above, he not only would have found his task easier, but his result more just and in accordance with the liberality which the legislature declares sets the tone in administering the Act. We examine the findings of the referee in light of the foregoing Larson questions:

1. "Did the employer in fact sponsor the event?" This is according to the case law without doubt the singularly most important question. An answer to that Larson question is readily found in the Findings of Fact:

"Ruth Grant died at a Christmas party sponsored by her employer, ...."

Finding of Fact I, R., p. 35.

Yet, observe that in the rather terse black-letter passage, the fact of sponsoring is given no mention whatever, because Larson assumes that legal minds may readily conclude that sponsoring a company party is almost the end of all necessary inquiry.

2. "Did the employer finance the occasion to a substantial extent?

The answer to this extremely important question is not only found in the findings of the referee, but also found there is the answer to an even more damaging question, one Larson either failed to think of, or again believed to be so beyond question as establishing liability as not worthy of mention, i.e., did the employer deduct his party as business expense in reporting the company's taxable profit?

"The party was planned by the president of the employer, and was to be paid for entirely by the employer. No employees have ever paid any part of the cost of a Christmas party. The employees made no arrangements for the party, except that employees arranged to draw names for the presentation of small gifts. The employer made all arrangements and reservations.

....

"... The employer deducted the cost of the parties from its income tax returns as a business expense."

Findings of Fact VI and IX, R., p. 37.

3. "Was there some encouragement to attend in such factors as [a] taking a record of attendance, ... or [d] maintaining a known custom of attending?"

An answer to 3[d] is available in the referee's findings:

"It was the custom of the employer to sponsor an annual Christmas party for its employees. These parties had been held since 1950. For several years prior to 1977, the parties had been held at the Crane Creek Country Club, in Boise."

Finding of Fact IV, R. p. 36.

The findings of the referee do not furnish an answer to question 3[a], but it is readily available from documentation supplied by the employer and found in the record. Eleven months after Mrs. Grant's death the employer was able to and did file with the Commission a statement providing the names of those employees who did attend, and those who did not attend. (Employer's Answer to Interrogatory No. 7(g).) The employer also kept attendance tabs sufficiently well to be able to state that since parties began in 1950, and were held annually thereafter, employee attendance ran between 75 percent to 80 percent. (Employer's Answer to...