Hays v. State ex rel. Wyoming Workers' Compensation Div.

• Decision Date: 19 January 1989
• Docket Number: No. 88-82,88-82
• Parties: Martin L. HAYS, Appellant (Claimant), v. STATE of Wyoming, ex rel., WYOMING WORKERS' COMPENSATION DIVISION, Appellee (Objector).
• Court: Wyoming Supreme Court

Page 11

768 P.2d 11

78 A.L.R.4th 959

Martin L. HAYS, Appellant (Claimant), v. STATE of Wyoming, ex rel., WYOMING WORKERS' COMPENSATION DIVISION, Appellee (Objector).

No. 88-82.

Supreme Court of Wyoming.

Jan. 19, 1989.

Catherine MacPherson of MacPherson Law Offices, Rawlins, for appellant.

Joseph B. Meyer, Atty. Gen., Ron Arnold, Asst. Atty. Gen., and Josephine T. Porter, Sr. Asst. Atty. Gen., for appellee.

Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY and GOLDEN, JJ.

MACY, Justice.

In this worker's compensation case, appellant Martin L. Hays, deceased, ¹ through his surviving widow and children, appeals from the denial of his motion for a new trial and for relief from judgment under W.R.C.P. 59 and 60.

We affirm.

Appellant presents the following issues:

1. Whether a partner whose business is classed as extrahazardous is an "employee" as defined by W.S. § 27-12-102(a)(viii) (1977 Repub.Ed.) [ ² and, therefore, entitled to coverage under the Wyoming Worker's Compensation Act if injured while actually subject to the hazards of the business.

2. If the Wyoming Worker's Compensation Act is construed to deny coverage to a partner, does that construction deny equal protection of the law, in violation of the Fourteenth Amendment of the United States Constitution and Article 1, § 34 of the Wyoming Constitution.

On October 25, 1986, appellant fell from a scraper that he was cutting into scrap metal with a blow torch. He suffered fatal head injuries and died within a few hours of the fall.

On December 8, 1986, appellant's widow, Tammy S. Hays, filed an employee's report of injury, alleging that appellant was a laborer for Hays Transportation Co. ³ and that his death was a result of his employment. This report was followed by an application for death benefits filed by Mrs. Hays on December 30, 1986, on behalf of herself and appellant's two minor children. The district court approved the application and on January 12, 1987, awarded an aggregate sum of $100,223.05 in death benefits plus costs of the last hospitalization and funeral service for appellant.

On January 30, 1987, appellee Wyoming Workers' Compensation Division filed an objection to the award, alleging that Hays Transportation Co. had not submitted an accident report and did not have a current worker's compensation account. ⁴ The objection further alleged that appellant was not an "employee" as defined in § 27-12-102(a)(viii) ⁵ but instead that he was a partner in Hays Transportation Co., and, as such, he was not entitled to benefits under the Wyoming Worker's Compensation Act.

On the basis of extensive testimony received at a hearing on April 17, 1987, the trial court entered its order on July 14, 1987, making the specific finding and conclusion of law that appellant and Steven Hays were in a partnership relationship on the date of appellant's death. The trial court requested the parties to submit memoranda of law addressing whether a partner was covered by the Act and, if not, whether the denial of coverage was a violation of equal protection under the United States and Wyoming Constitutions. The trial court considered both parties' submissions. By a decision letter dated August 13, 1987, and a subsequent order, the court concluded that partners were not included within the coverage of the Act, as partners were not "employees" as defined in the statute, and that such an exclusion of coverage was not a violation of equal protection. It thus denied the application for death benefits.

On September 30, 1987, appellant's representatives filed a motion for a new trial and for relief from judgment pursuant to W.R.C.P. 59 and 60, with accompanying affidavits. The motion was denied on December 22, 1987, by a decision letter, which was incorporated into a subsequent order on March 2, 1988. This appeal followed.

Appellant's representatives assert that, despite his status as a partner, he was nevertheless an employee and, therefore, he and his survivors are entitled to benefits under the Act. To recover death benefits under the Act, the decedent must have been an "employee" involved in extrahazardous work as that term was defined in § 27-12-102(a)(viii). Thus, the first question to be addressed is whether a member of a partnership, the business of which was classified as extrahazardous, was an "employee" within the meaning of § 27-12-102(a)(viii). This determination involves the statutory interpretation of § 27-12-102(a)(viii). Our rules of statutory interpretation have often been cited and need not be reiterated here except to note that, when a statute is clear and unambiguous, this Court will not resort to rules of statutory construction and the words will be given their plain and ordinary meaning. State Board of Equalization v. Jackson Hole Ski Corporation, 737 P.2d 350, on reh'g 745 P.2d 58 (Wyo.1987); Wyoming Insurance Department v. Avemco Insurance Company, 726 P.2d 507 (Wyo.1986).

Section 27-12-102(a)(viii) defined an "employee" as

any person who has entered into the employment of or works under contract of services or apprenticeship with an employer engaged in an extrahazardous occupation, except a person whose employment is purely casual and not for the purpose of the employer's usual trade or business, or those engaged in clerical work and not subject to the hazards of the business. "Employee" also includes the officers of a corporation, the business of which is classed as extrahazardous, if the officers are actually subject to the hazards of the business in the regular performance of their duties, and the employer elects to come under the provisions of a this act by notifying the division by registered mail at least thirty (30) days prior to the effective date of the coverage. Coverage remains effective until withdrawn by written notice to the division. Any reference to an employee who has been injured and dies, includes his dependents or his legal representatives, or his guardian or next friend if the employee is a minor or incompetent. No minor employee shall be denied the benefits of this act for the sole reason that his employment is in violation of the labor laws governing the employment of minors[.]

The plain and unambiguous language of § 27-12-102(a)(viii) mandates the conclusion that partners could not receive benefits as "employees" under the Act. The language specifically defined an "employee" as one who had "entered into the employment of or works under contract of services or apprenticeship with an employer." To accept appellant's argument that a partner was an employee under the Act would be to ignore the plain language of § 27-12-102(a)(viii) and the legal characteristics of a partner. The language of the statute clearly anticipated that an employer and employee would be separate legal entities. Thus, a partner-employer could not be included in the language of the statute as one covered under the Act, as the Act was intended to cover employees only. Although this Court has held that worker's compensation statutes are to be construed so that industry, rather than an injured workman, bears the burden of an industrial accident, Robinson v. Bell, 767 P.2d 177 (Wyo.1989), we nevertheless are not permitted to ignore clear statutory language so as to extend coverage and benefits to situations that do not reasonably fall within the intended ambit of the statutes. Lehman v. State ex rel. Wyoming Workers' Compensation Division, 752 P.2d 422 (Wyo.1988). Here, the statutory language cannot be construed so as to extend employee benefits to a partner/employer.

Even though this Court has never had occasion to address the question of whether a partner was an "employee" within the meaning of § 27-12-102(a)(viii), many other jurisdictions have answered this question in relation to statutes substantially similar to ours, and the overwhelming majority have found that partners are not eligible to receive compensation as employees under their worker's compensation acts. See 1C A. Larson, Workmen's Compensation Law § 54.30 (1986), and cases cited therein. Illustrative of the cases from those jurisdictions is In re W.A. Montgomery & Son, 91 Ind.App. 21, 169 N.E. 879, 880 (1930), in which the Indiana court stated:

In the early history of Workmen's Compensation Acts, it was decided by the courts of England that a partner working for his partnership and receiving compensation therefor independent of his share of the profits is not entitled to compensation for injuries sustained. And in the courts of the United States the great weight of authority is to the effect that a copartner in a partnership business cannot become an employee of himself and his copartners so as to be covered by a policy taken under the provisions of Workmen's Compensation Acts, insuring the partnership against liability for injury to employees.

(Citation omitted.)

Benefits for injuries to partners have traditionally been denied under worker's compensation acts because of the legal characteristics of partners and partnerships. A partnership is not an entity separate from its partners. 1C A. Larson, supra at § 54.31. "Therefore, since the partnership is nothing more than the aggregate of the individuals making it up, a partner-employee would also be an employer." Id. at 9-253, quoted in Ryder's Case, 341 Mass. 661, 171 N.E.2d 475, 477-78 (1961). The worker's compensation acts cannot be presumed to have envisioned any such combination of employer and employee. Fink v. Fink, 64 So.2d 770 (Fla.1953). As early as 1926, the New York Court of Appeals recognized the inconsistency when it stated in Lyle v. H.R. Lyle Cider & Vinegar Co., 243 N.Y. 257, 153 N.E. 67, 67-68, 47 A.L.R. 840 (1926):

The copartners, of course, are the principals and employers, and we do not think that it is within the contemplation of the Workmen's Compensation Act that one of them may become the employee of himself and his associates, and thus at the same time occupy the inconsistent attitudes of...