Hefley v. Morales

• Decision Date: 21 May 1979
• Docket Number: No. C-1686,C-1686
• Citation: 595 P.2d 233,197 Colo. 523
• Parties: A. B. HEFLEY, Petitioner, v. Apolonio MORALES, the Industrial Commission of the State of Colorado, and Sanchez Ochoa, Respondents.
• Court: Colorado Supreme Court

Page 233

595 P.2d 233

197 Colo. 523

A. B. HEFLEY, Petitioner, v. Apolonio MORALES, the Industrial Commission of the State of Colorado, and Sanchez Ochoa, Respondents.

No. C-1686.

Supreme Court of Colorado, En Banc.

May 21, 1979.

Rehearing Denied June 4, 1979.

Schmidt & Schmidt, Mark H. Schmidt, Springfield, for petitioner.

J. D. MacFarlane, Atty. Gen., Richard F. Hennessey, Deputy Atty. Gen., Edward G. Donovan, Sol. Gen., Timothy R. Arnold, Sp. Asst. Atty. Gen., Denver, for respondent The Industrial Commission of the State of Colorado.

Johnson, McLachlan & DiCola, Anthony J. DiCola, Larry E. Stutler, Lamar, for respondent Apolonio Morales.

GROVES, Justice.

We granted certiorari to review the court of appeals' decision in Colo.App., 584 P.2d 1229 which held the petitioner liable under the Workmen's Compensation Act. We reverse.

Sanchez Ochoa hired the respondent, Morales, to work as part of a four-man crew on farms in New Mexico, Oklahoma and Colorado. Ochoa then contracted with the petitioner (Hefley) to cut corn ensilage on Hefley's farm in Colorado. While cutting the corn, Morales sustained injuries to his arm. Morales filed for workmen's compensation against Hefley. ¹ The Industrial Commission dismissed his claim on the ground that section 8-41-105, C.R.S.1973 exempted Hefley as an employer of farm and ranch labor who had expended less than $24,000 for wages in 1975. The court of appeals reversed, holding that Hefley was liable under section 8-48-101, C.R.S.1973 because he had contracted out his regular business to an independent contractor.

The first question for review is whether the contracting out provision of the Workmen's Compensation Act supersedes the section of the Act which establishes an exemption for certain employers of farm and ranch labor. The Contracting out provision reads:

"Any person, company, or corporation operating or engaged in or conducting any business by leasing or contracting out any part or all of the work thereof to any lessee, sublessee, contractor, or subcontractor, irrespective of the number of employees engaged in such work, shall be construed to be an employer as defined in articles 40 to 54 of this title and shall be liable as provided in said articles to pay compensation for injury or death resulting therefrom to said lessees, sublessees, contractors, and subcontractors and their employees." Section 8-48-101(1), C.R.S.1973.

The Exemption provision for farm and ranch labor states:

Articles 40 to 54 of this title are not intended to apply to employers of farm and ranch labor if the amounts expended for wages by an employer of said farm and ranch labor do not exceed the sum of twenty-four thousand dollars for the calendar year 1975 and the sum of ten thousand dollars for the calendar year 1976; thereafter, effective 12:01 a. m., January 1, 1977, this subsection (2) shall not apply, and employers of farm and ranch labor shall be included in the definition contained in paragraph (b) of subsection (1) of this section. " Section 8-41-105(2), C.R.S.1973 (1976 Supp.)

The court of appeals ruled that the contracting out provision governed. In so doing, it relied upon Faith Realty and Development Co. v. Industrial Commission, 170 Colo. 215, 460 P.2d 228 (1969); Snyder v. Industrial Commission, 138 Colo. 523, 335 P.2d 543 (1959); and Zimmerman v. Industrial Commission, 109 Colo. 533, 127 P.2d 878 (1942). However, these cases are not dispositive in the instant situation. They raised the issues whether real estate salesmen (Faith Realty, supra ), the lessor of a coal company (Zimmerman, supra ), and joint venturers who contracted out construction work (Snyder, supra ) should be considered employers under the Act. None of the cases involved the application of the exemption provision. Rather, each required only a determination as to the scope of the contracting out provisions of section 8-48-101, C.R.S.1973.

Here, we must evaluate the interaction of the contracting out provisions and the exemption for farm and ranch labor. The terms of the exemption provide guidance inasmuch as the statute says "Articles 40 to 54 of this title are not intended to apply to employers of farm and ranch labor . . . ." The wording indicates that the General Assembly did not intend for the contracting out provisions to apply to exempted employers of farm and ranch labor. Further, the limiting language contained in the contracting out provision reinforces the conclusion that it is not intended to apply to employers otherwise exempted. It states that a person or company contracting out all or part of its work "shall be construed to be an employer As defined in Articles 40 to 54 of this title and shall be liable as provided in said articles." (Emphasis added.) The purpose of the contracting out provision is to prevent employers from avoiding financial responsibility by contracting out their regular work to uninsured independent contractors. In the exemption provision, the General Assembly clearly intended to exempt persons who directly employed farm and ranch labor on a limited scale.

We conclude that the contracting out provision does not...