Industrial Commission v. Navajo County

Decision Date18 March 1946
Docket Number4873
Citation64 Ariz. 172,167 P.2d 113
CourtArizona Supreme Court

Original proceeding by the Industrial Commission of Arizona against the County of Navajo, a subdivision of the State of Arizona, and a body corporate and politic, and others, to require respondents to report salaries, wages, commissions or fees paid to physicians under contract with county to render medical aid and perform surgery for indigent sick within the county and to pay to State Compensation Fund required insurance premiums thereon.

Alternative writ made peremptory.

H. S McCluskey, of Phoenix, for petitioner.

Dodd L. Greer, Co. Atty. of Navajo County, of Holbrook, for respondents.

LaPrade Judge. Stanford, C. J., and Morgan, J., concurring.


LaPrade, Judge.

An alternative writ was issued directed to the respondents in the caption, supra, directing them to report the salaries, wages, commissions, or fees paid to contract county doctors, and to pay the required premiums thereon or show cause why they had not done so.

Subsequent to the 6th day of August, 1945, the board instructed its clerk not to report to the Industrial Commission salaries of doctors under contract. The commission demanded that the respondents comply with the provisions of Section 56-935 (Compensation Law) and Section 56-1227 (Occupational Disease Disability Law), A.C.A.1939, as amended and supplemented. This request was denied. Respondents justified their refusal to pay insurance premiums to petitioner on the salaries of physician-surgeons upon the ground that such physician-surgeons are not employees, but independent contractors whose professional services are not supervised or controlled by respondents in any manner or to any extent whatsoever.

The question for this court to decide is whether or not under the facts of this case insurance premiums are due petitioner upon the salaries of such doctors. The contracts show that the doctors are under contract with respondent county to render medical aid or when necessary perform surgery for the indigent sick within the county. It is made to appear that in the performance of their duties under the contract the doctors are not supervised or controlled by the respondents in the ministration of medicines, treatment and surgery. The respondent supervisors are lay individuals and do not pretend to have any knowledge or skill in medicine or surgery. These doctors in the performance of their duties bring not only their best skill but the right to exercise it in accordance with their own best judgment without interference from any person; in fact, such is their duty because of their special skill, ability and technical training. They use their own judgment in the treatment of patients whose welfare is entrusted to them. Some of the contracts required the doctor at his own expense to furnish "ordinary medicine," and specified that if medicines "other than ordinary drugs and medicines are used they shall be ordered directly from a drug store and paid for by the board upon itemized demand." It was contemplated that the doctors would furnish their own offices, office help, and nurses. The professional services were to be rendered patients at the doctors' offices or at the homes of patients when the exigencies of the situation required the attendance of the doctor.

The powers and duties of respondent board of supervisors at all the times material hereto were the following:

"Sec. 17-309. (A.C.A.1939) 5. Provide for the care and maintenance of the indigent, sick and the dependent poor of the county; erect and maintain homes and hospitals therefor; provide in their discretion a farm in connection with the county hospital and make regulations for working the same."

"Sec. 17-346. Care of indigents -- Employees therefor. -- The board shall let the care of the indigents of the county, including medical attendance, medicine, food, lodging, clothing, and other supplies, to the best responsible bidder, after advertising for sealed bids or proposals in a newspaper and a notice posted in three (3) or more public places in such county, at least ten (10) days before the awarding of such contract. The board may reject any or all bids. The board may, however, employ a physician to furnish surgical and medical attendance, a superintendent, attendants, and such other help as may be necessary without advertising therefor. (Laws 1909, ch. 3, §§ 1, 2, p. 4; R.S.1913, Secs. 2481, 2482; cons. & rev. R.C.1928, § 811; Laws 1929, ch. 33, § 2, p. 76.)"

"Sec. 17-347. Contractor to give bond -- Contract. -- The person to whom such contract may be awarded shall give to such county a bond of not less than five thousand dollars ($ 5,000), for the faithful performance of such contract, to be approved by the board. The contract shall specify distinctly the amount proposed to be charged for each day's attendance upon each indigent sick person, including medical attendance, medicine, food, lodging, clothing and supplies. (R.S.1901, §§ 1030, 1031; 1913, §§ 2483, 2484; cons. & rev. R.C.1928, § 812.)"

"Sec. 17-348. Indigent only to be cared for -- Penalty -- Pay patients. -- No person other than an indigent shall receive public aid, or be admitted into any home or hospital the expenses of which are paid by the county, and any contractor or person having charge of any such home or hospital who knowingly receives into the same, for medical attention or subsistence, any person other than an indigent, shall be guilty of a misdemeanor. The board may admit into such hospital for hospital care, medical or surgical attention, any person other than an indigent who will pay, in part or in whole, for such hospital care, medical and surgical attention, under the rules and regulations prescribed by the board. (R.S.1901, § 1032; 1913, § 2485; Laws 1917, ch. 14, § 1, p. 12; rev. R.C.928, § 813.)"

"Sec. 17-401. Boards of supervisors to provide hospitalization and medical care of indigent sick. -- The boards of supervisors in each county of the state shall have the sole and exclusive jurisdiction to provide for the hospitalization and medical care of the indigent sick in such county, except in the case of the state welfare sanitarium, which shall be operated solely by the state board of social security and welfare. (Laws 1937 (3rd S.S.), ch. 4, § 1, p. 662)."

Under and by virtue of the foregoing granted powers the respondents entered into certain agreements with physicians located in Holbrook, Snoflake, and Winslow. The following contract is typical of these agreements.


This Agreement entered into the 1st day of May, 1945, between the Board of Supervisors of Navajo County, Arizona, hereinafter known as the Board, and Bernard S. Heywood, a duly licensed physician and surgeon, hereinafter known as the Doctor;


That the compensation hereinafter set forth, the said Doctor agrees to perform the following services for Navajo County, Arizona, from the date hereof to June 30th, 1945,

(a) To do and perform all acts required of a County Superintendent of Health without compensation;

(b) To act as County Physician;

(c) To perform all surgery for resident indigents of Supervisorial Districts No. 1 and No. 3 of Navajo County, for whom said Board is, by law, authorized to render such services;

(d) To render professional services for not to exceed twelve indigent obstetrical cases during the period of this agreement within the hospital at Holbrook, Arizona, operated by the Town of Holbrook;

In consideration of the satisfactory rendition of the services aforesaid, the board will pay monthly to the Doctor, upon demand, the sum of Three Hundred and No/100 ($ 300.00) Dollars."

By Section 56-935, A.C.A.1939, "The state and each county, city, town, municipal corporation or school district which is liable to its employees for compensation must insure in the state compensation fund. * * *" Section 59-936 provides that employees covered by insurance in the state fund are entitled to compensation. Section 56-941 provides that the state and political subdivisions are liable to the fund for accident benefit premiums. Section 56-929, as amended (Chapter 65, Laws 1943), enumerates the employees covered and, in part, reads as follows:

"Sec. 56-929. Employee, workman, and operative. -- (a). In this article, unless the context otherwise requires, the terms 'employee,' 'workman,' and 'operative' mean: 1. every person in the service of the state, or of a county, city, town, municipal corporation, or school district, including regular members of lawfully constituted police and fire departments of cities and towns, under appointment or contract of hire, except the elective officials and except officials receiving more than three thousand six hundred dollars ($ 3,600) per year salary, * * *."

Under the specific provisions of Section 56-928, as amended by Chapter 33, Laws 1945, an independent contractor is classified as an employer. We quote: "(c) A person engaged in work for another, and who while so engaged is independent of the employer in the execution of the work, not subject to the rule or control of the person for whom the work is done, but is engaged only in the performance of a definite job, or piece of work, and subordinate to the employer only in effecting a result in accordance with the employer's design, is an independent contractor, and an employer within the meaning of this section."

This court has on numerous occasions considered this section and under various fact situations defined who are independent contractors. A typical statement of the rule is contained in United States Fidelity & Guaranty Co. v. Industrial Commission, 42 Ariz. 422, 26 P.2d 1012, 1015: "* * * Without exception the...

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