Keil v. Nelson

• Decision Date: 12 September 1984
• Docket Number: Nos. 14413,14417,s. 14413
• Citation: 355 N.W.2d 525
• Parties: Dennis W. KEIL, Plaintiff and Appellee, v. Wesley NELSON and Harold Nelson, Defendants and Appellants.
• Court: South Dakota Supreme Court

Page 525

355 N.W.2d 525

Dennis W. KEIL, Plaintiff and Appellee, v. Wesley NELSON and Harold Nelson, Defendants and Appellants.

Nos. 14413, 14417.

Supreme Court of South Dakota.

Sept. 12, 1984.

Charles A. Wolsky of Mormon, Smit, Shepard, Hughes & Wolsky, Sturgis, for plaintiff and appellee.

Robert A. Amundson of Amundson & Fuller, Lead, for defendants and appellants.

HENDERSON, Justice.

This civil appeal is brought by Wesley Nelson and Harold Nelson (appellants) from an adverse judgment of the Eighth Judicial Circuit Court rendered pursuant to the South Dakota Worker's Compensation statutes. We affirm in part, reverse in part, and remand.

FACTS

Appellee Dennis W. Keil worked full time for appellants as a truck driver and farm laborer. On August 11, 1980, appellee was engaged by appellants to drive a commercial haul of sheep to Gillette, Wyoming. En route to this destination, appellee evidently fell asleep at the wheel. Appellants' 1960 Mack truck left the road, flew into the air some 75 feet, and crashed. Appellee was seriously injured and the truck was extensively damaged.

PROCEDURAL HISTORY/ISSUES

Appellants did not provide worker's compensation insurance, claiming appellee was hired primarily as an exempt farm laborer. By summons and complaint, appellee brought suit requesting compensation for his injuries under worker's compensation laws. By way of answer, appellants raised defenses of contributory negligence and assumption of the risk. Appellants also counterclaimed for damages to their 18-wheeler truck.

Both parties filed proposed findings of fact and conclusions of law and objections thereto. The trial court issued its own findings and conclusions to the effect that appellee's trucking activities did fall within the purview of the worker's compensation laws, and that appellants were therefore barred from raising any affirmative defenses. Further, appellee was denied double damages for failure to prove fault on the part of his employer.

Appellants filed notice of appeal on November 14, 1983. Appellee raises the double damages issue by way of notice of review. The issues for disposition are: (I) Was appellee an agricultural worker and therefore exempt from mandatory worker's compensation coverage pursuant to SDCL 62-3-15(2); (II) must appellee prove actual fault on appellants' behalf to recover double damages pursuant to SDCL 62-3-11 and are appellants entitled to assert affirmative defenses; and (III) was appellee guilty of "willful misconduct" within the meaning of SDCL 62-4-37 and therefore precluded from recovery under the worker's compensation act.

I.

Appellants, at one time, owned and operated a trucking business known as Nelson Trucking. In 1974, they sold that business to NCO Trucking. Both Nelsons are shareholders and officers of NCO Trucking. Appellants own two 18-wheeler trucks. Though they have no authority from the Public Utilities Commission to operate a trucking business, they do haul commercially, usually as a fill-in, under the authority of NCO Trucking. However, since 1974, appellants' primary business has been farming. The two trucks are often used to haul appellants' livestock and produce. In fact, appellants claim that any commercial hauling is only incidental to their farm operations and merely helps to supplement that operation.

Appellee contends he sought work as a truck driver and was hired by appellants to drive commercial hauls. Because he wanted full-time work, appellants hired him also to supplement as a farm worker. Appellants contend appellee acted only occasionally as a truck driver. Also, they insist that because their business is primarily a farming enterprise, they should be exempt from the worker's compensation laws pursuant to SDCL 62-3-15(2) which exempts farm or agricultural laborers from coverage.

This situation clearly falls within a classic "gray area" for determining applicability of the worker's compensation laws. Here, we have farmers admittedly engaged in some commercial trucking. We also have an employee truck driver who admittedly works at times as a farm laborer.

It is the whole character of employment which must be looked to in determining whether an employee is a farm laborer. Otto v. Hahn, 209 Neb. 114, 306 N.W.2d 587 (1981). "The fact that the employer or employers are engaged in farming does not remove from the coverage of the statute other businesses or occupations carried on by the employer which are otherwise in the coverage of the statute." Campos v. Tomoi, 175 Neb. 555, 557, 122 N.W.2d 473, 475 (1963).

Occasional agricultural work outside of an employee's principal work did not change the character of employment to that of farm laborer in Tucker v. Newman, 217 Minn. 473, 14 N.W.2d 767 (1944). The rule is settled:

"A person may engage in different kinds of business, some of which are within the Workmen's Compensation Act and some of which are not. The employes [sic] who are employed in business within the act are, in virtue of such employment, within the coverage of the act. By the same token, those who are employed in a business not within the act are not covered."

Id., 14 N.W.2d at 770 (citation omitted). The rule was also stated in H.J. Heinz Co. v. Chavez, 236 Ind. 400, 406, 140 N.E.2d 500, 504 (1957) that

although the character of the "employment" of an employee must be determined from the "whole character" of his employment and not upon the particular work he is performing at the time of his injury, nevertheless the coverage of an employee under the Act is dependent upon the character of the work he is hired to perform and not upon the nature and scope of his employer's business.

To get around this dilemma of dual employment in both a covered and an exempt business, the trial court found worker's compensation to attach whenever appellee was engaged in the covered enterprise. This cannot be. "Employees and employers do not dart in and out of coverage with every momentary change in activity." Hawthorne v. Hawthorne, 184 Neb. 372, 378, 167 N.W.2d 564, 567 (1969). For this reason, "[t]he great majority of decisions ... attempt to classify the overall nature of the claimant's duties, disregarding temporary departures from that class of duties even if the injury occurs during one of the departures." 1C Larson, The Law of Workmen's Compensation Sec. 53.40 (1982). See, e.g., Teschner v. Horan, 118 R.I. 237, 373 A.2d 173 (1977).

Viewed in this light, the trial court's ultimate finding of liability under worker's compensation is not clearly erroneous. Appellant's insistence that because they no longer work as "Nelson Trucking" and no longer have authority from the Public Utilities Commission, they are not in the trucking business is without merit. Appellants admit that one can be in the trucking business without this authority. Further, Wayne Crabill, of NCO Trucking, testified that appellants' trucks were not leased by NCO and NCO had no authority over the trucks. Clearly, as the trial court found, this activity "was not [an] incidental or necessary adjunct to the farm and ranch operation but was [a] separate and special business." Finally, the trial court found, and correctly so, that "[i]t is the nature of this secondary, separate enterprise, which is determinative of the [applicability of the] workmen's compensation statute of an employee injured while engaged in that enterprise ...." See Goodson v. L.W. Hult Produce Co., 97 Idaho 264, 543 P.2d 167 (1975).

Ultimately, then, the issue becomes a question of fact. Was appellee hired primarily as a trucker or as a farm laborer? To which area did he devote most of his time? There is direct, conflicting testimony on this issue. The trial court, having viewed the witnesses and observed their testimony, found that appellee was primarily involved in driving an 18-wheeler truck for commercial purposes. State v. Minkel, 89 S.D. 144, 230 N.W.2d 233 (1975). Upon reviewing the record, there appears to be no clear error in such a finding. Vaughn v. Eggleston, 334 N.W.2d 870 (S.D.1983). Appellee estimated the breakdown of his activities as follows: 75% was devoted to commercial hauling; 20% was spent hauling for appellants' personal use; only 5% of appellee's work time was devoted to actual farm labor. Appellants dispute this estimate, but provided no evidence to the contrary. Where the court has resolved conflicts in the evidence, this Court is not at liberty to change its findings. Mulder v. Tague, 85 S.D. 544, 186 N.W.2d 884 (1971).

Further, though appellee's checks were signed by appellants, from 1979 to 1982, appellee's W-2 forms were made out in the name of Nelson Trucking. Appellants contend that they were simply "filled out wrong." Appellants were requested by the State to pay, and did pay, unemployment insurance, despite the fact that this is not required for farm laborers. Finally, appellants' business tax forms distinguish farm income from trucking income and farm equipment from trucking equipment.

All of these facts point to the conclusion that appellants operated a secondary, albeit small, trucking business for which appellee was primarily employed. Appellee was injured in the pursuit of that employment. His employment is not exempt from worker's compensation. "[W]hen determining whether a workmen's compensation claimant is within the agricultural labor exclusion of the Act, any doubt as to claimant's status in a 'grey' or borderline case will be resolved in favor of compensation coverage and against exclusion as an agricultural laborer." Miranda v. Southern Farm Bureau Cas. Ins. Co., 229 So.2d 232, 235 (Fla.1969). See also, Goodson, 543 P.2d 167 (exemptions construed narrowly, doubts resolved in favor of compensation) and South Dakota Medical Service v. Minnesota Mutual Fire & Cas. Co., 303 N.W.2d 358 (S.D.1981) (worker's compensation laws must be liberally construed to provide coverage).

II.

                The trial court awarded damages as follows
                Hospital and medical expenses

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