Mathews v. BJS Construction, Inc., 02-244.
| Decision Date | 29 April 2003 |
| Docket Number | No. 02-244.,02-244. |
| Citation | 315 Mont. 441,68 P.3d 865,2003 MT 116 |
| Parties | Mark MATHEWS, Petitioner and Appellant, v. BJS CONSTRUCTION, INC., a Montana Corporation, Employer, and Liberty Northwest Insurance Corporation, Respondent and Respondent. |
| Court | Montana Supreme Court |
Geoffrey C. Angel, Angel Law Firm, Bozeman, Montana, For Appellant.
Larry W. Jones, Carrie L. Garber, Jones & Garber, Missoula, Montana, For Respondent.
Lawrence A. Anderson, Great Falls, Montana (MTLA); Michael S. Kakuk, Hoovestal, Kakuk & Fanning, Jacqueline T. Lenmark, Keller, Reynolds, Drake, Johnson & Gillespie, Helena, Montana (MBIA), For Amicus.
¶ 1 Mark Mathews appeals a determination of the Workers' Compensation Court concluding that because BJS Construction, Inc. (BJS) obtained a Certificate of Independent Contractor Exemption from Mathews at the time he was hired, Mathews is conclusively presumed to be excluded from the Workers' Compensation Act (the Act). We reverse and remand for further proceedings consistent with this Opinion.
¶ 2 On appeal, Mathews raised three issues which we restated for purposes of oral argument as follows:
¶ 3 1. Whether § 39-71-401(3), MCA, as a matter of law, conclusively precludes any factual inquiry into whether an employer/employee relationship exists once the worker has been issued the exemption contemplated by § 39-71-401(3), MCA.
¶ 4 2. Whether § 39-71-401(3), MCA, read in conjunction with § 39-71-120, MCA, requires the employer to make an initial good faith inquiry of the worker to determine that he or she does, in fact, meet the control and independently established business tests before the employer employs the worker as an independent contractor (IC).
¶ 5 3. Whether the public policy underlying the Act generally and as set out in § 39-71-105(1), (2) and (3), MCA, is violated when the employer offers to pay the worker a higher wage on the condition that the worker present an exemption at the time of hire.
¶ 6 BJS is in the business of "framing" which consists of constructing the walls, floors and roof of a house. BJS employs both employees and ICs. Brian Schroeder and his wife are the sole owners of BJS.
¶ 7 On June 8, 2000, the date Mathews was injured, BJS employed three workers as employees and three workers, including Mathews, as ICs. Brian Schroeder set the work hours, provided most of the equipment, called the lunch and coffee breaks, and supervised the work of employees and ICs alike. A worker's pay, whether the worker was designated as an employee or an IC, was solely dependent on the number of hours the person worked. ICs were not entitled to any other bonuses or profits.
¶ 8 Schroeder offered new hires the option of receiving a greater hourly wage if they would provide him with an exemption, or receiving a lesser hourly wage if BJS had to incur the expenses of employment taxes, workers' compensation insurance and unemployment insurance. BJS paid employees between $10 and $14 per hour and ICs between $15 and $20 per hour. BJS does pay employees overtime wages for overtime work, but it does not pay ICs overtime wages for overtime work. Mathews had been issued an exemption on December 31, 1997, that was effective until December 31, 2000. Mathews does not dispute that he knowingly and voluntarily entered into an agreement with BJS to work as an IC.
¶ 9 In his deposition, Schroeder testified that he did not do anything to establish that Mathews was in fact working as an IC. Mathews had no separate place of employment, no other employment agreements, did not pay for any materials or supplies, and realized no profit other than his hourly pay from BJS. On one occasion, Schroeder subcontracted out Mathews' labor to another contractor. Schroeder billed the other contractor and paid Mathews for the hours he worked.
¶ 10 On June 8, 2000, Schroeder instructed Mathews to cut roof planking on a forklift raised to the height of the roof trusses. Sawdust and scrap lumber had collected on the roof. Mathews was injured when he stepped on a piece of scrap lumber, slid down the roof and fell to the ground breaking his leg in several places. Mathews filed a claim for compensation on July 14, 2000, but BJS's insurer, Liberty Northwest Insurance Corporation (Liberty), refused to pay the claim relying on the conclusive presumption in § 39-71-401(3), MCA.
¶ 11 On February 1, 2002, the Workers' Compensation Court granted summary judgment in favor of BJS and Liberty concluding that Mathews' claim was barred by § 39-71-401(3)(c), MCA (1999), which provides that a worker with an exemption is precluded from receiving workers' compensation benefits. Mathews appeals.
¶ 12 Our standard of review in appeals from summary judgment rulings is de novo. Oliver v. Stimson Lumber Co., 1999 MT 328, ¶ 21, 297 Mont. 336, ¶ 21, 993 P.2d 11, ¶ 21 (citing Motarie v. N. Mont. Joint Refuse Disposal (1995), 274 Mont. 239, 242, 907 P.2d 154, 156; Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785). When we review a trial court's grant of summary judgment, we apply the same evaluation as that court based on Rule 56, M.R.Civ.P. Oliver, ¶ 21 (citing Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903). We set forth our inquiry in Bruner as follows:
The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue does exist. Having determined that genuine issues of fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. We review the legal determinations made by a district court as to whether the court erred.
Oliver, ¶ 21 (quoting Bruner, 272 Mont. at 264-65, 900 P.2d at 903).
¶ 13 "Summary judgment is an extreme remedy which should never be substituted for a trial if a material factual controversy exists." Montana Metal Buildings., Inc. v. Shapiro (1997), 283 Mont. 471, 474, 942 P.2d 694, 696 (citing Clark v. Eagle Systems, Inc. (1996), 279 Mont. 279, 283, 927 P.2d 995, 997). Moreover, in a summary judgment proceeding, the evidence must be viewed in the light most favorable to the nonmoving party, and all reasonable inferences will be drawn therefrom in favor of the party opposing summary judgment. Oliver, ¶ 22 (citing Joyce v. Garnaas, 1999 MT 170, ¶ 8, 295 Mont. 198, ¶ 8, 983 P.2d 369, ¶ 8).
¶ 14 In addition, we review decisions of the Workers' Compensation Court to determine whether that court correctly interpreted the law as it applies to the facts of the case. Lockhart v. New Hampshire Ins. Co., 1999 MT 205, ¶ 13, 295 Mont. 467, ¶ 13, 984 P.2d 744, ¶ 13 (citing Pinyerd v. State Compensation Ins. Fund (1995), 271 Mont. 115, 119, 894 P.2d 932, 934).
¶ 15 Whether § 39-71-401(3), MCA, as a matter of law, conclusively precludes any factual inquiry into whether an employer/employee relationship exists once the worker has been issued the exemption contemplated by § 39-71-401(3), MCA.
¶ 16 The statutes in effect on the day of an injury determine the benefits to which an injured worker is entitled. Buckman v. Montana Deaconess Hosp. (1986), 224 Mont. 318, 321, 730 P.2d 380, 382 (citations omitted). Because Mathews was injured on June 8, 2000, the 1999 Workers' Compensation Act controls.
¶ 17 Mathews argues on appeal that the Workers' Compensation Court erred when it held that the mere existence of an exemption conclusively precludes a worker from coverage under the Act. Mathews contends that § 39-71-401(3), MCA, does not apply to his employment by BJS because, by its own terms, § 39-71-401(3), MCA, applies only to a sole proprietor, a working member of a partnership, a working member of a limited liability partnership, or a working member of a member-managed limited liability company. He argues that it is clear that he was not any of those things because he was not engaged in an independent business at the time he worked for BJS and because he was subject to the control and direction of Brian Schroeder while he worked for BJS. Mathews also argues that, based on the express language of the exemption itself, BJS had the affirmative obligation to establish that Mathews was engaged in an independently established business and that Mathews was free and would continue to be free from the control and direction of another.
¶ 18 The provision of the Act at issue in this case, § 39-71-401(3), MCA (1999), provides, in pertinent part:
(a) A sole proprietor, a working member of a partnership, a working member of a limited liability partnership, or a working member of a member-managed limited liability company who represents to the public that the person is an independent contractor shall elect to be bound personally and individually by the provisions of compensation plan No. 1, 2, or 3 but may apply to the department for an exemption from the Workers' Compensation Act.
¶ 19 In our recent decision in Wild v. Fregein Construction, ...
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