Mill Street Church of Christ v. Hogan

• Decision Date: 02 March 1990
• Docket Number: No. 89-CA-380-WC,89-CA-380-WC
• Citation: 785 S.W.2d 263
• Parties: MILL STREET CHURCH OF CHRIST and State Automobile Mutual Insurance Company, Petitioners, v. Samuel J. HOGAN and Workers' Compensation Board, Respondents.
• Court: Kentucky Court of Appeals

Page 263

785 S.W.2d 263

MILL STREET CHURCH OF CHRIST and State Automobile Mutual Insurance Company, Petitioners, v. Samuel J. HOGAN and Workers' Compensation Board, Respondents.

No. 89-CA-380-WC.

Court of Appeals of Kentucky.

March 2, 1990.

Case Ordered Published by

Court of Appeals March 16, 1990.

G. Sidnor Broderson, Timothy D. Mefford, Franklin, for petitioners.

Alton L. Cannon, Leitchfield, for Samuel J. Hogan.

Before HAYES, HOWARD and REYNOLDS, JJ.

HOWARD, Judge.

Mill Street Church of Christ and State Automobile Mutual Insurance Company petition for review of a decision of the New Workers' Compensation Board [hereinafter "New Board"] which had reversed an earlier decision by the Old Workers' Compensation Board [hereinafter "Old Board"]. The Old Board had ruled that Samuel J. Hogan was not an employee of the Mill Street Church of Christ and was not entitled to any workers' compensation benefits. The New Board reversed and ruled that Samuel Hogan was an employee of the church.

Samuel Hogan filed a claim for workers' compensation benefits for an injury he received while painting the interior of the Mill Street Church of Christ on December 15, 1986. In 1986, the Elders of the Mill Street Church of Christ decided to hire church member, Bill Hogan, to paint the church building. The Elders decided that another church member, Gary Petty, would be hired to assist if any assistance was needed. In the past, the church had hired Bill Hogan for similar jobs, and he had been allowed to hire his brother, Sam Hogan, the respondent, as a helper. Sam Hogan had earlier been a member of the church but was no longer a member. The church at the time the painting project was undertaken, had switched to an Elder form of church government. At the time Bill Hogan was employed for other projects, the church operated under a congregational form of church government.

Dr. David Waggoner, an Elder of the church, soon contacted Bill Hogan, and he accepted the job and began work. Apparently Waggoner made no mention to Bill Hogan of hiring a helper at that time. Bill Hogan painted the church by himself until he reached the baptistry portion of the church. This was a very high, difficult portion of the church to paint, and he decided that he needed help. After Bill Hogan had reached this point in his work, he discussed the matter of a helper with Dr. Waggoner at his office. According to both Dr. Waggoner and Hogan, they discussed the possibility of hiring Gary Petty to help Hogan. None of the evidence indicates that Hogan was told that he had to hire Petty. In fact, Dr. Waggoner apparently told Hogan that Petty was difficult to reach. That was basically all the discussion that these two individuals had concerning hiring a helper. None of the other Elders discussed the matter with Bill Hogan.

On December 14, 1986, Bill Hogan approached his brother, Sam, about helping him complete the job. Bill Hogan told Sam the details of the job, including the pay, and Sam accepted the job. On December 15, 1986, Sam began working. A half hour after he began, he climbed the ladder to paint a ceiling corner, and a leg of the ladder broke. Sam fell to the floor and broke his left arm. Sam was taken to the Grayson County Hospital Emergency Room where he was treated. He later was under the care of Dr. James Klinert, a surgeon in Louisville. The church Elders did not know that Bill Hogan had approached Sam Hogan to work as a helper until after the accident occurred.

After the accident, Bill Hogan reported the accident and resulting injury to Charles Payne, a church Elder and treasurer. Payne stated in a deposition that he told Bill Hogan that the church had insurance. At this time, Bill Hogan told Payne the total number of hours worked which included a half hour that Sam Hogan had worked prior to the accident. Payne issued Bill Hogan a check for all of these hours. Further, Bill Hogan did not have to use his own tools and materials in the project. The church supplied the tools, materials, and supplies necessary to complete the project. Bill purchased needed items from Dunn's Hardware Store and charged them to the church's account.

It is undisputed in this case that Mill Street Church of Christ is an insured employer under the Workers' Compensation Act. Sam Hogan filed a claim under the Workers' Compensation Act. There was no decision in this case by an administrative law judge. The Old Board decided the case in favor of the Petitioners on June 20, 1988. The New Board reversed and entered its final order in favor of Sam Hogan on January 20, 1989. It remanded Samuel Hogan's claim to an administrative law judge for determination of compensation benefits to which Samuel Hogan may be entitled. The Petitioners now ask this Court to review and reverse the decision of the New Board.

The Petitioners first contend that the New Board erred by exceeding the proper scope of its review. Specifically, petitioners argue that the New Board substituted its own decision on a factual question in place of the Old Board's decision. After reviewing the applicable facts and relevant law, we disagree with this contention.

First, the approach of courts to reviewing problems considered by administrative agencies has been based on the distinction between questions of law and questions of fact. 2 Am.Jur.2d Administrative Law, § 618. Questions of law are generally for the ultimate determination of the court while questions of fact are rarely considered by the court. 2 Am.Jur.2d, supra. Rulings by administrative agencies on mixed questions of law and fact are subject to judicial review. The court may substitute its judgment for the agency's ruling especially if that ruling was based on an incorrect view of the law. 2 Am.Jur.2d Administrative Law § 670.

Kentucky courts have followed a similar approach. Questions of fact are generally for determination by the administrative agency. The reviewing court should not substitute its judgment for that of the Workers' Compensation Board on questions of fact. Paramount Foods, Inc. v. Burkhardt, Ky., 695 S.W.2d 418 (1985). The Supreme Court held that in order to reverse the Board's finding, the claimant must present evidence that is so overwhelming as to compel a decision in the claimant's favor. Paramount Foods, Inc. v. Burkhardt, supra, at 419. KRS 342.285 states that the reviewing court should not consider any new or additional evidence, and it should not substitute its judgment as to the weight of evidence on questions of fact. It can review the agency's decision to see if the order, decision, or award is clearly erroneous on the basis of the evidence contained in the whole record. Further, it is clear that the employee seeking benefits under the Workers' Compensation Act must prove employment. Smith v. Perry, Ky., 411 S.W.2d 903 (1967). Additionally, a party claiming the benefits of an agency relationship must prove that an agency relationship actually existed. Cincinnati Insurance Company v. Clary, Ky., 435 S.W.2d 88 (1968).

Petitioners contend that the New Board violated the above principles by substituting its own findings on questions of fact. We disagree. A review of the proceedings below shows that there was no real dispute as to the essential facts of this case. All of the parties seem to agree as to what the Elders decided, what had occurred in the past, and what Bill Hogan had been told during this specific employment. In this case, the New Board was reviewing the Old Board's decision to determine if the agreed facts established that Bill Hogan was acting as an agent for Mill Street Church of Christ and had the implied power to hire his brother, Sam Hogan, as a helper. Thus, the New Board was considering a question of law, not one of fact.

Brewer v. Millich, Ky., 276 S.W.2d 12 (1955), supports the New Board's decision to consider and determine whether Sam Hogan was an employee of the church. In Brewer, the Court ruled that since the facts were not essentially disputed, the question of whether the appellee in that case was an independent contractor or an employee was one of law. Similarly in Aetna Casualty & Surety Co. v. Petty, 282 Ky. 716, 140 S.W.2d 397 (1940), the Court ruled that since there was no substantial dispute concerning the facts, the question was one of law, and the Board's finding could be reviewed by the appellate court. Thus, the question involved in the case at bar was one of law, and the New Board acted properly in deciding to overturn the Old Board's decision.

Petitioners argue that the New Board also erred by applying the doctrine of implied authority as a basis for creation of an employment relationship between Sam Hogan and Mill Street Church of Christ. We disagree.

KRS 342.260 establishes the employees that are covered under the Workers' Compensation Act. Specifically, employees covered include:

... every person, including a minor, whether lawfully or unlawfully employed, in the service of an employer under any contract of hire or apprenticeship, express or implied, and all helpers and assistants of employes whether paid...