Orcutt v. S & L Paint Contractors, Ltd.

• Decision Date: 20 March 1990
• Docket Number: No. 11032,11032
• Parties: Brenda Lynn ORCUTT, Claimant-Appellant, v. S & L PAINT CONTRACTORS, LTD., and Aetna Casualty & Surety, Respondents-Appellees.
• Court: Court of Appeals of New Mexico

Page 71

791 P.2d 71

109 N.M. 796

Brenda Lynn ORCUTT, Claimant-Appellant, v. S & L PAINT CONTRACTORS, LTD., and Aetna Casualty & Surety Respondents-Appellees.

No. 11032.

Court of Appeals of New Mexico.

March 20, 1990.

[109 NM 797] Stacey A. Johnson, Phyllis Oman Bowman, Stacey A. Johnson, P.A., Albuquerque, for claimant-appellant.

Julie W. Brown, Beall, Pelton, O'Brien & Brown, Albuquerque, for respondents-appellees.

OPINION

APODACA, Judge.

Claimant Brenda Orcutt (worker) appeals the workers' compensation judge's (judge) denial of her claim under NMSA 1978, Section 52-1-64 (Repl.Pamp.1987) of the Workers' Compensation Act (the Act), based on an out-of-state injury. Worker, a New Mexico resident, was injured in Nevada while working for respondent S & L Paint Contractors, Ltd. (employer). Determining that worker's "contract of hire" was made in Nevada and not in New Mexico, the judge concluded that worker did not meet the extraterritorial coverage requirements under Section 52-1-64 and was thus not entitled to benefits under the Act. We agree with the judge's determination and affirm the denial of coverage.

On appeal, worker raises three issues. She argues that the judge erred in: (1) concluding that worker did not meet the "contract of hire" requirements under Section 52-1-64; (2) failing to give full faith and credit to certain "findings and conclusions" of a workers' compensation agency in Nevada concerning the place of hire; and (3) failing to conclude that employer was estopped from denying coverage under the Act by representing to worker and a Nevada hospital after the injury that employer would provide coverage for medical expenses incurred for treatment.

BACKGROUND

Worker was injured while working for employer, which was in the business of repairing and painting heavy equipment for sale at auctions. Ken Clark (Clark), employer's owner, was a New Mexico resident. Although employer transacted business in New Mexico, its primary place of business was located in Iowa. Employer's employees traveled interstate to different job sites.

Employer contracted for a job in Las Vegas. Clark telephoned and hired worker's husband in Albuquerque, New Mexico, for the Nevada job. Worker and her husband were New Mexico residents. During the telephone conversation with the husband, Clark also offered employment to worker. Because he did not want worker to work, worker's husband did not relay the offer to her. After worker and her husband arrived in Nevada, Clark directly offered worker a job. Before the Nevada offer, worker had not talked to employer about a job.

Worker accepted the offer and began work. She worked for about three hours before falling from a dump truck she was preparing for painting. She injured her back and ankle. As a result of the work-related injury, worker incurred $4,623.60 in medical expenses. She applied for workers' compensation benefits in Nevada. The Nevada agency denied coverage, concluding that worker was an out-of-state employee only temporarily in the state and that employer had failed to obtain coverage there.

DISCUSSION

Section 52-1-64 provides:

If an employee, while working outside the territorial limits of this state, suffers an injury on account of which he * * * would have been entitled to the benefits provided by the [Act], had such injury occurred within this state, such employee * * * shall be entitled to [such] benefits * * * provided that at the time of such injury:

A. his employment is principally localized in this state;

B. he is working under a contract of hire made in this state in employment not principally localized in any state;

C. he is working under a contract of hire made in this state in employment principally localized in another state whose workmen's compensation law is not applicable to his employer; or

D. he is working under a contract of hire made in this state for employment outside the United States and Canada. [Emphasis added.]

Under the statute, unless a worker's employment is principally localized in New Mexico, which neither party contends was the case in this appeal, it is a prerequisite that the contract of hire be made in this state before a worker is entitled to benefits.

State Where Contract of Hire Was Made

In enacting Section 52-1-64, the New Mexico legislature statutorily adopted the "place-of-contract or place-of-hiring test." See generally 4 A. Larson, Larson's Workmen's Compensation Law Sec. 87.31 (1989). Under this theory, the place where the employment contract was made is determinative of coverage. Although the theory has led to unsatisfactory and even contradictory results, according to Larson's, it has become established as a common test of coverage. Id.

In construing a statute, a reviewing court's central concern is to determine and give effect to the intent of the legislature. Smith Mach. Corp. v. Hesston, Inc., 102 N.M. 245, 694 P.2d 501 (1985). In determining this intent, we look primarily to the language used in the statute. See First Nat'l Bank of Santa Fe v. Southwest Yacht & Marine Supply Corp., 101 N.M. 431, 684 P.2d 517 (1984). This court must give the words used in the statute their ordinary meaning unless the legislature indicates a different intent. State v. Rodriguez, 101 N.M. 192, 679 P.2d 1290 (Ct.App.1984). Unreasonable or strained statutory constructions are proscribed. Anaya v. New Mexico Steel Erectors, Inc., 94 N.M. 370, 610 P.2d 1199 (1980).

Section 52-1-64 is not ambiguous. New Mexico can provide extraterritorial coverage only if the employment is "localized" here or the "contract of hire" was formed in the state. The plain language of a statute is the primary indicator of legislative intent. General Motors Acceptance Corp. v. Anaya, 103 N.M. 72, 703 P.2d 169 (1985).

The place-of-contract test depends on the technical formalities present with respect to elements required for contract formation. 4 A. Larson, supra, at Sec. 87.34. The manifestation of mutual assent to an exchange ordinarily takes the form of an offer by one party followed by an acceptance by the other party. Restatement of Contracts (Second) Sec. 22 at 66 (1981). It is elementary in contract law that mutual assent ordinarily must be expressed by parties to an agreement before a contract is made. Trujillo v. Glen Falls, Inc., 88 N.M. 279, 540 P.2d 209 (1975). Since an acceptance is required to make a binding contract, the geographical place where the acceptance is given will control the location of the formation of the contract. See U.S. Steel Corp., Gary Works v. Industrial Comm'n, 161 Ill.App.3d 437, 109 Ill.Dec. 584, 510 N.E.2d 452 (1987).

The rule is that an offer becomes a binding promise and results in a contract only when it is accepted. McCoy v. Alsup, 94 N.M. 255, 609 P.2d 337 (Ct.App.1980). A proposal by an offeror is not effective and is not an "offer" until it is made known to the other party, who is then in the position to accept or reject the offer. Foster v. Udall, 335 F.2d 828 (10th Cir.1964). In the formation of a contract, an offeror is entitled to know in clear terms whether the offeree accepts his proposal. Ross v. Ringsby, 94 N.M. 614, 614 P.2d 26 (Ct.App.1980). An offeree's acceptance must be clear, positive, and unambiguous in order to result in a binding contract. Tatsch v. Hamilton-Erickson Mfg. Co., 76 N.M. 729, 418 P.2d 187 (1966).

Acceptance of an offer is a manifestation of assent to the terms of the offeree in a manner invited or required by the offer. Restatement of Contracts (Second) Sec. 50 (1981). Acceptance may be by performance or by promise. See id. In an employment contract, an employer's offer may create a power to accept by performance. Corbin on Contracts Sec. 65 at 271 (1963). The employee may be fully authorized by the employer's proposal to proceed with performance without any further assent by the employer. Id. If this is so, the employee has the power to accept by action rather than words. Id. Thus, an employment contract may arise when an employer authorizes a prospective employee to accept an offer of employment by rendering services.

In the present case, the evidence is undisputed that worker did not find out about the offer until she arrived in Nevada. From her testimony, it appears that worker went to Nevada only to accompany her husband. Her plans were "to walk around" during the day. Since she was not going to be employed by employer, her husband had agreed to pay employer for half of the motel room. Employer did not pay worker any travel expenses. She was not regularly employed by employer in New Mexico. In fact, worker had never worked for employer before. There was no evidence supporting an inference that worker's travel to Nevada was an act of "acceptance" to a known job offer made by employer in New Mexico. It seems clear that, whether the contract of hire is classified as unilateral or bilateral, it was formed, as a matter of law, in Nevada.

As applied to the facts of this appeal, case law dictates that both the offer and its acceptance took place in Nevada. Worker admits that no offer of employment was made by employer directly to her while she was in New Mexico, nor did she accept any offer of employment while in New Mexico. Worker first knew of her opportunity to work for employer after she arrived in Nevada and it was there that she accepted the offer.

The cases relied on by worker fail to support her argument. In Franklin v. Geo. P. Livermore, Inc., 58 N.M. 349, 270 P.2d 983 (1954), the court never addressed the issue of where the employee was hired. The court merely accepted the apparently undisputed fact that the employee was hired in New Mexico.

In Roan v. D. W. Falls, Inc., 72 N.M. 464, 384 P.2d 896 (1963), on facts much different from those in this appeal, the court held that, rather than determining where the employment contract was formally made, it was satisfied there was "substantial evidence" that the employee was hired in New Mexico. Similarly, in ...