Rouse v. State

• Decision Date: 19 June 1985
• Docket Number: No. 84-969,84-969
• Citation: 369 N.W.2d 811
• Court: Iowa Supreme Court
• Parties: Beth J. ROUSE, As Administrator of the Estate of John Douglas Rouse, Deceased, Appellee, v. STATE of Iowa, Appellant, Iowa State Conservation Commission and Chariton Valley R C & D, Defendants.

Page 811

369 N.W.2d 811

Beth J. ROUSE, As Administrator of the Estate of John Douglas Rouse, Deceased, Appellee, v. STATE of Iowa, Appellant, Iowa State Conservation Commission and Chariton Valley R C & D, Defendants.

No. 84-969.

Supreme Court of Iowa.

June 19, 1985.

Thomas J. Miller, Atty. Gen., and Charles Lavorato, Asst. Atty. Gen., for appellant.

William L. Shelton and Richard L. Ambelang, Chariton, for appellee.

Considered by REYNOLDSON, C.J., and McCORMICK, SCHULTZ, CARTER, and WOLLE, JJ.

McCORMICK, Justice.

Judgment for $37,194.22 was entered against the State in this wrongful death action brought pursuant to the Iowa Tort Claims Act by Beth J. Rouse, administrator of the estate of John Douglas Rouse. In this appeal the State contends the trial court erred in rejecting its defense that the decedent was an employee of the state and thus limited to a workers' compensation recovery. See Iowa Code § 85.20 (1979). In her cross-appeal the administrator contends the damage award was inadequate. Because we find no basis for reversal in either contention, we affirm the trial court on both appeals.

I. The State's appeal. In contending that the trial court erred in finding decedent Rouse was not an employee of the state, the State relies on an asserted error of law. The asserted error is the alleged failure of the court to employ correct factors in determining whether an employer-employee relationship existed. The State argues that if the correct factors were considered the court would have been obliged as a matter of law to find Rouse was a state employee.

Because this case was tried to the court at law, the trial court's findings of fact have the force of a jury's special verdict. If supported by substantial evidence, the findings will not be disturbed. They are construed broadly and liberally and, in case of ambiguity, are construed to uphold rather than defeat the judgment. We are not bound by trial court determinations of law and are free to decide whether the court's findings were induced by legal error. Farmers Insurance Group v. Merryweather, 214 N.W.2d 184, 186-87 (Iowa 1974).

Ordinarily the determination of the relationship of employer and employee is a question of fact, although the question of the relationship created by a written contract may be one of law for the court. Hassebroch v. Weaver Construction Co., 246 Iowa 622, 627, 67 N.W.2d 549, 552 (1954). The State relies on a theory of implied contract in this case. Thus we can reverse the trial court only if we find that the court's decision was induced by legal error or that the evidence was strong enough to compel any reasonable mind to conclude Rouse was a state employee. We will first recite the relevant evidence and then address the legal issues.

Rouse was killed while working as a participant in a program under the federal Comprehensive Employment Training Act (CETA). See 29 U.S.C. §§ 801-822 (1975). The purpose of the federally funded program is to provide job training and skills to unemployed persons. The program is administered by state or local government bodies. The government sponsor enters contracts with entities who need labor performed. Eligible candidates are then referred by the sponsor to the contractor which screens and hires those who fit its needs.

In the present case the program sponsor was the Governor of Iowa who designated the Office of Planning and Programming to act for him. The contractor was defendant Chariton Valley R C & D, a nonprofit organization concerned with human and natural resources development in four southern Iowa counties. Chariton Valley contracted with OPP to employ twenty persons on public service jobs. Among the jobs was a position called "conservation aide." A person in that position was to be "outstationed," which in this case involved assignment of the person by Chariton Valley to perform work for the state conservation commission.

The OPP contract required Chariton Valley to hire persons from the pool of eligible CETA candidates and use them on the jobs described in the contract. Chariton Valley was to maintain all payroll records, pay participants' wages, withhold for tax purposes, and purchase workers' compensation insurance and health insurance. OPP, using federal funds, was to reimburse Chariton Valley for these expenses pursuant to the contract.

Rouse was a CETA applicant who was referred to Chariton Valley R C & D for possible hiring in November 1979. After an interviewing and screening process, Chariton Valley hired Rouse as a conservation aide. From November 13, 1979, until his death on January 14, 1980, Rouse and another CETA participant worked with conservation commission employees headquartered at Lake Rathbun except for one day when Rouse did some work for the Lucas County Historical Society. While outstationed with the conservation commission, he took orders from conservation commission employees and was supervised by them. He was killed on January 14, 1980, while helping them take down a silo which collapsed on him.

Rouse's administrator sued both the State and Chariton Valley in the present wrongful death action. Each defended on the ground it was Rouse's employer. In deciding the case, the trial court found that Rouse was an employee of Chariton Valley at the time of his death and not an employee of the state. Each defendant was attempting to establish itself as Rouse's employer to avoid liability for wrongful death damages. See Iowa Code § 85.20.

As recognized by the parties, Rouse could be a state employee for workers' compensation purposes only if he was an employee within the meaning of section 85.61(2) of the workers' compensation statute. Under that provision, an "employee" is "a person who has entered into the employment of, or works under contract of service ... for an employer." No legal distinction exists between the disjunctive phrases in this definition. For employment to be found, there must be a "contract on the part of the employer to hire and on the part of the employee to perform service." Henderson v. Jennie Edmundson Hospital, 178 N.W.2d 429, 431 (Iowa 1970).

The State argues that the trial court erred in stating that Iowa adheres to the "contract test" in determining who the employer is for workers' compensation purposes. Our statute and cases, however, support the trial court's view. We disagree with the court only in its assertion that this view is not shared by a majority of other jurisdictions. See 1C A. Larson, The Law of [Workers'] Compensation, § 47.10 at 8-231-232 (1982) ("Most acts insist upon the existence of a 'contract of hire, express or implied,' as an essential feature of the employment relation."). The issue here, of course, is whether the trial court was correct about the requirement in Iowa, not whether the court was correct about the law elsewhere.

Requiring a contract basis for the employment relationship distinguishes the relationship from the common law master-servant relationship. At common law vicarious liability can be imposed on a master on a theory of the master's acceptance and control of a service that led to a third person's injury. See id. The trial court characterized this as a "control test" and was right in finding it inapplicable. Employment for purposes of compensation law is

a mutual arrangement between the employer and employee under which both give up and gain certain things. Since the rights to be adjusted are reciprocal rights between employer and employee, it is not only logical but mandatory to resort to the agreement between them to discover their relationship. To thrust upon a worker an employee status to which he has never consented would not ordinarily harm him in a vicarious liability suit by a stranger against his employer, but it might...