Seal v. Welty

• Docket Number: Supreme Court No.: S-18244
• Decision Date: 28 April 2023
• Parties: Leona SEAL, Personal Representative of the Estate of Nicholson J. Tinker, Appellant, v. Mark C. WELTY, d/b/a North Country Services, Appellee.
• Court: Alaska Supreme Court

528 P.3d 452

Leona SEAL, Personal Representative of the Estate of Nicholson J. Tinker, Appellant,

v.Mark C. WELTY, d/b/a North Country Services, Appellee.

Supreme Court No.: S-18244

Supreme Court of Alaska.

April 28, 2023

David Murrills, Schlehofer Law Offices, P.C., Anchorage, for Appellant.

David H. Shoup, Tindall Bennett & Shoup, P.C., Anchorage, for Appellee.

Before: Winfree, Chief Justice, Maassen, Carney, Borghesan, and Henderson Justices.

OPINION

CARNEY, Justice.

I. INTRODUCTION

In Benson v. City of Nenana we held that a worker who brought a common law negligence action against the entity for whom he worked was not entitled to a jury trial on the question whether he was an employee or independent contractor under the Alaska Workers’ Compensation Act.¹ Relying on Benson , the estate of a worker killed in a construction accident asked the superior court to hold a preliminary hearing to determine whether he was an employee before proceeding to a jury trial on the estate's wrongful death claim. The estate requested the determination because the Act provides that an employer that fails to obtain workers’ compensation insurance is presumed negligent and cannot assert certain defenses against claims brought by an employee. The superior court decided that the question of employee status was an issue for the jury to decide. The estate petitioned for review, which we granted. Benson controls the outcome of this case. We reverse the superior court's order that employee status be tried to the jury and remand for further proceedings consistent with this opinion.

II. FACTS AND PROCEEDINGS²

Nicholson Tinker died in a work-related accident when a retaining wall at a construction site collapsed on him.³ He was working for Mark Welty, d/b/a North Country Services; Welty had no workers’ compensation coverage.⁴ The owner of the building where the accident happened also had no workers’ compensation coverage.⁵

Tinker's mother, Leona Seal, was appointed personal representative of his estate (the Estate).⁶ Seal filed a workers’ compensation claim in her own name against the Alaska Workers’ Compensation Benefits Guaranty Fund, which joined Welty and the property owner to the claim; the Estate later filed a wrongful death suit in superior court.⁷

The Estate's complaint alleged Tinker was an employee and that under the Act Welty was presumed negligent because he had no compensation coverage.⁸ Welty disputed whether Tinker was his employee, contending Tinker was an independent contractor and the Act therefore did not apply.⁹ The superior court and the Board both began proceedings, but the Board did not schedule any hearings after learning that the Estate wanted to pursue the civil action.¹⁰

Early in the superior court proceedings, the Estate asked the court to make a preliminary determination of employee status and suggested a bifurcated trial for that purpose. The Estate argued that under Benson the court, not the jury, must decide the issue. The Estate maintained that the employee status issue should be resolved in advance of trial, "following an appropriate evidentiary hearing" if necessary, and requested an early resolution of the issue because of its impact on discovery and trial preparation. At a trial setting conference the court scheduled an evidentiary hearing about employee status as well as a date for trial on the merits.

The Estate later settled its claims against the property owner; Welty did not join the settlement.¹¹ As part of the settlement the Estate agreed to dismiss the workers’ compensation claim against both Welty and the property owner and also to dismiss the superior court case against the property owner.¹² The settlement specifically stated the Estate was not dismissing the civil lawsuit against Welty.¹³ The parties asked the superior court to vacate the order for the evidentiary hearing; the Estate advised the court it had settled with the property owner and wanted to explore settlement with Welty.

After the Board proceedings concluded, Welty filed the summary judgment motion that was the basis for our earlier decision.¹⁴ Before the superior court ruled on Welty's summary judgment motion, the Estate filed a Motion for Ruling of Law about employee status pursuant to Alaska Civil Rule 12(c) and (d).¹⁵ The Rule of Law motion had three arguments related to Tinker's employment status and stressed the importance of the issue: if Tinker were Welty's employee, Welty would be unable to assert multiple defenses in the wrongful death case.¹⁶

The Rule of Law motion sought a legal ruling that Tinker was Welty's employee under the Act; the Estate appended a significant amount of factual information to support its position. The Estate first argued that employee status is jurisdictional, justifying early resolution of the issue.¹⁷ It also asserted that employment status was an issue for the court and not the jury under Benson . The Estate contended that the "relative nature of the work" test we adopted in Searfus v. Northern Gas Co. ¹⁸ or the Board's related regulation about employee status¹⁹ set out the correct legal test for deciding employee status. Based on that test, it argued that the facts demonstrated Tinker was an employee and not an independent contractor.

Welty countered that the Rule of Law motion was really a motion for partial summary judgment and therefore the evidence needed to be construed in his favor. Welty argued that the common law master-servant rule from another tort context²⁰ was the applicable legal test for employee status, not the relative nature of the work test. He maintained that material factual issues precluded summary judgment. Welty's opposition did not address whether the jury or the court should determine employee status.

In reply the Estate insisted that the Rule of Law motion was not one for partial summary judgment, writing that it was undisputed that the issue of employee status was "a preliminary issue of law and fact that only the [c]ourt (and not a jury) has to decide." (Emphasis omitted.) The Estate agreed that material factual disputes existed and said the issue was not "susceptible to resolution" on summary judgment. The Estate reiterated that under Benson ²¹ the court was required to resolve employee status and argued that under Rule 12(d) the parties could request a hearing to resolve factual disputes or the court could make findings based on the written evidence the parties had submitted.

The court then granted Welty's initial summary judgment motion dismissing the case,²² and decided that all the pending motions, including the Rule of Law motion, were moot. When we reversed the dismissal and remanded for further proceedings²³ we noted that Tinker's employee status had not been resolved in the Board proceeding and continued to be an open question.²⁴

Shortly after the remand, the Estate requested a ruling on the Rule of Law motion, observing that the motion had been ripe before the appeal. The superior court allowed Welty to respond to the request for a ruling if he was "opposed to [the Estate's] request for ruling." In his response Welty did not oppose the court issuing a ruling, but he included new legal arguments in opposition to the motion. Welty contended that Benson did not apply because the employee status question was governed by the common law rather than the Act. He argued that the issue of employee status had been determined "at trial" (emphasis omitted) in Benson ²⁵ and in Nickels v. Napolilli ,²⁶ another case the Estate relied on, rather than at a "preliminary hearing." Welty distinguished Benson because in that case the employer raised the exclusive liability defense, while he had not.

The superior court denied in part and granted in part the Estate's Rule of Law motion, treating it as one for partial summary judgment. The court decided that the relative nature of the work test applied and that material factual disputes precluded summary judgment about Tinker's status. The court then turned to the question whether a separate bench trial was necessary and concluded it was not because the jury should decide the employee status question. The court considered five of our decisions about the exclusive liability provisions of the Act, dividing them into two categories. The court interpreted Benson ²⁷ and Benner v. Wichman ²⁸ as cases in which "the injured parties were already classified as employees and their respective employers carried workers’ compensation,"²⁹ with the sole issue being whether the exclusive liability defense applied. The court reasoned that Benson and Benner were distinguishable because Welty did not have compensation coverage, and so could not raise the exclusive liability defense. The court interpreted the other three cases as being about employee classification. The court thought that both Trudell v. Hibbert ³⁰ and Nickels v. Napolilli ³¹ involved "bench trials to determine the classification ... as either employees or independent contractors," while Odsather v. Richardson ³² presented an issue of classification decided on summary judgment. Apparently because it believed that Benson ’s holding rested on the availability of the exclusive liability defense rather than the broader question of the Act's applicability, the court decided the jury should determine whether Tinker was an employee or independent contractor.

The Estate moved for reconsideration, contending that Benson was "dispositive and controlling" on the issue whether the court and not the jury should determine employee status. The Estate pointed out that Benson involved an employee classification dispute and argued the court had distinguished Benson for a reason "that simply does not exist." The Estate maintained that none of the cases the court relied on was inconsistent with the rule that the court and not the jury should decide employee status. The Estate argued that employee status needed to be resolved before trial because the determination would have "a profound impact" (emphasis...