Smigelski v. Potomac Insurance

Decision Date10 January 2008
Docket NumberNo. 52 Sept. Term, 2007.,52 Sept. Term, 2007.
Citation939 A.2d 189,403 Md. 55
PartiesAndrew A. SMIGELSKI d/b/a Columbia Roofing & Home Improvement v. POTOMAC INSURANCE COMPANY OF ILLINOIS.
CourtCourt of Special Appeals of Maryland

Robert W. Hesselbacher, Jr. (Wright, Constable & Skeen, L.L.P., Baltimore), on brief, for petitioner.

David B. Stratton (D. Stephenson Schwinn of Jordan, Coyne & Savits, L.L.P., Washington, DC), on brief, for respondent.

ARGUED BEFORE: BELL, C.J., RAKER, HARRELL, BATTAGLIA, GREENE, JJ., and ALAN M. WILNER and DALE R. CATHELL, JJ. (Retired, Specially Assigned).

GREENE, Judge.

This case arises from a workers' compensation claim filed by Alejandro Garcia, a Virginia resident, who was employed by Andrew Smigelski, owner of a Virginia company, and was injured while performing work in Maryland. The Maryland Workers' Compensation Commission awarded Alejandro Garcia benefits, but noted that as a result of his status as an illegal alien,1 Smigelski's workers' compensation insurance policy would not cover the injury. On petition for judicial review, the Circuit Court for Montgomery County granted summary judgment to the insurance provider, Potomac Insurance Company of Illinois, on the issue of coverage. The Court of Special Appeals affirmed the grant of summary judgment, and we granted Smigelski's petition for certiorari.

We shall hold that the workers' compensation insurance policy, by its own terms, excluded coverage in states other than Virginia for activities requiring the employer to procure workers' compensation insurance in those states. Pursuant to Maryland law, Smigelski, as a statutory employer, was required to procure workers' compensation insurance for his employees in Maryland. We shall hold that the jury's finding that Alejandro Garcia was regularly employed in Maryland precludes a determination that he was a casual employee. Accordingly, Smigelski was required to procure workers' compensation coverage in Maryland. Therefore, under the terms of the policy, Garcia was not covered for this accident. Finally, we shall hold that, because Alejandro Garcia was an illegal alien at the time of his injury, he could not properly file a claim in Virginia. There is no basis, consistent with our prior case law, to extend coverage in this case.

FACTUAL AND PROCEDURAL BACKGROUND

Andrew Smigelski, owner of Columbia Roofing & Home Improvements, a Virginia company, purchased a workers' compensation insurance policy ("the policy") from Potomac Insurance Company of Illinois ("Potomac"), with a policy period from February 28, 1998 to February 28, 1999. The policy, pursuant to Va.Code Ann. § 65.2-820 (1950, 2007 Repl.Vol.),2 provides coverage for employers who are unable to secure a policy in the voluntary market. The policy terms are predetermined by law and regulations governing Virginia assigned risk policies. Specifically, the policy provides coverage for injuries to workers arising out of and in the course of employment in Virginia,3 and limited coverage outside of Virginia according to the Residual Market Limited Other States Insurance Endorsement ("the Endorsement"). The Endorsement provides as follows:

1. We will pay promptly when due the benefits required of you by the workers compensation law of any state not listed in Item 3.A.4 of the Information Page if all the following conditions are met:

a. The employee claiming benefits was either hired under a contract of employment made in a state listed in Item 3.A. of the Information Page or was, at the time of injury, principally employed in a state listed in Item 3.A. of the Information Page; and

b. The employee claiming benefits is not claiming benefits in a state where, at the time of the injury, (i) you have other workers compensation insurance coverage, or (ii) you were, by virtue of the nature of your operations in that state, required by that state's law to have obtained separate workers compensation insurance coverage, or (iii) you are an authorized self-insurer or participant in a self-insured group plan; and

c. The duration of the work being performed by the employee claiming benefits in the state for which the employee is claiming benefits is temporary.

The construction project underway at the time of Alejandro Garcia's accident arose when Philip Kalnitzky, doing business as Victory Homes, contracted with Andrew Smigelski to install a roof for a new home being constructed in Maryland. Smigelski subcontracted the work to Ruben Garcia. Ruben Garcia assigned his nephew, Alejandro Garcia, to a crew of approximately five men who were to work on the project.

The job was expected to take four days to complete, and on February 25, 1999, after the job had been in progress for approximately three and one half days, Alejandro Garcia was injured when he slipped and fell from the roof. At the time of the accident, which occurred in Maryland, Alejandro Garcia was an illegal alien whose residence was in Virginia.

Alejandro Garcia filed a claim for benefits with the Maryland Workers' Compensation Commission. The Commission issued an order, finding, inter alia, that Smigelski was the statutory employer, and that the Potomac policy did not cover Smigelski against the claim because Alejandro Garcia was an illegal alien at the time of the accident. The Commission awarded benefits to Alejandro Garcia.

Smigelski filed a timely Petition for Judicial Review in the Circuit Court for Montgomery County, and both Smigelski and Potomac filed motions for summary judgment. Potomac argued in its motion that, because Maryland law required Smigelski to procure separate coverage, the Endorsement specifically excluded coverage for this type of work. In Smigelski's cross-motion for summary judgment, he argued that Alejandro Garcia was performing temporary or incidental work in Maryland; therefore, Smigelski argued that the policy covered Alejandro Garcia's injury, pursuant to the terms of the Endorsement.

The trial court agreed with the Commission, granting Potomac's motion on the issue of insurance coverage, and denying Smigelski's cross-motion for summary judgment. The case proceeded to a jury trial on the four remaining issues relating to Alejandro Garcia's claim: jurisdiction, willful misconduct, average weekly wage and temporary total disability.

The jury returned the following special verdict:

VERDICT:

1) WAS ALEJANDRO GARCIA REGULARLY EMPLOYED IN THE STATE OF MARYLAND? YES.

2) WAS ALEJANDRO GARCIA'S INJURY CAUSED BY WILLFUL MISCONDUCT ON HIS PART? NO.

3) FOR WHAT PERIOD OF TIME WAS ALEJANDRO GARCIA TEMPORARILY AND TOTALLY DISABLED? FROM FEBRUARY 26, 1999 THROUGH AUGUST 11, 1999.

4) WHAT WAS ALEJANDRO GARCIA'S AVERAGE WEEKLY WAGE? $415.00.

Smigelski appealed the court's grant of summary judgment to the Court of Special Appeals, but neither party appealed the judgment entered on the jury verdict. In an unreported opinion, the intermediate appellate court affirmed the judgment of the Circuit Court. Smigelski then filed a petition for writ of certiorari in this Court, which we granted.5 Smigelski v. Potomac Ins., 400 Md. 647, 929 A.2d 890 (2007).

DISCUSSION

In reviewing a court's grant of summary judgment, we determine first whether there is any genuine dispute of material fact, and, if not, then whether the moving party is entitled to judgment as a matter of law. Educ. Testing Serv. v. Hildebrant, 399 Md. 128, 139, 923 A.2d 34, 40 (2007). The relevant inquiry in this case, therefore, is whether the Circuit Court erred by granting summary judgment in favor of Potomac on the issue of coverage. Furthermore, "[i]f the trial court does not state its reasons for granting the motion, we will affirm the judgment so long as the record `discloses it was correct in so doing.'" Phillips v. Allstate Indem. Co., 156 Md.App. 729, 740, 848 A.2d 681, 687 (2004) (quoting Casey Dev. Corp. v. Montgomery County, 212 Md. 138, 145, 129 A.2d 63, 67 (1957)). Although the Circuit Court judge did not specify his reasons for granting summary judgment, nonetheless, we shall affirm because he was legally correct.

I. Policy Excludes Coverage

By its own terms, the Endorsement excludes coverage for activities where, "by virtue of the nature of [Smigelski's] operations in that state, [Smigelski was] required by that state's law to have obtained separate workers compensation insurance coverage." Maryland workers' compensation law requires employers to "secure compensation for covered employees of the employer." Md.Code (1991, 1999 Repl.Vol.), § 9-402(a) of the Labor &amp Employment Article. There is no genuine dispute that Smigelski is the correct statutory employer,6 and Smigelski concedes as much. As a statutory employer, Smigelski is required to secure insurance for covered employees.7 § 9-402(a) of the Labor & Employment Article.

Petitioner contends that Alejandro Garcia qualifies as a "casual employee," and therefore is not considered a covered employee.8 § 9-205 of the Labor & Employment Article. Although the term is not defined by statute, "this Court has consistently held that ... application of the term, `casual employee,' should be made according to the particular facts presented in each case." Wood v. Abell, 268 Md. 214, 221, 300 A.2d 665, 669 (1973). This Court has noted that "`where the employment for one job cannot be characterized as permanent or periodically regular, but occurs by chance, or with the intention and understanding on the part of both employer and employee that it shall not be continuous, it is casual.'" Lupton v. McDonald, 241 Md. 446, 452, 217 A.2d 262, 265 (1966) (quoting Consumers' Mut. Oil Producing Co. v. Indus. Comm'n., 289 Ill. 423, 124 N.E. 608 (1919)). Some of the factors we use to determine whether an employee is a casual employee are: the nature of the work, the duration of the employment, and the nature of the contract of employment. Wood, 268 Md. at 222, 300 A.2d at 669 (quoting Moore v. Clarke, 171 Md. 39, 53, 187 A. 887, 893 (1936)). We use these factors...

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