Uninsured Employers' Fund v. Garland

• Citation: 805 S.W.2d 116
• Decision Date: 14 March 1991
• Docket Number: No. 90-SC-935-WC,R-W,90-SC-935-WC
• Parties: UNINSURED EMPLOYERS' FUND, Appellant, v. Timothy F. GARLAND, Deceased; Karen Garland, Widow and natural mother of Travis Garland; Wayne Maxwell Trucking Company;Service Systems/X L Division, Inc.; and Workers' Compensation Board, Appellees.
• Court: United States State Supreme Court (Kentucky)

Page 116

805 S.W.2d 116

UNINSURED EMPLOYERS' FUND, Appellant, v. Timothy F. GARLAND, Deceased; Karen Garland, Widow and natural mother of Travis Garland; Wayne Maxwell Trucking

Company; R-W Service Systems/X L Division, Inc.; and

Workers' Compensation Board, Appellees.

No. 90-SC-935-WC.

Supreme Court of Kentucky.

March 14, 1991.

Frederic J. Cowan, Atty. Gen., John L. Pendly, Donald Roney, Asst. Attys. Gen., Uninsured Employers' Fund, Frankfort, for appellant.

Robert A. Jenkins, H. Douglas Jones, Greenebaum, Doll & McDonald, Covington, for Timothy F. Garland (deceased) and Karen Garland, etc.

Edward G. Drennen, II, Florence, for Wayne Maxwell Trucking Co.

Gregory M. Bartlett, Edgewood, for R-W Service Systems/X L Div., Inc.

MEMORANDUM OPINION OF THE COURT

In June of 1982, Timothy Garland was involved in an accident resulting in his death while operating a truck owned by Wayne Maxwell and pulling a trailer owned by R-W Service Systems/X L Division, Inc. Decedent was survived by his wife, Karen Garland, and his dependent child, Travis Garland. This appeal arises from a workers' compensation claim filed by Mrs. Garland (claimant), as widow of Timothy Garland and as natural guardian of Travis Garland, against Wayne Maxwell Trucking Company (Maxwell); R-W Service Systems/X L Division, Inc. (R-W); and the Uninsured Employers Fund (UEF).

The "old" Workers' Compensation Board (Old Board) found that the decedent was an employee of Maxwell, and a statutory employee of R-W pursuant to KRS 342.610(2), and awarded benefits. The award and order also dismissed the UEF on the ground that since R-W was responsible for payment of benefits and had insurance coverage, there was no liability as to the UEF. The claimants and R-W appealed to the "new" Workers' Compensation Board (New Board). The majority held that it did not have jurisdiction over R-W and that decedent was an independent contractor. The New Board remanded the action to the Administrative Law Judge to enter an order dismissing the claim against R-W and the UEF. Because Maxwell had not appealed the Old Board's decision, the award and order was affirmed as to him.

Claimants then appealed to the Court of Appeals arguing that the New Board had substituted its findings of fact for those of the Old Board regarding the employment status of decedent. No appeal was taken as to the dismissal of R-W for lack of jurisdiction.

The majority of the Court of Appeals held that there was substantial evidence to support the Old Board's finding of an employee/employer relationship and that its legal analysis fit within the framework of Ratliff v. Redmon, Ky., 396 S.W.2d 320 (1965). The Court of Appeals reversed the New Board and directed that an order be entered for an award against the UEF on proof of the inability to enforce the award against Maxwell. The court affirmed the New Board's dismissal of R-W since no appeal was taken on that issue.

The UEF filed an appeal in this Court alleging that: (1) The Court of Appeals misconceived the issue before it as a question of fact, where it is properly a question of law; (2) The New Board, using the proper standard of review, properly reviewed the whole record to determine whether it supported the conclusions of the Old Board; and (3) The New Board properly reversed the Old Board on the question of whether the decedent was an independent contractor.

Whether decedent was an employee or an independent contractor is a question of law if the facts below are substantially undisputed, and is a question of fact if the facts are disputed. Brewer v. Millich, Ky., 276 S.W.2d 12 (1955). A reviewing court must give great deference to the conclusions of the fact-finder on factual questions if supported by substantial evidence and the opposite result is not compelled. When considering questions of law, or mixed questions of law and fact, the reviewing court has greater latitude to determine whether the findings below were sustained by evidence of probative value. Aetna Casualty and Surety Co. v. Petty, 282 Ky. 716, 140 S.W.2d 397 (1940); M.H. & H. Coal Co. v. Joseph, Ky., 310 S.W.2d 257 (1958). While these standards of review are well settled, their application is often difficult as evidenced by the split decisions of both the New Board and the Court of Appeals.

The majority of the New Board concluded "that as a matter of law under the guidelines of Ratliff v. Redmon, Ky, 396 S.W.2d 320 (1965) there was an independent contractor relationship...." The UEF maintains that the New Board substituted its legal conclusions, and not its factual conclusions, for those of the Old Board which was proper where the facts below were not disputed.

To the contrary, a review of the record reveals that several issues were disputed, for example, whether decedent alone, or with Maxwell's assistance, arranged the trip leases; whether both decedent and Maxwell were in the trucking business, or Maxwell was in the parts selling business; whether the general standards in the trucking industry indicated an employee/employer relationship or independent contractor status. Both parties argued in...