Vail v. S/L Servs., Inc.

• Decision Date: 11 August 2017
• Docket Number: No. 20170011,20170011
• Citation: 900 N.W.2d 271
• Parties: Dawn VAIL, individually and as Trustee for North Dakota Workforce Safety & Insurance, Plaintiff v. S/L SERVICES, INC., Defendant
• Court: North Dakota Supreme Court

900 N.W.2d 271

Dawn VAIL, individually and as Trustee for North Dakota Workforce Safety & Insurance, Plaintiff

v.S/L SERVICES, INC., Defendant

No. 20170011

Supreme Court of North Dakota.

Filed August 11, 2017

Thomas J. Conlin (argued) and Stacy D. Stennes (appeared), Minneapolis, MN, for plaintiff.

Robert B. Stock (argued) and Jordan B. Weir (on brief), Fargo, N.D., for defendant.

McEvers, Justice.

[¶1] Under N.D.R.App.P. 47, a magistrate judge for the United States District Court for the District of North Dakota certified seven questions to this Court involving Dawn Vail's right to bring a common law tort action against S/L Services, Inc., for personal injuries she sustained while working for S/L Services. We conclude the exclusive remedy provisions of our workers' compensation laws do not preclude Vail's tort action against S/L Services under provisions authorizing the action for willfully misrepresenting to Workforce Safety and Insurance ("WSI") the amount of payroll upon which a premium is based, or for willfully failing to secure workers' compensation coverage for employees. We answer the certified questions accordingly.

I

[¶2] We briefly summarize the district court's statement of facts for the certified questions. On August 23, 2012, S/L Services, a Montana company, applied to WSI for workers' compensation coverage for workers in North Dakota. In the application, S/L Services estimated that in the next 12 months it would have 42 employees and total taxable wages of $976,500. On August 28, 2012, WSI issued S/L Services a premium statement charging an estimated premium for August 23, 2012 to August 31, 2013, which was based upon the number of employees that S/L Services reported and the employees' estimated wages. S/L Services paid that premium and WSI issued S/L Services a certificate of premium payment.

[¶3] After S/L Services paid the initial premium, Vail came to work for S/L Services as a welder's helper. Vail suffered a workplace injury on May 25, 2013. During her employment, S/L Services treated Vail as an independent contractor, and before she started work, she completed a tax form for independent contractors for the 2012 tax year and reported her compensation to the IRS using that form.

[¶4] Vail filed a claim for her injuries with WSI. WSI required S/L Services to complete a form asking for information about Vail's employment, including the dates of her employment, her hourly wage, and whether her work was full time, part time, or seasonal. The form also asked whether S/L Services was contesting the claim. S/L Services' response stated Vail was a subcontractor and not an employee. WSI thereafter required S/L Services to complete a worker relationship questionnaire to determine whether Vail was an employee or an independent contractor.

[¶5] In July 2013, WSI determined S/L Services was an employer of Vail and any similarly situated workers and awarded Vail related benefits. WSI's order required S/L Services to submit all wages for all employees, including Vail and any similarly situated employees, to WSI for the previous six years. WSI's order advised S/L Services that it had 30 days to seek reconsideration and, if reconsideration was not sought, the decision would become final. S/L Services did not seek reconsideration of WSI's decision within 30 days.

[¶6] On August 22, 2013, S/L Services submitted a payroll report to WSI for the period from August 23, 2012 to August 31, 2013. Despite WSI's prior order that S/L Services provide payroll information for Vail and others similarly situated, S/L Services did not include Vail's wages or the wages of other welder's helpers in that payroll report.

[¶7] On September 6, 2013, WSI issued S/L Services a premium billing statement in the amount of $26,737.23 for the period from August 23, 2012 to August 31, 2013. According to WSI's audit supervisor, WSI increased the adjusted total wages in its premium billing to reflect WSI's earlier determination that Vail was an employee and to include an amount for Vail's wages for that premium period. On September 12, 2013, S/L Services paid the requested amount of the billed premium for the billing period from August 23, 2012 to August 31, 2013.

[¶8] In November 2013, S/L Services asked WSI to reconsider its decision to classify Vail as an employee and pay her benefits, but the record does not reflect that WSI acted upon that request.

[¶9] In the first quarter of 2014, WSI audited S/L Services for the reporting period when Vail was injured, August 23, 2012 through August 31, 2013, as well as for S/L Services' current reporting period from September 1, 2013 to August 31, 2014. In June 2014, WSI informed S/L Services an additional premium for other welder's helpers was due for the period when Vail was injured and for the current period. S/L Services subsequently paid the additional premium.

[¶10] In November 2013, Vail filed a claim with the North Dakota Department of Labor for overtime pay based on her status as an employee. S/L Services contested the claim, contending Vail was an independent contractor and not an employee. In June 2014, the Department of Labor determined Vail was an employee and she was entitled to overtime pay during her employment with S/L Services.

[¶11] Meanwhile, in January 2014, Vail, individually and as trustee for WSI, filed a tort action against S/L Services in federal district court for personal injuries she sustained while working for S/L Services. The federal district court initially denied S/L Services' motion to dismiss for failure to state a claim, concluding S/L Services' action in opening a WSI account in August 2012 before Vail's injuries and paying some premiums at that time did not preclude her from bringing a personal injury action against S/L Services. S/L Services later moved for summary judgment. The federal district court thereafter certified seven questions of law to this Court after determining they may be determinative of Vail's action under N.D.R.App.P. 47(a)(1). The federal court also invited this Court to reformulate any of the questions to address the issues raised by the questions.

II

[¶12] The seven certified questions and the parties' arguments involve issues about employer immunity and an employee's exclusive or dual remedy for injuries occurring during the course of employment under our statutory provisions for workforce safety and insurance. Statutory interpretation is a question of law. Mosser v. Denbury Res., Inc. , 2017 ND 169, ¶ 13, 898 N.W.2d 406. The primary objective in interpreting statutes is to determine legislative intent, and that intent initially must be sought from the language of the statute. Id. Statutory provisions "are to be construed liberally, with a view to effecting its objects and to promoting justice." N.D.C.C. § 1-02-01. Statutory provisions are given their plain, ordinary, and commonly understood meaning unless a contrary intention plainly appears. N.D.C.C. § 1-02-02. Words and phrases are construed according to the context in which they are used and technical words defined by statute must be construed according to the definition. N.D.C.C. § 1-02-03. Statutes are construed as a whole and harmonized to give meaning to related provisions. N.D.C.C. § 1-02-07. Statutes are construed to give effect to all of their provisions so no part of a statute is rendered inoperative or superfluous. N.D.C.C. § 1-02-38(2) and (4). "When the wording of a statute is clear and free of all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit." N.D.C.C. 1-02-05. If the language of a statute is ambiguous or of doubtful meaning, however, a court may resort to extrinsic aids to determine the intention of the legislation, including the object sought to be obtained, the circumstances under which the statute was enacted and the legislative history. N.D.C.C. § 1-02-39. "A statute is ambiguous if it is susceptible to differing but rational meanings." Mosser , at ¶ 13.

III

[¶13] We briefly describe a worker's status as an employee or as an independent contractor under our workers' compensation law, and the parameters of an employee's exclusive or dual remedy for compensable injuries under that law.

[¶14] Under N.D.C.C. § 65-01-03(1), "[e]ach individual who performs services for another for remuneration is presumed to be an employee of the person for which the services are performed, unless it is proven that the individual is an independent contractor under the common-law test." See Workforce Safety & Ins. v. Larry's On Site Welding , 2014 ND 81, ¶¶ 15-22, 845 N.W.2d 310 (discussing common-law test for independent contractor under workers' compensation law). An entity asserting an individual is an independent contractor and not an employee has the burden of proving that fact. N.D.C.C. § 65-01-03(1).

[¶15] If a worker is an employee, the Workforce Safety and Insurance Act generally provides the exclusive remedy for the employee who suffers a compensable injury. Carlson v. GMR Transp., Inc. , 2015 ND 121, ¶ 12, 863 N.W.2d 514. However, an employer must comply with the Act's requirements for the exclusive remedy provisions to apply. Id. Section 65-04-28, N.D.C.C., provides that "[e]mployers who comply with the provisions of this chapter shall not be liable to respond in damages at common law or by statute for injury to or death of any employee, wherever occurring, during the period covered by the premiums paid into the fund."

[¶16] Section 65-09-01(1), N.D.C.C., provides that an employer who violates the workers' compensation coverage requirements of N.D.C.C. § 65-04-33(1) or (2)"is not protected by the immunity from civil liability granted to employers under this title for injuries to that employer's employees for damages suffered by reason of injuries sustained in the course of employment." Under N.D.C.C. § 65-09-02, an employee injured during the course of employment whose employer is in violation of N.D.C.C. § 65-04-33 may file a claim with WSI...