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UNINSURED EMPLOYERS' FUND
AUTO FINANCING USA
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT
Summary: 52-year-old car salesman claimed injury while lifting computer at workplace. Employer, who was sole proprietor, did not carry workers' compensation insurance and claimed the injury did not occur and was not reported to him in any event. Uninsured Employers' Fund (UEF) denied benefits based on employer's statement.
Held: WCC credited claimant's testimony that injury occurred, that employer was present when injury occurred, and that employer knew claimant claimed injury. UEF ordered to pay benefits. Employer ordered to reimburse UEF.
Constitutions, Statutes, Regulations and Rules: Montana Code: 39-71-603, MCA (1997). Uninsured employer had notice of accident under section 39-71-603, MCA (1997) where he was present when claimant hurt his back moving a computer and was later told by claimant that his back continued to hurt. Further, certified letter sent by claimant to employer, who refused to accept letter, would have been sufficient even if verbal notice not given. Employer cannot refuse to accept certified mail, then complain about a lack of the information contained in the letter.
¶1 The trial in this matter was held on May 11, 2000, in Butte, Montana. The Uninsured Employers' Fund (UEF), which is the petitioner in the case, was represented by Mr. Charles K. Hail. Claimant, Frank Helstowski (claimant), was present and represented by Mr. Mark L. Guenther. Pete Borup, the alleged uninsured employer and owner of Auto Financing USA, was present and represented by Mr. Karl Knuchel.
¶2 Although the UEF filed the petition in this matter, claimant's response included a cross-claim against Pete Borup, owner of Auto Financing USA. At trial, claimant's counsel confirmed that claimant presently wishes to pursue his claim in this Court.
¶3 Exhibits: Exhibits 1 through 12 were admitted without objection. No depositions were presented to the Court.
¶4 Witnesses: Claimant, Jennifer Helstowski, and Pete Borup testified at trial.
¶5 Issues: The issues stated in the Pretrial Order are as follows:
¶6 Having considered the Pretrial Order, the testimony presented at trial, the demeanor and credibility of witnesses, the exhibits, and the arguments of the parties, the Court makes the following:
FINDINGS OF FACT
¶7 Claimant is presently 52 years old. (Ex. 1 at 1.) His employment history includes military service, insurance sales, work as a disc jockey, and car sales.
¶8 During 1998, Pete Borup (Borup) started a business known as Auto Financing USA. He did not incorporate the business.
¶9 Borup bought cars at auction, then offered them for sale at a small lot (a former gas station) in Livingston, Montana. Borup testified he acted as a broker between lending institutions and people who needed credit for cars.
¶10 Borup was in business for only a short time. Auto Financing USA folded in December 1998.
¶11 Claimant and Borup had known each other prior to 1998. Around May 1998, claimant talked to Borup and told him he was looking for work. Borup hired claimant to sell cars and help in the business. Claimant began work around the beginning of June 1998.
¶12 According to claimant, Borup agreed to pay him on a wage and commission basis. The claim for benefits (ex. 10) states a wage rate of $5.25 per hour. According to Borup, he originally agreed to pay claimant only commissions, but claimant thereafter sold only one vehicle, so he then put claimant on "like a minimum wage" because he (Borup) needed someone to answer the phones and deal with people who came into the lot when he was not present. Borup acknowledged paying claimant "close to $300" every two weeks. He also provided him with a car to use.
¶13 Borup did not withhold taxes from amounts he paid claimant. He testified that the reason he did not withhold taxes was because claimant refused to complete necessary forms. According to Borup, claimant was afraid his wages would be garnished for support.
¶14 Borup and claimant were the only persons working at Auto Financing USA.
¶15 Borup admitted not having workers' compensation insurance. He testified: "I didn't think I needed it."
¶16 Claimant alleges he suffered a herniated disk while working for Borup at Auto Financing USA on August 31, 1998, a Monday. Borup disputes the allegation. Resolution of the dispute involves the Court's assessment of each individual's credibility.
¶17 Claimant testified both he and Borup were working on August 31st when Borup decided to move the office computer. Claimant picked up the computer and monitor, then waited for instructions but Borup hesitated. According to claimant he then turned to put down the equipment and felt a "twinge" or pulling in his lower back, which took his breath away. He testified that he told Borup, "Hold on, I have to sit down." He then sat for approximately ten or fifteen minutes. According to claimant, Borup asked him how his back was feeling and he replied, "Give it a few minutes." Claimant worked the rest of the shift but did not finish moving the equipment.
¶18 Claimant testified to the following subsequent history:
¶19 Borup disputed claimant's testimony. The salient points of his testimony are as follows:
¶22 I find that claimant injured his back while lifting a computer at work on August 31, 1998. I further find that Borup was present and witnessed the injury, thus he had immediate notice of it. Moreover, claimant thereafter told Borup that his back was hurting and on September 16, 1998, sent a certified letter containing a demand for his back wages and advising Borup of his intention to pursue a workers' compensation claim.
¶23 I further find that the UEF's denial of the claim in conjunction with its petition with this Court was reasonable. As noted earlier, the claim pits claimant's credibility against that of Borup. While the Court has found in favor of claimant, there is nothing in the evidence which makes the credibility determination overwhelming or obvious.
¶24 Claimant's entitlement to benefits is governed by the 1997 version of the Workers' Compensation Act since that version was in effect at the time of his injury. Buckman v. Montana Deaconess Hospital, 224 Mont. 318, 321, 730 P.2d 380, 382 (1986).
¶25 The claimant has the burden of proving by a preponderance of the evidence that he is entitled to compensation. Ricks v. Teslow Consolidated, 162 Mont. 469, 512 P.2d 1304 (1973); Dumont v. Wicken Bros. Construction Co., 183 Mont. 190, 598 P.2d 1099 (1979).
¶26 Section 39-71-119, MCA (1997), provides in relevant part:
Under Montana law, "unusual strain" encompasses not only unexpected causes of injury, but also unexpected injuries resulting from ordinary workplace activities. Jones v. Bair's Café, 152 Mont. 13, 445 P.2d 923 (1968). Claimant has carried his burden of proving an injury to his back, caused by an unusual strain occurring when he lifted the computer equipment. All four elements of the accident definition are satisfied and the MRI evidence constitutes objective findings establishing physical harm.
¶27 With regard to required notice to the employer, section 39-71-603, MCA (1997), provides:
As I have found, Borup was present while claimant moved the computer, felt a twinge in his back, and sat down. In addition, claimant subsequently spoke with Borup about his hurting back. Even if verbal notice had not been provided, the certified letter satisfied claimant's obligation to provide notice. Borup cannot refuse to retrieve certified mail then complain about a lack of information contained within the mailing. Both the verbal notice and the availability of the certified letter occurred within 30 days of August 31, 1998, making the notice timely under section 39-71-603, MCA (1997).
¶28 Counsel for Borup argued at hearing that claimant was an independent contractor not entitled to workers' compensation coverage. This issue was not stated in the Pretrial Order and is not properly before the Court. Even if properly raised, the evidence clearly shows that claimant was an employee, not an independent contractor.
¶29 Section 39-71-120, MCA (1997), defines an independent contractor as follows:
"[I]ndependent contractor status requires a 'convincing accumulation' of evidence from the statutory test, whereas employee status may be found based on one part of the statutory test." Lundberg v. Liberty Northwest Ins. Co. Inc., 268 Mont. 499, 503, 887 P.2d 156, 159 (1994). Designation of a worker as an independent contractor is not dispositive: a party must have been an independent contractor in fact. Id.
¶30 In this case, the only evidence before the Court demonstrates that claimant was an employee. He was not engaged in an "independent established trade, occupation, profession or business." Moreover, as evidenced by Borup's unilateral decision (according to Borup) to put claimant on a biweekly wage because he wasn't earning enough selling cars, claimant was not free from Borup's control. There is no evidence claimant worked for anyone other than Borup. Thus, I find that claimant was an employee of Borup, and that Borup was required to provide workers' compensation coverage, § 39-71-401, MCA (1997).
¶31 Since Borup was an uninsured employer, the UEF is liable to claimant for compensation and medical benefits. § 39-71-502, MCA. Section 39-71-504, MCA, provides that the UEF "shall collect from an uninsured employer an amount equal to all benefits paid or to be paid from the fund to an injured employee of the uninsured employer." Thus, the UEF is entitled to indemnification from Borup for compensation and medical benefits due, and which in the future shall become due to claimant.
¶32 Claimant's Response of Claimant Frank Helstowski and Cross-claim Against Pete Borup DBA Auto Financing Usa includes a prayer for "an award of reasonable attorney's fees and costs against the Employer." The request is set out in the Pretrial Order as one of the issues.
¶33 The remedies this Court can order are limited to those provided by statute. While there is statutory provision for an award of attorney fees against an insurer which has unreasonably withheld benefits, §§ 39-71-611, -612, MCA (1997), there is no corresponding statute for an award of attorney fees against an employer, at least in a proceeding in the Workers' Compensation Court. Section 39-71-515 (5), MCA (1997), does make provision for an award of costs and attorney's fees against an uninsured employee but that section is limited to an independent cause of action brought by the employee in district court. Such actions are within the exclusive jurisdiction of the district court. Thus, this Court lacks jurisdiction to order Borup to pay claimant's attorney's fees in this case. Claimant will have to seek his fees in district court.
¶34 Claimant is entitled to costs from the UEF pursuant to section 39-71-611, MCA (1997), and section 39-71-505, MCA (1997), (providing that all appropriate provisions in the Workers' Compensation Act apply to the UEF in the same manner as they apply to compensation plans No. 1, 2, and 3). UEF is entitled to indemnification from Borup for those costs.
¶35 1. On August 31, 1998, claimant was an employee of Pete Borup, who was doing business as Auto Financing USA.
¶36 2. On August 31, 1998, claimant suffered an industrial injury while working for Pete Borup, doing business as Auto Financing USA, and is entitled to the compensation and medical benefits provided in the Workers' Compensation Act. Since his employer was uninsured, claimant is entitled to receive benefits from the Uninsured Employer's Fund pursuant to section 39-71-502, MCA, and the Uninsured Employer's Fund shall pay those benefits as provided by the Workers' Compensation Act.
¶37 3. Pete Borup shall indemnify, reimburse, and pay the Uninsured Employers' Fund all reasonable amounts it pays in compensation and medical benefits to or for claimant. The Court retains continuing jurisdiction to determine the amounts owed by Borup and to enforce its judgment.
¶38 4. Claimant is entitled to costs from the UEF in an amount to be determined by the Court in accordance with its rules.
¶39 5. This JUDGMENT is certified as final for purposes of appeal pursuant to ARM 24.5.348.
¶40 6. Any party to this dispute may have 20 days in which to request a rehearing from these Findings of Fact, Conclusions of Law and Judgment.
DATED in Helena, Montana, this 23rd day of May, 2000.
c: Mr. Charles K. Hail
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