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Odsather v. Richardson (08/06/2004) sp-5828
Odsather v. Richardson (08/06/2004) sp-5828
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
JON K. ODSATHER, )
) Supreme Court No. S-10956
Appellant, )
) Superior Court No.
v. ) 4FA-01-1494 CI
)
DAVID RICHARDSON, ) O P I N I O N
)
Appellee. ) [No. 5828 - August 6, 2004]
)
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Richard D. Savell, Judge.
Appearances: Theodore D. Hoppner, Hoppner Law
Office, Fairbanks, for Appellant. Robert
Groseclose, Mila A. Neubert, Cook Schuhmann &
Groseclose, Inc., Fairbanks, for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
MATTHEWS, Justice.
Were truck owners who leased their trucks to the same
firm independent contractors or employees of the firm? If they
were independent contractors then the injury claim of one of the
owners against the other is not barred by the exclusive remedy
provision of the Alaska Workers Compensation Act. On summary
judgment the superior court concluded that they were employees.
We conclude that there are genuine issues of fact as to their
status, and therefore reverse the summary judgment.
On January 20, 2000, Jon Odsather and David Richardson
were driving trucks on the Dalton Highway. Because a bridge was
under construction, they were forced to drive down the riverbank
to cross the frozen river. Richardson was not able to stop at
the bottom of the incline, and his truck hit Odsathers. Odsather
was injured in the accident. Odsather and Richardson each owned
the trucks they were driving. Both trucks were under lease to
Sourdough Express.
Odsather sued Richardson alleging that the accident was
caused by Richardsons negligence. Richardson pled the
affirmative defense that he and Odsather were co-employees of
Sourdough at the time of the accident so that Odsathers exclusive
remedy was under the Alaska Workers Compensation Act.
Richardson moved for summary judgment arguing that
Odsathers complaint was barred by AS 23.30.055, the exclusive
remedy provision of the Act.1 Richardson based his argument on
the terms of the Independent Owner/Operator Lease Agreements that
both Odsather and Richardson had signed with Sourdough. These
agreements each contain a provision that reads:
It is specifically agreed, understood
and intended that O/O is an independent
contractor and is not the employee of The
Company for an[y] purpose, except as set
forth below with regard to workers
compensation insurance. . . .
. . . .
Notwithstanding the foregoing, The
Company and O/O [owner/operator] acknowledge
that administrative and judicial
interpretation of the Alaska Workers
Compensation Act may impose an obligation on
The Company to obtain Workers Compensation
coverage for O/O and O/Os drivers while they
operate the Equipment for The Company.
Accordingly, The Company shall obtain Workers
Compensation coverage for O/O and O/Os
employees while they operate The Equipment
for The Company.
In an affidavit in support of his motion for summary judgment,
Richardson stated that under this agreement he is entitled to the
benefits of an employee for purposes of Alaskas workers
compensation law.
Odsather opposed this motion, arguing that factual
issues remained as to whether Odsather was an independent
contractor or an employee. Odsather contended that the agreement
as a whole was more consistent with an independent contractor
relationship and further that the court should look at more than
just the terms of the contract to decide whether an employee
relationship exists.
The superior court granted summary judgment for
Richardson. Odsather appeals.
There Are Issues of Fact as to Whether Odsather and
Richardson Were Employees or Independent Contractors of
Sourdough.
Odsather argues that summary judgment was improper
because issues of fact remain with respect to the relationship
established by the agreement, and that Richardson was not
entitled to judgment as a matter of law because the court was
required to look at the actual employment relationship by
applying the relative nature of the work test.2
Alaska has adopted the relative nature of the work test
for distinguishing between employees and independent contractors
for the purposes of workers compensation.3 In Benner v. Wichman,
we applied this test in the context of determining whether
litigants were co-employees or independent contractors.4 This is
a multi-factor test which looks at first, the character of the
claimants work or business; and second, the relationship of the
claimants work or business to the purported employers business.5
The inquiry into the character of the claimants business can
further be broken into three factors: (1) the degree of skill
involved, (2) whether the claimant holds himself out to the
public as a separate business, and (3) whether the claimant bears
the accident burden.6 The inquiry into the relationship between
the claimants work and the work of the purported employer can
also be broken into three factors: (1) extent to which claimants
work is a regular part of the employers regular work, (2) whether
claimants work is continuous or intermittent, and (3) whether the
duration of the work is such that it amounts to hiring of
continuing services rather than a contract for a specific job.7
The relative nature of the work test thus requires that
the relevant facts be first determined and then analyzed. There
has been no such determination in this case. A remand is
therefore needed so that the facts relevant to the application of
the test can be presented.8 If there is no genuine issue
concerning them, it is possible that this case can be resolved,
one way or the other, as a matter of law on a motion for summary
judgment. But on this record no resolution as a matter of law is
possible.
The trial court relied on Article 5of the Independent
Owner/Operator Lease Agreement in granting summary judgment.9
Even without considering extrinsic facts relevant to the relative
nature of the work test, the text of the agreement raises
substantial questions as to the actual employment relationship
between Richardson, Odsather, and Sourdough. The agreement is
primarily a lease. The second recital on the first page of the
agreement provides that O/O is an independent contractor who will
furnish and/or operate equipment . . . . Other indicia of
independent contractor status in the agreement are that Odsather
and Richardson were to provide their own equipment, were
responsible for tax withholding for themselves and their
employees, and were required to indemnify and hold the Company
harmless from any loss resulting from the injury to or death of
their employees.
The fact that Sourdough carried workers compensation
insurance on Odsather and Richardson is not conclusive of their
employment status. In his treatise on workers compensation law,
Professor Larson observes that the majority view is that
insurance coverage is at most persuasive on the
employee/independent contractor issue.10 In Kroll v. Reeser, this
court stated that [w]hile the parties agreement as to insurance
may have a bearing on the nature of an employment relationship
and workers compensation coverage, the Board cannot simply base
its decision on the alleged agreement: the totality of all the
relevant circumstances still controls.11 While Kroll dealt with
the issue of which party was the employer rather than the
employee/independent contractor dichotomy, the general principle
that an agreement to carry insurance is simply evidence of
coverage under workers compensation is equally applicable in the
present context.
The fact that Odsather applied for and received workers
compensation benefits is also not conclusive of his status as an
employee.12 His application might constitute an admission by him
that he is an employee, but such an admission would only be
evidence of that status, not conclusive proof.13
We conclude that the summary judgment must be reversed
because the facts necessary to apply the relative nature of the
work test have not been established. Further, neither the
Sourdough leases nor Odsathers application for and acceptance of
compensation benefits conclusively resolve the
employee/independent contractor issue.
REVERSED and REMANDED for proceedings in accordance
with this opinion.
_______________________________
1 AS 23.30.055 provides: The liability of an employer
prescribed in AS 23.30.045 is exclusive and in place of all other
liability of the employer and any fellow employee to the employee
. . . .
2 A grant of summary judgment is reviewed de novo.
Arctic Tug & Barge, Inc. v. Raleigh, Schwarz & Powell, 956 P.2d
1199, 1200 (Alaska 1998). Summary judgment is only proper if the
record presents no genuine issues of material fact and the movant
is entitled to judgment as a matter of law. On appeal the court
must resolve all reasonable inferences in favor of the non-moving
party. Bishop v. Municipality of Anchorage, 899 P.2d 149, 153
(Alaska 1995).
3 Benner v. Wichman, 874 P.2d 949, 952 (Alaska 1994)
(applying the relative nature of the work test to determine
whether parties were co-employees for purpose of determining
whether workers compensation was the exclusive remedy).
4 Id.
5 Id. (quoting Ostrem v. Alaska Workmens Compensation
Bd., 511 P.2d 1061, 1063 (Alaska 1973)).
6 Id.
7 Id. at 953.
8 Richardson, as the summary judgment movant, had the
burden of presenting evidence sufficient to negate Odsathers
claim that the parties were not employees of Sourdough. See
Barry v. Univ. of Alaska, 85 P.3d 1022, 1025-26 (Alaska 2004);
McWilliams v. Bolstridge, 644 P.2d 240, 241 (Alaska 1982).
9 Relevant provisions of Article 5 are quoted supra at
pages 2-3.
10 3 Larsons Workers Compensation Law 63.04[2], at 63-7
(1999). See also Miles v. Tennessee River Pulp & Paper Co., 519
So. 2d 562, 564 (Ala. App. 1987) (when almost all other indicia
showed plaintiff was independent contractor, fact that company
provided workers compensation insurance and deducted premiums
from his pay did not require finding of employee status); Wilcox
v. Swing, 230 P.2d 995, 997-98 (Idaho 1951) (finding sufficient
evidence that claimant was independent contractor even though
defendant bought surety bond from insurer covering all liability
to claimant under workers compensation laws); Green v. W.O.
Nannen & Sons, 20 A.D.2d 139, 140-41 (N.Y. App. Div. 1963)
(holding that agreement for compensation insurance coverage or
actual coverage was not conclusive of employment status).
11 655 P.2d 753, 756 (Alaska 1982) (citation omitted).
12 Odsather admits that he filled out a workers
compensation employee statement and submitted it to Sourdoughs
insurer and that he received some compensation. But he claims
that ultimately the insurer denied coverage claiming Plaintiff
was not an appropriate workers compensation claimant under their
coverage.
13 See Brinkmann v. Liberty Mut. Fire Ins. Co., 403 P.2d
136, 140 (Cal. 1965) ([I]t cannot be said that the mere
acceptance of benefits amounts to an admission by plaintiff that
Brinkmann was performing duties in the course of his employment
when the accident occurred, and in any event, the effect of any
admission in this regard would be a matter for the trial court to
weigh.); Chamberlain v. Mut. Benefits Health & Accident Assn, 260
S.W.2d 790, 794 (Mo. 1953) (Absent an award, any action taken by
the plaintiff in connection with workmens compensation at most
could only be evidentiary by way of an admission against
interest.). Richardson has not argued that Odsather made a
binding election of remedies precluding him from seeking a
judicial remedy.
