Alaska Supreme Court Opinions made Available by Touch N' Go Systems and Bright Solutions

Touch N' Go, the DeskTop In-and-Out Board makes your office run smoother. Visit Touch N' Go's Website.
  This site is possible because of the following site sponsors. Please support them with your business.
www.gottsteinLaw.com

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. 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.