John C. Morris v. Custom Kitchen & Baths ( 2016 )

FILED
Dec 07 2016, 9:24 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Robert W. Rock Doris L. Sweetin
Gerling Law Offices, P.C. Allen & Newman, PLLC
Evansville, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
John C. Morris, December 7, 2016
Appellant-Plaintiff, Court of Appeals Case No.
93A02-1601-EX-179
v. Appeal from the Indiana Worker’s
Compensation Board
Custom Kitchen & Baths, The Honorable Linda Peterson
Appellee-Defendant. Hamilton, Chairman
Application No.
C-219200
Robb, Judge.
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Case Summary and Issue
[1] John Morris is a licensed building contractor in Vanderburgh County, Indiana,
and the sole proprietor of Custom Kitchen & Baths (“CKB”). Morris often uses
his contractor’s license, skills, tools, and vehicle in volunteer community
projects, particularly with the Boy Scouts of America, in which his son is a
participant. In August 2012, Morris suffered an injury while constructing a 10’
x 10’ garden storage shed (“Olivet Project”) for Olivet Presbyterian Church
(“Church”) in Evansville, Indiana. The Olivet Project was constructed as a
volunteer Boy Scout project and Morris was not compensated for its
construction. Following his injury, Morris filed claims with CKB’s worker’s
compensation carrier, the Church’s insurance company, and the liability carrier
for the Boy Scouts, all of whom paid money to or on behalf of Morris. In 2013,
Morris filed an Application for Adjustment of Claim with the Indiana Worker’s
Compensation Board (“Board”), which a Single Hearing Member denied.
Morris then appealed to the full Board, which affirmed the Single Member’s
decision. Morris appeals from the Board’s denial of his Application for
Adjustment of Claim, raising one issue for review: whether his injury arose out
of and in the course of his employment. CKB cross-appeals, seeking
reimbursement of monies paid to or on behalf of Morris. Concluding Morris’
injury arose out of and in the course of his employment, and is therefore
covered by Indiana’s Worker’s Compensation Act, we reverse the decision of
the Board and remand for a determination of disability benefits.
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Facts and Procedural History 1
[2] In 2011, Morris obtained his general contractor’s license and formed his sole
proprietorship, CKB. Through his business, Morris designs and renovates
kitchens and baths from start to finish. Prior to 2011, Morris owned a business
called Envision Designs and sold cabinets and countertops.
[3] As a licensed contractor, Morris often performs volunteer community service
projects involving carpentry or construction, for which he is not compensated,
either through his church or the Boy Scouts. Morris’ son, Brad, was a Boy
Scout and Morris was an Assistant Scout Manager. Morris testified that since
2003, he has performed thirteen Boy Scouts’ community service projects in
Vanderburgh County and Warrick County; through these community service
projects, he donates the building materials as well as his skills, tools,
contractor’s license, and vehicle. While it was not his “primary concern for
doing the [community service] projects,” Morris stated he receives a substantial
amount of business and goodwill from these projects. Transcript at 45. He
testified,
[I]t was a matter of working with other scout families and
working with friends of scout families and by doing that I
obtained a lot of business . . . . [B]ut just in the general course of
the project you meet a lot of parents and they [ask] what do you
do and, of course, some of them know and some of them don’t.
1
We held oral argument in this case on November 3, 2016, in Indianapolis, Indiana. We commend counsel
for their excellent arguments.
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And they engage me and [say] hey can you come by and look at
this project for me and I just—a lot of what do you call it—
networking . . . .
Tr. at 44-45. At the Single Member Hearing, Morris produced three witnesses
who testified they hired Morris to perform work, for which he was paid, after
observing his work on certain community service projects. For example, David
Hayhurst, a Boy Scout acquaintance of Morris, testified he “had seen [Morris]
do a fair bit of work through the [Boy] Scouts and seemed like he really knew
what he was doing. So, that’s why we went ahead and [hired Morris].” Id. at
19. In addition, Amy Johnson, a member of Morris’ church, testified she hired
Morris to perform work at her home because she “knew of [Morris’] skills and
what he did through [Boy Scouts]—known him for years and years through
there. That he was a contractor, designed kitchens, did all that kind of work.”
Id. at 34.
[4] In 2012, Morris and his son approached the congregation of the Church
regarding the Olivet Project. They promoted the Olivet Project to the Church
as a Boy Scout venture, and the Church approved the Olivet Project and its
design. Brad planned a significant amount of the Olivet Project, and the
Church did not employ, compensate, or contract with Morris or CKB, and had
no control or input over the Olivet Project except for approving the project and
its design. Further, the Boy Scout troop posted a plaque next to the project
stating the Olivet Project was constructed as a Boy Scout project.
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[5] However, the Olivet Project was constructed under Morris’ supervision and
could not have been performed without his skills, tools, materials, and
contractor’s license. Benjamin Miller, the Vanderburgh County Building
Commissioner, testified the Olivet Project could only be constructed if Morris
was a properly licensed building contractor in Vanderburgh County. Moreover,
Vanderburgh County ordinances required Morris to display his contractor’s
license number on his work vehicle and carry his license with him at the
construction site. If Morris failed to obey the ordinances, he would be subject
to a fine. Morris, through his business account, purchased and donated
$1,244.46 in building materials for the Olivet Project. When Morris prepared
his tax return, he deducted the cost of the donated materials as a business
expense.
[6] On August 6, 2012, while working on the Olivet Project, Morris fell from the
roof of the storage shed and suffered a fracture to his right leg. As a result of
the fractured leg, Morris underwent three separate surgeries. Following his
injury, Morris filed a claim with CKB’s worker’s compensation insurance
carrier, West Bend Mutual Insurance Company. West Bend paid Morris
$5,757.14 in temporary total disability benefits and $87,654.60 for his medical
treatment. Morris also submitted a claim to Church Mutual Insurance, the
Church’s liability insurance carrier. Church Mutual paid an additional $10,000
on behalf of Morris. The Boy Scouts of America’s insurance carrier, Health
Special Risk, Inc., also paid medical bills on behalf of Morris.
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[7] On February 4, 2013, Morris filed his Application for Adjustment of Claim
with the Board. A hearing before a Single Member of the Board was held on
November 3, 2014. The Single Member denied Morris’ claim on January 26,
2015, and Morris filed his Application for Review by the full Board shortly
thereafter.
[8] After a hearing before the full Board, the full Board adopted the findings of the
Single Member, modified the findings by adding findings number six and seven,
and affirmed the denial of Morris’ Application for Adjustment of Claim. The
Board determined Morris did not meet his burden to show his injuries arose out
of and occurred in the course of his employment:
1. [Morris] was hurt while building a yard barn structure as part
of his son’s Eagle Scout project.
2. [Morris’] business is as a building contractor but at the time of
his injury he was not being paid for the project.
3. [Morris] introduced evidence that he worked on several Eagle
Scout projects with others seeking goodwill and this translated
into an increased clientele for the business.
4. [Morris’] injury did not arise out of his employment with
Custom Kitchens.
5. [Morris] should take nothing on his Application for
Adjustment of Claim filed February 4, 2013.
6. [Morris] is and has been a committed parent, supporter and
leader in his sons’ Boy Scout troop.
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7. [Morris’] injury arose out of an activity that was motivated by
[Morris’] desire to further his son’s Eagle project in particular
and to further the goals [of] his son’s Boy Scout troop in
general and did not arise from the business of which [Morris]
is the sole proprietor.
Appellant’s Appendix at 4-9. Morris now appeals; CKB cross-appeals, seeking
reimbursement of monies paid to or on behalf of Morris.
Discussion and Decision
I. Standard of Review
[9] The Indiana Worker’s Compensation Act is to be liberally construed to
effectuate its humane purpose. Daugherty v. Indus. Contracting & Erecting, 802
N.E.2d 912, 919 (Ind. 2004). In reviewing a challenge to a decision of the
Board, this court is bound by the factual determinations of the Board and may
not disturb them unless the evidence is undisputed and leads inescapably to a
contrary conclusion. Kovatch v. A.M. Gen., 679 N.E.2d 940, 942 (Ind. Ct. App.
1997), trans. denied. We neither reweigh the evidence, nor judge the credibility
of the witnesses. Id. at 942-43. “We must disregard all evidence unfavorable to
the decision and must consider only the evidence and reasonable inferences
therefrom which support the Board’s findings.” Id. at 942. The burden rests
with the claimant to prove a right to compensation under the Worker’s
Compensation Act. Danielson v. Pratt Indus., Inc., 846 N.E.2d 244, 247 (Ind. Ct.
App. 2006). “Although we are not bound by the Board’s interpretations of law,
we will reverse the Board’s decision only if the Board incorrectly interpreted the
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[Worker’s Compensation] Act.” Krause v. Ind. Univ.-Purdue Univ. at Indianapolis,
866 N.E.2d 846, 851 (Ind. Ct. App. 2007), trans. denied.
II. Arising Out of and in the Course of Employment
[10] Indiana Code section 22-3-2-2(a) mandates the payment of compensation to
employees for “personal injury or death by accident arising out of and in the
course of the employment . . . .” The dual requirements the accident be
“arising out of” and “in the course of” employment must both be met, and
neither alone is sufficient. Conway v. Sch. City of East Chicago, 734 N.E.2d 594,
598 (Ind. Ct. App. 2000), trans. denied. An injury “arises out of” employment
when a causal nexus exists between the injury sustained and the duties or
services performed by the injured employee. Milledge v. Oaks, 784 N.E.2d 926,
929 (Ind. 2003). A causal connection exists when a reasonable person would
consider the injury to be the result of a risk incidental to employment or when
there is a connection between employment and the injury. Milledge, 784 N.E.2d
at 929. An accident occurs “in the course of employment” when it takes place
within the period of employment, at a place where the employee may
reasonably be, and while the employee is fulfilling the duties of employment or
while engaged in doing something incidental thereto. Id.
[11] In Knoy v. Cary, 813 N.E.2d 1170 (Ind. 2004), Gemtron Corporation, a glass
shelving manufacturer, sponsored a cleanup project at a Vincennes city park.
Employees were encouraged, but not required, to attend the cleanup. Notice of
the project was posted on a company bulletin board inviting employees to
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attend. The company publicized the event with advertisements in the local
newspaper and supplied participating employees with work gloves, food, and
beverages. Donald Knoy, a Gemtron employee, supplied a tractor for
removing debris from a riverbank. During the cleanup, Joseph Cary, another
Gemtron employee, was injured by Knoy’s negligent operation of the tractor.
Cary filed suit against Knoy in Knox Superior Court. While the case was
appealed to the supreme court on a different issue—whether the trial court
lacked subject matter jurisdiction because Cary’s exclusive remedy was under
the Act—the principle question was whether Cary’s injury “ar[ose] out of and
in the course of” employment. Knoy, 813 N.E.2d at 1171.
[12] Ultimately, our supreme court concluded Cary’s injuries arose out of and in the
course of his employment with Gemtron and were therefore covered by the Act.
In reaching this decision, the supreme court relied on two cases: Noble v.
Zimmerman, 237 Ind. 556, 146 N.E.2d 828 (1957) and Ski World, Inc. v. Fife, 489
N.E.2d 72 (Ind. Ct. App. 1986). The supreme court summarized those cases,
stating,
[I]n Noble, this Court allowed recovery under the Worker’s
Compensation Act for an employee’s death that occurred at an
after-hours activity sponsored by his employer. The employer in
Noble held a business meeting at his lakeside summer residence
with the understanding that at the conclusion of the meeting,
dinner would be provided and there would be an opportunity for
the employees to enjoy swimming and boating. After the
business meeting concluded, an employee was injured diving into
the lake and subsequently died. In sustaining compensation for
his death under the Worker’s Compensation Act, this Court
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explained that injuries suffered while participating in after-hours
recreational activities are usually not compensable because the
injuries typically occur when the employee is not performing any
duty related to his employment. The Court reasoned, however,
that “in recent years it has become increasingly evident that
employers are more and more utilizing recreational programs for
their employees . . . in aiding and promoting better business
relations with persons in their employ.” The Court concluded
that the employee’s injury arose out of and in the course of his
employment.
The Court of Appeals reached the same conclusion in [Ski
World], involving an injury during an after-hours party for the
employees sponsored by the employer. The court reasoned that
this Court’s emphasis in Noble was not on whether attendance at
the party was required, but on the nexus between the claimant’s
employment and the party. The court pointed out that Ski World
“encouraged and therefore presumably expected its employees to
attend the party . . . provided the food, the refreshments, the
entertainment and the recreational equipment . . . and believed
that holding such an event would be in its best business
interests.” This was sufficient connection between the
employer’s business and the recreational activity to support
coverage.
Knoy, 813 N.E.2d at 1171-72 (alteration in original) (internal citations omitted).
The Court further explained that “where the employer’s interests in sponsoring
an after-hours activity are not merely altruistic, but are also intended to improve
the business, the activity may be incidental to employment.” Id. at 1172. The
Court concluded that similar to generating goodwill among employees, an
employer’s public image and goodwill in the community is a significant
business consideration. Id. at 1173. Therefore, it was in Gemtron’s business
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interest to involve itself in community projects and its “sponsorship of and
participation in the project served its business interests by enhancing its image,
fostering a good relationship with the local community, and team building
among its employees.” Id. at 1172.
[13] Morris contends his case is factually and legally analogous to Knoy, and that his
practice of participating in community service projects “fostered the growth of
goodwill, his business reputation, and additional business” for CKB. Brief of
Appellant at 12. In response, CKB recognizes Indiana courts have held some
after-hours activities leading to an employee’s injury are compensable;
however, CKB argues the Olivet Project was not an “employer-sponsored
activit[y],” as required by Knoy. Appellee’s Brief at 13. CKB points out the
Olivet Project was primarily intended to benefit Brad Morris’ Boy Scout
ambitions, and that Brad actually planned the project and approached the
congregation of the Church about the Olivet Project. Further, CKB states,
Sponsorship by the employer encompasses more than a decision
by Morris to help his son with an Eagle Scout Project. It
encompasses more than Morris’ [sic] using some of his tools and
his building knowledge to assist in the construction of the shed,
or having his pickup truck parked at the site or, even donating
some of the materials for the Project.
Id. at 14.
[14] We do not think “sponsorship” was intended to be a term of art or to connote a
certain level of community awareness to be achieved by a business; rather, the
focus is on the “connection between the employer’s interests in improving the
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business by holding the after-hours work-related activity and the employee’s
employment.” Curry v. D.A.L.L. Anointed, Inc., 966 N.E.2d 91, 95-96 (Ind. Ct.
App. 2012) (citing Knoy, 813 N.E.2d at 1172), trans. denied. In this case, Morris
demonstrated a sufficient connection between his interests in improving his
business by conducting community service projects and his sole proprietorship.
At the Single Member Hearing, Morris introduced evidence showing he
contributed to and participated in thirteen Boy Scout projects over a period of
ten years. For the Olivet Project, Morris donated the materials his son needed
to complete the project which were deducted as a business expense, used CKB’s
tools and equipment, and participated in and directed its construction. Morris
also parked his truck, which was clearly marked with the name of his business,
telephone number, and contractor’s license number near the construction site.
Moreover, the Vanderburgh County Building Commissioner’s testimony
indicates the Olivet Project could not have been built without a contractor’s
license, and without Morris’ license, Brad would either have had to create a
different project or not build one.
[15] CKB stresses the fact Morris primarily intended the Olivet Project to benefit his
son’s Boy Scout endeavors. For example, Brad planned a significant amount of
the project, and sought approval from and submitted documents to the Boy
Scouts to be eligible to achieve an Eagle Scout ranking based on the project.
Although we acknowledge the Olivet Project was primarily intended for this
purpose, it does not alter the final resolution of the issue. In Knoy, Gemtron
sponsored and engaged its employees to participate in a community cleanup
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project of a local park. Knoy does not indicate what level of involvement, if any
at all, Gemtron contributed to planning the actual cleanup. Likewise, Morris
contributed to and participated in the Olivet Project. Regardless of whether
Brad planned a significant amount of the Olivet Project, the facts demonstrate
Morris played a significant role in the project, and it could not have been
completed without his contributions.
[16] Further, Morris’ business received a direct benefit from his participation in
community service projects, such as this one. Cf. Knoy, 813 N.E.2d at 1172
(noting Gemtron did not receive or expect a direct business benefit). Morris
testified that while improving his business and community relations were not
his “primary concern for doing the [community service] projects,” his
businesses did garner a substantial amount of business and goodwill as a result.
Tr. at 45. Morris described his participation in the projects as opportunities for
“networking” and engaging with the community, and at the Single Member
Hearing Morris produced three witnesses who testified they hired Morris after
observing his prior work on community service projects. Id. All of Morris’
witnesses testified they knew of Morris and CKB through Morris’ participation
in Boy Scouts, observed the quality of his work on Boy Scout community
service projects, and subsequently hired him to complete remodeling or kitchen
design in their homes.
[17] As noted above, the Worker’s Compensation Act is to be liberally construed in
order to effectuate its humane purpose, and we conclude these facts inescapably
lead to a decision opposite of the Board’s decision—that Morris’ injury arose
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out of and in the course of his employment. See Daugherty, 802 N.E.2d at 919.
Because we hold Morris’ injury is covered by the Worker’s Compensation Act,
we do not address CKB’s cross-appeal.
Conclusion
[18] We conclude the facts presented inescapably lead to a decision opposite of the
Board’s decision, and that Morris’ injury arose out of and in the course of his
employment. Therefore, Morris’ injury is covered by the Indiana’s Worker’s
Compensation Act. Accordingly, we reverse and remand for determination of
the benefits he should receive.
[19] Reversed and remanded.
Mathias, J., and Brown, J., concur.
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