Romero v. Hornung ( 2024 )

NOT DESIGNATED FOR PUBLICATION
No. 126,331
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
ALBERTO ROMERO,
Appellant,
v.
NORBERT HORNUNG and
KANSAS WORKERS COMPENSATION FUND,
Appellees.
MEMORANDUM OPINION
Appeal from the Workers Compensation Board. Submitted without oral argument. Opinion filed
August 30, 2024. Affirmed.
Peter J. Antosh, of Garcia & Antosh, LLP, of Dodge City, for appellant.
Travis J. Ternes, of Watkins Calcara, Chtd., of Great Bend, for appellee.
Before GREEN, P.J., GARDNER and PICKERING, JJ.
PER CURIAM: In 2013 and 2014, Alberto Romero was injured when employed by
Norbert Hornung. Romero sought workers compensation benefits for his injuries, and the
administrative law judge (ALJ) issued an award. But the Workers Compensation Appeals
Board (the Board) overturned it, finding that Romero was not eligible for workers
compensation benefits because he had not met his burden to show that his employer,
Hornung, met the gross payroll threshold to qualify for coverage under the Workers
Compensation Act, K.S.A. 44-501 et seq. (the Act). Finding no error, we affirm the
Board.
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Romero's Employment and Injuries
Hornung operated a farm and ranch near Offerle, a small town in southwestern
Kansas. Romero, one of his employees, primarily worked for Hornung's manure
spreading business, which involved operating heavy equipment and driving a manure
truck. When Hornung's manure work was slow, Romero would help Hornung with other
farm and ranch duties, such as welding, making repairs, installing fencing, and working
the cattle.
Romero testified that when he began working for Hornung in March of 2013, he
was paid $10 per hour. At some point, he received a raise to $13 an hour. As is common
in the farming industry, his work fluctuated with the weather and the season.
Throughout his employment, Romero was injured twice. On August 29, 2013, Romero
was in a vehicle rollover accident which injured his left shoulder, head, neck, back, and
right leg. This injury required hospitalization and shoulder surgery. Romero testified that
he received no pay or other benefits while recuperating and was off work for over a year.
Romero did not know if Hornung paid for his medical costs.
After Romero recuperated from that injury, he returned to work for Hornung, but
suffered another injury on November 17, 2014. Romero slipped on ice while changing a
flat tire on the company truck, injuring his right leg. He was off work for six months,
during which Romero claimed he received no pay or benefits and was unaware if
Hornung paid any of his medical costs.
Romero testified that he returned to work for Hornung after recovering from his
second injury but for only three days a week and his duties were limited to checking
fences and cattle. In what was described as a mutual agreement of the parties because of
the belief that Romero's physical condition would no longer allow him to drive the
manure trucks, Romero's employment ended when the light duty work ended. Yet
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Romero also admitted his employment stopped with Hornung due to "criminal
complications" for driving under the influence (DUI) and arson charges, which ultimately
led to Romero's incarceration. The DUI conviction led to the suspension of Romero's
driver's license, which he admitted compromised his ability to work for Hornung.
Romero timely applied for workers compensation benefits for both injuries.
Hornung did not carry workers compensation insurance, so the Workers Compensation
Fund of Kansas (the Fund) was impleaded.
Romero's Pay and Hornung's Payroll
Before Romero's claims for workers compensation benefits were fully litigated,
Hornung had passed away. But before he died he gave two depositions in this case which
revealed the following.
Some of Romero's wages were paid by checks issued by his accountant upon
Hornung's request, but Hornung also testified that "[i]f [Romero] caught me and he
needed money I'd have some cash in my pockets I'd just pull it out and give it to him."
Hornung also gave Romero payments "in kind" or ostensibly fringe benefits. After
about six months of Romero's employment, Hornung gave him access to a pick-up truck
that Hornung owned and maintained. Romero testified that he was given use of a
company truck, which included the payment of gas, but that he was never allowed to use
the truck except for commuting to and from work. Additionally, when work was slow,
Hornung testified that he would make up for lost hours by occasionally paying Romero's
rent in amounts of $325 to $375. But he also testified that he always paid Romero's rent
while Romero was working for him. To the contrary, Romero denied that Hornung ever
paid his rent. Hornung also testified that he paid for a lawyer for Romero on at least one
occasion to try to reinstate Romero's driver's license.
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Hornung believed that his automobile insurance company paid the medical bills
incurred by Romero's injuries. He did not recall Romero returning to work for him after
the second injury.
Hornung testified that he would sometimes pay Romero on a barter-like basis. For
example, he would give Romero materials for Romero's personal welding projects or let
Romero sell scrap metal from the farm and let him keep the earnings as his pay.
Hornung's accountant, Ronald Schneweis, testified about Hornung's payroll
records. In 2012, the year before Romero began working for Hornung, Hornung's payroll
shows payments totaling $1,221. In 2013, the year Romero started working for Hornung,
the payroll records show $11,094 in total payroll payments for three employees.
Hornung's 2014 total payroll was only for Romero, whose payments that year were
$14,692.
Schneweis described Hornung as "not the most efficient in providing
documentation." He also testified that Hornung was behind on his personal income taxes
and that he was not privy to all of Hornung's business operations. When paid by check,
Hornung's employees received checks issued from Schneweis' office when Hornung
would call and report the employees' hours worked. Schneweis did not do any of
Hornung's banking and never saw his bank statements.
Romero's Workers Compensation Award
Romero's workers compensation claims languished for years while Romero was
incarcerated and then for some time after. Eventually, in November 2022, the two claims
came before an ALJ for a hearing to determine Romero's award, if he so qualified. The
cases were in all practicality consolidated, as the award issued was for Romero's injuries
in 2013 and 2014 and was based on much of the same evidence.
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Before the ALJ, the Fund argued that the parties were not covered by the Act
because Hornung did not exceed the necessary $20,000 annual gross payroll threshold.
See K.S.A. 44-505(a)(2).
Regarding 2013, the ALJ found that "using reasonable inferences on payroll
records alone, in 2013 there is a $3,216.88 shortfall of the $20,000.00 threshold." But the
ALJ then added amounts of rent Hornung paid for Romero ($3,000), Romero's use of
Hornung's truck, and cash payments from Hornung to Romero, which took Hornung over
the $20,000 payroll threshold. The ALJ found the circumstantial evidence "is compelling
that if one included all of [Romero's] actual compensation from employment, total
employee pay, and benefits, then [Hornung's] employee remuneration surpassed the
$20,000 threshold."
As for 2014, the ALJ concluded that payroll records showed Hornung met the
threshold because Hornung's business records kept by Schneweis totaled $22,111. But
that figure does not appear in the payroll documentation or Schneweis' testimony.
The ALJ thus held that for the relevant years of 2013 and 2014, Hornung met the
$20,000 threshold by a preponderance of the evidence and was thus subject to the Act.
The ALJ awarded Romero $23,448.30—$20,270.72 for the 2013 injury, and $3,177.58
for the 2014 injury.
The Fund applied for review to the Board challenging only whether Romero met
his burden of proof that Hornung was covered under the Act.
The Board's Decision
The Board looked to K.S.A. 44-505(a)(2) and held that for the 2013 injury the
relevant payroll years were the preceding calendar year (2012) and the current calendar
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year (2013). For the 2014 injury, the relevant years were 2013 and 2014. The Board held:
"Based upon the testimony and exhibits provided by Mr. Schneweis, [Hornung's] payroll
did not exceed the $20,000 threshold set forth in K.S.A. 44-505(a)(2) in any of the years
at issue."
The Board found that the ALJ's use of rent payments and a company truck as
additional compensation was based on speculation and not sufficient evidence:
"The record is unclear regarding the value of the rent and truck use. The record is unclear
when rent was paid and the truck used. Even the simplest of information, such as what
kind of a truck was lent to [Romero], is absent from the record. It is difficult to find paid
rent as additional compensation when [Romero] denies [Hornung] ever paid rent. The
ALJ's finding the rent and truck use should be added as additional compensation is based
on speculation and is unsupported by the record. This finding requires the Board to make
a leap of faith it is unwilling to make.
"Absent proof of the value of rent and when it was paid, combined with the lack
of evidence regarding the value of the truck use and how often it was used, the evidence
does not establish, on a more probably true than not standard, [Hornung] had the
statutorily required payroll for application of the Kansas Workers Compensation Act."
It concluded that the record failed to prove payroll totals for the relevant years were
above the $20,000 threshold, so the Act did not apply. Accordingly, it reversed the ALJ's
award and denied Romero compensation from the Fund.
Romero timely petitioned this court for judicial review of the Board's order.
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The Board properly held that the Act did not cover Romero because Hornung did not
reach the minimum payroll threshold for coverage required by K.S.A. 44-505(a)(2).
On appeal, Romero argues that the Board erred by reversing the ALJ's award
because substantial evidence shows that Hornung's payroll exceeded the $20,000 gross
payroll threshold required for the Act to apply. That evidence is the additional
compensation the ALJ used—Hornung's payment of Romero's rent and his providing
Romero a company vehicle to use for commuting. Although he frames his argument as
one of mere statutory interpretation, Romero's argument challenges the sufficiency of the
evidence supporting the Board's decision.
Under the Act, our standard of review is statutorily controlled by the Kansas
Judicial Review Act (KJRA), K.S.A. 77-601 et seq. See K.S.A. 44-556. The KJRA
provides that appellate courts review the Board's factual determinations to verify that
they are supported by substantial evidence "in light of the record as a whole." K.S.A. 77-
621(c)(7). The KJRA defines "in light of the record as a whole" to mean
"that the adequacy of the evidence in the record before the court to support a particular
finding of fact shall be judged in light of all the relevant evidence in the record cited by
any party that detracts from such finding as well as all of the relevant evidence in the
record, compiled pursuant to K.S.A. 77-620, and amendments thereto, cited by any party
that supports such finding, including any determinations of veracity by the presiding
officer who personally observed the demeanor of the witness and the agency's
explanation of why the relevant evidence in the record supports its material findings of
fact." K.S.A. 77-621(d).
"Substantial evidence in a workers compensation case is evidence that possesses
something of substance and relevant consequence that induces the conclusion that the
award is proper; it furnishes a basis of fact from which the issue raised can reasonably be
resolved." Olds-Carter v. Lakeshore Farms, Inc., 45 Kan. App. 2d 390, 394, 250 P.3d
7
825 (2011) (citing Redd v. Kansas Truck Center, 291 Kan. 176, 183-84, 239 P.3d 66[2010]). Put differently, substantial evidence is "such evidence as a reasonable person
might accept as being sufficient to support a conclusion." Herrera-Gallegos v. H & H
Delivery Service, Inc., 42 Kan. App. 2d 360, 363, 212 P.3d 239 (2009). When reviewing
the Board's findings, we will not reweigh evidence. K.S.A. 77-621(d). Rather, we
consider credibility determinations and review the Board's explanation for why the
evidence supports its findings. Williams v. Petromark Drilling, 299 Kan. 792, 795, 326
P.3d 1057 (2014).
While we give deference to the Board's evidentiary conclusions, we give no
deference to the Board's interpretation of legal issues. Trevizo v. El Gaucho Steakhouse,
45 Kan. App. 2d 667, 671, 253 P.3d 786 (2011). To the extent that resolution of
Romero's appeal involves statutory interpretation, our standard of review is de novo.
Fernandez v. McDonald's, 296 Kan. 472, 475, 292 P.3d 311 (2013). The most
fundamental rule of statutory construction is that the intent of the Legislature governs if
that intent can be determined. Johnson v. U.S. Food Service, 312 Kan. 597, 600-01, 478
P.3d 776 (2021). An appellate court must first attempt to determine legislative intent
through the statutory language enacted, giving common words their ordinary meanings.
Bruce v. Kelly, 316 Kan. 218, 224, 514 P.3d 1007 (2022). "Dictionary definitions are
good sources for the 'ordinary, contemporary, common' meanings of words." Midwest
Crane & Rigging, LLC v. Kansas Corporation Comm'n, 306 Kan. 845, 851, 397 P.3d
1205 (2017). When a statute is plain and unambiguous, an appellate court should not
speculate about the legislative intent behind that clear language, and it should refrain
from reading something into the statute that is not readily found in its words. Schmidt v.
Trademark, Inc., 315 Kan. 196, 200, 506 P.3d 267 (2022).
K.S.A. 44-505(a)(2) provides that the Act does not apply to
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"any employment, other than those employments in which the employer is the
state, or any department, agency or authority of the state, wherein the employer had a
total gross annual payroll for the preceding calendar year of not more than $20,000 for all
employees and wherein the employer reasonably estimates that such employer will not
have a total gross annual payroll for the current calendar year of more than $20,000 for
all employees, except that no wages paid to an employee who is a member of the
employer's family by marriage or consanguinity shall be included as part of the total
gross annual payroll of such employer for purposes of this subsection."
Our task is thus to determine whether substantial evidence supports the Board's
factual findings that led it to find that Hornung did not meet the $20,000 gross payroll
threshold for coverage under the Act. See K.S.A. 44-505(a)(2). As the claimant, Romero
bears the burden of proof to establish his "right to an award of compensation and to prove
the various conditions on which [his] right depends." K.S.A. 44-501b(c). So Romero
bears the burden to prove that Hornung's gross employee payroll exceeded $20,000 in
each applicable year. See Moore v. Granger Brothers Roofing, No. 112,739, 2015 WL
5036965, at *4 (Kan. App. 2015) (unpublished opinion).
The language of K.S.A. 44-505(a)(2) is plain and unambiguous. The plain
language of the statute indicates that to qualify for coverage under the Act, an employer
must have a gross payroll of greater than $20,000 for the year before the accident and, via
a reasonable estimation, have a gross payroll greater than $20,000 for the year of the
accident. K.S.A. 44-505(a)(2). This language is not ambiguous.
"Payroll" is not defined in the Act, so we look to a dictionary to find its common
meaning. Black's defines "payroll" as "[a] list of employees to be paid and the amount
due to each of them." Black's Law Dictionary 1364 (11th ed. 2019). "Pay" (the present
tense of "paid"), is defined as "money paid, esp. for work or services; wages or salary."
Webster's New World College Dictionary 1072 (5th ed. 2018). Beyond these definitions,
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common sense and logic dictate that an employer's payroll is based on the wages it pays
to its employees.
The Act defines "wage" as "the total of the money and any additional
compensation that the employee receives for services rendered for the employer in whose
employment the employee sustains an injury arising out of and in the course of such
employment." K.S.A. 44-511(a)(3). But "additional compensation" is limited by its
statutory definition:
"The term 'additional compensation' shall include and mean only the following:
(i) Board and lodging when furnished by the employer as part of the wages, which shall
be valued at a maximum of $25 per week for board and lodging combined, unless the
value has been fixed otherwise by the employer and employee prior to the date of the
accident or injury, or unless a higher weekly value is proved; and (ii) employer-paid life
insurance, disability insurance, health and accident insurance and employer contributions
to pension and profit sharing plans." (Emphasis added.) K.S.A. 44-511(a)(2)(A).
So, when determining Hornung's gross payroll, we consider both traditional wages and
additional compensation which consists of only (1) board and lodging and (2) employer-
paid life insurance, disability insurance, health and accident insurance, and employer
contributions to pension and profit sharing plans. K.S.A. 44-511(a)(2)(A), (a)(3).
Romero's use of a company vehicle thus cannot be considered when calculating
Hornung's gross payroll—K.S.A. 44-511(a)(2)(A)'s list is exclusive yet it does not
include vehicle use as "additional compensation." Thus, the Board correctly ruled, albeit
on an evidentiary basis, that the vehicle was not to be considered in gross payroll
calculations. See In re Tax Exemption Application of Westboro Baptist Church, 40 Kan.
App. 2d 27, 49, 189 P.3d 535 (2008) ("[W]hen an agency tribunal reaches the right result,
its decision will be upheld even though the tribunal relied upon the wrong ground or
assigned erroneous reasons for its decision."); see also Atkins v. Webcon, 308 Kan. 92,
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97, 419 P.3d 1 (2018) (citing "right for wrong reasons" rule in workers compensation
case).
Board and lodging, however, may properly be considered as "additional
compensation." The ALJ included Hornung's purported payments of Romero's rent. But
the Board made a credibility determination about the quality of evidence surrounding the
rent payments and determined it lacked substantial evidence to include rent payments in
Hornung's gross payroll calculations. This is because the evidence failed to show how
much rent Hornung paid or when he paid it. And the Board noted "[i]t is difficult to find
paid rent as additional compensation when [Romero] denies [Hornung] ever paid rent."
We agree. Without specific evidence of Hornung's alleged rent payments for
Romero and with Romero's denial that Hornung ever paid his rent as part of his wages,
the record lacks substantial evidence to show that rent payments were additional
compensation to be included as part of Romero's wages and, in turn, Hornung's gross
payroll. The evidence is not such that a reasonable person might accept as sufficient to
support a conclusion. See Herrera-Gallegos, 42 Kan. App. 2d at 363. By not providing
documentation or testimony as to the amounts or dates Hornung paid for Romero's rent
and by denying that Hornung paid any rent for him, Romero failed to meet his burden of
proof. See K.S.A. 44-501b(c).
That leaves us with the payroll testimony and documentation from Hornung's
accountant, Schneweis. For Romero's 2013 injury to be covered by the Act, Hornung's
gross payroll must have exceeded $20,000 in both 2012 (the year before the injury) and
2013 (the year of the injury). See K.S.A. 44-505(a)(2). Hornung's payroll documentation
prepared by Schneweis reflects that in 2012, Hornung's payroll totaled $1,221. The
record reflects no additional compensation listed in K.S.A. 44-511(a)(2)(A) that would
increase that amount for 2012, nor does Romero point us to any. Thus, the Board
correctly held that Romero's 2013 injury was not covered by the Act. Consideration of
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the 2013 payroll figures for his 2013 injury is unnecessary because payroll in both the
year before the injury and the year of the injury must exceed $20,000. K.S.A. 44-505
(a)(2).
For Romero's 2014 injury to be covered by the Act, Hornung's gross payroll must
have exceeded $20,000 in both 2013 (the year before the injury) and 2014 (the year of the
injury). See K.S.A. 44-505(a)(2). Hornung's payroll documentation prepared by
Schneweis reflects that in 2013, Hornung's payroll payments totaled $11,094. And the
record reflects no other additional compensation listed in K.S.A. 44-511(a)(2)(A) that
would increase Hornung's gross payroll for 2013. Therefore, the Board correctly held that
Romero's 2014 injury was not covered by the Act. And we need not consider the 2014
payroll figures because payroll in both the year before the injury and the year of the
injury must exceed $20,000. K.S.A. 44-505(a)(2).
Romero failed to successfully meet his burden of proof and did not establish his
"right to an award of compensation and to prove the various conditions on which [his]
right depends" for both his 2013 and 2014 injuries. See K.S.A. 44-501b(c). Thus, under
K.S.A. 44-505(a)(2), the Act does not apply to Romero. The Board properly reversed the
ALJ's decision and properly denied Romero an award of compensation under the Act.
Affirmed.
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