Grange Mut. Cas. Co. v. Laughlin , 2013 Ohio 4447 ( 2013 )

[Cite as Grange Mut. Cas. Co. v. Laughlin, 2013-Ohio-4447.]
COURT OF APPEALS
LICKING COUNTY, OHIO
FIFTH APPELLATE DISTRICT
GRANGE MUTUAL CASUALTY : JUDGES:
COMPANY : Hon. William B. Hoffman, P.J.
: Hon. Sheila G. Farmer, J.
Plaintiff-Appellant : Hon. Patricia A. Delaney, J.
:
-vs- :
:
PATRICK LAUGHLIN, ET AL. : Case No. 12-CA-0089
:
Defendants-Appellees : OPINION
CHARACTER OF PROCEEDING: Appeal from the Court of Common
Pleas, Case No. 11 CV 01490
JUDGMENT: Affirmed
DATE OF JUDGMENT: October 8, 2013
APPEARANCES:
For Plaintiff-Appellant For Defendants-Appellees
JAMES E. FEATHERSTONE SEAN HARRIS
610 South Front Street 445 Hutchinson Avenue, Suite 100
Columbus, OH 43215 Columbus, OH 43235
GUS M. SHIHAB
65 East State Street, Suite 1550
Columbus, OH 43215
LIcking County, Case No. 12-CA-0089 2
Farmer, J.
{¶1} Appellee, Patrick Laughlin, owned a business building wood furniture and
cabinets. On March 19, 2010, appellee's nineteen year old nephew, William "Billy"
Laughlin, was working with appellee, spraying a lacquer spray material on doors. The
two were overcome by the fumes of the lacquer spray. Patrick survived and Billy
passed away.
{¶2} On February 7, 2011, Billy's estate, appellee herein, filed a wrongful death
action and negligence claims against appellee Patrick and his business, claiming Billy
was an independent contractor as opposed to an employee. At the time of the incident,
appellee Patrick was insured under three policies of insurance, a fire policy, a
homeowner's policy, and a business owner's policy, issue by appellant, Grange Mutual
Casualty Company.
{¶3} On November 7, 2011, appellant filed a complaint for declaratory
judgment, asking the trial court to interpret and construe the insurance contracts.
Appellees filed motions for summary judgment, asking the trial court to declare that Billy
was an independent contractor. By judgment entry filed August 29, 2012, the trial court
declared there was no coverage under the fire and homeowner's policies, but there
were genuine issues regarding coverage under the business owner's policy.
{¶4} A trial on the remaining issue of coverage commenced on September 17,
2012. By judgment entry filed September 26, 2012, the trial court determined Billy was
not an employee at the time of his death, and appellant's business owner's policy
provided liability coverage to satisfy any potential verdict obtained in the wrongful death
action. Findings of fact and conclusions of law were filed on November 1, 2012.
LIcking County, Case No. 12-CA-0089 3
{¶5} Appellant filed an appeal and this matter is now before this court for
consideration. Assignments of error are as follows:
I
{¶6} "THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT FAILED
TO GRANT DECLARATORY JUDGMENT IN FAVOR OF GRANGE MUTUAL
CASUALTY COMPANY AND AGAINST ITS INSURED, PATRICK LAUGHLIN, ON
CROSS-MOTIONS ASSERTING 'NO GENUINE DISPUTE AS TO ANY MATERIAL
FACT.' "
II
{¶7} "AFTER A BENCH TRIAL, THE TRIAL COURT ERRED AS A MATTER
OF LAW RENDERING ITS CONCLUSIONS OF LAW."
III
{¶8} "THE TRIAL COURT'S FINDINGS OF FACT (NUMBERED 1-15) RECITE
FOR THE MOST PART FINDINGS THAT ARE NOT RELEVANT TO AN ANALYSIS OF
THE EMPLOYER VS. INDEPENDENT CONTRACTOR QUESTION UNDER BOSTIC
V. CONNER OR UNDER THE CRITERIA AT R.C. 4123(A)(1)(c)(i-xx)."
I
{¶9} Appellant claims the trial court erred in denying its motion for declaratory
judgment as there were no disputed questions of fact. Given the fact pattern in this
case, we disagree.
{¶10} Appellant argues pursuant to Bostic v. Connor, 37 Ohio St.3d 144 (1988),
when issues of fact are not in dispute, it is the duty of the trial court to rule on the
existence of an employee relationship as a matter of law.
LIcking County, Case No. 12-CA-0089 4
{¶11} In its judgment entry filed August 29, 2012, the trial court found genuine
issues of material fact existed to warrant a trial on coverage under the business owner's
policy. In its reply in support for declaratory judgment filed July 10, 2012, appellant
relied on the factors set forth in R.C. 4123.01(A)(1)(c), the definition of "employee"
under the workers' compensation statutes. Appellant claimed fifteen or sixteen factors
out of twenty weighed in favor of Billy having been an employee.
{¶12} As the Supreme Court of Ohio held in Bostic at 145-146, "Whether
someone is an employee or an independent contractor is ordinarily an issue to be
decided by the trier of fact. The key factual determination is who had the right to control
the manner or means of doing the work." The Bostic court at 146 went on to state, "The
determination of who has the right to control must be made by examining the individual
facts of each case."
{¶13} Per Bostic, we find appellees advanced sufficient evidence to rebut the
presumptions argued by appellant. The deposition of appellee Patrick raised genuine
issues regarding Billy's work: appellee Patrick and his wife gave aid and assistance to
their nephew Billy because they wanted to help him get started in a business, and Billy
controlled when, where, and what he wanted to do for his uncle.
{¶14} Upon review, we find the trial court did not err in denying appellant's
motion for declaratory judgment.
{¶15} Assignment of Error I is denied.
LIcking County, Case No. 12-CA-0089 5
II, III
{¶16} Appellant claims the trial court erred in finding that Billy was not an
employee as it met the statutory test of R.C. 4123.01, and the trial court's findings of
facts were not relevant to the decision. We disagree.
{¶17} On review for manifest weight, the standard in a civil case is identical to
the standard in a criminal case: a reviewing court is to examine the entire record, weigh
the evidence and all reasonable inferences, consider the credibility of witnesses and
determine "whether in resolving conflicts in the evidence, the jury [or finder of fact]
clearly lost its way and created such a manifest miscarriage of justice that the conviction
must be reversed and a new trial ordered." State v. Martin, 20 Ohio App.3d 172, 175
(1st Dist.1983). See also, State v. Thompkins, 78 Ohio St.3d 380, 1997-Ohio-52;
Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179.
{¶18} On September 17, 2012, the parties filed a stipulation regarding trial on
the issue of insurance coverage. The stipulation narrowed the issue "for determination
by the finder of fact whether, at the time of his death, William Laughlin, is considered an
'employee'' of Patrick Laughlin as defined under the insurance policy and Ohio law."
{¶19} In its Conclusions of Law Nos. 3 and 4 filed November 1, 2012, the trial
court answered the sole issue in the negative:
3. Weighing all the factors, Patrick Laughlin did not have the right to
control Billy Laughlin at Patrick's business. Billy Laughlin was, therefore,
not an employee of Patrick Laughlin. At best, Billy was an independent
contractor.
LIcking County, Case No. 12-CA-0089 6
4. However, under either the common law right to control test or the
statutory test, Billy Laughlin was not an employee of Patrick Laughlin.
{¶20} In support of its position that Billy was an employee, appellant relies on
the definition of "employee" under the workers' compensation statutes, R.C.
4123.01(A)(1)(c), to substantiate its position:
As used in this chapter:
(A)(1) "Employee" means:
(c) Every person who performs labor or provides services pursuant
to a construction contract, as defined in section 4123.79 of the Revised
Code, if at least ten of the following criteria apply:
(i) The person is required to comply with instructions from the other
contracting party regarding the manner or method of performing services;
(ii) The person is required by the other contracting party to have
particular training;
(iii) The person's services are integrated into the regular functioning
of the other contracting party;
(iv) The person is required to perform the work personally;
(v) The person is hired, supervised, or paid by the other contracting
party;
LIcking County, Case No. 12-CA-0089 7
(vi) A continuing relationship exists between the person and the
other contracting party that contemplates continuing or recurring work
even if the work is not full time;
(vii) The person's hours of work are established by the other
contracting party;
(viii) The person is required to devote full time to the business of
the other contracting party;
(ix) The person is required to perform the work on the premises of
the other contracting party;
(x) The person is required to follow the order of work set by the
other contracting party;
(xi) The person is required to make oral or written reports of
progress to the other contracting party;
(xii) The person is paid for services on a regular basis such as
hourly, weekly, or monthly;
(xiii) The person's expenses are paid for by the other contracting
party;
(xiv) The person's tools and materials are furnished by the other
contracting party;
(xv) The person is provided with the facilities used to perform
services;
(xvi) The person does not realize a profit or suffer a loss as a result
of the services provided;
LIcking County, Case No. 12-CA-0089 8
(xvii) The person is not performing services for a number of
employers at the same time;
(xviii) The person does not make the same services available to the
general public;
(xix) The other contracting party has a right to discharge the
person;
(xx) The person has the right to end the relationship with the other
contracting party without incurring liability pursuant to an employment
contract or agreement.
{¶21} It is conceded by appellant that R.C. 4123.01 is but a template for
consideration in determining the issue of employment status. See, Appellant's Brief at
15; November 1, 2012 Conclusions of Law No. 2. We concur because R.C. Chapter
4123 sets forth Ohio's statutory scheme for workers' compensation; therefore, R.C.
4123.01 defines an "employee" for purposes of workers' compensation.
{¶22} As cited above, the Bostic court at 146 quoted the following from Gillum v.
Industrial Commission, 141 Ohio St. 373, paragraph two of the syllabus (1943):
"Whether one is an independent contractor or in service depends
on the facts of each case. The principal test applied to determine the
character of the arrangement is that if the employer reserves the right to
control the manner or means of doing the work, the relation created is that
of master and servant, while if the manner or means of doing the work or
LIcking County, Case No. 12-CA-0089 9
job is left to one who is responsible to the employer only for the result, an
independent contractor relationship is thereby created."
{¶23} The Bostic court at 146 went on to explain:
The factors to be considered include, but are certainly not limited
to, such indicia as who controls the details and quality of the work; who
controls the hours worked; who selects the materials, tools and personnel
used; who selects the routes travelled; the length of employment; the type
of business; the method of payment; and any pertinent agreements or
contracts.
{¶24} Despite appellant's consistent reliance on the workers' compensation
statute, appellant argues the trial court's Findings of Fact Nos. 1-15 were irrelevant to
the subject issue. We find the trial court's findings mirror the evidence presented at trial,
and are substantiated in the record.
{¶25} The trial consisted of the testimony of Billy's father (Frank Laughlin), uncle
(appellee Patrick), and aunt (appellee Patrick's wife, Deborah Laughlin). The thrust of
appellant's position is that the facts of the case undisputedly lead to a conclusion contra
to the trial court's decision, that Billy was an employee. Appellant argues that because
appellee Patrick paid Billy more than $160.00 in a calendar quarter, he was in fact an
employee under R.C. 4123.01(A)(1)(b) which states the following:
LIcking County, Case No. 12-CA-0089 10
b. Every person in the service of any person, firm, or private
corporation, including any public service corporation, that (i) employs one
or more persons regularly in the same business or in or about the same
establishment under any contract of hire, express or implied, oral or
written, including aliens and minors, household workers who earn one
hundred sixty dollars or more in cash in any calendar quarter from a single
household and casual workers who earn one hundred sixty dollars or
more in cash in any calendar quarter from a single employer, or (ii) is
bound by any such contract of hire or by any other written contract, to pay
into the state insurance fund the premiums provided by this chapter.
{¶26} Deborah Laughlin described the money as "pocket money" not
compensation. T. at 70. Some of the money included a payment to get Billy's taxes
done. T. at 34.
{¶27} Although appellant correctly cites the workers' compensation law of Ohio,
this argument completely disregards the nature of the agreement between Billy and
appellee Patrick. The nature of the family's relationship, the very specific reason for
taking in Billy, was best stated by appellee Patrick: "Well, he was my nephew, and I
loved him, and I was trying to help him out. He had been in some trouble, so." T. at 53.
Appellee Patrick described the issue of payment as follows (T. at 60):
LIcking County, Case No. 12-CA-0089 11
Q. At that time that we're talking about, when you and Billy worked
together, did the needs of your business require that you have additional
work?
A. No.
Q. So you didn't bring Billy on to help you get more work done?
A. No.
Q. You brought him on to teach him a trade?
A. Yes.
Q. For his benefit?
A. Yes.
Q. In fact, if you were going to hire somebody, either as an
employee or an independent contractor, it would have been somebody
who had some experience already?
A. Yes.
{¶28} Appellee Patrick did not require Billy to work any set days or hours. T. at
45, 58. If Billy felt like working, he could work. T. at 45, 58-59. Appellee Patrick
explained, "I expected him to apply himself and try to learn and work what he could, but
if you can't afford to pay someone X amount of dollars, you can't expect X amount of
work." T. at 46.
{¶29} It would be error to disregard this relationship. Accepting appellant's
position with blinders on would place every family relationship i.e.,
grandparent/grandchild, under the harsh light of employment status when in fact it is a
LIcking County, Case No. 12-CA-0089 12
gift generated by love to help those who need it or a "bribe" to get a child to do chores
or accept responsibility.
{¶30} The "quid pro quo" of the arrangement was also described by Deborah.
She explained, "[w]e loved him," and because Billy was having problems, she and her
husband decided to help him so he could survive in the world. T. at 65, 66. This help
was pre-conditioned upon Billy accompanying Deborah to Bible study class every
Thursday night. T. at 66. Billy could work when he wanted and "was to come and go as
he wanted to go, and in the meantime, Patrick would teach him his skills." T. at 67.
{¶31} By assessing the circumstances as a whole and in particular, the obvious
lack of control over Billy's comings and goings, we cannot say that the trial court erred
as a matter of law in finding no employment relationship. Whether Billy was a volunteer
or at best an independent contractor was not germane to the issue sub judice.
{¶32} Assignments of Error II and III are denied.
LIcking County, Case No. 12-CA-0089 13
{¶33} The judgment of the Court of Common pleas of Licking County, Ohio is
hereby affirmed.
By Farmer, J.
Hoffman, P.J. and
Delaney, J. concur.
_______________________________
Hon. Sheila G. Farmer
_______________________________
Hon. William B. Hoffman
_______________________________
Hon. Patricia A. Delaney
SGF/sg 918
[Cite as Grange Mut. Cas. Co. v. Laughlin, 2013-Ohio-4447.]
IN THE COURT OF APPEALS FOR LICKING COUNTY, OHIO
FIFTH APPELLATE DISTRICT
GRANGE MUTUAL CASUALTY :
COMPANY :
:
Plaintiff-Appellant :
:
-vs- : JUDGMENT ENTRY
:
PATRICK LAUGHLIN, ET AL. :
:
Defendants-Appellees : CASE NO. 12-CA-0089
For the reasons stated in our accompanying Memorandum-Opinion, the
judgment of the Court of Common Pleas of Licking County, Ohio is affirmed. Costs to
appellant.
_______________________________
Hon. Sheila G. Farmer
_______________________________
Hon. William B. Hoffman
_______________________________
Hon. Patricia A. Delaney