Thompsen, Jason v. Concrete Solutions ( 2015 )

TENNESSEE DIVISION OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
Employee: Jason Thompsen ) Docket No. 2014-04-0012
)
Employer: Concrete Solutions ) State File No. 77580-2014
In accordance with Rule 0800-02-22-.02(6), please find attached the Workers’
Compensation Appeals Board’s Order and Opinion Affirming and Remanding
Interlocutory Order of Court of Workers' Compensation Claims in the referenced case.
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Order and Opinion Affirming and
Remanding Interlocutory Order of Court of Workers' Compensation Claims was sent to
the following recipients by the following methods of service on this the 10th day of
February, 2015.
Name Certified First Class Via Fax Via Email Address
Mail Mail Fax Number Email
Greg Groth X greg@greggrothlaw.com
B. Duane Willis X dwillis@morganakins.com
Kenneth M. Switzer, X Via Electronic Mail
Chief Judge
Penny Shrum, Clerk, X Penny.Patterson-Shrum@tn.gov
Court of Workers’
Compensation Claims
Matthew Salyer
Clerk, Workers’ Compensation Appeals Board
220 French Landing Dr., Ste. 1-B
Nashville, TN 37243
Telephone: 615-253-1606
Electronic Mail: Matthew.Salyer@tn.gov
TENNESSEE DIVISION OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
FILED
Employee: Jason Thompsen ) Docket No. 2014-04-0012 February 10, 20l:'i
)
TENNESSEE
Employer: Concrete Solutions ) State File No. 77580-2014 \YORKERS ' COl\ IPENSATION
APPEALS BOARD
)
) T ime: 8: 45.-\l\I
Appeal from the Court of Workers' )
Compensation Claims )
Kenneth M. Switzer, Judge )
Affirmed and Remanded - February 10, 2015
ORDER AND OPINION AFFIRMING AND REMANDING INTERLOCUTORY
ORDER OF COURT OF WORKERS' COMPENSATION CLAIMS
This interlocutory appeal involves a concrete worker who fell and fractured his left
ankle while performing work at a job site. The employer denied the claim, asserting the
claimant was an independent contractor at the time of the accident. In its Interlocutory
Order, the trial court found that the claimant was an employee, not an independent
contractor, and that the employee was entitled to medical benefits. The trial court
concluded that the employee had not established entitlement to temporary disability
benefits. The employer appealed, arguing: (1) the trial court improperly denied employer
the opportunity for an evidentiary hearing; and (2) the evidence preponderates against the
conclusion of the trial court that the claimant was an employee. Having carefully
reviewed the record, we affirm the decision of the Court of Workers' Compensation
Claims.
Judge Timothy W. Conner delivered the opinion of the Appeals Board, in which Judge
Marshall L. Davidson, III, and Judge David F. Hensley, joined.
B. Duane Willis, Nashville, Tennessee, for the employer-appellant, Concrete Solutions
Greg Groth, Cookeville, Tennessee, for the employee-appellee, Jason Thompsen
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Factual and Procedural Background
The claimant, Jason Thompsen, is a forty-nine year-old resident of Putnam
County, Tennessee. In late May 2014, the claimant met with Eric Turney, owner of
Concrete Solutions, to discuss the possibility of the claimant assisting on a concrete
construction project. Mr. Turney was in need of immediate help because he did not feel
that the foreman he had on site was capable of performing the job. He was aware that the
claimant had experience with "vertical concrete" construction and he needed someone
with this specialized knowledge to act as superintendent on the job site.
With respect to the issue of compensation, the claimant testified that he wanted to
be hired as a regular employee, but Mr. Turney informed him that he was not capable of
"doing payroll" at that time and that all the workers would receive a Form 1099 at the
end of the year. The claimant accepted these conditions and both parties agreed that he
would be paid at a rate of $15. 00 per hour. Once the claimant was on site, he concluded
that additional workers were needed to complete the job. He recommended two
individuals to Mr. Turney, who in turn gave the claimant the authority to hire the
workers. Both parties agreed, however, that Mr. Turney would pay the workers an hourly
rate. The claimant acknowledged that he had the authority to fire these workers if they
were not capable of performing the work.
The claimant testified that he had his own tool belt, hammer and nail bag.
However, the company provided power tools, drills, and a concrete vibrator. Mr. Tumey
acknowledged that he also supplied a bobcat, a demolition saw, and extension cords. He
testified that the company rented concrete forms and purchased lumber and materials for
the concrete forms as needed. He also purchased rebar and rented an all-terrain forklift.
The claimant testified that he and the crew generally were expected to work 7 :00
a.m. to 3:30 p.m. At some point, they switched work hours to 6:00 a.m. to 2:30 p.m. to
avoid the afternoon heat. However, he also acknowledged that the work hours were
"pretty informal" and the only restriction was to not exceed forty hours a week. The
claimant also admitted that he was free to offer his services to other companies while
working for Mr. Turney. However, he testified that, given the workload, he "didn't have
time" to work other jobs.
On July 10, 2014, the claimant was working near the middle of the structure under
construction and was attempting to install a piece of decking when part of the structure
collapsed and he fell approximately ten feet. He landed on his left leg. He contacted Mr.
Turney after the accident and informed him of the fall. The claimant advised Mr. Turney
that he intended to go to Satellite Medical. After x-rays confirmed a leg fracture, he was
referred to Tier One Orthopedics, where he saw Dr. Gregory Roberts. He was advised
that surgery was needed to repair the fracture and insert hardware into his leg.
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Both parties acknowledged that a conversation occurred after the recommendation
for surgery concerning the medical expenses associated with surgery. Both parties
testified that Mr. Turney agreed to pay for the surgery. The claimant testified that he
assumed Mr. Turney was offering to pay because he did not have workers' compensation
insurance. Mr. Turney testified that he considered the claimant to be a "contract worker"
who would not be covered by his workers' compensation insurance and that he offered to
pay for the surgery because he knew that the claimant was financially unable to pay.
In late August or early September 2014, the claimant contacted Mr. Turney to see
if he had any work available. Mr. Turney agreed to bring him back to work as a
supervisor at a different job site. Mr. Tumey testified that he was in the process of
forming a limited liability company and was offering all workers the option to become
"employees" instead of contract workers. Mr. Turney testified that most of his regular
workers agreed to become employees, but three elected to remain "contract workers." He
further testified that he now gives preference to his employees for work assignments and
only uses contract workers when there is sufficient work available.
After working several weeks, the claimant approached Mr. Turney to ask that the
company pay for an ultrasound and follow-up visits with Dr. Roberts. Mr. Tumey
replied that he was financially unable to pay for the additional medical treatment. The
claimant testified that he became aware that Mr. Turney had workers' compensation
insurance and asked that a claim be submitted to the insurer. He then contacted an
attorney.
On October 28, 2014, a Petition for Benefit Determination was filed. After
mediation was unsuccessful, a Dispute Certification Notice was filed November 24,
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2014. Thereafter, a Request for Expedited Hearing was filed on December 3, 2014. On
the Request for Expedited Hearing, the claimant's attorney noted, "a hearing is necessary
for the Judge to determine the work status of the Employee and decide whether or not
medical benefits and temporary total disability benefits should be paid by the Employer
and Carrier." On the portion of the form concerning witnesses, the claimant's attorney
noted that two witnesses would testify by deposition. On December 31, 2014, counsel for
the claimant submitted to the Court the depositions of Jason Thompsen and Eric Turney
and asked that the depositions be considered "as part of Mr. Thompsen's proof in this
claim." The employer did not object to the introduction of these depositions for proof. In
fact, Employer's Response to Motion for Expedited Hearing, filed January 2, 2015, cited
extensively to the deposition testimony.
A hearing was scheduled for January 6, 2015. On that date, the Court entered an
Agreed Order of Continuance, rescheduling the hearing for January 27, 2015. Prior to
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On the Dispute Certification Notice ("DCN"), the mediator indicated that medical records had been exchanged and
that the parties had "agreed to their admissibility in future hearings." Neither party objected to the DCN.
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the date of the rescheduled hearing, the trial court entered an Order on January 15, 2015
addressing the issues raised in the Request for Expedited Hearing. In its Order, the trial
court noted that it had reviewed "Mr. Thompsen's request, both parties' sworn deposition
testimony and stipulated medical evidence, and pursuant to Tennessee Code Annotated
section 50-6-239( d)(l) and (2), infra, and Mediation and Hearing Procedures Rule 0800-
02-21-.14(1 )( c), the undersigned determines that no additional information is needed to
determine whether ... Mr. Thompsen is likely to prevail at a hearing on the merits of the
claim." The trial court held that Mr. Thompsen was an employee, that he was entitled to
medical benefits, but that he was not entitled to temporary disability benefits. The
Employer timely filed a Notice of Appeal on January 22, 2015. The case was submitted
to the Appeals Board on February 3, 2015.
Standard of Review
The standard of review to be applied by the Appeals Board in reviewing a trial
court's decision is statutorily mandated and limited in scope. Specifically, "[t]here shall
be a presumption that the findings and conclusions of the workers' compensation judge
are correct, unless the preponderance of the evidence is otherwise." Tenn. Code Ann. §
50-6-239(c)(7) (2014). The trial court's decision must be upheld unless "the rights of the
party seeking review have been prejudiced because findings, inferences, conclusions, or
decisions of a workers' compensation judge:
(A) Violate constitutional or statutory provisions;
(B)Exceed the statutory authority of the workers' compensation judge;
(C)Do not comply with lawful procedure;
(D) Are arbitrary, capricious, characterized by abuse of discretion, or
clearly unwarranted exercise of discretion; or
(E) Are not supported by evidence that is both substantial and material in the
light of the entire record.
Tenn. Code Ann. § 50-6-217(a)(2) (2014).
In applying the above standard, courts have construed substantial and material
evidence to mean "such relevant evidence as a reasonable mind might accept to support a
rational conclusion and such as to furnish a reasonably sound basis for the action under
consideration." Clay County Manor, Inc. v. State of Tennessee, 849 S.W.2d 755, 759
(Tenn. 1993) (quoting Southern Railway Co. v. State Bd. of Equalization, 682 S.W.2d
196, 199 (Tenn. 1984)). Like other courts applying the standard embodied in section 50-
6-217(a)(2), the Appeals Board will not disturb the decision of the trial court absent the
limited circumstances identified in the statute.
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Analysis
A. Lack of an Evidentiary Hearing
The procedure for resolving a Request for Expedited Hearing is governed by
Tennessee Code Annotated section 50-6-239 and the Rules of the Tennessee Department
of Labor, Division of Workers' Compensation. The statute provides as follows:
(d) Hearings of disputes on an expedited basis shall be conducted in
the following manner:
(1) Upon motion of either party made at any time after a dispute
certification notice has been issued by a workers' compensation mediator, a
workers' compensation judge may, at the judge's discretion, hear disputes
over issues provided in the dispute certification notice concerning the
provision of temporary disability or medical benefits on an expedited basis
and enter an interlocutory order upon determining that the injured employee
would likely prevail at a hearing on the merits ....
(2) A workers' compensation judge is not required to hold a full
evidentiary hearing before issuing an interlocutory order for temporary
disability or medical benefits.
Tenn. Code Ann. § 50-6-239(d) (2014) (emphasis added).
The Rules of the Division of Workers' Compensation further provide:
(1) After a case is placed on the docket, if there is a dispute over temporary
disability or medical benefits, either party may request an expedited hearing
(c) Seven (7) business days after the motion is filed with the clerk, the
clerk shall compile the file and the motion shall be assigned to a workers'
compensation judge. Upon receipt of the file, the judge shall have
discretion to either set the matter for a hearing or enter an interlocutory
order based on a review of the file upon determining that no additional
information is needed to determine whether the employee is likely to
prevail at a hearing on the merits of the claim.
Tenn. Comp. R. & Regs. 0800-02-21-.14(1)(c) (2014) (emphasis added).
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In its Memorandum in Support of Expedited Hearing Notice of Appeal, the
employer argues that "to require the Defendant to pay benefits without the benefit of a
hearing is violative of the Defendant's due process right afforded under both the United
States and Tennessee Constitutions." Employer's position is unconvincing.
The Tennessee Supreme Court addressed a similar issue in Freemon v. VF
Corporation, 675 S.W.2d 710 (Tenn. 1984). In Freemon, the workers' compensation
claimant filed a motion for new trial, alleging that he intended to submit "newly
discovered" information for the court's consideration. In rejecting the employee's
argument, the Supreme Court stated, "a motion for new trial in a workers' compensation
case may be summarily disposed of in the discretion of the trial judge, with or without a
hearing, and any claim of prejudice by the moving party will not be entertained upon
appeal." Id. at 712 (emphasis added). The Supreme Court has also held that a pre-trial
order compelling an employer to initiate workers' compensation benefits is not a
dispositive ruling on the merits, since the Court can readdress the issue at a subsequent
hearing. Shelton v. ADS Environmental Srvcs., 100 S.W.3d 214, 216-17 (Tenn. 2003); see
also McCall v. Nat'/ Health Corp., 100 S.W.3d 209 (Tenn. 2003) (rejecting employer's
contention that allowing a trial court to initiate temporary benefits at a pre-trial hearing
violated the employer's due process rights).
In the present case, the employer has been given sufficient opportunity to present
evidence and offer legal arguments. The Dispute Certification Notice reflects that the
parties exchanged medical records and expressly agreed that such records would be
admissible in future hearings. Counsel for the employer took the deposition of the
claimant on December 17, 2014 and attended the deposition of Eric Tumey the same day.
In accordance with its Request for Expedited Hearing, Counsel for the claimant
submitted the depositions for proof without objection. Counsel for the employer filed a
written Response to Motion for Expedited Hearing, in which he cited extensively to the
deposition testimony and offered legal argument in opposition to the request for
temporary disability and medical benefits.
The trial court carefully considered the evidence properly before it. The court did
not consider the affidavits of the parties, since those affidavits had not been filed in
accordance with the court's Practice and Procedure guidelines. In its Memorandum in
Support of Expedited Hearing Notice of Appeal, the employer did not identify other
evidence it claims should have been admitted into evidence or considered by the court.
Finally, because the trial court's order is interlocutory in nature, the Employer can seek to
establish through other admissible evidence that the claimant was an independent
contractor at the final compensation hearing. Neither the statute nor the applicable rules
compels a hearing prior to the issuance of an interlocutory order. The employer's
arguments on this issue are without merit.
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B. Employee versus Independent Contractor
To recover workers' compensation benefits, the claimant must be an employee and
not an independent contractor or a casual employee. Bargery v. Obion Grain Co., 785
S.W.2d 118, 121 (Tenn. 1990). Determining whether an individual is characterized as an
employee or an independent contractor for workers' compensation purposes requires a
specialized factual analysis. Masiers v. Arrow Transfer & Storage Co., 639 S.W.2d 654,
656-57 (Tenn. 1982) (citing Barnes v. Nat'/ Mortg. Co., 581 S.W.2d 957 (Tenn. 1979)).
No single aspect of a work relationship is conclusive in making this determination, and in
deciding whether a worker is an employee or independent contractor, "the trier of fact
must examine all relevant factors and circumstances" of the relationship. Boruff v. CNA
Ins. Co., 795 S.W.2d 125, 127 (Tenn. 1990). The fact that a company did not deduct
social security or income taxes is not a controlling factor in deciding whether an
employer-employee relationship existed. Carter v. Sparta Elec. Sys., 690 S.W.2d 218
(Tenn. 1985).
The Tennessee Workers' Compensation Act requires that "[i]n a work
relationship, in order to determine whether an individual is an 'employee,' or whether an
individual is a 'subcontractor' or an 'independent contractor,' the following factors shall
be considered:
(i) The right to control the conduct of the work;
(ii) The right of termination;
(iii) The method of payment;
(iv) The freedom to select and hire helpers;
(v) The furnishing of tools and equipment;
(vi) Self-scheduling of working hours; and
(vii) The freedom to offer services to other entities."
Tenn. Code Ann. § 50-6-102(1 l)(D) (2014).
These factors are not absolutes that preclude examination of each work
relationship as a whole and are no more than a means of analysis. Masiers, 639 S.W.2d
at 656 (citing Jackson Sawmill v. West, 619 S.W.2d 105 (Tenn. 1981)). While no single
factor is determinative, the Tennessee Supreme Court "has repeatedly emphasized the
importance of the right to control, the relevant inquiry being whether the right existed,
not whether it was exercised." Galloway v. Memphis Drum Service, 822 S.W.2d 584,
586 (Tenn. 1991). Once it is established that an employment relationship exists, "the
burden is on the employer to prove the worker was an independent contractor rather than
an employee." Id. Another factor that has gained significance is the right of termination.
Masiers, 639 S.W.2d at 656 (citing Wooten Transports, Inc. v. Hunter, 535 S.W.2d 858
(Tenn. 1976)). "As noted in Masiers [citation omitted], 'the power of a party to a work
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contract to terminate the relationship at will is contrary to the full control of work
activities usually enjoyed by an independent contractor."' Boruff, 795 S.W.2d at 127.
In the present case, the employer insists that the parties intended to create an
independent contractor relationship and that this was "agreed upon." However, Tennessee
law is clear that the intent of the parties is not dispositive on this issue. In Fayette
Janitorial Services & Technology Insurance Company v. Kellogg, No. W2011-01759-
COA-R3-CV, 2013 Tenn. App. LEXIS 66 (Tenn. Ct. App. Feb. 4, 2013), the direct
employer of an injured worker sued in tort the company where the injured worker had
been injured, seeking reimbursement of amounts paid in workers' compensation benefits.
In response, the defendant asserted that it was a "statutory employer" and thus immune
from suit in tort. In addressing the issue of the intent of the parties, the Court of Appeals
stated:
We first note that the designation given by the parties in their contract does
not dictate the applicability of the Workers' Compensation Law. Our
Supreme Court has stated that "a contract purporting to establish the
plaintiff as an 'independent contractor' is insufficient when the facts
surrounding the arrangement indicate [otherwise]." [Citation omitted.] Such
a provision is not dispositive ....
Id. at *16-17; see also Barber v. Purina, 825 S.W.2d 96, 100 (Tenn. Ct. App. 1992) ("the
issue of whether one is an employee or an independent contractor is one oflaw").
With respect to the specific statutory criteria set forth in Tennessee Code
Annotated section 50-6-102(10)(D), the facts support the trial court's determination that
the claimant was an employee. In regard to the most important factor, the right to control
the conduct of the work, there is no question that the claimant was hired to supervise this
particular job because of his specialized knowledge regarding vertical concrete
construction. It is also true that Mr. Tumey did not visit this job site on a regular basis.
The claimant testified that he spoke to Mr. Tumey by telephone approximately once a
week regarding this project. Nevertheless, there is sufficient evidence that Mr. Tumey
retained the right to control the conduct of the work; whether he exercised that right is
irrelevant. The claimant testified without contradiction that he and his crew were
expected to report to work at regular hours each day and were told not to exceed forty
hours per week. Mr. Tumey testified that his company's primary focus is concrete
construction, including driveways, patios, sidewalks, garage slabs, building slabs and
porches. The claimant was hired to supervise a project that is part of the company's
regular business. In Fayette Janitorial Services, one of the elements addressed by the
court in determining whether Kellogg was a statutory employer or a general contractor
was whether "the work being performed . . . is part of the regular business of the
company or is the same type of work usually performed by the company's employees."
Fayette Janitorial Services, supra at *30. The present case presents an analogous
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situation. Here, the claimant was not hired to oversee a project outside the normal scope
of the company's business, but was hired to supervise a project that was a regular part of
the company's business. Mr. Tumey retained the right to control the conduct of the
work. The fact that he chose to rely heavily on the claimant's technical expertise does
not tend to make the claimant an independent contractor.
It is also apparent that Mr. Tumey retained the right of termination. This is
evidenced by the fact that the prior supervisor on this project was, in fact, terminated.
There is no evidence to suggest that the claimant was given the autonomy to complete the
project independently, regardless of the progress toward completion. Had the claimant
failed to exhibit the specialized knowledge or expertise to complete the project, Mr.
Tumey could have replaced him at any time.
The method of payment, though not determinative, supports the trial court's
conclusion that the claimant was an employee. In a typical construction subcontractor
scenario, an independent contractor offers a bid on a particular job and agrees to
complete the project based on that bid. In this case, the claimant agreed to accept an
hourly rate offered by Mr. Tumey. Moreover, the fact that Mr. Tumey called his workers
"contract workers" does not weigh in favor of a conclusion that they were independent
contractors. Mr. Tumey was clear in his testimony that he classified his workers as
"contract workers" because "I did not do payroll. Everybody was 1099." He also stated
that it was a "cleaner way for me to produce the work."
The "freedom to select and hire helpers" further supports the trial court's
conclusion. If an independent contractor requires help to assist in the completion of the
job, he typically will hire workers and pay them from the proceeds of the job. In the
present case, when it became evident that the claimant needed more workers, he was
given authority to hire workers, but those workers were also paid an hourly rate by Mr.
Tumey. These facts suggest an employer-employee relationship.
With respect to the furnishing of tools and equipment, the parties agreed that only
small, personal tools were brought to the job site by the claimant. Large tools, power
tools and equipment were supplied by the company. This is uncontradicted and supports
the trial court's conclusion.
Regarding the scheduling of work hours, the claimant testified without
contradiction that he and his crew generally were expected to work an eight-hour day,
and no more than forty hours per week. While the claimant admitted that the hours were
"pretty informal," he also testified that if he was not on the job site, he would not get
paid. These conditions suggest an employee-employer relationship.
Finally, with respect to the freedom to offer services to other entities, both parties
agreed that the claimant was free to offer his services to other companies, though the
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claimant testified that, as a practical matter, the demands of this job made it impractical
to work elsewhere. This is the only statutory factor which would tend to support a
finding that the claimant was an independent contractor. However, it is insufficient, in
and of itself, to support a reversal of the trial court's decision.
Conclusion
The trial court in this case complied with the statute in electing to issue an
Interlocutory Order without holding a full evidentiary hearing. The court carefully
reviewed the admissible evidence and each party had the opportunity to submit argument
in the form of written position statements. Furthermore, there is sufficient evidence to
support the trial court's conclusion that the claimant was an employee as that term is
defined in the Tennessee Workers' Compensation Act and that he is entitled to reasonable
and necessary medical benefits for his work-related injury.
W. Conner, Judge
s' Compensation Appeals Board
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