Jason Young v. Hood's Gardens, Inc.

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
John P. Daly, Jr. John C. Trimble
Matthew M. Golitko Lewis Wagner, LLP
Golitko & Daly PC Indianapolis, Indiana
Indianapolis, Indiana
Sonia C. Das
Rocap Musser LLP
Indianapolis, Indiana
______________________________________________________________________________
In the
Indiana Supreme Court Jan 22 2015, 9:42 am
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No. 29S02-1405-PL-314
JASON YOUNG, Appellant (Defendant),
v.
HOOD'S GARDENS, INC., Appellee (Plaintiff).
_________________________________
Appeal from the Hamilton Superior Court, No. 29D04-1008-PL-12527
The Honorable J. Richard Campbell, Judge
_________________________________
On Transfer from the Indiana Court of Appeals, No. 29A02-1303-PL-298
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January 22, 2015
Dickson, Justice.
When a person engages a contractor for the performance of work exceeding $1,000 in
value but fails to take certain steps to assure that the contractor complies with the Indiana Work-
er's Compensation Act, that person is secondarily liable to the same extent as the contractor for
worker's compensation benefits payable to an employee of the contractor injured in an accident
arising out of and in the course of the contracted-for work. This case presents an issue of first
impression: whether the predicate $1,000 in value is determined solely by the amount of money
paid to the contractor or also includes the value of other consideration received by the contractor
in connection with the services provided. We hold that the $1,000 monetary threshold may in-
clude the ascertainable value of ancillary consideration received by the contractor.
In September 2009, Steve Hood, operator of Hood's Gardens, Inc., a wholesale green-
house (the business), contacted Craig Mead, proprietor of Discount Tree Extraction a/k/a D & E
Tree Removal (the contractor), to remove a large tree at the business. The contractor orally
quoted a fixed price of $600 for the work, to be paid upon completion. As part of the job, the
contractor was to clear away and remove from the premises all of the wood and debris. The
business permitted the contractor to keep the wood, which the contractor intended to sell as fire-
wood. To complete the work, the contractor hired the plaintiff, a tree climber-cutter, to take
down and remove the trunk. While working, the plaintiff was severely injured and rendered a
paraplegic. As a result of the work, the contractor received the wood from the removed tree, and
the business paid the contractor $600.
The present litigation arose as a declaratory judgment action brought by the business
seeking to establish that it had no secondary liability because—under its view—the value of the
work by the contractor was less than $1,000. Following various procedural occurrences, 1 the
trial court granted summary judgment in favor of the business. The trial court also struck a por-
tion of the plaintiff's affidavit containing his opinion that the value of the wood exceeded $400
on grounds that the plaintiff did not qualify as an expert and there was nothing about the plain-
tiff's knowledge and background that would make his opinion admissible as a lay observer. The
plaintiff challenged both issues on appeal, and the Court of Appeals affirmed. Young v. Hood's
Gardens, Inc., 2 N.E.3d 724 (Ind. Ct. App. 2013). We granted transfer and now address whether
the "value" that triggers secondary liability under Indiana Code section 22-3-2-14(b) is limited to
the dollar amount paid in cash or may include the value of other property transferred in connec-
tion with the performance of services. 2
1
The contractor did not respond to the business's complaint and suffered default judgment. After
the business filed a motion for summary judgment on its complaint, an initial appeal established subject
matter jurisdiction, see Hood's Gardens, Inc. v. Young, 976 N.E.2d 80, 84 (Ind. Ct. App. 2012), trans. not
sought.
2
The plaintiff's appeal also challenges the trial court's grant of the business's motion to strike
parts of the plaintiff's affidavit. Because these stricken portions are not relevant to our decision, we de-
cline to address this claim.
2
We review summary judgment de novo, applying the same standard as the trial court:
summary judgment is appropriate only where "the designated evidentiary matter shows that there
is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law." Ind. Trial Rule 56(C); see Kroger Co. v. Plonski, 930 N.E.2d 1, 4–5 (Ind.
2010). We consider only those materials properly designated pursuant to Trial Rule 56 and con-
strue all factual inferences and resolve all doubts as to the existence of a material issue in favor
of the non-moving party. Plonski, 930 N.E.2d at 5–6. Further, the interpretation of a statute is a
legal question that we also review de novo. State v. Int'l Bus. Machines Corp., 964 N.E.2d 206,
209 (Ind. 2012).
The Indiana's Worker's Compensation Act, specifically Indiana Code section
22-3-2-14(b), "imposes on a person who hires a contractor without verifying that the contractor
carries worker's compensation insurance liability to the same extent as the contractor for the in-
jury or death of any of the contractor's employees," Everett Cash Mut. Ins. Co. v. Taylor, 926
N.E.2d 1008, 1011 (Ind. 2010)—but only if the value of the work exceeds $1,000:
[A]ny corporation, limited liability company, partnership, or person, contracting for the
performance of any work exceeding one thousand dollars ($1,000) in value by a contractor
subject to the compensation provisions of IC 22-3-2 through IC 22-3-6, without exacting
from such contractor a certificate from the worker's compensation board showing that such
contractor has complied with section 5 of this chapter, IC 22-3-5-1, and IC 22-3-5-2, shall
be liable to the same extent as the contractor for compensation, physician's fees, hospital
fees, nurse's charges, and burial expenses on account of the injury or death of any employee
of such contractor, due to an accident arising out of and in the course of the performance
of the work covered by such contract.
Ind. Code § 22-3-2-14(b) (emphasis added). 3 It is undisputed that the business did not obtain the
requisite certificate from the contractor and that the contractor had no worker's compensation in-
surance.
The parties dispute whether the "value" of the contractor's work exceeds $1,000. On ap-
peal, the plaintiff argues that the value of the contractor's work consists of the total amount of
3
This provision does not apply to "an owner who contracts for the performance of work on the
owner's owner occupied residential property" or certain nonprofit corporations. Ind. Code
§ 22-3-2-14(a)(1).
3
consideration exchanged by the parties. Although the undisputed contract price for the contrac-
tor's work was $600, the plaintiff urges this Court to include the value of the wood received by
the contractor based primarily on the testimony of the contractor that the work was priced de-
pending on whether it was permitted to keep the wood and that the value of the wood exceeded
$400. The business counters that we should interpret the statute to focus on the contract price
only, adding that any additional benefit the contractor might have realized from salvaging the
wood is extra-contractual in nature and not considered by the parties at the time the contract was
formed and that the value of services is determined by the benefit conferred on the business only.
The first step in statutory interpretation is to determine whether the legislature has spoken
clearly and unambiguously on the point in question. Sees v. Bank One, Indiana, N.A., 839
N.E.2d 154, 157 (Ind. 2005). "When a statute is clear and unambiguous, we need not apply any
rules of construction other than to require that words and phrases be taken in their plain, ordi-
nary, and usual sense." Id. But if a statute is susceptible to more than one interpretation, it is
deemed ambiguous and thus open to judicial construction. Id. Where a statute is ambiguous, our
primary goal is to determine and give effect to the intent of the legislature. Id. We find that Sec-
tion 14(b) is ambiguous regarding the scope of "value."
"To effectuate legislative intent, we read the sections of an act together in order that no
part is rendered meaningless if it can be harmonized with the remainder of the statute. We also
examine the statute as a whole." City of Carmel v. Steele, 865 N.E.2d 612, 618 (Ind. 2007) (in-
ternal citation omitted). As a general rule, we liberally construe the Act to effectuate its humane
purposes and resolve any doubts in the application of terms in favor of the employee. Christo-
pher R. Brown, D.D.S., Inc. v. Decatur Cnty. Mem'l Hosp., 892 N.E.2d 642, 649 (Ind. 2008).
When the intent of the legislature to limit the Act is "very obvious," however, we do not extend
the Act's applicability beyond its provisions:
The [Act] is a humane enactment designed and intended for the protection of workmen
who come within its provisions, which are and ought to be liberally construed and applied,
so as to extend that protection to the ultimate good of the greatest possible number of our
workers; but the extent and limitation of its applicability also are fixed by those provisions
and we cannot, by judicial pronouncement, enlarge these beyond the very obvious intent
of the Legislature . . . .
Id. (quoting McGill Mfg. Co. v. Dodd, 116 Ind. App. 66, 70–71, 59 N.E.2d 899, 901 (1945),
4
trans. denied). Applying the foregoing principles of statutory interpretation and construing
"value" to harmonize with the remainder of Section 14(b) and the Act, we hold that "value" (in
the phrase "work exceeding one thousand dollars in value") includes both direct monetary pay-
ment as well as any ancillary consideration in goods or services received by the employer for the
work.
Section 14(b) evinces the legislative intent to enhance the availability of worker's com-
pensation benefits for workers injured during their employment with employers not providing
such coverage. Section 14(b) incentivizes persons who engage other employers to seek those
who can pay worker's compensation benefits to injured workers. Failure to obtain a certificate
showing that an employer is able to provide worker's compensation by insurance or by the em-
ployer's own financial ability to pay benefits exposes the person engaging the employer to full
liability for worker's compensation benefits for any of the employer's workers injured in the
course of the work. This legislative objective is best served by interpreting Section 14(b) to trig-
ger secondary liability for worker's compensation benefits at the lowest threshold, that is by per-
mitting the $1,000 trigger to be satisfied by both direct monetary payment as well as any ancil-
lary consideration received by the employer for the work.
We acknowledge that Section 14(b) also operates to limit the imposition of secondary
worker's compensation liability on those utilizing employers for small jobs, that is, those where
the work does not exceed $1,000 in value. For this distinction to be meaningful and to enable a
person engaging an employer to ascertain whether or not to obtain the worker's compensation
certificate from the employer, the business urges that the $1,000 trigger value be determined by
the monetary contract price only, excluding any ancillary consideration provided to the em-
ployer. It argues that, by imposing secondary liability based upon unclear and possibly disputa-
ble claims of ancillary value, the requirement of certificates will become so widespread as to un-
dermine the Act's objective of permitting small jobs (those under $1,000 in value) to be engaged
without requiring a worker's compensation certificate.
"Value" is commonly understood to encompass more than mere contract price. When ex-
amining statutes, we "give common and ordinary meaning to the words employed." Robinson v.
5
Wroblewski, 704 N.E.2d 467, 474 (Ind. 1998). One common usage dictionary defines "value"
primarily as "the amount of a commodity, service, or medium of exchange that is the equivalent
of something else." Webster's Third New International Dictionary 2530 (2002) (emphasis
added). Another first defines "value" as "[a]n amount considered to be a suitable equivalent for
something else; a fair price or return for goods or services." The American Heritage Dictionary
1336 (1985). Considering the plain meaning of the "value" received "for the performance of any
work," Ind. Code § 22-3-2-14(b), we find that "value" is intended to convey both direct monetary
payment as well as any ancillary consideration received.
To prevail on its motion for summary judgment, the business must establish that the tree
removal work for which it hired the contractor had a value of $1,000 or less and that this fact was
free of factual dispute. Under the applicable statute, the value of this work is to be determined
by considering both the monetary payment and ancillary consideration received by the contrac-
tor, namely the $600 contract price and the value of the wood received. As the moving party, the
business failed to designate evidence establishing that the undisputed value of the ancillary con-
sideration (the wood received) plus the $600 monetary payment did not exceed $1,000. Further-
more, the plaintiff designated testimony by the contractor that the value of the wood received
was more than the $600 received. The business was not entitled to summary judgment.
Conclusion
We conclude that the "value" attributable to the performance of work that triggers sec-
ondary liability under Indiana Code section 22-3-2-14(b) includes both direct monetary payment
as well as any ancillary consideration received for the work. Finding a question of fact as to the
value of the wood received by the contractor Discount Tree Extraction in connection with the
performance of its work, we reverse the grant of summary judgment to the business, Hood's Gar-
dens, and remand for further proceedings.
Rush, C.J., and Rucker, David, and Massa, JJ., concur.
6