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Smith v. Liberty Mutual Fire Insurance Co.

Court of Workers Compensation of Montana

November 19, 1997

STEPHEN G. SMITH Petitioner
v.
LIBERTY MUTUAL FIRE INSURANCE COMPANY Respondent/Insurer for THE MISSOULIAN Employer.

          Submitted: August 13, 1997

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

          MIKE McCARTER JUDGE.

         Summary: Claimant was injured while delivering newspapers for the Missoulian. Respondent alleged claimant was exempt from coverage of the Workers' Compensation Act because he met the criteria under section 39-71-401(3)(k), MCA (1995) or because he was an independent contractor.

         Held: Pursuant to section 39-71-401(3)(k), MCA (1995), the Workers' Compensation Act does not apply to the employment of a person performing services as a newspaper carrier if the person "has acknowledged in writing" that he is not covered. The individual must also in fact be a "newspaper carrier" as defined by statute, which requires that he "provides a newspaper with the service of delivering newspapers singly or in bundles" and is not "an employee of the paper who, incidentally to the employee's main duties, carriers or delivers papers." While claimant's work at the time of the injury met the "newspaper carrier" definition, there was no written acknowledgment in place governing the work at that time. Claimant had executed written acknowledgments during earlier periods of employment, but his contract for employment had expired and he continued working under an oral agreement that did not satisfy the statutory requirement and did not, in any event, address non-coverage. Although claimant was not exempt under section 39-71-401 (3)(k), MCA (1995), he could still fall outside the coverage of the Workers' Compensation Act if he had been working as an independent contractor. However, under the 1995 version of section 39-71-120, MCA, which defines independent contractor, a worker is not an independent contractor unless he has received an independent contractor exemption from the Department of Labor. Claimant had not received an exemption. Thus, his injury was covered and the insurer is responsible.

         Topics:

         Constitutions, Statutes, Regulations and Rules: Montana Code Annotated: section 39-71-120, MCA (1995). Pursuant to section 39-71-401(3)(k), MCA (1995), the Workers' Compensation Act does not apply to the employment of a person performing services as a newspaper carrier if the person "has acknowledged in writing" that he is not covered. Although claimant was not exempt under section 39-71-401(3)(k), MCA (1995), because there was no written acknowledgment governing the employment, he could still fall outside the coverage of the Workers' Compensation Act if he had been working as an independent contractor. However, under the 1995 version of section 39-71-120, MCA, which defines independent contractor, a worker is not an independent contractor unless he has received an independent contractor exemption from the Department of Labor. Claimant had not received an exemption. Thus, his injury was covered and the insurer is responsible.

         Constitutions, Statutes, Regulations and Rules:Montana Code Annotated: section 39-71-401(3)(k), MCA (1995). Pursuant to section 39-71-401(3)(k), MCA (1995), the Workers' Compensation Act does not apply to the employment of a person performing services as a newspaper carrier if the person "has acknowledged in writing" that he is not covered. The individual must also in fact be a "newspaper carrier" as defined by the statute, which requires that he "provides a newspaper with the service of delivering newspapers singly or in bundles" and is not "an employee of the paper who, incidentally to the employee's main duties, carries or delivers papers." While claimant's work at the time of injury met the "newspaper carrier" definition, there was no written acknowledgment in place governing the work at that time. Claimant had executed written acknowledgments during earlier periods of employment, but his contract for employment had expired and he continued working under an oral agreement that did not satisfy the statutory requirement and did not, in any event, address non-coverage. Although claimant was not exempt under 39-71-401(3)(k), MCA (1995), he could still fall outside the coverage of the Workers' Compensation Act if he had been working as an independent contractor. However, under the 1995 version of section 39-71-120, MCA, which defines independent contractor, a worker is not an independent contractor unless he has received and independent contractor exemption from the Department of Labor. Claimant had not received an exemption. Thus, his injury was covered and the insurer is responsible.

         Employment: Exempt Employments: Newspaper Carriers. Pursuant to section 39-71-401(3)(k), MCA (1995), the Workers' Compensation Act does not apply to the employment of a person performing services as a newspaper carrier if the person "has acknowledged in writing" that he is not covered. The individual must also in fact be a "newspaper carrier" as defined by the statute, which requires that he "provides a newspaper with the service of delivering newspapers singly or in bundles" and is not "an employee of the paper who, incidentally to the employee's main duties, carries or delivers papers." While claimant's work at the time of injury met the "newspaper carrier" definition, there was no written acknowledgment in place governing the work at that time. Claimant had executed written acknowledgments during earlier periods of employment, but his contract for employment had expired and he continued working under an oral agreement that did not satisfy the statutory requirement and did not, in any event, address non-coverage. Although claimant was not exempt under 39-71-401(3)(k), MCA (1995), he could still fall outside the coverage of the Workers' Compensation Act if he had been working as an independent contractor. However, under the 1995 version of section 39-71-120, MCA, which defines independent contractor, a worker is not an independent contractor unless he has received and independent contractor exemption from the Department of Labor. Claimant had not received an exemption. Thus, his injury was covered and the insurer is responsible.

         Independent Contractor: Independent Contractor Exemption. Pursuant to section 39-71-401(3)(k), MCA (1995), the Workers' Compensation Act does not apply to the employment of a person performing services as a newspaper carrier if the person "has acknowledged in writing" that he is not covered. The individual must also in fact be a "newspaper carrier" as defined by the statute, which requires that he "provides a newspaper with the service of delivering newspapers singly or in bundles" and is not "an employee of the paper who, incidentally to the employee's main duties, carries or delivers papers." While claimant's work at the time of injury met the "newspaper carrier" definition, there was no written acknowledgment in place governing the work at that time. Claimant had executed written acknowledgments during earlier periods of employment, but his contract for employment had expired and he continued working under an oral agreement that did not satisfy the statutory requirement and did not, in any event, address non-coverage. Although claimant was not exempt under 39-71-401(3)(k), MCA (1995), he could still fall outside the coverage of the Workers' Compensation Act if he had been working as an independent contractor. However, under the 1995 version of section 39-71-120, MCA, which defines independent contractor, a worker is not an independent contractor unless he has received and independent contractor exemption from the Department of Labor. Claimant had not received an exemption. Thus, his injury was covered and the insurer is responsible.

         The trial in this matter was held on July 22, 1997, in Helena, Montana. Petitioner, Stephen G. Smith (claimant), was present and represented by Mr. Edward K. Duckworth. Respondent, Liberty Mutual Fire Insurance Company (Liberty), was represented by Mr. Larry W. Jones. At the close of trial, counsel were provided an opportunity to file supplemental briefs. Upon receipt of the briefs, the case was deemed submitted for decision.

         Exhibits: Exhibits 1 through 17 were admitted without objection.

         Witnesses and Depositions: The claimant, Lois A. Smith, Rachel Pulis, Sarah Zerwin, Jim Rickman and Brian Mellstead testified at trial. In addition, the depositions of claimant, Jim Rickman and Rachel Pulis were submitted to the Court for its consideration.

         Issues Presented: The claimant was injured on April 21, 1996, while delivering newspapers for the Missoulian. The following issues, as phrased by the parties, are presented to the Court for decision:

1.Whether the claimant was covered by the Workers' Compensation Act as an employee when he was hurt on April 21, 1996, and therefore entitled to benefits under the Montana Workers' Compensation Act.
2.If the written acknowledgment in the Missoulian carrier contracts, Exhibits "B" and "C" to the claimant's deposition, expired, whether the written acknowledgment attached as Exhibit "A" to the claimant's deposition bars his claim.
3.In the alternative, if the written acknowledgments signed by the claimant did not bar his claim, whether he was an independent contractor when injured and not entitled to benefits.
4.Whether the claimant is entitled to costs and attorney fees pursuant to either Section 39-71-611 or 39-71-612, MCA.

         Having considered the Final Pretrial Order, the testimony presented at trial, the demeanor and credibility of the witnesses, the depositions, the exhibits, and the arguments of the parties, the Court makes the following:

         FINDINGS OF FACT

         1.Claimant is 50 years old and lives in Charlo, Montana. He has a sixth grade education.

         2.Claimant began delivering newspapers for the Missoulian in 1987. Except for a one-year period between March 1993 and March 1994, he continued delivering papers for the Missoulian until he was injured on April 21, 1996.

         3.At different times, claimant worked three different delivery routes. Those routes were Kicking Horse (abbreviated KICKM1), Ronan (abbreviated RounM1) and Pablo (abbreviated PablM1). The routes ...


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