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Schimmel v. Uninsured Employers' Fund

Court of Workers Compensation of Montana

June 28, 2000

ARTHUR SCHIMMEL Petitioner
v.
UNINSURED EMPLOYERS' FUND Respondent JASPER EXPRESS, INCORPORATED Employer.

          Submitted: May 11, 2000

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

          MIKE MCCARTER JUDGE

         Summary: Claimant, a long haul truck driver working in several states, but living in Montana, claimed entitlement to Montana Workers' Compensation Benefits following an injury in Missoula County while allegedly "employed" by a company not carrying Montana workers' compensation insurance for claimant. The Uninsured Employers' Fund (UEF) and the employer argued claimant was not an employee within the Montana WCA.

         Held: Under 39-71-118, MCA (1997), a worker is an employee for whom an employer must carry WC insurance only if he is a resident of Montana whose employment duties are primarily carried out or controlled within this state. Where the alleged employer had offices in and controlled its business from Washington, and most of claimant's long-haul truck driving occurred outside Montana, claimant was not a "worker in this state" and Montana WC coverage was not required.

         Topics:

Constitutions, Statutes, Regulations and Rules: 39-71-118, MCA (1997).
Under 39-71-118, MCA (1997), a worker is an employee for whom an employer must carry WC insurance only if he is a resident of Montana whose employment duties are primarily carried out or controlled within this state. Where the alleged employer had offices in and controlled its business from Washington, and most of claimant's long-haul truck driving occurred outside Montana, claimant was not a "worker in this state" and Montana WC coverage was not required.
Employment: Employee. Under 39-71-118, MCA (1997), a worker is an employee for whom an employer must carry WC insurance only if he is a resident of Montana whose employment duties are primarily carried out or controlled within this state. Where the alleged employer had offices in and controlled its business from Washington, and most of claimant's long-haul truck driving occurred outside Montana, claimant was not a "worker in this state" and Montana WC coverage was not required.
Montana Employment. Under 39-71-118, MCA (1997), a worker is an employee for whom an employer must carry WC insurance only if he is a resident of Montana whose employment duties are primarily carried out or controlled within this state. Where the alleged employer had offices in and controlled its business from Washington, and most of claimant's long-haul truck driving occurred outside Montana, claimant was not a "worker in this state" and Montana WC coverage was not required.

         ¶1 The trial in this matter was held on April 10, 2000, in Missoula Montana. Petitioner, Arthur Schimmel (claimant), was present and represented by Mr. Norman H. Grosfield. Respondent, Uninsured Employers' Fund (UEF), was represented by Mr. Kevin Braun. Respondent, Jasper Express, Incorporated (Jasper Express), was represented by Mr. Dean K. Knapton.

         ¶2 Witnesses: The claimant, Lon Jasper, and Thomas Cauley testified.

         ¶3 Exhibits and Deposition: Exhibits 1 through 3, 6 through 15, 19, 20, 22 through 26 and 28 through 32 were admitted without objection. Exhibits 4, 5, 16, and 21 were admitted over objection. Exhibit 17 was refused. Objections to Exhibits 18 and 27 were withdrawn and those exhibits were admitted. Exhibit 27 duplicates Exhibit 18. The deposition of claimant was also submitted to the Court for its consideration.

         ¶4 Issues: The issues, as stated by the parties, are as follows:

1. Whether Petitioner would be considered an employee covered by workers' compensation insurance or an independent contractor under the Montana Workers' Compensation Act in relation to the accident of November 18, 1998.
2. If the Court finds Petitioner's claim compensable and finds the Uninsured Employer Fund liable for payments, is the Fund entitled to recover from Respondent/Employer benefits paid to Petitioner and the penalty specified in §39-71-504, MCA.
3. If the Court finds Petitioner is an independent contractor, is Petitioner nonetheless entitled to benefits under §39-71-117(4), MCA.

(Pretrial Order at 3.)

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

         FINDINGS OF FACT

         ¶6 Claimant is a long-haul truck driver. He has a seventh grade education but acknowledges that he is able to read and comprehend what he reads.

         ¶7 At the times material to this proceeding, claimant was a resident of Montana.

         ¶8 Jasper Express is incorporated and maintains its place of business in the State of Washington. It has no place of business in Montana. Jasper began business in March 1998. It operates a long-haul trucking business. Until recently it exclusively used flatbed trailers in its operations.

         ¶9 Jasper Express has Interstate Commerce Commission (ICC) authority to operate interstate. Its trucks operate in seven western states, including Montana.

         ¶10 Jasper Express does not own its own fleet of trucks. Rather, with one exception, it has leased trucks (tractor and flatbed units) from drivers who own their own trucks and then contracted with the driver/owners (hereafter "owner/operators") to haul loads for Jasper Express. It has entered into written agreements with each of its owner/operators similar to one it used with claimant. (Ex. 1). The agreement is entitled "Lease of Motor Vehicle Equipment With Driver" (hereinafter "Owner/Operator Lease").

         ¶11 The one exception involves the claimant. At the time Jasper Express began business the claimant was driving a truck for B&K trucking. He did not own his own tractor or trailer and B&K had leased its trucks to Jasper Express under the arrangement described in the previous paragraph. Claimant was unhappy with the condition of B&K's trucks. He contacted Jasper Express about getting his own truck and driving for the company, but he had no funds to purchase or make a down payment on a truck. He asked Jasper Express to assist him in purchasing a truck.

         ¶12 At the time of claimant's initial contact, Jasper Express did not own a flatbed trailer. Around that time one of its other drivers quit and Jasper Express bought that driver's 1973 Peterbilt tractor. Claimant located a used 1988 flatbed trailer and Jasper Express purchased it in contemplation of leasing it to claimant. Jasper Express then leased both the tractor and trailer to claimant. The written agreement, dated September 16, 1998, is found at Exhibit 2 and provides for claimant to pay Jasper Express weekly payments of $278.17 for a term of 104 payments. The agreement further provides that upon making the last lease payment claimant could purchase the tractor and trailer for a nominal, additional payment of $1.32. (Ex. 2 at 4.) The lease was unconditional: Payments were due whether or not claimant drove for Jasper Express. Both claimant and Jasper Express were listed as co-owners on the truck's certificate of title.

         ¶13 Simultaneous to the execution of the truck lease, claimant entered into a separate agreement wherein the claimant agreed to use the tractor and trailer exclusively to haul for Jasper Express. That agreement, as noted earlier, is found at Exhibit 1 and is the same type of agreement Jasper Express used with its other drivers.

         ¶14 Owner/operators, including claimant, operated their trucks under Jasper Express' ICC operating authority. They ...


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