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Korman Marketing Group v. Independent Contractor Central Unit

Court of Workers Compensation of Montana

May 3, 2005

KORMAN MARKETING GROUP Appellant
v.
INDEPENDENT CONTRACTOR CENTRAL UNIT Respondent.

          Submitted: February 16, 2005

          FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT

          MIKE MCCARTER JUDGE

         Summary: Icefox (his real name), a dogsled racer who had previously operated a business offering dogsled rides, bid and entered into a contract to provide dogsled races to guests of the operator of a guest ranch. The first contract was for the winter of 2001-2002. Icefox requested and received advances so he could purchase dogs and equipment. He in fact purchased the necessary dogs and equipment, laid out the specific dogsled routes on Ranch property, employed and paid others to assist him, supervised and operated the rides, and made safety decisions. He entered into a second contract for a second season, again specifying a price to which the Ranch then agreed. He did not enter into a contract for a third season and then sought unemployment benefits. The Ranch objected to his claim on the ground that he was an independent contractor and the matter was referred to the Independent Contractor Central Unit of the Montana Department of Labor and Industry, which is responsible for making an initial determination as to whether a worker is or is not an independent contractor. Following an ICCU decision, the Ranch filed a petition with the Workers' Compensation Court seeking a final determination of Icefox's status.

         Held: Icefox was an independent contractor.

         Topics:

Independent Contractor: Independent Business. Where an individual has previously been in the same line of business, negotiates a contract for the same sort of services and does so at arm's length, intends to go back into his prior business, thereafter purchases the necessary equipment to operate the business, hires and pays employees, and is responsible for the actual services, including safety, the independent business requirement under part B of the AB test is met.
Independent Contractor: Independent Business. The fact that a contractor provides his or her services serially, a single client at a time, rather than to multiple clients simultaneously, does not disqualify the contractor from being deemed an independent contractor.
Independent Contractor: Independent Business. The fact that a contractor is not engaged in an actual business at the time he solicits a contract for his or her services does not disqualify the contractor from being deemed an independent contractor where he or she has been engaged in the same business previously and shows a clear intention to recommence that business as an independent enterprise.
Independent Contractor: Elements: Tools and Equipment. The fact that a contractor may rent or lease, or be provided with the premises on which he or she conducts business, is not per sè inconsistent with being an independent contractor.
Independent Contractor: Specific Cases. A dogsled racer, who had previously operated a business giving dogsled rides to others; who entered into an arm's-length contract to provide dogsled rides for a guest ranch; specified the contract price, which was paid in installments; hired and paid his own employees; purchased and owned his own dogs, harnesses, truck for transport, and other equipment; laid out the dogsled route; was contractually committed to providing services; could not be terminated by the hiring party without liability; and was responsible for the operation and safety of the dogsled rides, was an independent contractor.

         ¶1 The trial in this matter was held in Helena, Montana, on February 16, 2005. The petitioner was present and represented by Mr. Tom W. Stonecipher and Ms. Bridget W. leFeber. Respondent, Independent Contractor Central Unit, was represented by Mr. Joseph R. Nevin.

         ¶2 Exhibits: Exhibits 1 through 31 and 35 through 37 were admitted without objection. Pages 2 through 8 of Exhibit 33 were admitted; the remaining pages of that exhibit were refused. Pages 33 through 38 and page 41 of Exhibit 34 were admitted; the remaining pages of that exhibit were refused. At the time of trial, the Court reserved ruling on Exhibit 32, which is the Determination of the Independent Contractor Central Unit. That exhibit is now admitted for purposes of procedural history only.

         ¶3 Witnesses and Depositions: Dan Martin, Kelly Johnson, and Icefox testified at trial. In addition, Icefox's deposition was submitted for the Court's consideration.

         ¶4 Issues Presented: The sole issue presented for the Court's determination is whether Icefox was an independent contractor or an employee when providing dogsled rides for Korman Marketing Group during the winters of 2001-2003.[1]

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

         FINDINGS OF FACT

         I. Korman Marketing Group, L.P.

         ¶6 Korman Marketing Group, L.P. (KMG) is a Texas Limited Partnership registered to do business in the state of Montana. It is an "experiential marketing" and consulting business, specializing in event planning for other businesses. As a part of its event planning business, it plans for and provides unique "experiences" for customers of its clients.

         ¶7 At times relevant to this action, KMG had a contract with Philip Morris, USA (Philip Morris), to provide event planning services for it at Crazy Mountain Ranch (Ranch). The Ranch is a guest facility located in Clyde Park, Montana. As a part of a rewards program to advertise its cigarettes, Philip Morris gives away Ranch vacations to selected smokers. The Ranch vacations are aimed at providing a western experience and promoting the Marlboro brand of Philip Morris cigarettes.

         ¶8 KMG planned and provided "experiences" for the Ranch guests. Examples of the "experiences" it provided during the winter months are downhill and cross-country skiing and ice fishing. In 1999 it added dogsled rides. Since that time it has contracted with three different dogsled providers to provide the rides.

         II. Icefox

         ¶9 Icefox is an experienced dogsledder. He has participated in dogsled racing and was known on the circuit as "Icefox," a name he legally adopted in January 1999 or 2000 (Icefox Dep. at 5.) During the winters of 1991 through 1994, while living in Colorado, he provided dogsled rides to the public. Although he had a tough go of it and never made a profit, his intent was to make a profit. At the time, he owned his own dogs, sleds, and harnesses. Although he offered dogsled rides to the general public, many of his riders were guests of the various ranches over which he ran his dogs and sleds. In some cases, Icefox paid the ranchers for use of their land and trails.

         ¶10 When operating his dogsled rides in Colorado, Icefox used the name "Icefox Racing." He also used the name "Icefox" in races he entered during that time.

         ¶11 From 1995 until 1999, Icefox focused on dogsled racing and ...


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