Submitted: June 13, 2013
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
JAMES JEREMIAH SHEA JUDGE.
The parties agreed to submit this matter to the Court upon agreed facts and briefs, and the Court treated the parties' submissions as cross-motions for summary judgment pursuant to ARM 24.5.329. Petitioner made a claim for benefits for injuries sustained in a fall from a roof while a resident of the Butte Prerelease Center under contract with the Montana Department of Corrections. The partnership that hired Petitioner to replace the roof on a rental house was uninsured, as was the owner of the house. The Uninsured Employers' Fund maintained that Petitioner was an employee of the partnership which was in turn a subcontractor of either the owner of the house or the Butte Prerelease Center under § 39-71-405, MCA.
Petitioner was at most only a casual employee of the owner of the house where Petitioner was injured. Although the Butte Prerelease Center was required to assist its residents in attaining employment, there was no contractual relationship between the Butte Prerelease Center and the partnership that employed Petitioner. Since there was no statutory employer pursuant to § 39-71-405, MCA, the Uninsured Employers' Fund is liable for Petitioner's workers' compensation benefits, with a right to indemnification from the partners of the partnership who hired and employed Petitioner.
¶ 1 On October 3, 2011, I issued an Order Granting Motion for Default Judgment against Paul Kessler and Steven Kessler d/b/a Artistic Exteriors for failing to respond to the Uninsured Employers' Fund's Third Party Petition and Request for Amended Caption filed on June 22, 2011, and for failing to appear at the hearing held on September 23, 2011, following this Court's Order to Respond or Show Cause.
¶ 2 On December 12, 2012, counsel for the Uninsured Employers' Fund (UEF) advised the Court that the parties were in agreement to submit this matter on briefs, and trial was vacated. On January 14, 2013, Petitioner Olin Jensen's attorney e-mailed the Court that the parties desired to await the Court's ruling on Third Party Respondent Daniel Christianson's Motion for Leave to Re-file Motion for Summary Judgment before agreeing to a briefing schedule. Thereafter, I issued my Order denying Christianson's motion and requiring the parties to agree to stipulated facts or a stipulated record and a briefing schedule in order to facilitate submission of this matter without trial. An Order Setting Briefing Schedule was issued on March 27, 2013, setting dates for the simultaneous submission of briefs and a joint statement of agreed facts. The Court subsequently granted an extension to file the stipulated facts upon agreement of the parties.
¶ 3 The parties submitted a Joint Statement of Agreed Facts and Issues (Joint Statement) and have fully briefed this matter. Since there are no issues as to any material fact, I will address the parties' submissions as cross-motions for summary judgment pursuant to ARM 24.5.329.
¶ 4 Issues Presented: The Court restates the issues set forth in the parties' Joint Statement,  as follows:
Issue One: Whether at the time of Jensen's December 10, 2010, injury, Community Counseling & Correctional Services d/b/a Butte Prerelease Center (Butte PRC) was Jensen's statutory employer pursuant to § 39-71-405, MCA, and its insurer, Montana State Fund (State Fund), is the liable insurer for all benefits paid or payable on Jensen's claim and obligated pursuant to § 39-71-504, MCA, to reimburse the UEF for all benefits it paid on the claim.
Issue Two: Whether at the time of Jensen's December 10, 2010, injury, Christianson was an uninsured employer as defined by § 39-71-501, MCA, and Jensen's statutory employer pursuant to § 39-71-405, MCA, and therefore, obligated pursuant to § 39-71-504, MCA, to indemnify the UEF for all benefits paid or payable with respect to Jensen's claim.
Issue Three: In the event the Court finds that neither the Butte PRC nor Christianson was the statutory employer under § 39-71-405, MCA, for Jensen's claim, then to the extent the UEF has liability with respect to Jensen's claim and pursuant to the Court's Order Granting Motion for Default Judgment, the uninsured employers, Paul Kessler and Steven Kessler d/b/a Artistic Exteriors, are ordered, jointly and severally, to indemnify the UEF pursuant to § 39-71-504, MCA, for all benefits paid and payable with respect to Jensen's claim.
¶ 5 Jensen was a resident at the Butte PRC from August 2010 to March 2011.
¶ 6 Residents at the Butte PRC are in the custody of the Montana Department of Corrections (DOC). A contract between the Butte PRC's parent division and DOC governs the services provided to residents by the Butte PRC, which include counseling, education, and work placement. The Butte PRC must follow guidelines prescribed by DOC in assisting adult offenders in transitional living, including job placement.
¶ 7 Pursuant to the contract between DOC and the Butte PRC's parent division, DOC pays the Butte PRC a daily fee for the successful delivery of services to each resident. The contract includes the provision that the Butte PRC must comply with the provisions of §§ 39-71-120, -401, and -405, MCA. The Butte PRC has an internal requirement to confirm that an employer for whom a resident performs work has workers' compensation coverage. If a resident is injured while performing community service for a nonprofit organization, the Butte PRC has workers' compensation coverage for that resident.
¶ 8 The Butte PRC has an internal policy not to send a resident to an employer for community service work or paid work if the employer does not have workers' compensation coverage. In accordance with its parent division's contract with DOC, the Butte PRC physically checks on residents while outside of the center, including checking on them at job sites. If the Butte PRC learns that a resident is at a job with no workers' compensation coverage, it removes the individual from the job.
¶ 9 As part of their treatment plans, residents are required to maintain employment to meet their financial obligations, and they are assisted in finding employment by staff at the Butte PRC who also direct residents to non-paying community service work.
¶ 10 Jensen was not an employee of the Butte PRC, and the Butte PRC is not a temporary employment agency. The Butte PRC posts jobs on a bulletin board at its facility and employs an "Employment Specialist" who assists residents in finding employment.
¶ 11 The Butte PRC has a series of questions it asks employers before it sends a resident for either paid work or community service work in order to document vehicle insurance and registration, drivers' licenses, and the employer's workers' compensation insurance coverage.
¶ 12 On December 8, 2010, Paul Kessler, on behalf of Artistic Exteriors, phoned Scott Harding at the Butte PRC looking for workers for a roofing job in Anaconda. Harding informed Kessler he needed proof of vehicle registration, drivers' licenses, and workers' compensation coverage. Harding had Jensen and another resident, Corbin Eystad, complete a form to work on the job for Kessler.
¶ 13 On December 10, 2010, Kessler picked up Eystad and Jensen to work on the roofing job in Anaconda. Harding was out of the office at the time, and when he arrived later and realized Kessler had not provided proof of workers' compensation coverage, Harding travelled to the job site. On December 10, 2010, while working on the roof of the house ...