[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 866 ¶ 0 Claimant, sole shareholder of a Subchapter Scorporation, filed a compensation claim alleging a work-relatedinjury. The company and its insurance provider denied liability.Claimant urged that because his wages were used in calculationof the policy's premiums, respondents were estopped from denyingliability by the terms of 85 O.S.2001 §§ 65.2 and 65.3 (theestoppel act).1 The trial tribunal ruled it had jurisdictionand claimant could invoke the estoppel act. A three-judge panelvacated the order. It held that under the terms of 85 O.S.2001§§ 3(8) and (9)2 claimant was neither an employer *Page 867 nor an employee, and the terms of § 65.2 were henceinapplicable. The Court of Civil Appeals (COCA) sustained thisruling. On certiorari granted upon claimant's petition,
THE COURT OF CIVIL APPEALS' OPINION IS VACATED AND THETRIAL TRIBUNAL'S ORDER IS REINSTATED.
"Every employer and every insurance carrier who schedules any employee as a person employed by the employer for the purpose of paying or collecting insurance premiums on a Workers' compensation insurance policy or who pays, receives or collects any premiums upon any insurance policy covering the liability of such employer under the Workers' compensation law by reason of or upon the basis of the employment of any such employee shall be estopped to deny that such employee was employed by the employer in a hazardous employment subject to and covered by the Workers' compensation law if such person receives an accidental personal injury arising out of and in the course of his employment, during the period for which such premium was so received, regardless of the type of business in which the employer was engaged or the type of employment in which the employee was engaged at the time of such injury.
The terms of 85 O.S.2001 § 65.3 provide:
"Every contract of insurance issued by an insurance carrier for the purpose of insuring an employer against liability under the Workers' Compensation Act shall be conclusively presumed to be a contract for the benefit of each and every person upon whom insurance premiums are paid, collected or whose employment is considered or used in determination of the amount of premium collected upon such policy for the payment of benefits as provided by the Workers' Compensation Act regardless of the type of business in which the employer of such person is engaged or the type of work being performed by the employee at the time of any injury received by such employee arising out of and in the course of his employment, which contract may be enforced by such employee as the beneficiary thereof."
"`Employer', except when otherwise expressly stated, means a person, partnership, association, limited liability company, corporation, and the legal representatives of a deceased employer, or the receiver or trustee of a person, partnership, association, corporation, or limited liability company, departments, instrumentalities and institutions of this state and divisions thereof, counties and divisions thereof, public trusts, boards of education and incorporated cities or towns and divisions thereof, employing a person included within the term "employee" as herein defined," The terms of 85 O.S.2001 § 3(9) provide:
"`Employee' means any person engaged in the employment of any person, firm, limited liability company or corporation covered by the terms of the Workers' Compensation Act . . . Sole proprietors, members of a partnership, members of a limited liability company who own at least ten percent (10%) of the capital of the limited liability company or any stockholder-employees of a corporation who own ten percent (10%) or more stock in the corporation are specifically excluded from the foregoing definition of "employee", and shall not be deemed to be employees as respects the benefits of the Workers' Compensation Act . . . Sole proprietors, members of a partnership, members of a limited liability company who own at least ten percent (10%) of the capital of the limited liability company or any stockholder-employees of a corporation who own ten percent (10%) or more stock in the corporation may elect to include the sole proprietors, any or all of the partnership members, any or all of the limited liability company members or any or all stockholder-employees as employees, if otherwise qualified, by endorsement to the policy specifically including them under any policy of insurance covering benefits under the Workers' Compensation Act. When so included, the sole proprietors, members of a partnership, members of a limited liability company or any or all stock-holder-employees shall be deemed to be employees as respects the benefits of the Workers' Compensation Act . . ." * * *
¶ 1 The question presented on certiorari is whether COCA erred when it sustained the three-judge panel's order that ruled the terms of 85 O.S.2001 § 65.24 (the estoppel act) may not be invoked by claimant in today's cause. We answer in the affirmative.
I. ANATOMY OF THE LITIGATION ¶ 2 John Shorter (Shorter or claimant) is sole shareholder of Tulsa Used Equipment and Industrial Engine Services (Tulsa Used Equipment), a Subchapter S corporation engaged in heavy equipment sales and service. National American Insurance Company (NAIC) is Tulsa Used Equipment's workers' compensation insurance provider (these two entities together with the Workers' Compensation Court (WCC) are collectively called respondents). Tulsa Used Equipment's compensation policy contains a "partners, officers and others exclusion endorsement" which excludes from compensation coverage those whose names are listed on the form. Shortens name is listed on this endorsement.
¶ 3 Shorter filed a compensation claim alleging he sustained a work-related injury to his hands on 28 July 2003. NAIC initially provided 52 weeks of benefits to claimant but later denied its liability for the injury. At a hearing before the WCC, Shorter urged respondents were estopped to deny liability by the provisions of 85 O.S.2001 §§ 65.2 and 65.3 (the estoppel act)5. This is so because, despiteShorter's name appearance on the exclusion endorsement, hissalary was in fact included in the calculation of the workers'compensation insurance premiums to be paid by Tulsa UsedEquipment.
¶ 4 Respondents urged that the estoppel act may not be invoked because NAIC did not accept an insurance premium that included Shorter's wages in the calculation; rather, it accepted only a deposit. This is so because Shorter's wages, which were included in determining the premium at the beginning of the policy's term, were deducted from the computations in the annual end-of-policy audit and refunded to Tulsa Used Equipment.6 In their post-trial briefs respondents *Page 868 challenged the WCC's jurisdiction over the cause7 and urged Shorter is not one who may invoke estoppel's protection because 1) he excluded himself from coverage and there is no employer-employee relationship between him and the insured and 2) Shorter's actions prevent application of estoppel here.8
¶ 5 The trial judge ruled that: 1) the court has jurisdiction and 2) Shorter is within the compensation policy's coverage by the estoppel act. This is so because, according to the judge, NAIC breached the terms of its exclusion endorsement.9 A three-judge panel vacated the trial judge's order. It held that under the Workers' Compensation Act (Act)10 Shorter was neither an employer nor an employee. The express text of § 65.211 — referencing the "scheduling of any employee . . ." — was inapplicable. COCA sustained the panel's ruling.12 Claimant seeks certiorari review.
II. STANDARD OF REVIEW ¶ 6 The issue presented calls for resolution of a question of law. Review of contested law is governed by a denovo standard.13 In its re-examination of the trial tribunal's legal rulings an appellate court *Page 869 exercises plenary, independent and non defer cite cases deemed to support their divergent ential authority.14 III. A. THE PARTIES' ARGUMENTS ¶ 7 Respondents urge COCA's analysis — Shorter, in essence, must first be found to be an employee in accordance with the Act before he may invoke the terms of § 65.215 — is correct. Claimant, according to respondents, may not use the estoppel act as a means of "bootstrapping" jurisdiction. They urge an employer-employee relationship must first be established and the jurisdictional requirements met before the estoppel act is applicable.16 Shorter, on the other hand, continues to assert that because his wages were used in calculating the compensation premium, he stands eligible to invoke the estoppel act's protection. Both parties' lower-court briefs cite cases deemed to support their divergent view of the applicable law.
¶ 8 Respondents cite to the teachings of RosamondConstruction Co. v. Rosamond.17 There a sole proprietor obtained worker's compensation insurance for his business, paid the premium (calculation of the premium included the owner's wage), and, later the same day, sustained an on-the-job injury. The court ruled the terms of the Act then in force anticipated that the parties be two separate individuals and unless there is an employer-employee relationship, no liability can arise under the Act.18 Although claimant there sought the estoppel act's protections, the court maintained the enactment could not be invoked by the claimant unless an employer-employee relationship is first established.19
¶ 9 Claimant, in his lower-court materials, cites Youngv. the City of Holdenville20 and the court's decision in a series of Indian sovereignty cases.21 Young teaches that an *Page 870 insurance company is estopped to deny that an elected city official is an employee when the official's wages were used in calculating compensation premiums and the claimant's relationship with the city is in the nature of employer and employee. The court in Young plainly instructs that the enactment of the estoppel provisions disposes of the contention that the relation of master and servant or employer and employee must be shown to exist as a prerequisite to recovery in those causes where the estoppel act is invoked.22 Young further distinguished Rosamond by noting that there was no representation of an employer-employee relationship in favor of which an estoppel could be asserted.23Dominic24 and its progeny (the Indian sovereignty causes) dealt with the WCC's jurisdiction where an employer's status as a covered entity under the Act was challenged.25 These cases teach that a compensation insurer who collectsinsurance premiums that are based on claimant's monetarycompensation is estopped to deny insured's status as a coveredemployer.26 In these latter cases the court held that once the existence of a workers' compensation insurance policy that covers the claimant is established, jurisdictional requirements for proceeding before the trial tribunal are deemed met.
B. DOMINIC CONCRETIZED THE APPLICATION AND OUTERREACHES OF THE ESTOPPEL ACT, 85 O.S.2001 §§ 65.2 and 65.3, TOPROVIDE COMPENSATION PROTECTION FOR ALL CLAIMANTS WHO AT THETIME OF INJURY WERE ACTING FOR THE INSURED AND UPON WHOSEEARNINGS THE INSURER COLLECTED PREMIUMS
¶ 10 Claimant's status is of no consequence in determining here whether the estoppel act may be invoked. The sole legal question presented is whether the insurance carrier is statutorily estopped from denying workers' compensation coverage. When denying an award to this claimant, the three-judge panel clearly relied on, and gave paramount importance to, Shorter's express exclusion from the compensation protection to be provided by the carrier. This analysis was clearly in error. The terms of §§ 65.2 and 65.3 are utterly devoid of requirements that either contractual or consensual elements of claimant's relationship to the insured be established.27 The focus is, rather, on the rights of an injured claimant against the insurance carrier of the entity for whom claimant was acting when injured. These rights are purely statutory.28
¶ 11 Respondents' interpretation of and reliance on the court's pre-Dominic jurisprudence (dealing with the estoppel act) is in error. Indeed, a review of this body of law reveals the cacophony of voices entangling application of the estoppel provisions.29 The *Page 871 discord stands clearly resolved by Dominic30 and its progeny.
¶ 12 An insured's compensation is policy is treated as a guarantee that its workers are protected by the Act.31Once the existence of workers' compensation insurancecovering claimant is established, jurisdictional requirementsfor proceeding in the compensation court are deemedmet.32 The tribunal then acquires power to entertain the claim. Although the Indian sovereignty causes used terms that addressed themselves to an to an employer's status under the Act, Dominic concretizes33 the doctrine ofestoppel by imposing on a claimant who invokes the doctrine theduty to prove but three and elements: 1) the claimed injuryoccurred during the time the premium-paying insured maintained acompensation liability policy 2) claimant's earnings were usedin the calculation of the premium that was paid by the insuredand 3) claimant's injury occurred while he was acting for theinsured.34 Once this proof is met, coverage is effected under the estoppel act through the law's conclusive presumption in claimant's favor. The presumption is created by premiums on the policy having been collected or a worker's employment having been considered or used in determining the amount of premium collected upon the policy regardless of the type of business in which an employer is engaged or the nature of the employee's work.35
¶ 13 Respondents' analysis of today's cause would make utterly immaterial the consideration of a worker's remuneration in setting and accepting compensation premiums.36 The terms of the estoppel act are plainly contemplated to apply to all those situations where a worker's employment is not covered by the specific provision of the insured's policy but whose wages were used in premium *Page 872 calculations.37 Any other interpretation of the estoppel act would be contrary to its terms.38 To limit the benefits of the Act only to those whose status as "employer" or "employee" or whose "employment" is beyond legal question would eliminate all need for the enactment itself and stand inapposite to Dominic's teachings.39 Those who are in need of estoppel's protection are not those who may gain legal standing by meeting the Act's jurisdictional requirements.
¶ 14 The court's decision in Rosamond,40 likewise, cannot be read to support respondents' assertions here. Its teachings belong to the body of pre-Dominic jurisprudence and are inapplicable to today's dispute.41 Any doubts that may have existed concerning estoppel's application were silenced by Dominic42 and its progeny.
¶ 15 Estoppel's reach is broad. While the text of § 65.243 appears to bar only an insurer's initiated challenge to the "hazardous" nature of the insured's business, the intended purpose of the quoted word in the enactment has been construed to extend the estoppel act's benefit to all disputes spawned by the insurer's denial of its insured's status as an employer covered by workers' compensation liability.44 The provisions, likewise, have been held to estop a carrier from denying liability to an insured employer who had fewer employees than the minimum number required by the Act.45 Estoppel's purpose is to prevent an insurer who accepts premiums from evading liability for benefits due under the law.46 Today's controversy falls into the ambit of those with scenarios the statute was enacted to cover.
¶ 16 Shorter has met his burden. Evidence shows that insurance carrier used claimant's wages to compute the premium due. The premiums that included Shorter's salary were in fact collected, but after claimant's accident that gave rise to the injury here in suit, the insurance carrier refunded the excess premiums after a routine end-of-term policy audit.47 Anunrequested post-accident refund does not defeat the employer'sor insurer's already incurred liability.48 This legal maxim applies with even *Page 873 greater vigor to a public-policy statute that is bottomed on the principle that it would be inequitable to allow a workers' compensation insurer to accept premiums and then contest coverage.49 An insurer who accepts a premium must likewise accept that it affords protection for all those upon whose earnings the premium is based. This protection extends from the time of premium payment through the policy's maturity, absent a pre-accident refund and notice to the insured of the disclaimed individual. If a premium is in fact overpaid and no refund is effected before the accident, the status of the worker stands fixed as that of one covered by the compensation policy.The duty to establish proper procedures to monitor premiumpayments computed on the basis of an insured's personnelexpenditures and guard against over-payment rests solely on theinsurer. An end-of-policy audit and accompanying refund will not protect an insurer from liability for an accident that occurs during the period the policy is in effect. In sum, Shorter's status as one who may invoke the estoppel act stands undenied.50 This holding comports with the well-established rule that the Workers' Compensation law should be liberally construed in favor benefits.51
¶ 17 There is an additional basis for today's conclusion that we raise sua sponte.52 Before respondents sought to deny liability for claimant's injury, insurance carrier paid 52 weeks of temporary total disability. Its payment of temporary total disability saws contest of the employment-related nature of Shorter's harm constitutes a waiver of the defenses available against liability.53 IV. SUMMARY ¶ 18 Once the existence of a workers' compensation insurance policy is established in a worker's favor, that worker is free to invoke the jurisdiction of the Workers' Compensation Court. A claimant who relies upon the estoppel act, 85O.S.2001 §§ 65.2 and 65.3, must show that the claimed injuryoccurred when claimant was acting for the insured and premiumscomputed on his/her earnings were accepted under a policyinsuring the insured against the liability risk under theWorkers' Compensation Act. Once this is shown, the insurance contract is conclusively presumed to be for the benefit of the injured claimant. Claimant has the burden of proving the facts necessary to raise the Act's conclusive presumption in his favor. Here, claimant has met that burden.
¶ 19 WATT, C.J., WINCHESTER, V.C.J., HARGRAVE, KAUGER, EDMONDSON and COLBERT, JJ., concur.
¶ 20 LAVENDER and TAYLOR, JJ., dissent.
Respondents, in their post-trial brief, assert the contract for insurance was executory. The condition precedent was for the insurer to estimate wages and receive a deposit. The condition subsequent was to audit the payroll and determine the actual premium due. According to respondents, only after the insurer made a refund was the contract complete and the premium considered actually paid. No controlling authority is cited for the claim that this contract provision may protect the insurer from the operation of the estoppel statute.
Claimant, owner of respondent employer, because of his election in accordance with § 8 was excluded from the definition of employer. (Three-judge panel order, p. 1) For the text of § 8 see supra note 2.
Respondents urge that estoppel is an ancillary issue and because Shorter did not contest the denial of his status as an "employee," he concedes that the court cannot award benefits regardless of other factors. Today's pronouncement deals with the application of the estoppel act and its impact upon the court's jurisdiction. Neither is an ancillary issue. Claimant did not concede to respondents' interpretation of his status as an employee.
Respondents also cite to Mills v. R.T. "Bob" Nelson'sPainting Service, 1966 OK 262, ¶ 9, 421 P.2d 849, 851. The court there found the claimant was an independent contractor and not an employee. He, hence, was not entitled to compensation benefits. There the claimant unsuccessfully sought to invoke the estoppel provisions. The court ruled the estoppel act goes only to the question of hazardousness, and the nature of claimant's work was clearly hazardous and not in dispute, (citingFolsom Auto Supply v. Bristow, 1954 OK 254, ¶ 16,275 P.2d 706, 711) We note that although the body of the opinion does not address whether the claimant's wages were considered in setting compensation premiums, the court's syllabus provides "[t]he effect of the `Estoppel Act, . . . is to prohibit interposition by an employer of the defense that the employment of a claimant was nonhazardous if the remuneration paid claimant is scheduled, considered or used in determining the amount of premium paid for workmen's compensation insurance."supra.
For support of respondents' proposition — that jurisdictional elements must first be established before the estoppel act may be invoked — see Rosamond, supra note 17, at ¶ 14 at 395. See also Mills, supra note 17, at ¶ 9 at 851.
The second element applies even if the premium was calculated using a method that considered the scheduling of workers or the number of workers and their job duties. Dominic, supra note 21, ¶ 11 at 938.
Estoppel implements the policy decision of the legislature that it would be inequitable to allow a workers' compensation insurer to accept premiums and then contest coverage. Miller v.Sears, Roebuck and Co., 1976 OK 67, ¶ 14,550 P.2d 1330, 1334.