Jenny's Cleaning Service & Wausau Insurance v. Reddick

James R. Cooper, Judge,

dissenting. I dissent because I disagree with the majority’s holding that, although the appellee failed to file an A-18 form, she was nevertheless in compliance with Ark. Code Ann. § 11-9-102(2) (1987), which requires a sole proprietor to file written notice with the Workers’ Compensation Commission if the proprietor wishes to be included in the definition of “employee” under the Act so as to qualify for workers’ compensation benefits in the event of injury.

The result reached by the majority is contrary to every indication concerning Arkansas law on the issue of whether a sole proprietor must file a written election with the Commission in order to be considered an employee under the Workers’ Compensation Act. Arkansas is listed as being among those states where a sole proprietor cannot be an “employee” of the sole proprietorship within the meaning of the Workers’ Compensation Act. Annotation, Ownership Interest in Employer Business as Affecting Status as Employee for Workers ’ Compensation Purposes, 78 A.L.R. 4th 973 (1990). Furthermore, an authority which the majority opinion cites as persuasive states that, under Arkansas law, an employer who fails to file the statutory form electing coverage is not an “employee” under the Arkansas Workers’ Compensation Act. 4 Larson The Law of Workmen’s Compensation § 92.25, N.25 (1993) (citing Gilbert v. Gilbert, 292 Ark. 124, 728 S.W.2d 507 (1987). Finally, we ourselves have cited the Supreme Court’s Gilbert opinion for the very proposition we reject today. In Stone v. Patel, 26 Ark. App. 54, 759 S.W.2d 579 (1988), we said that:

It is clear that after 1979 sole proprietors could be considered employees, but only if they elected to be included in the definition of employees and filed their election with the Commission. Gilbert v. Gilbert Timber Co., 292 Ark. 124, 126, 728 S.W.2d 507 (1987).

Stone v. Patel, supra, 26 Ark. App. at 58 (emphasis in the original).

Nor do I agree with the majority’s conclusion that the appellee substantially complied with the statutory writing requirement by obtaining a workers’ compensation insurance policy. It is generally held that:

The employer’s election to come within a compensation act. . . must be indicated in the manner prescribed by the act, and if the employer does not manifest his election in accordance with the statute he is not covered even though he intended to be, and believed he was, covered.

99 C.J.S. Workmens’ Compensation § 122 (1958). The appellee in the case at bar clearly did not manifest her election in the manner prescribed by the Act. Furthermore, although we have never addressed the question of whether substantial compliance would be sufficient to fulfill the statutory requirement of a written election, see INA/Cigna Insurance Company v. Simpson, 27 Ark. App. 222, 772 S.W.2d 353 (1989), I submit that there was clearly no substantial compliance with the statutory requirement in the case at bar, where the appellee failed to list herself as the proprietor of the business in her workers’ compensation insurance application, and never notified the Commission, in writing or otherwise, of her election to be considered an employee for workers’ compensation purposes. In a related area of workers’ compensation law, we have held that this combination of deceit and failure to file does not constitute substantial compliance. See Rogers v. International Paper Company, 1 Ark. App. 164, 613 S.W.2d 844 (1981). I see no basis for a distinction in the case at bar, and I respectfully dissent.

Pittman, J., joins in this dissent.