Geiger v. Uninsured Employers' Fund

J0SEPI-t GEIGER,

             Petitioner and Appellant,




             Resporident and Respondent,                  . .-,.
                                                          - .      , ,., ,*-,:,,,-
                                                                   .
                                                                   ;
                                                             .... '><
                                                          ">,~      .   ,
                                                                            ,
                                                                                t ilill.

      and

DAVID D K K F R T , d/b/a DAVID
DECKERT 'TRUCKING,


             Respondent and Ernployer



APPEAL FROM:        IVorkers' Compcnsatio~~
                                          Coun of the State of tvlontaria,
                    Honorable Mike Mecarter, Judge Presidilig


CObYSEI Ob RECORD.

             For Appellant:

                    blan~inI.. Howe. Navratil, Herring & Mow?, Glendive, Montana

             For Respondent:

                    Daniel B. hlcGregor, Departrilent of Labor and lrrd~~siry
                                                                           Legal Services
                    Division. Helena, Molita~ia

                    Richard I.. Burns, Attor~~eyLa\&-,
                                              at     Glendive, Montana


                                                 Subniitted on Briefs: Jtinc 27, 2002

                                                             I)eeicied: Deeernbcr 20, 2002
Jusricc W. \i;iliiam Leaphari deiivered the Opinion of the Coun.

Yi     Appeliant Joseph Geiger (Geiger) ai-,pe"i~ ii.017; LYarkirs' Coi:ipensetioi~Court's
                                                        the

judgment dated hugust 22,2001, where the Workers' Compensatioii Court ruieci that Geiger

Bas not an employee at the time of 111si n j u and tha-cfore u a s not entitled to eo~llpensation
                                               ~

from the Uninsured Eniplojers' Fund (UEF). We affirm.

72
 1     Geiger presents the following three issues on appeal:

73     1. Did the Workers' Compensation Court err in concluding that David Deckert d/b!a

David Deckert Trucking was not an "employer" as defined by 3 39-71-1 17(l) and (4), MCA

(1907)?

'3
1      2.     Did the Workers' compensation Court err in concluding that Geiger was not

an "employee" or "\vorkern as defined by    4 39-71 -1 1 P,(l)(a),h4CA (1997)?
15     3.     Did the Workers' Compensation Court e n in concluding that neither the E E F

xior Deckerr was equitably estopped from denying compensation for Geiger's injuries?

                                         Background

1' 3   In Marc11 of 1997, Cieigerwas hircd by David Deckert (Deckert), d'b'a David Deckert

Truck~ng(Deckert Trucki~ig),an rnterstate truckcng business under author~tyfrom the

Interstate Con-irnerce Co~nrncss~on
                                 (ICC). In late 1997, Deckert financed the purchase o f 3

sccoltd truck and leased a secorld trader. Geiger bcgan dr~cing second truclc and leased
                                                              the

tracler In 1998, Deckert's attornej drafted an Independent contractor agreement for Geiger.

I\lthough he mas repeatedlq asked to do so, Ge~ger
                                                 neLer signed the agceemcnt. Flnally,
I>eckcrtstarted withholding taxes and social security Fium Geiger's wages, and in May 1998,

hi: obtained xi-orhcrs' cornpensarioa covcragc for Geiger.

f! 3    A cotiple of months later. Geiger and Dcckert discussed Geiger's purchase of the

second truck. Because Geiger was unable to secnrc adequate financing, the two parties

entered into a sales contract whereby Geiger paid monthly installnicnts to Deckert who in

turn paid the original lender. The contract provided that Geiger would pay the insurance

premiums, maintenance, license fees and fuel costs for the truck. The parties also entered

itito a lease agreement that required Geiger to pay the license fees, insurance, and

maintenance of the trailer. Both the contract and the lease agreement specifically provided

that during ti-ic terms of tlze agreements Geiger was required to operate the tractor and rrailer

under Lleckert Trucking's ICC authority, because Deekert recognized that until the truck was

in Geiger's name, Geiger could not license and insure the truck, nor get his o\vn ICC

authority required for certain interstate hauls. Occkert's attorncy drafted the sales contact

and lease agreement in September of 1998; ho\vever, they were not signed until April 1 ,

1999.

75      At the time the contract and lease were signed, Deckert notified Geiger that Decke~t

had stopped payroll withholdings and had quit paying workers' compensation preniiums for

Geiger. Evcn prior to the signing of the salcs contract and lease agreetncnt on April 1,l"rO,

and at least as carlg as October 1998, Geiger arranged his own loads. A substantial part of

Geiger's hauls were arranged by Geiger without the aid of Dcckert, and in many cases clients
paid Geigcr directly. Geigcr also arranged brokerage loads by co~ilacting brokerage firms
                                                                        thc

directly. 1)eckerr's invoiitcmeni was Iiniieci IG noiifyi~~g brokers that Geiger lvas
                                                           the

operating under Dcckcrt's I C t aiitl~ority. Paynents for loads arranged through brolterage

firms \%eretypically remitted to Deckert. After April 1 1999, Deckert deducted amounts due

to himsclf under tile tr~ick
                           contract and lease from the amounts receited for loads d r i ~ e n
                                                                                            by

Geiger. Most ~mportantly,
                        Dechcrt d ~ nor take a percentage or fee for loads and made no
                                    d

profit with respect to Geiger's trucking operations.

71 6   The amo~ints
                  received by Deckert were insufficient to cover Geiger's payments under

the contract and lease. As a result, Deckcrt fell behind in his payments to the original lender.

On June 23, i999, l1cche1-tinfot-med Geiger that the monies received were insufficient to

cover Geiger's expenses. 'fwo days later, while driving the truck through Illinois, Geiger

sustained a closed head injury when he fell ten feet from the top ofhis tractor trailer to the

concrete. At the time he was injured, Geiger was hauling a load for ProAm, a brokerage

company, pursuant to Deckert's ICC authority. Ilcekert did not have ~iorkrrs'
                                                                            co~npensation

insurance coverage at tlie time of Geiger's injury.

77     On October 21, 1999, Geiger filed a First Report of Injury with the Montana

Ikpartment of I..abor and Industry which was routed to the L'ninsured Employers' Fund on

Novembcr 2,1999, because Ueckert was ini insured. Initially, thc UEF was unable to make

a cornpensability determination without additional investigation; howeverl it paid benefits

to Geiger under a filll reservation of rights pursuant to 9 39-71-508, MC:A (1'497). After an
investigation, the LJZF denied coverage for rhc ciairn based upon its conclusion that Cieiger

                              wiifl-related il/ury arid that he \xvasnot \%.,orking an enlployec
did not suffer a acon~pensa'biz                                                   as

of L3eckert at tlre tirne of his claimed injury. The UEF ofticiafly denied Gcigcr cot-crag on

April i 0. 20110.

78     Geiger appealed the LIEF'S detem~ination tlie Workers' Conipensation Court. At
                                              to

trial, the I!EF defended its initial denial, reasoning that Geiger was not an "employee or

worker in this state" as required by   9 39-71-1 18(10)(a), 2.LC:A   (1997). Conversely-,during

thc trial Deckert argued that Geiger was precluded fiom workers' compensation bencfits

because Gciger was an independent contractor as defined in       4 39-71-120, MCA (1997).

9      The Workers' Compecisaiion Coui? ruled that Deckert was not an "employer," and that

Geiger was not his "employee" as defined in the Workers' Compelisation Act. Therefore,

it concluded that Geiger was not eligible for benefits under the Act.            The Workers'

Compensation Court did not address the issue of whether Geiger was an independent

contractor. Geiger filed a timely post-trial motion in which he raised the issue of equitable

estoppel. The Workcrs' Compensation Court denied Geiger's motion for recoilsideration and

rejected the eqwitable estoppel argument. Following the timely filing of this appeal, David

Ileckert passcd away and his estate elected not to participate further.

                                       Standard of Review

7 10   't'llis Court en~ploys two standards of rcvieiv for decisions of the Workers'

Compcnsat~onCourt. u c rcvle\\ the find~ngs fact to determine if they are supported bv
                                          of
subsraniia!, credihie evidence, and       reviiw
                                        1~-c       conciusions of law to dctcnnine iTtitcy arc

correct. Haic   1.
                 ,   R t ~ i i Loggijzg, I999 M1302," 1 1 297 Mont. Ib5,Tj 1 i : 990 P,2d 12.15;
                               l

(I: 11: Tllijiit?ir. 1'(1licl~: View Estiltes (lOOS), 272 Mon:. 386; 390, 901 t<2d 75;79.

                                            Discussion

7 11   Workers' cornpensation benefits are determined by the statutes in effect as ofthe date

ofinjury. Buckmutr v. .il.fontunai)euconess Hosp. (1986), 223 Mont. 318,321,730 P.2d 380,

382. The 1997 version of the Act applies since it was in effect at tile time of Geiger's injury.

Accordingly, all statutory references hereinafter \+-illbe to the 1997 version of the Act unless

otherwise indicated,



  12   Did the Workers' C:otnpensation Court e n in concluding that Deckert was not an

"employer" as defined by      3 39-71-1 17(1) and (4), MCA?

1 13 The resolution ofthis casc involves the interpretation and application of i j $ 39-71-1 17
1
and 39-71-118, MCA, which define "employer" and "e~nployee" under the Montana

Vv'orkers' Compensation Act. Because the .Act "applies to all employers, as defined in 39-71 -

117, andtoall employees, as definedin 39-71 -1 18," these provisions indirectly establish who

must pro\-ide workers' compensation coverage and \\:hat workers are covered under the Act.

Section 39-7 1-30 1( 1 !,MCA.

  13 Two subsections of i j 39-71-1 17, MCA, defining "employer" apply to the case at bar.

The first definition is specific to interstate motor carriers such as Deckert Trucking. It
provides that ~'(4j[ajn interstate or intras~atccommon or contract motor carrier doing

htisiness in this state who    drivers in this stiii:: is considered the employer, [andj is liable

forworkers' compensation premiums . . . ." Section 39-7 1-1 17(4), MCA (emphasis added).

Applying this definition to the facts before it; the Workers' Compensation Court found that

Deckert Trucking was doing business in Montana, that it was an interstate contract motor

carrier, and that Geiger drove within Montana; Itowever, the Workers' Compensation Court

ultimately concluded that Deckert did not "use" Geiger and therefore was not his employer

under this definition.

7 15   in concluding that Deckert did not "use" Geiger in his intcrstate trucking business, the

Workers' Compensation Court focused on whcthcr Geiger had benefitted Dcckcrt. The

findirrgs of the Workers' Compensation Court indicated that Deckert had not received any

percentage or other k e for the loads carried by Geiger, and that he had not recei\!ed any

financial benefit from Geiger's actual expenses of operating the truck since the signing of

the contract and lease on April l 1999. Because the Workers' Compensation Court was

"unable to disccm any 'use' to which Deckel-t put Geiger after they entered into thc truck and

trailer contract arid lease," the 'vlrorkers' Compensation Court held that Deckert was not an

cmployer under C; 30-71-1 17(4), MCA.

  16   The Workers' Conipensatio~~
                                Court then applicd a second, n~orc
                                                                 general definition of

"employer" which defines an employer as one who "has a person in scrvicc under an

appointnlent or contract of hire . . . ." Section 39-71-1 17(l)(a), MCA (emphasis added).
Applying the sanlc reasoning mentioned in tlze preceding paragraph, the Workers?

Coarpensatiorn Couit riricd that Geiger was not iii servicc ro Dccltcrr. A4ccordingly9
                                                                                     the

\&rot-kcrs'Collipensation Court held that Deckert was not at1 employer under the Act.

     17 Geiger maintains that tile IVorkers' Compensation Court erred in concluding that

Deckert was not an ernploycr under the Act. First, Geiger argues that the Workers'

Compensation Court's interpretation of "use" in the first definition is too narrow because

it requires an employee to financially benefit or profit his employer. Geiger asserts that the

Workers' Compensation Court's interpretation of "use" would allow a floundering business

to avoid paying workers' compensation premiums for its employees solely because it was

not turning a profit.

?i
 18 Because the resolution of this issue is dependent on the meaning of the ~vord
                                                                                "use"

in   5 39-71-1 17(3), MC.4,   we look to the rules of statutory construction which require thc

                                     according to its plain meaning. If the language is clcar
language of a statute to be co~lstnied

and unambiguous, no further interpretation is required. Kriuscl~ Stcite Liinzperzsarion Iris.
                                                                v.

      2002 MT 203, T/ 33,3 1 l Mont. 210, ?j33,54 P.3d 25, 1 33; Lovellv. Sti~tc
Fz~nil,                                                    '                   Coinpensn-

tioil hI1rf. Itzs. Fund (1993). 260 blont. 2701 285. 860 P.2d M5,
                                                                99.

j' 1')   In the instant case, we believe that the statutory language of   5 39-71-1 17(3), MCA,
is clear. "l!se" is defined as "to put into servicc or apply for a purpose; employ . . . .> >

A M ~ : R I ~HE:KI~.AC~I:
             ~\N      DICTI(ISARY
                                I966 (3d ed. 1992). The verb "use" in the statutory

context of the Workers' Co~npcnsationAct means titat the employer utilizes tlie driver to
servc an end. a purpose. Geiger contcnds that Deckcrt "uscd" him for the purpose of making

paynrents to the origiriai creditor and in turn increasing Decken's cquiiy in the second truck.

I-ioxvcl-er, the fact that Geiger made a number of monthly paynents ~rnder contract and
                                                                         the

lease does not mean that Dcckert used him to serve Deckert's trucking business. This

"benefit" received by Deckert was contemplated in their sales contract and lease agreement

-not in a contract for hire. In fact, as of April 1, 1999, Geiger and Deckert's relationship

more closely resembles that of debtor and creditor. We cannot hold that Deckert "used"

Geiger under this definition of employer simply because Deckert received monthly

iz~stall~nents
            according to a contract. If we were to make such a ruling, then any party

Ftcilitating the payment on a contract for ihc sale of equipment could be rcquircd to pay

workers' cornpensation premiums for the debtor. Obviously, this is not the intent of the Act.

7 20   l h c trial court's reasoning that because Deekert did not use Geiger, Geiger was not

in Deckert's service, is also sound. Accordingly, we agree with the Workers' Compensation

Court that Deckert did not use Geiger, that Deckert did not have Geiger in service, and thus

Deckert xvas not an employer under either definition.

                                           Issue 2

1 21
1      Did the Workers' Compensation Court err in concluding that Geiger was not an

"employee" or "~vorker"as defined by     5 39-7 1 - 1 18(1)(a), MCA?
 22 Because we have ruled that Deckert was not Geiger's employer?we neednot consider

whether Geiger was Deckert's employee.
                                            Issue 3

9 22    Did the Workerst Colnpcnsation Court crr in concluding that ircitkcr ti-ir: ijEF nor

Decltct-t was equitably estopped   fictr~tdenying   compensation rirr Geiger's in,jurics?

71 24   Lastlyl Geiger contends that Deckert and the UEF should he equitably cstopped from

denying his claim. "Equitable estoppel applies when an employer . . . has taken somc

positive action which either prevents a claimant fiom filing a timely claim or leads the

clamant reasonably to believe she need not file such a cla~m."Kuzura v. State Comzpefzsi~-

tron I ~ I A
           Fzmd (l996), 279 Mont. 223,23 1,928 P.2d 136, 141. One of the six requirements

for the application of the doctrine of equitable estoppel is conduct amounting to a

                                                                  279 Mont.
representation or a concealmcrrt of rnalcrial facts. S ~ ~ K Z I Z C ~ J - ~ ,at 231, 928 P.2d

at 141.

% 25 Geiger insists that Deckert concealed from him the fact that Deckert had discontinued
paying for Geiger's workers' compensation coverage. To that end, Geiger categorically

deilies that Ire was ever notificd by Deckert that he would no longer be paying Geiger's

premiums. The Workers' Compensation Court was not convinced by Geiger's testimony

on this matter; instead it was "persuaded that at that time [April 1, 19991 Geiger understood

that any v:orkers' compensation insurance was his responsibility." Tlicrdbre. becausc

Deckert had not concealed or misrepresented that he had ceased paying for Geigcr's

coverage, it ruled that Deckert and the UEF were not equitably estopped from denying

Geiger's claim
p 6      \bye have reviewed the record and believe that the Workers' C~ornpensationCourt

based its coi~clusion subsianiiai crcdibii: ecidencc. spccificaily Decken's tesiiii?on>that
                    on

he had notified Geiger that he was no lo~iger
                                            paying for Gciger's workers' compcnsatiun

coverage at the time the contract and lease were signed. When, as here, the trial court is the

trier of factl it is in the best position to determine the facts by asscssi~lg demeanor of thc
                                                                             the

~~itnesses, testimony presented and the totality of the evidence before t11c court. See
         the

);eIloivs~oneBczsirz
                   Properties, Irzc. v. Burgess (1992), 255 Mont. 341.352; 843 P.2d 341,348

(quoting Cic/zer.crii\,filis, 111~. Zei-be fIro.s., IFIC.
                                  v.                   (1983), 207 Mont. 10, 23, 672 P.2d I 109,

11 11). We will not disturb the Workers' Compensation Court's finding. Because Geiger

kncu that Deckert had discontinued paying for his workers' compensation coverage, liis

estoppel argument necessarily fails; at the very least. one of the six elements required for the

doctrine's application is not present.     This Court need not address the five remaining

elements of equitable estoppel. Therefore, we hold that the Workers' Con~pensationCourt

did not err in concluding that neither the UEF nor Deckert was equitably estopped from

denying compensation for Geiger's injuries.

f j 27   The order of the Workers' Compensation Court is affirmed in its entirety for the

reasons discussed above
..   ~

w e concur:
Justice ferry I;. Trictb-ciier dissenting.

2      I dissent from thc majority's Opinion, i %+-mid
                                                    reverse the judgment o f thc Li:orherst

Cornpcnssrt~on
             Court.

9      Thc Workers' Compensatron Court and the majority have correctly ~dcntlfiedthe

narrow issue in this case. It is simply whetltcr at the time of his injury the claimant, Joseph

Geiger, was being "used" as a driver by David Deckert, d/b/a David Deckert Trucking.

.4ecepting the majority's definition of used as "to put into service or apply it for a purpose;

. . . ." it is clear that Geiger was serving a purposc for Deckert at the time of his injury. In

fact, the nature of Geiger's and Deckert's relationsltip changed in no substantive way from

the period prior to March of 1999 when Deckert carried workers' coniperisation insurance for

Geiger and considered him an ertiployec and the date of Geiger's injury on June 25, 1999.

730    At the time of Geiger's injury, the tractor and trailer that he was operating were still

ocvnect by Dcckert; it was still insured by Deckert; it was still being operated pursuant to

Deckert's interstate commerce commission authority; the brokers through whom jobs were

obtained still recognized Deckert as the trucking operator and all payments which came from

those brokers went directly to Deckert who then controlled the d~sbursement those funds
                                                                          of

by making the lease payments, depositing $500 a month in an escrow accotrnt. paying various

expellscs associatcd with the truck's operation. arid making payments for the t r ~ ~ c k
                                                                                      which

werc actually owed by tleckert to a third party.

73 I   From October of 1998 through June of 1999, Geiger paid to Deckcrt at least

S1(1,080.25 for the payments mentioned in the previous paragraph. These payments were of

                                              13
"usc" to Deckert because he used thcm ro maintain his tractor, [case his trailer, reduce the

debt on his tractor and fund an escrow account for necessary repairs lo tilit tractor and trailer

in the cvcut that thcy were eventually returned to him by Geiger. It coultl not he more

obvious that Dcckcrt ~ v a s interstate common contract motor carrier who "used" Geiger.
                           an

Therefore, by the plain language of    5   39-71 -1 17(4), MCA (1997), Geiger was Dcckert's

employer.

732    In 15 , the majority attaches significance to the fact that Deckert made no profit kom

Geiger's trucking operations. The reason is self evident from the first sentence in the

following paragraph. The amount that Geiger was able to generate \vas insufficient to cover

the payments for the tractor and trailer and its expenses. I-iowever, the mere fact that the

operation was unprofitable should not deteimine the nature of the parties' relationship.

Geiger still prolonged the period of time over which Deckert was able to own the tractor and

trailer which he would have to have returned to the third pai-ty earlier had Deckert not

operated it for h i ~ n provided him with most of the income from his operations.
                      and

733    In 71 1% the majority states that, "the fact that Geiger made a number of monthly

payments under the contract and lease does not mean that Decltcrt used hi111 to serve

Dcekcrt's trucking business." Ho\veverl I disagree. The fact that Geiger nlade a ntimhcr of

monthly payments uncter the contract and provided other income which allowed for the

maintertance, operation and insttrance of the tractor and trailer whicl~ owned by 1.lecke1-t
                                                                       was

and operated by Lleckert's trucking business, did serve his interest. As stated earlier, if

Geiger had not provided the revenue to pay these expenses, Deckert would have to h a w

                                               14
retur-ned the truck to the party to whorn he was making payments months earlier tliarr he, in

factl did return it.

*?4
ti_     Finally7iri ? 1% thc majority states that if the Court was to hold that rccciving montkly

installments according to a contract satisfied the definition of "used," then "any party

facilitating the payment on a contract for sale of equipment could be required to pay workers'

compensation premiums for the debtor." That observation is a gross simplification of

Geiger's and Dcckert's financial relationship and, at the same time, a broad expansiorl of the

application of $ 39-41-1 17(4), kICA (1997). First, Geiger \vas not simply making monthly

installments according to a purchase contract. All of the income that he earned froin jobs

arranged by brokers was sent directly to Decket-t who then ~tscdthat nioney to make the

payrnents he owed for hls truck, to make lease payments on the trailer, to pay for Insurance

for the truck and trailer and to pay operatsng and maintenance expenses. Second, to hold that

Deckert's total dependency on Geiger for reve~iue
                                                with kvhich to pay for and maintain his

truck~vould
          open the flood gates of workers' compelisation litigation to "any party facililating

the paynlent on a contract for the sale of equipment" ignores the fact that "used" is only

significant for purposes of the definition of employer found at 8 39-71 -1 17(4?,MCA, which

pertains only to interstate motor carriers such as Deckert Trucking. One of the reasons for

providing broad coverage for drivers who arc used by interstate motor carriers is the history

of creative methods in the trucking industry for avoiding an employer's workers'

compcnsatlon rcsponslbrl~tses.L>eckert'sdemand that Gelger slgn an agreement that he was

an indcpcndent contractor before the sales contract was ever executed is just one example.

                                               I5
4'35    r he majority Opinion exalts form o\:er subslance and fails victim to another smoke
       '-



and minor method of avoiding coverage for the state's injtil-ed workers.

736    For these reasons; 1 dissent &om the majority Opinion. 1 conclude. based on the

undisputed facts: that Geiger w s Deckert's employee at the timc of his illjury and would,

therefore, Ieverse the judgment of the Workers' Compensation Court




Justices Jim Regnier and Jim Velson join in the foregoing dissent.
                                                       / I
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