Opinion
W.C. No. 4-560-852.
January 2, 2004.
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Harr (ALJ) which determined the claimant was an "employee" when he suffered work-related injuries and therefore, required the respondents to provide workers' compensation benefits. We affirm.
To recover workers' compensation benefits the claimant must be the respondent-employer's "employee" at the time of the injuries. Section 8-41-301 C.R.S. 2003. Section 8-40-202(2)(a), C.R.S. 2003, provides:
"Notwithstanding any other provision of this section, any individual who performs services for pay for another shall be deemed to be an employee, irrespective of whether the common-law relationship of master and servant exists, unless such individual is free from control and direction in the performance of the service, both under the contract for performance of service and in fact and such individual is customarily engaged in an independent trade, occupation, profession, or business related to the service performed."
However, under § 8-40-301(5), C.R.S. 2003, a person working as a driver under a lease agreement meeting the requirements set forth in § 40-11.5-102 C.R.S. 2003, is excluded from the definition of "employee." Further, a lease agreement which meets the requirements of § 40-11.5-102(4) creates a presumption that the lessee is an independent contractor and that presumption may only be overcome by "clear and convincing evidence."
Section 40-11.5-102(5)(a), provides that a lease agreement which qualifies to exclude a driver from the definition of an "employee" must also "provide for coverage under workers' compensation or a private insurance policy that provides similar coverage." Section 40-11.5012(5)(b), defines the term "similar coverage" as disability insurance for on and off the job injuries, health insurance and life insurance.
For two years the claimant was employed as a delivery driver for USF Distribution Services Inc. (USF). On February 21, 2000, the claimant signed an "Independent Contractor Agreement" (Agreement). Section 3.6 of the Agreement required the claimant to obtain and keep in force, a "work accident and/or workers' compensation insurance policy." The Agreement also stated that:
"The [claimant] at his or her option, may satisfy this obligation by seeking USF Distribution's assistance in obtaining a policy negotiated by USF Distribution, or the [claimant] may secure a policy through an applicable state sponsored program, or through a policy providing comparable benefits and issued by an insurance company qualified to write such coverage."
The claimant subsequently applied for and obtained occupational accident insurance from Professional Associated Contract Truckers (PACT). On November 11, 2002, the claimant was injured in a motor vehicle accident while driving his truck for USF.
The parties stipulated that the Agreement complied with § 40-11.5-102(4) for purposes of creating a presumption the claimant was an independent contractor at the time of the injuries. However, the ALJ found the PACT policy did not provide coverage similar to the benefits available under the Workers' Compensation Act (Act). Therefore, the ALJ determined the claimant overcame the presumption he was an independent contractor. The ALJ also implicitly determined the respondents failed to prove by a preponderance of evidence that the claimant was an independent contractor.
I.
Relying on our conclusions in Steir v. Burnham Services Corporation, W.C. No. 4-348-699 (March 26, 1999), the respondents contend the Agreement satisfied the requirements of § 40-11.5-102(5)(a) because it contained a provision for workers' compensation insurance. We disagree.
Contrary to the respondents' argument, the ALJ did not find the Agreement did not provide for workers' compensation insurance. Rather the ALJ found that the Agreement did not contain a provision for "a private insurance policy that provides similar coverage."
Section 40-11.5-102(5)(b) requires that where a private insurance policy is provided the coverage shall meet or exceed standards set by the division of insurance and "such standards shall specify that the benefits offered by such insurance coverage shall be at least comparable to the benefits offered under the workers' compensation system." Based upon this language, we agree with the claimant that one obvious purpose of § 40-11.5-102(5) is to ensure that the lessor is not relieved of liability for workers' compensation benefits unless the independent contractor has comparable benefits available. Consequently, the statute contemplates that the lessee will obtain either workers' compensation insurance or a private insurance policy and where the claimant elects to obtain a private insurance policy, the private policy will provide coverage similar to the Act. Thus, the issue is whether the private insurance policy satisfied the requirements of § 40-11.5-102(5)(a) (b).
It follows that the respondents' reliance on Steir v. Burnham Services Corporation, supra, is misplaced. In Steir the claimant executed a similar independent contractor agreement which required him to obtain workers' compensation insurance. The claimant argued the lease agreement did not satisfy the requirements of § 40-11.5-102(5)(a) because the lease did not specifically advise him of the availability of workers' compensation insurance from the Colorado Compensation Insurance Authority. We concluded the term "provide" in § 40-11.5-102(5)(a) connotes a requirement that the lease contain a "provision or stipulation" for insurance. Consequently, we rejected an argument that the lease agreement must contain a specific advisement of the lessee's right to workers' compensation insurance from a specific insurer. However, we did not consider whether the private insurance policy the Steir claimant ultimately purchased satisfied the requirements of § 40-11.5-102(5)(a) (b). Neither did we consider whether a lease agreement which contains a provision for workers' compensation insurance satisfied the requirements of § 40-11.5-102(5)(a)(b) if the lease also provided for private insurance.
II.
The respondents also contend the ALJ exceeded his authority in determining that the PACT policy did not provide comparable coverage. The respondents argue that this question is a determination for the Division of Insurance in the Department of Regulatory Agencies. Based on this record, we disagree.
Admittedly, § 40-11.5-102(5)(b) purports to authorize the Division of Insurance to establish "specifications" for private insurance that provides similar coverage. However, the respondents have not cited any such standards or specifications established by the Division of Insurance and we are unable to locate any specific standards in either Title 10 or the Colorado Code of Regulations. Under these circumstances, the ALJ did not usurp the authority of the Division of Insurance in determining whether the claimant was exempt from the term "employee" by application of § 40-11.5-102. Section 8-43-201 C.R.S. 2003; cf. City of Boulder v. Dinsmore, 902 P.2d 925 (Colo.App. 1995) (due process not denied by Director's failure to promulgate impairment rating guidelines for psychological injuries).
In any case, § 40-11.5-102(5)(b) requires that the standards set by the division of insurance shall "specify that the benefits offered by such insurance coverage shall be at least comparable to the benefits offered under the workers' compensation system." The term "comparable" is defined as "similar or equivalent." The American Heritage Dictionary (1981).
The ALJ found the PACT policy provided for temporary disability benefits capped at 53 percent of the rate of temporary total disability benefits provided under the Act. The ALJ also found that the wage loss benefits under the PACT were limited to 104 weeks unlike the Act. In addition, the PACT policy had a maximum medical benefit of $1 million payable over 52 weeks. Therefore, the ALJ found the PACT policy failed to provide comparable benefits to those offered under the Act. The ALJ's determination is supported by substantial evidence and plausible inferences drawn from the record and therefore must be upheld on review. (Claimant's Hearing Exhibit 8); F.R. Orr Construction v. Rinta, 717 P.2d 965 (Colo.App. 1985). Moreover, the ALJ's findings support the conclusion the claimant overcame the presumption he was an independent contractor. Thus, the burden shifted to the respondents to prove the claimant was free from control and customarily engaged in an independent trade business. See Locke v. Longacre, 772 P.2d 685 (Colo.App. 1989); Weld County Kirby Co. v. Industrial Commission, 676 P.2d 1253 (Colo.App. 1983).
The record is subject to highly conflicting inferences. Within his sole prerogative as the fact finder, the ALJ resolved the conflicts against the respondents. See Rockwell International v. Turnbull, 802 P.2d 1182 (Colo.App. 1990). Consequently, the ALJ was not persuaded the respondents sustained their burden to prove the claimant was free from control and customarily engaged in an independent trade. Rather, with record support, the ALJ determined the respondents exercised a degree of control over the claimant's hours, delivery schedule, driving route, and conduct with customers. These findings support the ALJ's determination the claimant was the respondent-employer's employee. Consequently, it is immaterial the record contains some evidence which, if credited, might support a contrary result. Campbell v. IBM Corp., 867 P.2d 77 (Colo.App. 1993).
The respondents' further arguments on this issue have been considered and do not alter our conclusions.
III.
We also reject the respondents' contention that the ALJ erred in excluding the expert testimony of David Yun. We perceive no error.
The respondents contend Yun was offered as an expert in contracts relating to transportation law for the purpose of offering testimony that the PACT policy provided benefits "comparable" to benefits available under the Act. Because the proffered testimony went to the heart of the legal question before the ALJ, the claimant contends it was properly excluded. We agree with the claimant.
C.R.E. 702 permits a qualified expert to offer an opinion if he possesses scientific, technical, or other specialized knowledge which will assist the trier of fact to understand the evidence or determine a fact in issue. The ALJ has wide discretion in determining whether a witness is qualified as an expert, and whether the expert's opinion will assist in resolving an issue in the case. See Dow Chemical Co. v. Industrial Claim Appeals Office, 843 P.2d 122 (Colo.App. 1992); Sims v. Industrial Claim Appeals Office, 797 P.2d 777 (Colo.App. 1990). Because determination of these matters is committed to the ALJ's sound discretion, we may not interfere with his decision unless an abuse is shown, as where the order is beyond the bounds of reason. See Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993).
Here, the ALJ reasonably determined he was capable of determining as a matter of law whether the PACT policy offered benefits comparable to the Act. Under these conditions the ALJ did not abuse his discretion in finding Yun's testimony would not assist in resolving the disputed legal issue.
IV.
Finally, the respondents contend the ALJ erroneously calculated the claimant's average weekly wage without deducting amounts paid by the claimant to a driver and laborer. We disagree.
In Filippone v. Industrial Commission, 41 Colo. App. 322, 590 P.2d 977 (1978), the Court of Appeals held that a trucker, who was paid an hourly wage for hauling sand and gravel, was entitled to have his average week wage determined without regard to expenses incurred in operating the truck. In reaching this decision, the court relied on the predecessor to § 8-40-201(19)(a), C.R.S. 2003, which defines "wages" as the "money rate at which the services rendered are recompensed under the contract of hire in force at the time of the injury." The court reasoned that once a person is determined to be an employee, his "wages" are the amounts paid by the employer for his work, not the "net profit" resulting from the employment. The court observed that no provision of the statute allows a deduction for expenses which a claimant might incur in earning the wages.
Subsequently, in Sneath v. Express Messenger, supra, the court relied on Filippone for the proposition that it is the gross compensation, not an employee's net profit, which serves as the basis for computation of wages under the statute. Therefore, we reject the respondents' challenge to the ALJ's determination of the average weekly wage.
IT IS THEREFORE ORDERED that the ALJ's order dated July 7, 2003, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ Kathy E. Dean
______________________________ Robert M. SocolofskyNOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the Court, within twenty (20) days after the date this Order is mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 2003. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this order were mailed to the parties at the addresses shown below on January 2, 2004 by A. Hurtado.
Steven D. Engebretson, 10961 W. 60th Ave., Arvada, CO 80004
USF Distribution Services, Inc., c/o Franne Donovan, USF Logistics, 2122 York Rd., #300, Oak Brook, IL 60523
Thomas W. Clarke, Vice-President, Risk Management, US Freightways, 8550 W. Bryn Mawr, #700, Chicago, IL 60631
Tammy Stukes, Travelers Insurance Company, P. O. Box 173762, Denver, CO 80217
John C. Bowes, Esq., 720 Kipling St., #201, Lakewood, CO 80215 (For Claimant)
Keith E. Mottram, Esq., 1125 17th St., #600, Denver, CO 80202 (For Respondents)