Opinion
W.C. No. 4-183-933
January 30, 1998
FINAL ORDER
The employer, Mayflower Transit, Inc. (Mayflower), and its insurer (respondents), seek review of orders of Administrative Law Judge Erickson (ALJ) dated December 29, 1995 and March 13, 1997. We affirm these orders.
This matter was previously before us. In an order dated July 13, 1995, we held that the ALJ erred in dismissing the claim on grounds that Colorado lacks jurisdiction over the claimant's Utah injury. Relying on § 8-41-204, C.R.S. 1997, we remanded the matter with directions to determine whether the claimant was "regularly employed" within the State of Colorado.
In the order dated December 29, 1995, the ALJ determined that the claimant was "regularly employed" in Colorado, and therefore, Colorado has jurisdiction over the Utah injury. In support of this determination, the ALJ found that the claimant, a long haul truck driver, resided in Colorado. The ALJ also found that Mayflower required that the claimant "regularly stop and check with the Denver Mayflower agent for scheduling, reloading, unloading and for local hauling." Moreover, the ALJ found that the claimant hauled loads originating in Colorado, and brought loads to Colorado from other states. Finally, the ALJ found that the claimant recruited and trained drivers in Colorado.
Further, the ALJ rejected the respondents' argument that the claimant was an "independent contractor" operating under the type of lease arrangement described in § 40-11.5-102, C.R.S. 1997. Instead, the ALJ found that there was clear and convincing evidence that Mayflower exercised significant control over the means and methods by which claimant performed his job, and that the level of control exceeds that contemplated by § 40-11.5-102. Specifically, the ALJ noted that Mayflower established a "Quality Assurance Program" regulating many aspects of the claimant's duties, and that Mayflower retained the contractual right to suspend or terminate the claimant's employment for violation of its policies.
In the order dated March 13, 1997, the ALJ found that the parties stipulated to the claimant's temporary total disability between December 6, 1991 and January 21, 1994. In determining the benefits payable for this disability, the ALJ based the average weekly wage on the claimant's gross "commissions" for the year 1991. In so doing the ALJ relied on Sneath v. Express Messenger, 881 P.2d 453 (Colo.App. 1994), for the proposition that it would be improper to reduce the average weekly wage based on business expenses which the claimant deducted on his 1991 tax return. The ALJ also determined that the respondent-insurer should be penalized $800 for failing timely to file an admission or denial of liability. In support, the ALJ found that the insurer received notice of the injury on October 14, 1993, but did not file a notice of contest until December 10, 1993.
I.
On review, the respondents contend that our order of July 13, 1995 was erroneous in holding that Colorado jurisdiction over this claim for a Utah injury is governed by § 8-41-204 rather than Monolith Portland Cement v. Burak, 772 P.2d 688 (Colo.App. 1989). However, none of the respondents' arguments persuades us that our analysis of the law was incorrect. We also note that the Court of Appeals recently decided the case of Moorhead Machinery and Boiler Co. v. Del Valle, 934 P.2d 861 (Colo.App. 1996). In that case, the court held that "jurisdiction" over out of state injuries is governed by § 8-41-204.
II.
The respondents next contend that, even if § 8-41-204 governs this case, the ALJ misapplied the statute. The respondents argue that in order to be "regularly employed" in Colorado a claimant must be constantly employed in Colorado. The respondents also assert that the evidence does not support a finding that the claimant was regularly employed in Colorado. We are not persuaded.
We have previously addressed the standard to be used in determining whether a claimant is "regularly employed" in Colorado for purposes of § 8-41-204. In our view, the question of whether the claimant was "regularly employed" in Colorado depends on whether the claimant engaged in "substantial employment" within the state. Resolution of this issue largely depends on the frequency and extent of the claimant's activities within the state. See RCS Lumber Co. v. Worthy, 149 Colo. 537, 369 P.2d 985 (1962). There is no hard and fast rule concerning the number of times a claimant must be in Colorado, or the "constancy" of his presence, in order to be "regularly employed" within the state. See Rosborough v. Schneider National, W.C. No. 4-007-808 (December 17, 1991). This is true because the overall purpose of § 8-41-204 is to insure workers' compensation protection for Colorado citizens who are sent out of state for "temporary or occasional work." Moorhead Machinery and Boiler Co. v. Del Valle, supra.
Moreover the question of whether the claimant was "regularly employed" is one of fact. See Pfuhl v. Prime, Inc., W.C. No. 4-215-435 (October 15, 1994). Consequently, we must uphold the ALJ's order if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 1997. Application of this standard of review requires us to defer to the ALJ's resolution of conflicts in the evidence, his credibility determinations and the plausible inferences which he drew from the evidence. Metro Moving Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 1995).
It follows that we reject the respondents' assertion that the claimant was required to establish that he was "constantly employed" within the state of Colorado in order to meet the jurisdictional test of "regular employment." As the ALJ found, the claimant testified that he was frequently in Colorado, and performed various services at the request of Mayflower's Denver agent. (Tr. November 13, 1995, pp. 17-25). Although the respondents' evidence showed that a relatively small percentage of the claimant's shipments originated in or were destined for Colorado, the claimant nevertheless showed that his work frequently required him to travel within the state. (E.g. claimant's Exhibit B). Further, the transient nature of the claimant's duties meant that no state produced a large percentage of the claimant's pick-ups or deliveries. Under these circumstances, there is substantial, albeit conflicting, evidence from which the ALJ could find that the claimant was regularly employed in Colorado.
We also reject the respondents' assertion that the claimant's presence in Colorado is irrelevant because he was free to choose his routes. Although the respondents assert that the evidence on this issue is undisputed, the claimant testified that Mayflower frequently dictated his travel routes. (Tr. October 31, 1995, p. 22). In any event, the mere fact that the employer did not designate a specific route does not mean that the claimant's decision to travel through the state of Colorado removed him from the scope of his employment. See Phillips Contracting, Inc. v. Hirst, 905 P.2d 9 (Colo.App. 1995) (traveling employee always within scope of employment except when departing on a personal errand).
The respondents also assert that the claimant failed to prove that he was injured within six months of leaving the state of Colorado, as required by § 8-41-204. The respondents cite Employers' Liability Assurance Corp. v. Industrial Commission, 147 Colo. 309, 363 P.2d 646 (1961), for the proposition that the claimant was required to prove that Mayflower "ordered" him to be in Colorado within six months of the injury. However, we are not persuaded by this argument.
Section 8-41-204 requires that the out of state injury be "received by the employee within six months after leaving the state." In the Employers' Liability case, the claimant had been ordered to return to Colorado to perform the employer's business within six months of suffering his out of state injury. Under such circumstances, the court held that the six month period ran from the date of the claimant's most recent departure from Colorado, not his previous date of departure. The court concluded that the predecessor to § 8-41-204 "should not bar a claim where it appears, as in the instant case, that the decedent had returned upon orders of his employer and for his purposes within six months immediately prior to his injury."
Here, as the ALJ found, there is evidence that the claimant performed work for the employer in Colorado the day before his injury. However, there is no direct evidence that Mayflower "ordered" the claimant to be in Colorado, or required him to perform any specific duty on the day before the injury.
Nevertheless, we do not read Employers' Liability as precluding application of § 8-41-204 where the claimant's presence in Colorado is incidental to his employment, and not the result of a direct order. The Employers' Liability court was merely applying the law to the facts before it, and the facts indicated that the employer "ordered" the claimant to return to Colorado.
Furthermore, since the underlying purpose of § 8-41-204 is to protect Colorado citizens who are temporarily out of the state, but are regularly employed within it, it would make no sense to require the claimant's presence in Colorado to be the result of an express "order" by the employer. To the contrary, the scope of employment generally includes activities which are incident to the employment, even if they are not strictly duties of employment. City of Boulder v. Streeb, 706 P.2d 786 (Colo. 1985). Thus, we conclude that, because the claimant was present in Colorado the day before the injury, and was performing services arising out of and in the course of his employment, he was present in Colorado for purposes of § 8-41-204.
III.
The respondents next contend that the ALJ erred in determining that the claimant was Mayflower's employee, and not an independent contractor operating under the type of agreement described in § 40-11.5-102. We disagree.
In Frank C. Klein Co., Inc. v. Colorado Compensation Insurance Authority, 859 P.2d 323 (Colo.App. 1993), the court held that the definition of an "independent contractor" found in § 40-11.5-102 applies in workers' compensation proceedings. Thus, the court determined that a contractual arrangement satisfying the requirements of § 40-11.5-102 is prima facie evidence of an independent contractor relationship. Further, the presumption of independent contractor status prevails unless overcome by clear and convincing evidence. See § 40-11.5-102(4), C.R.S. 1997.
Significantly, the Klein court held that employer-issued "manuals of instruction," which directed truckers as to the methods and means of making deliveries, could constitute evidence of employer control above and beyond that contemplated by § 40-11.5-102. This was particularly true where the contractual agreement between the truckers and the putative employer required the truckers to obey the employer's rules and any manual of instruction or bulletin.
Here, as the ALJ found, Mayflower issued the claimant a document known as the "Quality Assurance Program." Further, the claimant testified that the contents of the document constituted the "rules" of the company. (Tr. October 31, 1995 pp. 15-16).
A review of the Quality Assurance Program reveals that it contains detailed instructions concerning the handling of moves by drivers in the claimant's position. This evidence supports the ALJ's determination that Mayflower held substantial control over the means and methods of performing the job. This is particularly true because Mayflower retained the contractual right to suspend or terminate the claimant for "any violation of the policies or procedures established by the Company." Cf. Dana's Housekeeping v. Butterfield, 807 P.2d 1218 (Colo.App. 1990) (right to control can be as important as the fact of day to day control in determining whether a claimant is an independent contractor or an employee).
The respondents assert that there is no evidence that the Quality Assurance Program constituted a "policy or procedure" of Mayflower. However, the introduction to the Quality Assurance Program, authored by Mayflower's chief executive officer, states as follows:
"Mayflower's quality assurance standards and measurements were established to define, clarify, and measure each phase of the move process. Specific standards for each agent, van operator, and van line employee, provide a clear-cut definition of the mission and role in providing the best possible service. Measuring the execution of that service through surveys of our customers, agents, and van operators provides essential feedback on training needs, marketing approaches, and development of new service features."
Under these circumstances, there is substantial evidence from which the ALJ could conclude that the Quality Assurance Program constituted a policy or procedure of Mayflower. It follows that there is substantial evidence to support the ALJ's determination that the claimant overcame the presumption of independent contractor status by clear and convincing evidence. See Metro Moving Storage Co. v. Gussert, supra.
IV.
The respondents next contend that the ALJ did not determine whether the claimant sustained a compensable injury, and that there is not substantial evidence in the record to support the finding of a compensable injury. We reject this argument.
As the ALJ found in his order of March 13, 1997, the parties stipulated that the claimant was temporarily totally disabled from December 6, 1991 to January 21, 1994. Under the circumstances of this case, we agree with the claimant that this stipulation amounts to an admission that the claimant sustained a compensable injury. See Schlage Lock v. Lahr, 870 P.2d 615 (Colo.App. 1993) (judicial admissions should be enforced, and parties may not take contrary positions on appeal).
The record reflects that at the commencement of the hearing on January 15, 1997, the ALJ inquired of respondents' counsel whether he had any objection "regarding the period of time to which the claimant may be entitled to temporary total disability benefits." Counsel indicated that he had no such objection, and the period of disability was established as December 5, 1991 to January 24, 1994. (Tr. January 15, 1997, 17). After this discussion, the ALJ indicated to claimant's counsel that his understanding was that the only issues were average weekly wage and penalties since the parties agreed on the period of temporary total disability. Counsel for respondent raised no objection to the ALJ's summary of the issues. (Tr. January 15, 1997, p. 23).
Since the respondents were willing to stipulate to the period of temporary total disability, the ALJ reasonably inferred that respondents were admitting the existence of an injury which arose out of and in the course of the claimant's employment. Indeed no compensable disability could exist without a compensable injury. Had the respondents intended to contest the claimant's entitlement to temporary total disability benefits based upon the absence of any compensable injury, they should have so stated when the ALJ recited his understanding of the issues before him. See Hendricks v. Industrial Claim Appeals Office, 809 P.2d 1076 (Colo.App. 1990). The respondents may not now be heard to assert the insufficiency of the evidence concerning a fact to which they implicitly stipulated.
V.
The respondents next contention is that the ALJ erred in calculating the average weekly wage because he failed to deduct various business expenses which the claimant reported on his 1991 income tax return. The respondents assert that the case of Elliott v. El Paso County, 860 P.2d 1363 (Colo. 1993) is controlling on this issue, and therefore, the ALJ erred in relying on Sneath v. Express Messenger, supra. We disagree with the respondents.
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 $21.00 per hour 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. 1997, 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. In so doing, the Sneath court distinguished Elliott v. El Paso County, supra, because Elliott concerned the calculation of temporary partial disability benefits for a self-employed worker, and therefore, did not construe the statutory definition of "wages." The Sneath court noted that the statutory definition of wages has not materially changed since Filippone was decided.
Filippone and Sneath stand for the proposition that gross wages are the proper yardstick for measuring a claimant's benefits under these circumstances. Moreover, Sneath confines Elliott to cases of self-employment. Here, the claimant was not "self-employed," but instead received direct cash transfers from Mayflower. Consequently, we perceive no error in the ALJ's decision to base the claimant's average weekly wage on his gross earnings without regard to expenses claimed on the tax return.
Further, Tozer v. Scott Wetzel Services, Inc., 883 P.2d 496 (Colo.App. 1994) is not authority to the contrary. Like Elliott, Tozer concerned the calculation of a claimant's earnings from self-employment. Although the Tozer case mentions Filippone, it certainly does not purport to overrule Filippone. In any event, Tozer was decided on April 7, 1994, prior to the decision in Sneath v. Express Messenger, which was issued on July 14, 1994. Therefore, Sneath is the most current expression of the law.
VI.
The respondents' final contention is that the record does not contain substantial evidence supporting the imposition of the penalty for failure timely to admit or deny liability. The respondents assert that the only basis for imposition of a penalty was a discussion between the attorneys and the ALJ. The respondents reason that this discussion does not constitute evidence. We find no error.
The respondents' argument notwithstanding, Mayflower's own employee testified that on October 14, 1993, Mayflower sent a FAX to the respondent-insurer's adjusting agency advising it of the injury. In fact, the witness testified that, on October 20, 1993, the adjusting agency sent a letter acknowledging receipt of the notice. Moreover, the record contains a "Notice of Contest" which is stamped as having been received on December 10, 1993. (Tr. January 15, 1997, p. 60).
Under these circumstances, the record contains substantial evidence to support the ALJ's imposition of a penalty under § 8-43-203(2)(a), C.R.S. 1997. The respondents' assertion that the record contains no evidence supporting the penalty is without merit.
IT IS THEREFORE ORDERED that the ALJ's orders dated December 29, 1995 and March 13, 1997, are affirmed.
INDUSTRIAL CLAIM APPEALS PANEL ________________________________ David Cain ________________________________ Kathy E. DeanNOTICE
This Order is final unless an action to modify or vacate the Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a petition to review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date the Order was mailed, pursuant to §§ 8-43-301(10) and 307, C. R. S. 1997.
Copies of this decision were mailed January 30, 1998 to the following parties:
Bogdan Gordon, 8190 Miller Ct., Arvada, CO 80005
Mayflower Transit, Inc., Attn: Mike Lee, P. O. Box 107, Indianapolis, IN 46206-0107
Great Plains Insurance Corp. and/or Credit General Insurance, CNA Insurance Companies,
Attn: Marilyn Michotte, P.O. Box 17369, Denver, CO 80217
John C. Bowes, Esq., 720 Kipling St., #201, Lakewood, CO 80215 (For Claimant)
Art M. Lee, Esq. and Ronald C. Jaynes, Esq., 777 E. Speer Blvd., #210, Denver, CO 80203 (For Respondents)
Barbara Carter, Special Funds Unit, Division of Workers' Compensation — Interagency Mail
By: ________________________________