Opinion
No. 58385-9-I.
June 4, 2007.
Appeal from a judgment of the Superior Court for Snohomish County, No. 05-2-11201-6, Ellen J. Fair, J., entered May 25, 2006.
Kenneth Derricott died while removing a tree from property owned by his nephew. Veronica Derricott, his widow, applied to the Department of Labor and Industries (Department) for benefits pursuant to the Industrial Insurance Act (IIA), Title 51 RCW. The Department rejected Ms. Derricott's claim. The Board of Industrial Insurance Appeals (BIIA) and the Snohomish County Superior Court both affirmed the denial, each concluding that Mr. Derricott had not been proved to be a worker within the contemplation of the IIA. Ms. Derricott appeals from the superior court's judgment and order. Finding no error, we affirm.
FACTS
Mr. Derricott was removing a tree from land owned by his nephew, Gregory Wallis, when a branch struck and killed him. Ms. Derricott applied to the Department for workers' compensation eligibility as the beneficiary of her late husband. The Department rejected her claim, stating that an employer-employee relationship between Mr. Wallis and Mr. Derricott could not be established at the time of Mr. Derricott's fatal injury and that, therefore, Ms. Derricott was not entitled to benefits pursuant to the IIA. Ms. Derricott appealed to the BIIA.
During a hearing before an industrial appeals judge, Ms. Derricott testified that, for approximately fifteen months prior to his death, her husband worked full time on the land owned by Mr. Wallis and that he logged his hours in notebooks that he kept in his truck. She testified that neither she nor Mr. Derricott invested any money in, nor had any legal interest in, the property owned by Mr. Wallis.
Ms. Derricott further testified that she overheard Mr. Wallis tell Mr. Derricott, on one occasion, that Mr. Wallis would pay him $25 per hour to work on the land. She also testified that Mr. Wallis made payments on the Derricotts' van and made some payments toward the school tuition of the Derricotts' son, both before and after Mr. Derricott's death. Ms. Derricott testified that she considered such payments to be compensation for back wages owed by Mr. Wallis to Mr. Derricott.
Ms. Derricott also testified, however, that neither she nor Mr. Derricott reported any of the money paid to them by Mr. Wallis to the Internal Revenue Service as wages. She further testified that Mr. Derricott drove his own truck and used his own equipment and tools while working on the land.
Mr. Wallis testified that, although Mr. Derricott was working on Mr. Wallis' land at the time of his fatal injury, Mr. Derricott was not employed by him. Mr. Wallis further testified that he and Mr. Derricott agreed to build a campground on the land and to extract gold from the land, and that he and Mr. Derricott planned to share the profits from both ventures. Mr. Wallis described the arraignment as a "family endeavor" and a "loosely set . . . partnership." Mr. Wallis testified that he and Mr. Derricott had drafted a partnership agreement, but that he had been unable to locate the document. Mr. Wallis also testified that he did not "run" Mr. Derricott's schedule and that Mr. Derricott worked "as he saw fit." Mr. Wallis flatly denied that he was Mr. Derricott's employer at the time of the fatal injury.
Mr. Wallis further testified that he and Mr. Derricott had a close relationship, and that he often helped the Mr. Derricotts financially, but that this financial assistance was not meant to represent wages. Mr. Wallis described his relationship with Mr. Derricott thusly: "He was my uncle, my best friend. Like a brother to me; like a father to me. He was someone very special, very close." Mr. Wallis estimated that over a period of three years, leading up to Mr. Derricott's death, he had given Mr. Derricott between $18,000 and $20,000. He considered this money to be either a gift or a draw against future partnership earnings. Mr. Wallis acknowledged that Mr. Derricott kept track of his work hours, but denied that he did so for the purpose of collecting wages. He also acknowledged both that he had employed Mr. Derricott in the past for construction work, and that he had helped support Mr. Derricott's family in the past when Mr. Derricott had been incarcerated. This financial support lasted approximately two and one-half years to three years, and ranged as high as $1,700.00 to $2,500 per month for one period of nine months to one year.
Following the hearing, the IAJ affirmed the Department's order and concluded that Mr. Derricott was not an employee of Mr. Wallis and, therefore, was not a worker within the contemplation of the IIA. The IAJ explained that the "evidence was consistent with the existence of a partnership relationship as testified to by . . . Mr. Wallis and not supportive of the existence of an employer-employee relationship."
Ms. Derricott filed a Petition for Review to the BIIA, which denied her request, and adopted the IAJ's order as the BIIA's final order. Ms. Derricott then appealed the BIIA's final order to the superior court. After reviewing the record and hearing the arguments of the parties, the superior court entered a judgment consistent with the BIIA's decision.
In rendering its oral decision, the superior court explained that Ms. Derricott had not satisfied her burden of proving that Mr. Derricott was an employee of Mr. Wallis at the time of his fatal injury. Ms. Derricott's counsel asked the court whether it was making a finding regarding the existence of a partnership between Mr. Derricott and Mr. Wallis. The court responded in the negative, explaining that:
I think the only evidence before me is whether or not Ms. Derricott satisfied her burden of showing that he was an employee, and I think that's the only thing I can find pursuant to this. She did not satisfy her burden of proving that he was an employee at the time of the death.
The superior court entered a factual finding that, "[a]t the time of his death on December 11, 2002, Kenneth T. Derricott was not an employee of Gregory Wallis," and entered a conclusion of law stating that, "[a]t the time of his injury and death on December 11, 2002, Kenneth T. Derricott was not a worker within the contemplation of RCW 51.08.180."
Ms. Derricott appeals.
DISCUSSION Standard of Review
We review the superior court's decision under the ordinary standard of review for civil cases. RCW 51.52.140. Accordingly, we review whether substantial evidence supports the superior court's factual findings, made after its de novo review, viewing the record in the light most favorable to the party that prevailed in the superior court. Harrison Mem'l Hosp. v. Gagnon, 110 Wn. App. 475, 485, 40 P.3d 1221 (2002); Young v. Dep't of Labor Indus., 81 Wn. App.123, 128, 913 P.2d 402 (1996).
Although the Department, the BIIA, and the superior court all made the same determination, that Ms. Derricott failed to prove the existence of an employer-employee relationship between Mr. Wallis and Mr. Derricott, it is the superior court's decision that we review. Ruse v. Dep't of Labor Indus., 138 Wn.2d 1, 5, 977 P.2d 570 (1999).
Substantial evidence is evidence sufficient to persuade a reasonable person that the finding is true. Garrett Freightlines v. Dep't of Labor Indus., 45 Wn. App. 335, 340, 725 P.2d 463 (1986) (quoting Nichols Hills Bank v. McCool, 104 Wn.2d 78, 82, 701 P.2d 1114 (1985)). This court also reviews whether the superior court's findings support its conclusions of law. Ruse v. Dep't of Labor Indus., 138 Wn.2d 1, 5, 977 P.2d 570 (1999).
Employee-Employer Relationship
Viewing the evidence in the light most favorable to the Department, substantial evidence supports the superior court's determination that Ms. Derricott failed to satisfy her burden of proving the existence of an employment relationship between Mr. Wallis and Mr. Derricott.
A workers' compensation claimant bears the burden of establishing the claimant's eligibility for benefits. Ehman v. Dep't of Labor Indus., 33 Wn.2d 584, 595, 206 P.2d 787 (1949); Jenkins v. Dep't of Labor Indus., 85 Wn. App. 7, 14, 931 P.2d 907 (1996). In order to receive workers' compensation benefits pursuant to the IIA, a claimant must prove that the injured party is a "worker" injured "in the course of his or her employment." RCW 51.32.010;Ackley-Bell v. Seattle Sch. Dist. No. 1, 87 Wn. App. 158, 165, 940 P.2d 685 (1997). Pursuant to the IIA, a worker is defined as "every person in this state who is engaged in theemployment of an employer under this title, whether by way of manual labor or otherwise in the course of his or her employment." RCW 51.08.180 (emphasis added);Ackley-Bell, 87 Wn. App at 165.
Thus, a workers' compensation claimant must prove the existence of an employment relationship in order to establish the claimant's entitlement to benefits. Although no statute specifically defines when an employment relationship exists within the meaning of the IIA, in making such determinations, courts have consistently applied the two-part test articulated in Novenson v. Spokane Culvert Fabricating Co, 91 Wn.2d 550, 553, 588 P.2d 1174 (1979). Bennerstrom v. Dep't of Labor Indus., 120 Wn. App. 853, 856, 86 P.3d 826 (2004). As our Supreme Court stated:
For purposes of workmen's compensation, an employment relationship exists only when: (1) the employer has the right to control the servant's physical conduct in the performance of his duties, and (2) there is consent by the employee to this relationship. Marsland v. Bullitt Co., 71 Wn.2d 343, 428 P.2d 586 (1967); Fisher v. Seattle, 62 Wn.2d 800, 384 P.2d 852 (1963). The right of control is not the single determinative factor in Washington. A mutual agreement must exist between the employee and employer to establish an employee-employer relationship.
Novenson, 91 Wn.2d at 553.
Whether both elements of this inquiry are proved is a question of fact and neither may be imputed as a matter of law.Smick v. Burnup Sims, 35 Wn. App. 276, 279, 666 P.2d 926 (1983). Moreover, although the IIA is liberally construed "in favor of persons who come within the act's terms,"Berry v. Dep't of Labor Indus., 45 Wn. App. 883, 884, 729 P.2d 63 (1986), the IIA's liberal construction "does not apply to defining who those persons might be."Berry, 45 Wn. App. at 884. Indeed, "persons who claim rights [under the IIA] should be held to strict proof of their right to receive the benefits provided by the act." Olympia Brewing Co. v. Dep't of Labor Indus., 34 Wn.2d 498, 505, 208 P.2d 1181 (1949), overruled on other grounds by Windust v. Dep't of Labor Indus., 52 Wn.2d 33, 323 P.2d 241 (1958).
Ms. Derricott's contention to the contrary, that an employment relationship is defined simply as "services performed by an individual for remuneration," is not supported by controlling authority. Ms. Derricott's citation to Doty v. Town of South Prairie, 155 Wn.2d 527, 540, 120 P.3d 941 (2005), in support of this contention, is inapposite. InDoty, the issue was whether the claimant was a "worker" or a "volunteer." Doty, 155 Wn.2d at 539. The court noted that a volunteer "`receives no wages'" while a worker is engaged in "employment," defining the term for the purposes of that discussion as "`services performed by an individual for remuneration.'" Doty, 155 Wn.2d at 540 (quoting RCW 51.08.195). Nowhere in its discussion of the issues resolved in the Doty case does the Supreme Court purport to overrule the long-standing rule announced inNovenson. Similarly, Ms. Derricott's citation to RCW 51.08.195 is unavailing, as that statute simply enumerates circumstances that do not give rise to an employment relationship.
There is ample evidence in the record to support the superior court's factual finding that an employee-employer relationship between Mr. Derricott and Mr. Wallis was not proved to exist. First, the record lacks evidence that Mr. Wallis had a right to control Mr. Derricott's physical conduct in the performance of his duties, a necessary element of an employment relationship pursuant to the Novenson test. "The hallmark of [an employment] relationship is the employer's right to control the employee's conduct." Judy v. Hanford Envtl. Health Found., 106 Wn. App. 26, 35, 22 P.3d 810 (2001). In determining whether such a right to control exists, a court may examine the following factors:
(1) who controls the work to be done; (2) who determines the qualifications; (3) setting pay and hours of work and issuing paychecks; (4) day-to-day supervision responsibilities; (5) providing work equipment; (6) directing what work is to be done; and (7) conducting safety training.
Bennerstrom, 120 Wn. App. at 863.
Here, Ms. Derricott failed to produce evidence indicating that Mr. Wallis directed or controlled Mr. Derricott's work activities in any significant way. In contrast, Mr. Wallis testified that he did not "run" Mr. Derricott's schedule, that Mr. Derricott worked "as he saw fit" and that Mr. Derricott "did whatever he wanted to do up there." Furthermore, Mr. Wallis testified that he specifically asked Mr. Derricott not to remove the tree that ended Mr. Derricott's life, an additional indication that Mr. Wallis did not control Mr. Derricott's work.
Ms. Derricott also testified that Mr. Derricott used his own tools and equipment while working on Mr. Wallis' land. While Mr. Wallis owned the land upon which Mr. Derricott worked, we disagree with Ms. Derricott's contention that such ownership, standing alone, imputed a right to Mr. Wallis to control Mr. Derricott's conduct.
Furthermore, the record also lacks evidence of consent by Mr. Wallis to the existence of an employment relationship. See Novenson, 91 Wn.2d at 553. An employment relationship requires "mutual agreement" between the employer and the employee. Jackson v. Harvey, 72 Wn. App. 507, 515-16, 864 P.2d 975 (1994). A worker's bare assertion of belief that he or she worked for a particular employer does not establish an employment relationship. Jackson, 72 Wn. App. at 519.
Here, Mr. Wallis specifically testified that he "never" considered Mr. Derricott to be his employee, that he "never" considered himself to be Mr. Derricott's boss, and that he did not consider Mr. Derricott to be his "subordinate." Furthermore, Ms. Derricott acknowledged that she was unaware of a contract of employment between Mr. Derricott and Mr. Wallis.
Viewing the evidence in the light most favorable to the Department, substantial evidence supports the superior court's determinations both that Mr. Wallis did not have a right to control Mr. Derricott's physical conduct in the performance of his duties and that there was an absence of mutual consent to an employer-employee relationship. Pursuant to theNovenson test's requirements, an employment relationship may not exist in the absence of both such control and consent. In turn, a claimant is not a "worker" entitled to benefits pursuant to the IIA in the absence of such an employment relationship. RCW 51.08.180. Thus, substantial evidence supports the superior court's factual finding which, in turn, supports its conclusion of law that Mr. Derricott was not a "worker" within the contemplation of the IIA.
Ms. Derricott next contends that because the superior court did not make a factual finding that Mr. Derricott and Mr. Wallis were "partners" we must conclude, as a matter of law, that they were not partners. Furthermore, Ms. Derricott argues, if they were not partners, we must conclude, as a matter of law, that Mr. Derricott was Mr. Wallis' employee.
This contention fails for several reasons. Initially, it was Ms. Derricott, the claimant, who bore the burden of proving the existence of an employment relationship. Ehman, 33 Wn.2d at 595. In the absence of such proof, it was not incumbent upon the superior court to determine whether the asserted employment relationship was, in fact, a partnership, exempted from coverage by the IIA. See RCW 51.12.020. Moreover, contrary to Ms. Derricott's contention, the absence of a finding on the question does not compel a finding in Ms. Derricott's favor. The superior court was not required to make a factual finding on every contention of the parties. City of Tacoma v. Fiberchem, Inc., 44 Wn. App. 538, 541, 722 P.2d 1357 (1986). Instead, only those findings which establish the existence or non-existence of a determinative factual matter need be made. Maehren v. Seattle, 92 Wn.2d 480, 487-88, 599 P.2d 1255 (1979). Given the superior court's factual finding on the question of the existence of an employer-employee relationship, the question of whether Mr. Wallis and Mr. Derricott were partners was not such a determinative factor. Finally, Ms. Derricott's argument is an attempt to persuade us to impute the existence of an employer-employee relationship to Mr. Wallis and Mr. Derricott. Imputing such a relationship as a matter of law is forbidden.Smick, 35 Wn. App. at 279.
Ms. Derricott also contends that, should this court find that the evidence in the record is not sufficient to establish the existence of an employment relationship between Mr. Derricott and Mr. Wallis, it should remand the matter to the Department for further fact-finding. We disagree. Ms. Derricott bore the initial burden of proving the existence of an employment relationship. Ehman 33 Wn.2d at 595. She failed to satisfy that burden. A second chance to do so is, therefore, unwarranted.
Ms. Derricott also requests attorney fees on appeal pursuant to RCW 51.52.130, which allows for an award of attorney fees to a party prevailing in a claim against the Department. Ms. Derricott has not prevailed in her claim and is, therefore, not entitled to fees and costs on appeal.
Affirmed.