next houston specialty versus on at all they please the court my name is robert baer and i represent houston specialty in this matter this case really involves the interplay of three concepts the first obviously is the common law definition of who is an employee the second concept is how does that interplay with the worker's compensation statute which is in derogation of the common law and then the third issue is how does all of that fit within the general liability insurance policy issued by houston specialty can i ask you a question just to kind of set the stage is it common ground here that employees status either under the common law or under the statute brings you within the exclusion it was definitely the court's position to that effect there are cases that also say that so we stuck with that when we went past summary judgment with the drug court for purposes of the trial so for our purposes either common law employee or statutory employer excluded not necessarily and here's the reason i say that if you look at the worker compensation statute which is what all of the language about who is a statutory employee i like column employees under the workers compensation statute because the term statutory employee really doesn't exist in the statute it's created by courts the statute says in the very first sentence of forty four or forty two when used in this chapter unless the context clearly requires otherwise and then it goes into the definition so it's very clear that the purpose of the statute was never to go beyond the employment relationship for purposes of workers compensation benefits you know we have in our in our scheme of laws we have a common law definition of who's an employee and who's an agent we have tax definitions of who's going to be considered an employee for example of residential service in worker's comp statutes in each stage we also have something in derogation of the common law which is the worker's comp statute so although most cases do tend to go in that direction that is not literally what the statute says so like help me and i don't recall the context of the case but i'm looking at this quotation from a case called florida insurance guarantee vs rever a no statutory employees have been treated identically to actual employees in relation to standard employee exclusion clause that is correct little law right yes at story employee and for purposes for our purposes here statutory employee is the worker's comp statute that's what we're talking about right yes the definition of employee in that statute i believe is what the courts are referring to when they say statutory got it so so i think that the answer to my initial question is nation as yes we took the position the judge made it very very clear after my first few objections that she was going to charge both the statutory employee and the common law definition of employee which was consistent with your pleadings which was consistent with the fact that we raised both issues in the pleadings yes and did you ever tell the judge white would change your mind not in that sense we did raise it in our summary judgment moji was he was giving you the instruction that your pleadings requested basically after ruling on summary judgment against us on that issue  raised by some but were not understand but all these jury instruction issues i looked at them closely and time after time after time you either requested them are you didn't object are both i don't find one that you specifically objected to that you preserve the issues maybe i've overlooked one of them we definitely because i cited to the ones in the record and the quoted from the record where we did object initially and then when the judge had ruled against us a couple of times when she'd ask are there any other objections to it i'd say only the things that we previously wrote but the jury instructions came after that yes and i've said in the record only objections i have are the ones i've previously read and cut it you've got to you've got well i can give you an example of something really doesn't cut it you asked for the instruction on burden of proof yes and then didn't object to it yes and now arguing we ought to reverse a district court because they gave you what you asked far because it didn't when it gave its decision to add language out of four forty  she added language to the charge that we didn't ask for and which you didn't object to that is correct ok but she did and we did object to the fact that it didn't compass what we had asked for as well can i can i ask you another question about the i guess the interaction between the common law employee instruction and the statutory employee instruction and you know i can tell just looking at the instructions that the font changes i assume between pages nine and ten something changes and i assume that these were submitted instructions that that the district would sort of piece together but i mean so you're the party here who wants vaughan desperately to be an employee right i mean you want to exclude say you want him to be an employee why then could it possibly prejudice you to give the jury two bites at that apple you can find him an employee this way or that way i don't understand how that could possibly be bad for you the part that is bad for us is she did not separate those out because we can't now determine which one the jury did here's where it makes a difference if they say no they say no or both they said no to the combined question of whether he is a statutory it was a stat was an employee which met by what she charged a statutory employee or common law employer gave two definitions and they said no right now here's where that becomes the problem in order to be a statutory employee then mr vaughan has to be an independent contractor if mr vaughan is an independent contractor under the workers compensation statute then he has to be involved in the construction industry any has to be to cut it down to a hundred grand yes and so the dilemma with the way the court charged in as i pointed out to the court we needed to separate those two if what they were saying was no he is not a common law employee but yes he was a a subcontractor under the statute who will treat as a statutory employee then the court needed to know that you do object to the verdict for yes i said that we needed i didn't object after she read it i did object during the charge conference and we talked about the verdict form because i said you have to separate these out judge otherwise we will not have a clear verdict from the jury and so the analysis is either he's a common law employee and completely excluded or a statutory employee and it completely excluded eggs which in the now does go it does sort of both if he's a statutory employee he's not covered at all if he is a statutory employee but an independent contractor then that kicks in the independent contractor indorsement and by definition project issue and that makes that issue moot have an instructional reconstruction project and auction project issue we did submit both submitted charges and the judge gave  lives circumstances basically what did the jury find about that the jury found that they were not in a construction project and not in the construction industry that your honor is where we have the confusion in the verdict for the jury was determining in any way shape fashion or form that he was an independent contractor under the worker's compensation statute and he filed an exemption form which might not make him a statutory employee and and we're speculating on whether that's what the jury did but if that's what they found and they took him out of either a common law employee or statutory employee then by doing that he's automatically an independent contractor automatically in the construction good morning shortly after me in a van was injured and this was the testimony at the trial he found himself in the hospital with tubes and drugs and was dealing with the concept of being paralyzed for life when a social worker pushed him with numerous forms and said you fill out every single one of these because whether you get approved or not sometimes you make a mistake you might get something to help you out here so he filled them all out one of those happened to be an application for worker's comp and subsequently the workers comp carrier denied it finding that he was not an employee of all florida and at that point he instructed his lawyer to withdraw the petition because he considered himself to be an independent contractor when houston specialty got a hold of the application worker's comp they became enamored with that application and that got us ultimately to where we are today in the meantime  and going back to when you know on an m t v painting began working as a sub for all florida he had prepared a contract which dealt with installing windows and things of that nature three years prior to the accident in the meantime the relationships evolved as they often do and for there's a very good reason that the law says that the title the parties placed on a relationship don't control and that's why we've got all of these  he was turned down for workers yes or i believe so i'd have to go back and revisit that specific part of the testimony but i believe they were informed of that he told them that he had instructed his lawyer to someone in his condition saying you know i've been thinking about the legal implications of my obligation and i would tend to agree yes yes in any event it was good advice yes it was fast forward to the you know we get to the trial there was plenty of evidence and not every factor lined up perfectly and i've never seen them line up perfectly but in this case there was an abundance of evidence as to you know that he was an independent contractor and i could rattle them all off but you know things like having the ten ninety nine being paid per job having his own insurance having his own computers his own equipment so on and so forth are you arguing that no reasonable jury could fund that he was an employee are simply that there was sufficient evidence to fund that he was not the latter i think there were disputed issues then you got to face his issue that there was confusing verdict form that  we disagree that there was a confusing verdict form on that because because the law is actually quite consistent in this area we've got two manners in which somebody can be determined to be an employee and you've got common law and you've got statutory the common law we talked about statutorily we've got the worker's comp statute and then of course we've got reverendo that says you can rely on that to be an employee under the common law scheme it rises and falls on construction industry there's a split excuse me not common law under the comp statute there's a split construction industry is an exception the way the statute is written it starts by saying here is who is an employee here is who in it is an independent contractor and there's an exception unless you are in the construction industry in that case if it's a concern if you're in the construction industry and then is defined of course an independent contractor will be considered an employee and that instruction was given to the jury the instructions from the comp statute follow along on what an employee is when an employee is not and then comes step ten which is if if you're in the construction industry you will be considered an employee if you're an independent contractor that's a question you can tell me why this is too simple minded but but setting aside all the construction industry stuff there's this provision or actually there are two provisions in the comp statute say the same thing in effect an officer of  corporation who elects to be exempt from this chapter by filing a notice is not an employee why doesn't that resolve our position is that it does it's an alternate the construction industry you're not an employee period so even the it's an exception to the exception because it takes you out of it so for those reasons we did not believe that the verdict was inconsistent there's a possibility that it could have been inconsistent for instance if the jury determined that he was an employee and then determined that this was not a construction project it would be we would have some difficulty here but that's not what they decided that the manner in which this verdict form came down ultimately and we spent a lot of time with this of course was the only manner that i could think of at the time which put all these concepts together in a consistent manner ultimately the jury viewed the evidence the same way as we did and came down with a very consistent verdict given the instructions that they were given the rest of the materials are are well briefed the cases are pretty clear unless the court has any specific questions i'll wrap it up up up as evidence that god was not performing a construction project use his own testimony is that when it was or was that was part of it there was much more to it there was testimony that what it involved was pressure where this was by the way i don't know if it became that clear in the brief this was a mobile home with an aluminum roof and the the the job involved cleaning it off pressure washing it and then rolling on with a paint roller a sealer and that was part of what the jury considered in addition to that there was no actual construction in a typical sense so there's an absence of evidence on construction for installing dry wall installing windows things of that nature it was like one that you see in a mobile home park that sits down on a you know a concrete pad and the actual act is analogous there is the same scale as rolling on paint you literally took a roller got on the roller and painted it across the surface that was what we're talking about the testimony in which he was asked if he thought he was engaged in construction how is that admissible well he's a tradesmen and it may not be admissible but there was no objection at the time and certainly in terms of lay opinion late opinion can be admissible if the right predicate is laid and at that point had the objection been made we could have laid the predicate he had been doing this for forty years i don't see how the term construction project in the definition under florida  hour and then the jury determines whether subject to the judge is going to have been you know you're right no objection there just like most of the jury instructions in the end the import of his testimony was precisely how you evidence but what we are going summation was to a reasonable person in a car driving by watching a man rolling has to be paint on the roof of a mobile home it would be on reasonable for someone in that car to say look at that construction  let me sort of work backwards through what was said on the question of whether he's performing construction or in a construction industry or a construction project we've got a case it's not binding on this court it comes out of the first district court of appeals for florida that deals with this process it's the case that we cited in our brief it's the because c said nine thirty two southern second twelve thirty first district court of appeals exact same process manufactured homes rubes basically deteriorate faster than normal so you go in you clean them and you apply a roof coating which is the same as real roofing the height of the structure that's the way you redo a roof on a manufactured home so what you've got is somebody who if we over simplified it to a van yes it would be construction but when you're talking about what is the manufactured home equivalent of resurfacing a house or you know building the roof that's what we're involved in here and that's what makes it the construction industry sally is that you wouldn't say if somebody was painting on the walls outside exterior walls of a house that they were constructing the house well but exactly the process when you go back to mr mendenhall role in this he would come out he would examine the roof and determine if additional structural changes had to be met the whole description of the process by mr vaughan was to make sure that he didn't step on any of the areas of the roof that were weakened over time that he needed to replace  if he fell off the roof or he stepped through the roof and so we started with he had some testimony of him self he was the only witness that those were the two things that went on but for purposes of whether he was an employee neither one of those matter for purposes of the fuselage distinction because selo distinction yes that might make a difference in the applicability of that case but if you read his description of the process it's very clear it was a roofing process for a manufacturer on a turn to the second issue that was raised which is the issue of what is the purpose of the workers comp exemption and i think what the the presumption that when you say exemption you're exempting him from being an employee if you look at for forty two and then you look back i believe it's four forty one or five which deals with the worker's comp exemption what that does is it takes away the benefits remember what workers comp does workers comp says we're going to take people who are not maybe traditionally employees we're going to provide them with a benefit that benefit is workers compensation benefits in addition to that we're going to give the employer toward immunity for any and injuries to a person that has been treated as an employee the exemption says if you have certain things that are met your cell phone or of a business you're a ten percent shareholder in a business things of that nature you can follow an exemption whereby your company does not pay the premium for workers comp and you do not get the benefits from workers comp it doesn't take you out of the statutory definition of being an employee it just says you're not going to qualify for the workers compensation ways to be an employee within the meaning of an exclusion common law and statutory in that the statutory avenue for this case is the statute the statutory avenue for this case is the statute but it takes him out of the employee for purposes of the benefits and we go back and look i've got it here you said it was fifteen fifteen b three and d eight i think effectively say the same thing basically if you're an officer and you file the exemption then you're not an employee but that's where it says as provided in for forty point zero five you're not an employee that's the provision that deals with the payment of benefits it's not taking you out of an employee for for forty point of two for forty point zero two is where the definition of an employee is your interpretation you get the benefit but you can be employed yes and that's exactly what some of the statutory employer community cases talk about is there is a place the presumption is that someone who is an owner of their own business is only going to want to file an exemption if they have otherwise like i'm exempt we have good health insurance we have a good disability policy wot pay the premium on my salary in my law firm to have workers compensation benefits for me when i get better health insurance and better disability insurance than worker's comp that's available unfortunately the statute allows anybody who owns a business to file an exemption so that they don't have necessarily any proof that those people are otherwise well insured i'm not in agreement with that exemption in the way that it's written in the statute but that is the facto result of the way the statute is written but the the provision actually takes away the the employee definition you know five which then takes away the benefits