Title: IN THE MATTER OF THE WORKERS' COMPENSATION CLAIM OF: JUSTIN C. KUNKLE V. STATE OF WYOMING, ex rel., WYOMING WORKERS' SAFETY AND COMPENSATION DIVISION

State: wyoming

Issuer: Wyoming Supreme Court

Document:

IN THE MATTER OF THE WORKERS' COMPENSATION CLAIM OF: JUSTIN C. KUNKLE V. STATE OF WYOMING, ex rel.,  WYOMING WORKERS' SAFETY AND COMPENSATION DIVISION2005 WY 49109 P.3d 887Case Number: 04-131Decided: 04/14/2005
 
 
APRIL 
TERM, A.D. 2005

 
 
                                                                                                            

 
 
IN THE 
MATTER OF THE WORKERS'

COMPENSATION 
CLAIM OF:

 
 
JUSTIN 
C. KUNKLE,

 
 
Appellant

(Petitioner),

 
 
v.

 
 
STATE OFWYOMING, ex rel., WYOMING

WORKERS' 
SAFETY AND COMPENSATION

DIVISION,

 
 
Appellee

(Respondent).

 
 
 
 

Appeal 
from the DistrictCourtofTetonCounty

The 
Honorable Nancy Guthrie, Judge

 
 

Representing 
Appellant:

            
David M. Gosar, Jackson , Wyoming . 

 
 

Representing 
Appellee:

            
Patrick J. Crank, Attorney General; John W. Renneisen, Deputy Attorney 
General; Steven Czoschke, Senior Assistant Attorney General; and Kristi M. 
Radosevich, Assistant Attorney General. 

 
 
 
 
Before 
HILL, C.J., and GOLDEN, KITE, and VOIGT, JJ., and STEBNER, D.J., 
Retired.

 
 
 
 
KITE, 
Justice.

[¶1]      Justin C. Kunkle 
filed a claim for workers' compensation benefits claiming he was injured while 
working in TetonCounty for Shane Demler Masonry (Demler), a Utah based construction 
company.  The Wyoming Workers' 
Compensation Division (Division) denied Mr. Kunkle's claim, he objected and, 
after a hearing, the Office of Administrative Hearings (OAH) also denied his 
claim, finding that Mr. Kunkle did not meet his burden of proof and that Demler 
"was not an employer principally located in Wyoming."  Mr. Kunkle appealed to the district 
court, which affirmed the denial of benefits, and he now appeals to this 
Court.  We 
reverse.

 
 
 
 

 
 
[¶2]      Mr. Kunkle 
presents a single issue for review:

 
 
The Office of Administrative Hearings erred as a 
matter of law by applying W.S. [§27-14-301] to this case, and further, by 
interpreting this statute in a manner that resulted in the denial of workers' 
compensation coverage.

 
 
The State rephrases the issue as 
follows:

 
 
Whether the Hearing Examiner's denial of Workers' 
Compensation coverage, to an employee of a non-resident employer who has no 
principal place of business in Wyoming, is in accordance with 
law.

 
 
 
 

 
 
[¶3]      On January 21, 
2002, Demler hired Mr. Kunkle to work as a stone mason on the Four Seasons Hotel 
in TetonVillage, a project which 
lasted over a year.  Demler is a 
Utah company 
and was contracted to provide masonry services to the project.  On the same day Demler hired Mr. Kunkle, 
he injured his right knee when he fell from icy scaffolding and landed on a 
heater, twisting his knee and tearing ligaments.  Mr. Kunkle reported the injury to his 
foreman and was taken to St. John'sHospital in Jackson. Following 
treatment at the hospital, Mr. Kunkle was given a leg brace and prescribed 
physical therapy.   No surgery 
was performed.

 
 

[¶4]      Mr. Kunkle's 
physician certified temporary total disability from January 21, 2002, to March 
26, 2002, and he applied for both Utah and 
Wyoming 
workers' compensation benefits.  The 
Utah workers' 
compensation division denied Mr. Kunkle's claim on February 13, 2002.  Likewise, on March 20, 2002, the 
Division issued a final determination concluding, "pursuant to Wyoming 
Statute 27-14-301(a)(i), coverage is required only if the principal place of 
business is localized in Wyoming.  
Shane Demler Masonry did not elect to obtain coverage for Wyoming residents on the 
date of injury."1

 
 
[¶5]      Mr. Kunkle 
objected to the Division's determination and a hearing was held.  At the hearing, Mr. Kunkle contended 
that Demler's contacts within Wyoming 
established that Demler was not a temporary employer, but rather was required to 
obtain workers' compensation coverage in Wyoming.  
However, the hearing examiner affirmed the Division's denial of benefits, 
concluding that "[Demler] was not an employer principally located in Wyoming, and [Mr. Kunkle] 
should not receive benefits under the Wyoming Workers' Compensation Act."  

 
 
[¶6]      Mr. Kunkle timely 
filed with the district court a petition for review of the hearing examiner's 
order.  On March 11, 2004, the 
district court affirmed the order and Mr. Kunkle now 
appeals.

 
 
 
 

 
 
[¶7]      We review agency 
action following contested case hearings in accordance with Wyo. Stat. Ann. § 
16-3-114(c) (LexisNexis 2003), which provides as follows: 

 
 
(c) To 
the extent necessary to make a decision and when presented, the reviewing court 
shall decide all relevant questions of law, interpret constitutional and 
statutory provisions, and determine the meaning or applicability of the terms of 
an agency action.  In making the 
following determinations, the court shall review the whole record or those parts 
of it cited by a party and due account shall be taken of the rule of prejudicial 
error.  The reviewing court 
shall:

            
(i) Compel agency action unlawfully withheld or unreasonably 
delayed;  and

            
(ii) Hold unlawful and set aside agency action, findings and conclusions 
found to be:

  (A) Arbitrary, capricious, an abuse of 
discretion or otherwise not in accordance with law;

  (B) Contrary to constitutional right, 
power, privilege or immunity;

        (C) In excess of statutory jurisdiction, 
authority or limitations or lacking statutory right;

        (D) Without observance of procedure 
required by law;  
or

        (E) Unsupported by substantial evidence 
in a case reviewed on the record of an agency hearing provided by statute. 

 
 
[¶8]      Furthermore, in 
Hoff v. State ex rel. Wyo. Workers' Safety and Compensation Div., 2002 WY 
129, ¶¶5-8, 53 P.3d 107, ¶¶5-8 (Wyo. 2002), we reiterated the proper application 
of the substantial evidence and arbitrary and capricious standards of review: 

 
 
Our 
standard of review when reviewing administrative agency action was recently 
clarified in the case of Newman v. State ex. rel.Workers' Safety and 
Compensation Div., 2002 WY 91, 49 P.3d 163 (Wyo. 2002) . . . 
.

 
 
In 
appeals where both parties submit evidence at the administrative hearing, 
Newman mandates that appellate review be limited to application of the 
substantial evidence test. Newman, 2002 WY 91, ¶22, 49 P.3d 163. This 
is true regardless of which party appeals from the agency decision. In addition, 
this court is required to review the entire record in making its ultimate 
determination on appeal. Newman, at ¶19 and 
¶¶24-26.

 
 
            
The substantial evidence test to be applied is as 
follows:

"In reviewing 
findings of fact, we examine the entire record to determine whether there is 
substantial evidence to support an agency's findings. If the agency's decision 
is supported by substantial evidence, we cannot properly substitute our judgment 
for that of the agency and must uphold the findings on appeal. Substantial 
evidence is relevant evidence which a reasonable mind might accept in 
support of the agency's conclusions. It is more than a scintilla of 
evidence."

Newman, 
at ¶12 (quoting State ex rel. Workers' Safety and Compensation Div. v. 
Jensen, 2001 WY 51, ¶10, 24 P.3d 1133, ¶10 (Wyo. 
2001)).

 
 
Even 
when the factual findings are found to be sufficient under the substantial 
evidence test, Newman further concludes this court may be required to 
apply the arbitrary-and-capricious standard as a "safety net" to catch other 
agency action which prejudiced a party's substantial right to the administrative 
proceeding or which might be contrary to the other WAPA review standards. . . 
.

 
 
Because 
Mr. Kunkle and the Division both presented evidence, we will review the decision 
under the substantial evidence standard.        

 
 
[¶9]      We afford no 
deference to the agency's legal conclusions. Statutory interpretation raises 
questions of 
law over which our review authority is plenary.  
Conclusions of law made by an administrative agency are 
affirmed only if they are in accord with the law. Wesaw v. Quality 
Maintenance, 2001 WY 17, ¶8, 19 P.3d 500, ¶8 (Wyo. 
2001).

 
 
 
 

 
 
[¶10]   Mr. Kunkle argues that Wyo. Stat. 
Ann. § 27-14-301 (LexisNexis 2003), which purports to require that the 
employment must be principally located in Wyoming for the act to apply to the 
work-related injury, pertains only to employment outside of Wyoming and 
therefore, does not apply to Mr. Kunkle who was working in Wyoming when 
injured.   The Division argues 
§ 27-14-301 clearly pertains to Mr. Kunkle's situation. 

 
 
[¶11]   Statutory interpretation involves a reasoned 
search for the intention of the legislature.  Petroleum Inc. v. State ex 
   rel.   State Bd. of Equalization, 983 P.2d 1237, 1240 
(Wyo. 
1999).  We interpret statutory language in light 
of the purpose and policy behind the enactment.  In seeking to ascertain the intent of 
the legislature regarding the proper construction, we are guided by the fact 
that the legislature is presumed to have intended a reasonable, just, and 
constitutional result.  82 C.J.S. 
Statutes §§307-310 (2004); Petroleum Inc., 983 P.2d  at 
1240.  The rules of statutory 
interpretation 
are well recognized: 

"We 
first decide whether the statute is clear or ambiguous. This Court makes that 
determination as a matter of law. 'A statute is unambiguous if its wording is 
such that reasonable persons are able to agree as to its meaning with 
consistency and predictability.' A 'statute is ambiguous only if it is found to 
be vague or uncertain and subject to varying interpretations."

Powder 
River Coal Co. v. State Bd. of Equalization, 2002 WY 
5, ¶6, 38 P.3d 423, ¶6 (Wyo. 2002) (citations omitted). 

"When 
the words used are clear and unambiguous, a court risks an impermissible 
substitution of its own views, or those of others, for the intent of the 
legislature if any effort is made to interpret or construe statutes on any 
basis other than the language invoked by the legislature. . . . If the language 
selected by the legislature is sufficiently definitive, that language establishes 
the rule of law. . . . This inhibition upon statutory construction offers 
assurance that the legislative efforts and determinations of elected 
representatives will be made effective without judicial adjustment or 
gloss."

State ex 
rel. Dept. of Revenue v. Buggy   Bath Unlimited, Inc., 2001 
WY 27, ¶16, 18 P.3d 1182, ¶16 (Wyo. 2001) (citation omitted).  Furthermore, when interpreting statutes, 
we give effect to every word, clause and sentence, and construe them in pari materia. 
Pedro/Aspen, 
Ltd. v. Bd. of County Comm'rs, 2004 WY 
84, ¶27, 94 P.3d 412, ¶27 (Wyo. 2004).  We avoid 
construing a statute so as to render a portion of it meaningless.  Id.  

 
 
[¶12]   The actual language of § 27-14-301 
is quite clear and unambiguous.  It 
states:

 
 
§ 
27-14-301. Applicability of provisions.

 
 
  (a) This act applies to all injuries and 
deaths occurring in Wyoming in 
employment described in W.S. 27-14-108(a), (d), (e), (j), (k) or (m) if the employment is principally localized 
in Wyoming and to all injuries and deaths occurring outside of Wyoming in 
employment described in W.S. 27-14-108(a), (d), (e), (j), (k) or (m) under the 
following conditions:

      (i) The employment is 
principally localized in Wyoming;

(ii) The 
employee at the time of the injury is working under a contract for hire made in 
Wyoming for employment by an employer who has a principal place of business 
within the state established for legitimate business-related purposes and the 
employment is within the United States, a United States territory, Canada or 
Mexico, but which is not principally localized in any other state, United States 
territory, Canada or Mexico;  
or

            
(iii) The employee at the time of the injury is working under a contract 
for hire made in Wyoming for employment 
principally localized in another state, United States territory, Canada or Mexico, the 
workers' compensation law of which jurisdiction does not require that the 
employment be covered by a workers' compensation insurance policy issued under 
the laws of that jurisdiction.

  (b) For purposes of this section, 
employment is principally localized where:

            
(i) The employer has a principal place of business within the state 
established for legitimate business-related purposes;  and

            
(ii) The employee regularly works at or from that place of business. 

 
 
(emphasis 
added).

 
 
[¶13]   Mr. Kunkle argues that the 
legislature's use of the term "this act" in the first phrase refers to the entire Wyoming Workers' Compensation 
Act and thus that phrase simply restates the general purpose of the act as a 
whole.  He contends the remainder of the statute addresses 
out-of-state employment.  We can 
agree that the second phrase of subsection (a), which refers to injuries 
occurring outside of the state, and subsections (i) and (ii) do not apply to 
injuries such as Mr. Kunkle's which occur in the state. However, his argument 
ignores the complete language of the first phrase which states,  "[t]his act applies to all injuries and deaths occurring in 
Wyoming in employment described in W.S. 27-14-108(a), (d), (e), (j), (k) or 
(m) if the employment is principally localized in 
Wyoming . . ."  § 27-14-301(a) 
(emphasis added).  Ignoring the 
requirement that employment must be principally localized in Wyoming disregards our 
well-established case law, which requires we give full effect to the plain 
language chosen by the legislature. 

 
 
[¶14]   However, when all of the workers' 
compensation statutes are read together, we perceive a conflict between the 
apparent intent to cover all employees working in the state and the requirement 
of § 27-14-301 that the act is applicable to injuries occurring in the state 
only if the employment is "principally located in Wyoming."  The structure of the workers' 
compensation system seems to be focused upon providing all employees in 
ultra-hazardous jobs an exclusive remedy for any injury, no matter where the 
employer resides or whether the employer obtained coverage and paid the required 
premiums.  See Wyo. Stat. 
Ann. § 27-14-102(a)(vii) (LexisNexis 2003) defining employee as any person 
engaged in extrahazardous employment; Wyo. Stat. Ann. § 27-14-102(a)(viii) 
(LexisNexis 2003) defining employer as any person employing an employee engaged 
in extrahazardous employment or who elects coverage without limitation as to 
residence; Wyo. Stat. Ann. § 27-14-102(a)(xi) (LexisNexis 2003) defining injury 
without limitation to where it occurred; Wyo. Stat. Ann. § 27-14-203(a) 
(LexisNexis 2003) which allows the state to recover against employers who do not 
obtain and pay for coverage for benefits paid to injured employees (inferring 
employees are covered irrespective of whether employer has coverage); Wyo. Stat. 
Ann. § 27-14-108(g)(iv) (LexisNexis 2003) which provides the act does not apply 
to itinerant employers without a fixed base of operation in the state, but also 
provides this section does not prohibit coverage of any resident employee 
performing substantially all his services within the state (inferring such 
employees are eligible for benefits).  
However, the issue of the inconsistency of § 27-14-301(a) with the rest 
of the act was not raised below, and therefore, we will not address it 
here.  In addition, we need not 
address it in resolving this case because the record supports the conclusion 
that Mr. Kunkle's employment was principally located in Wyoming and thus the 
requirement of § 27-14-301 was met and he was entitled to 
benefits.

 
 
[¶15]   Based upon a thorough review of the 
entire record, we agree with Mr. Kunkle that his employment was principally 
localized in Wyoming because Demler had "a 
principal place of business in Wyoming," thus complying with § 27-14-301(a) 
and entitling Mr. Kunkle to benefits.  
Section 27-14-301(b) defines "employment principally localized" as where 
"the employer has a principal place of business within the state established for 
legitimate business-related purposes; and the employee regularly works at or 
from that place of business."  The 
Workers' Compensation Act does not define "a principal place of business."  However, Chapter 1, Section 4(t)2 of the Division's rules and 
regulations defines it as follows:

 
 
(t)         
Principal Place of Business. For purposes of W.S. 
§27-14-301(b), a "principal place of business within the state established for 
legitimate business-related purposes" must have the following 
characteristics:

 
 
(i)  exclusive use of fixed premises with 
recognizable physical and mailing addresses:

 
 
(ii)  at least one employee who regularly 
performs most of his services for the business in or out of the fixed 
premises;

 
 
(iii) 
the business is regularly accessible by telephone and mail at the fixed 
premises; and

 
 
(vi) the 
business regularly conducts its primary business or necessary ancillary services 
at the fixed premises.

 
 
 
 
[¶16]   We consider each element of the 
rule as it applies to Demler.  
First, we must address the Division's argument that Demler did not occupy 
a "fixed premises," because that term appears in each element of the rule.  The term "fixed premises" is not defined 
by either the Wyoming Workers' Compensation Act or the workers' compensation 
rules and regulations.  According to 
Webster's New World Dictionary 528 (2d ed. 1972), the word "fixed" means "firmly 
placed or attached; not movable, unmoving, resolute."  As the record shows, Demler maintained 
an office in a construction trailer that was located in the same place for at 
least one year.  While it was 
apparently capable of being moved, it was not moved, and provided support for a 
job of substantial duration.  Within 
the trailer, Demler had a designated area in which its employees worked and 
provided support to the masonry project. 

 
 

[¶17]   Section 4(t)(i) of the Division's 
rules requires "exclusive 
use of fixed premises with recognizable physical and mailing 
addresses."  Demler shared a trailer on the job site 
with the general contractor. Mr. Kunkle testified that Demler had exclusive use 
of its portion of the trailer.  
"[The general contractor] had an office [on] this side of the trailer; 
then [Demler] had their . . . office over there, you know." The 
Division seems to suggest that simply because Demler's office was in a 
construction trailer shared with the general contractor it was not the 
"exclusive use of a fixed premises."  
We find that reading of the statute and the workers' compensation rules 
and regulations unreasonable.  To 
require that employers occupy a certain type of structure or refrain from 
sharing facilities in order for the employment to qualify as principally located 
in Wyoming would go far beyond § 27-14-301(b).  As we noted in Cochran v. State ex rel. Wyo. Workers' 
Safety and Compensation Div., 993 P.2d 320 (Wyo. 1999), the 
Division lacks the power to legislate and is limited to the authority granted to 
it by the legislature.  There was 
also testimony that 
Demler maintained a post office box in Jackson, thus complying with "recognizable 
physical and mailing address."

 
 

[¶18]   Section 4(t)(ii) of the Division's 
rules requires that at least 
one employee must regularly perform most of his services for the business in or 
out of the fixed premises.  Mr. Kunkle's uncontested testimony 
indicated that Demler had a secretary that worked out of the construction 
trailer. 

 
 

[¶19]   Section 4(t)(iii) of the Division's 
rules mandates that the 
business be regularly accessible by telephone and mail at the fixed premises. 
 Mr. Kunkle testified the trailer 
contained a "land line" telephone and a cell phone for use in connection with 
the business.  Demler had a working 
fax machine in the trailer which was used to fax Mr. Kunkle's W-2 form to 
Utah.  Further, the 
Division conceded at oral argument that most mail in Jackson is delivered to 
post office boxes and Demler maintained such a box.

 
 

[¶20]   Lastly, 
Section 4(t)(iv) of the Division's rules, requiring that "the business regularly 
conducts its primary business or necessary ancillary services at the fixed 
premises," was satisfied by the testimony that Demler employed a secretary at 
the trailer site, W-2 forms were faxed to Utah from the trailer, and Mr. Kunkle 
was hired at the trailer site. While Demler obviously did not conduct its 
"primary" business, that of masonry, at the trailer, "necessary ancillary 
services" including the administration of the business were unmistakably 
conducted at the trailer site.  

 
 

[¶21]   The only factual findings made by 
the hearing examiner were that Demler was working on a job in Teton County 
expected to last a year, had a trailer at the jobsite that they used as an 
office, and received mail at a post office box in Jackson.  On the basis of those limited findings, 
the 
hearing examiner concluded, as a matter of law, "Demler was not an employer 
principally located in Wyoming" and Mr. Kunkle should not receive 
workers' compensation benefits.  
While the hearing examiner's limited factual findings are supported by 
substantial evidence, they do not support the conclusions of law which 
purportedly rely upon them.  We have 
stated:

 
 
"When an 
agency's determinations contain elements of law and fact, we will not treat them 
as findings of fact. We extend deference only to agency findings of basic 
fact.' When reviewing a finding of ultimate fact,' we 
divide the factual and legal aspects of the finding to determine whether the 
correct rule of law has been properly applied to the facts. If the correct rule 
of law has not been properly applied, we do not defer to the agency's finding 
but correct the agency's error in either stating or applying the 
law."

 
 

Tollefson 
v. Wyo. State Ret. Bd., 2003 WY 
150, ¶10, 79 P.3d 518, ¶10 (Wyo. 2003) (citation omitted).

 
 
[¶22]   The hearing examiner's conclusions 
erroneously characterize the statute as requiring the employer, as opposed to the employment, to be principally located in 
Wyoming.  In a demonstration of similarly 
imprecise and misleading use of language, the Division's brief suggests the 
statute requires that the employer conduct "its primary business" in Wyoming.  The clear requirement of the statute is 
simply that the "employment be 
principally localized" in Wyoming and that occurs when an employer has 
a (not the) principal place of business within 
the state established for legitimate business-related purposes and the employee 
regularly works at or from that place of business.  The uncontested evidence Mr. Kunkle 
presented met that standard.

 
 
[¶23]   Although not mentioned in the 
hearing examiner's findings and conclusions, the Division's determination to 
reject Mr. Kunkle's claim also referred to the employer's election not to obtain 
coverage as a basis for its ruling.  
While this issue is not directly before us, we note that a non-resident 
employer has certain obligations pursuant to the statute including to provide 
certain reports to the division and to file a surety bond.  Wyo. Stat. Ann. § 27-14-302 (LexisNexis 
2003).  In addition, no contract is 
to be let to a nonresident employer for work in the state until worker 
compensation contributions have been made.  
Wyo. 
Stat. Ann. § 27-14-303 (LexisNexis 2003).  
The only non-resident employer that is exempt from the act is a primarily 
itinerant worker with no fixed base of operations in the state as provided in 
Wyo. Stat. Ann. § 27-14-108(g)(iv) (LexisNexis 2003).  Further, the statute provides that 
employees of itinerant employers are not prohibited from obtaining coverage 
under the act. Thus, it appears when the entire act is read as a whole, the 
employer's election not to obtain coverage is not determinative of whether the 
employee is entitled to benefits.

 
 
 
 
CONCLUSION

 
 

[¶24]   We hold that Mr. Kunkle's 
employment was principally located in Wyoming and, thus the act applied to his 
work-related injury.  We reverse the district court's 
order and remand for further proceedings consistent with this 
opinion.

  
 
 
FOOTNOTES

1Demler 
obtained Wyoming coverage after Mr. Kunkle's 
accident.

2This 
section was amended in 2004 and has been renumbered section 4(ad).  The section now 
reads:

 
 
            
(ad) Principal Place of Business.  For purposes of W.S. § 27-14-301 
(b), a "principal place of business within the state established for legitimate 
business purposes" must have the following 
characteristics:

 
 
(i) 
exclusive use of fixed premises with recognizable physical 
address;

 
 
(A)  A business sharing building or trailer 
space must have a clearly defined location used exclusively for its 
business.

 
 
(ii) at 
least one employee who regularly performs most of his services for the business 
in or based out of the fixed premises;

 
 
(iii) is 
regularly accessible by mail or other recognized delivery service; 
and

 
 
(iv) 
regularly conducts its primary business or necessary ancillary services at the 
fixed premises.