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302 Nebraska Report

MARTINEZ v. CMR CONSTR. & ROOFING OF TEXAS

Cite as 302 Neb. 618

Juan Martinez, appellee, v. CMR Cons

& Roofing of Texas, LLC, defen

third-party plaintiff, appellant, 

Rene Menjivar and Texa

Insurance Company, third-

defendants, appellee

____ N.W.2d ___

Filed March 22, 2019. No. S-18-419.

1. Workers’ Compensation: Appeal and Error. A judgment, order, or 

award of the compensation court may be modified, reversed, or set aside 

only upon the grounds that (1) the compensation court acted without or 

in excess of its powers; (2) the judgment, order, or award was procured 

by fraud; (3) there is not sufficient competent evidence in the record to 

warrant the making of the judgment, order, or award; or (4) the findings 

of fact by the compensation court do not support the order or award.

2. ____: ____. An appellate court is obligated in workers’ compensation 

cases to make its own determinations as to questions of law.

3. ____: ____. Findings of fact made by the Workers’ Compensation Court 

after review have the same force and effect as a jury verdict and will not 

be set aside unless clearly erroneous.

4. Workers’ Compensation. As the trier of fact, the Workers’ Compensation 

Court is the sole judge of the credibility of witnesses and the weight to 

be given their testimony.

5. Workers’ Compensation: Liability. When a contractor fails to require 

a subcontractor to carry workers’ compensation insurance and an 

employee of the latter sustains a job-related injury, the contractor is a 

statutory employer and, with the immediate employer subcontractor, is 

jointly and severally liable to pay compensation under the terms of the 

Nebraska Workers’ Compensation Act.

6. Workers’ Compensation. When determining a loss of earning capacity for an injured worker, the four factors to consider under Neb. Rev. 

Stat. § 48-121 (Reissue 2010) are the worker’s (1) eligibility to procure 

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

06/07/2019 09:08 AM CDT
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employment generally, (2) ability to earn wages, (3) ability to hold a job 

obtained, and (4) capacity to perform the work in the job in which the 

worker is engaged.

7. Workers’ Compensation: Words and Phrases. A worker who, solely 

because of his or her injury, is unable to perform substantial amounts 

of labor, either in his or her particular line of work, or in any other for 

which he or she would be fitted except for the injury, is totally disabled 

within the meaning of the workers’ compensation law.

8. Final Orders: Appeal and Error. Under Neb. Rev. Stat. § 25-1902 

(Reissue 2016), the three types of final orders that an appellate court 

may review are (1) an order that affects a substantial right and that 

determines the action and prevents a judgment, (2) an order that affects 

a substantial right made during a special proceeding, and (3) an order 

that affects a substantial right made on summary application in an action 

after a judgment is rendered.

9. Workers’ Compensation: Final Orders. A workers’ compensation case 

is a special proceeding.

10. Final Orders: Appeal and Error. A substantial right is an essential 

legal right, not a mere technical right. A substantial right is affected if 

the order affects the subject matter of the litigation, such as diminishing 

a claim or defense that was available to the appellant prior to the order 

from which the appeal is taken.

11. Final Orders. It is not enough that the right itself be substantial; the 

effect of the order on that right must also be substantial.

12. Final Orders: Appeal and Error. A substantial right under Neb. Rev. 

Stat. § 25-1902 (Reissue 2016) is not affected when that right can be 

effectively vindicated in an appeal from the final judgment.

13. Jurisdiction: States. Specific personal jurisdiction requires that the 

defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of 

its laws.

14. ____: ____. To exercise specific jurisdiction, the plaintiff’s cause of 

action must arise out of, or be related to, the defendant’s contacts with 

Nebraska.

15. ____: ____. In order to give rise to specific personal jurisdiction, the 

defendant’s conduct and connection with the forum state must be such 

that he or she should reasonably anticipate being haled into court there.

Appeal from the Workers’ Compensation Court: Daniel 

Fridrich, Judge. Affirme

Benjamin E. Maxell, of Govier, Katskee, Suing & Maxell, 

P.C., L.L.O., for appellant.
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Cite as 302 Neb. 618

James R. Walz for appellee Juan Martinez.

Jason W. Grams and Stacy L. Morris, of Lamson, Dugan & 

Murray, L.L.P., for appellee Texas Mutual Insurance Company.

Heavican, C.J., Miller-Lerman, Cassel, Stac

Papik, and Freudenberg, 

Heavican, C

INTRODUCTION

The Nebraska Workers’ Compensation Court concluded 

that CMR Construction & Roofing of Texas, LLC (CMR), 

was a statutory employer under Neb. Rev. Stat. § 48-116 

(Reissue 2010) of the Nebraska Workers’ Compensation Act,1

thus requiring it to compensate Juan Martinez for injuries sustained while acting as an employee of Rene Menjivar, a CMR 

subcontractor.

CMR challenges the compensation court’s determination 

under § 48-116 of what constitutes the term “employer” and 

alleges the compensation court lacked personal jurisdiction 

over Texas Mutual Insurance Company (Texas Mutual), a 

workers’ compensation insurance company domiciled and having its principal place of business in Texas. CMR also challenges the compensation court’s findings regarding earning 

capacity, attorney fees, and entitlement to future medical care. 

We affirm.

BACKGROUND

CMR is engaged in the repair and replacement of the roofs 

of single family dwellings anywhere in the continental United 

States, corresponding to the aftermath of severe weather conditions. In 2014, CMR engaged Menjivar as a subcontractor and 

at that time, required Menjivar to produce workers’ compensation insurance, which CMR verified. CMR further required 

Menjivar to add CMR to its workers’ compensation policy and 

produce a certificate that demonstrated CMR would be notified 

1 Neb. Rev. Stat. §§ 48-101 to 48-1,117 (Reissue 2010 & Cum. Supp. 2014).
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by Menjivar’s insurance carrier, Texas Mutual, before the cancellation or expiration of the policy.

CMR agreed to repair a residential roof in Omaha, Nebraska. 

CMR subsequently assigned the roofing project to Menjivar. 

On March 12, 2015, Martinez, employed by Menjivar, was 

working on the roof when he fell two stories and suffered significant injuries to his back, hip, and legs. Martinez was treated 

at various medical facilities in Omaha.

On December 11, 2015, Martinez initiated an action in the 

compensation court to recover for his injuries. Martinez moved 

for summary judgment, and in the course of litigating that 

motion, Martinez and CMR agreed that Menjivar previously 

possessed valid workers’ compensation insurance through 

Texas Mutual, but that the policy of insurance was canceled on 

December 16, 2014, due to nonpayment.

On August 17, 2016, following a motion for summary 

judgment, the compensation court found that CMR was the 

statutory employer of Martinez. The court specifically noted 

in response to Martinez’ third set of requests for admissions, 

that CMR admitted it had “created or carried into operation 

a ‘scheme, artifice, or device’ as contemplated by Neb. Rev. 

Stat. §48-116” to avoid employer liability. On September 6, 

CMR sought an interlocutory appeal seeking to reverse the 

employer determination, which on October 27, in case No. 

A-16-857, was summarily dismissed by the Nebraska Court 

of Appeals.

During the course of the workers’ compensation proceedings, Texas Mutual sought to be dismissed from the suit on the 

basis that the court lacked personal jurisdiction over it. CMR 

offered the affidavit of its attorney in opposition to the motion 

to dismiss filed by Texas Mutual. That affidavit contained the 

policy of insurance between Menjivar and Texas Mutual, with 

CMR added as an additional insured. The policy of insurance 

shows that Texas Mutual’s company office is in Austin, Texas, 

and further that Texas Mutual issued the policy to CMR, whose 

office was in Haltom City, Texas.
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Evidence in the record demonstrates that Texas Mutual is 

a creation of the Texas Legislature as an insurer of last resort 

and does not provide insurance or do business in the State of 

Nebraska. The record further demonstrates that in item 3(A) 

of the policy procured in this case, Texas is the only state in 

which benefits of the workers’ compensation insurance applies. 

The court found that the evidence offered by CMR failed to 

establish a prima facie case of personal jurisdiction.

Martinez also opposed Texas Mutual’s motion to dismiss 

and offered exhibit 35, a workers’ compensation insurance 

policy between Menjivar and Texas Mutual. Exhibit 35 showed 

that a policy of workers’ compensation insurance was issued 

to Menjivar at an address in Houston, Texas. Texas Mutual’s 

address was noted to be in Austin. The court again found that 

this exhibit did nothing to show the existence of any contacts 

between Texas Mutual and Nebraska.

The court noted that Texas Mutual had initiated a declaratory action in the State of Texas, asking a Texas court to determine whether the policy of workers’ compensation insurance 

issued by Texas Mutual afforded coverage for the injuries suffered by Martinez. The compensation court ultimately found 

that Texas was the proper forum to decide a dispute between 

two Texas companies involving a policy of workers’ compensation insurance that was issued in Texas, and it therefore 

granted Texas Mutual’s motion to dismiss. On September 20, 

2017, CMR filed a second interlocutory appeal with the Court 

of Appeals, seeking review of the trial court’s finding that it 

lacked personal jurisdiction over Texas Mutual. On October 

27, in case No. A-17-1020, the Court of Appeals dismissed the 

appeal without opinion.

On January 12, 2017, the compensation court held a hearing 

on Martinez’ second motion for partial summary judgment, in 

which Martinez sought a finding and award of, among other 

things, attorney fees. On February 10, the compensation court 

entered partial summary judgment in favor of Martinez, finding that Martinez was entitled to “a reasonable attorney’s fee 
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pursuant to Neb. Rev. Stat. § 48-125 for [CMR’s] failure to pay 

the medical bill from [a medical center in Omaha] within thirty 

days of its receipt.”

On February 13, 2018, the compensation court held a trial 

in this case. The court issued its award on March 23. During 

trial, the court resolved the outstanding issues of the nature and 

extent of the injuries Martinez suffered on March 12, 2015, the 

extent of Martinez’ entitlement to temporary and permanent 

disability benefits, CMR’s liability for medical bills incurred 

by Martinez, and Martinez’ entitlement to an award of future 

medical care.

The court found that Martinez was entitled to temporary 

total disability benefits for the 3 months he was off work after 

the accident. The court relied on the opinion of the physician 

who treated Martinez’ femur fracture, as well as the testimony 

of Martinez, to find that Martinez was temporarily totally 

disabled from and including March 12 through and including 

June 12, 2015, a period of 13.2857 weeks. The court found 

that Martinez was entitled to temporary total disability benefits 

at the weekly rate of $761, which was the maximum rate for 

injuries in 2015.

Finding insufficient evidence, the compensation court 

declined to award Martinez temporary partial disability benefits. The court found that Martinez had reached maximum medical improvement from all of his injuries on October 12, 2016. 

Relying on the testimony of Dr. Sunil Bansal, a physician who 

examined Martinez, the court further found that Martinez suffered permanent impairment to his whole body due to his neck, 

head, and back injuries.

Having considered all of the evidence, including the opinion of the agreed-upon vocational rehabilitation counselor, the 

court found that Martinez had suffered an 80-percent loss of 

earning capacity. Based upon that factual finding, the court 

found that Martinez was entitled to permanent partial disability 

benefits at the weekly rate of $613.34, starting June 13, 2015, 

and continuing for 286.7143 weeks.
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CMR was ordered to pay a total of $52,980.58 in medical 

and physical therapy expenses. The court further found that 

Martinez was entitled to an award of future medical care for 

his neck injury only.

ASSIGNMENTS OF ERROR

CMR assigns, consolidated and restated, that the compensation court erred in (1) finding that CMR was the statutory 

employer of Martinez and that therefore CMR was liable for 

the payment of any awarded indemnity, medical, or other 

benefit to Martinez; (2) awarding Martinez an excessive loss 

of earning capacity; (3) finding that CMR was liable for the 

payment of attorney fees to Martinez for unpaid medical bills 

related to Martinez’ injuries; (4) finding that Martinez is entitled to future medical care; and (5) finding that the court lacked 

personal jurisdiction over Texas Mutual.

STANDARD OF REVIEW

[1] A judgment, order, or award of the compensation court 

may be modified, reversed, or set aside only upon the grounds 

that (1) the compensation court acted without or in excess of 

its powers; (2) the judgment, order, or award was procured 

by fraud; (3) there is not sufficient competent evidence in the 

record to warrant the making of the judgment, order, or award; 

or (4) the findings of fact by the compensation court do not 

support the order or award.2

[2,3] An appellate court is obligated in workers’ compensation cases to make its own determinations as to questions of 

law.3 Findings of fact made by the Workers’ Compensation 

Court after review have the same force and effect as a jury verdict and will not be set aside unless clearly erroneous.4

2 See Buckingham v. Creighton University, 248 Neb. 821, 539 N.W.2d 646 

(1995). See, also, § 48-185.

3 Hull v. Aetna Ins. Co., 247 Neb. 713, 529 N.W.2d 783 (1995).

4 Id.
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[4] As the trier of fact, the Workers’ Compensation Court is 

the sole judge of the credibility of witnesses and the weight to 

be given their testimony.5

V. ANALYSIS

CMR’s Liability for 

Martinez’ Injuries.

CMR assigns that it was not liable for Martinez’ injuries. 

CMR argues that it is not a statutory employer under § 48-116, 

because it had taken all requisite steps to ensure that Menjivar, 

its subcontractor, had proper workers’ compensation coverage 

for its employees and therefore was excluded from the status 

of a statutory employer under § 48-116.

The Nebraska Workers’ Compensation Act applies to every 

nonresident employer performing work in the state who 

employs one or more employees in the regular trade, business, profession, or vocation of such employer.6

 Workers’ 

compensation coverage must be obtained from an insurance 

company licensed to provide workers’ compensation coverage 

in Nebraska, unless the employer is authorized to self-insure 

workers’ compensation liability under Nebraska law.7 The 

record contains no cooperative agreements showing Nebraska 

was required to honor any workers’ compensation coverage 

provided by state funds in other states.

In Nebraska, principal employers can be held jointly and 

severally liable with the immediate employer for uninsured 

injuries to the immediate employer’s workers.8 Section 48-116 

provides:

Any person, firm, or corporation creating or carrying 

into operation any scheme, artifice, or device to enable 

him or her, them, or it to execute work without being 

5 Hynes v. Good Samaritan Hosp., 291 Neb. 757, 869 N.W.2d 78 (2015).

6 § 48-106(1).

7 § 48-106(6).

8 See § 48-116.
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responsible to the workers for the provisions of the 

Nebraska Workers’ Compensation Act shall be included 

in the term employer, and with the immediate employer 

shall be jointly and severally liable to pay the compensation herein provided for and be subject to all the provisions of such act. This section, however, shall not be 

construed as applying to . . . a contractor, who, in good 

faith, lets to a subcontractor a portion of his or her contract, if the owner or principal contractor, as the case may 

be, requires the contractor or subcontractor, respectively, 

to procure a policy or policies of insurance from an insurance company licensed to write such insurance in this 

state . . . .

The purpose of statutes such as § 48-116 is to protect 

employees of “irresponsible and uninsured subcontractors by 

imposing ultimate liability on the presumably responsible principal contractor, which has it within its power, in choosing 

subcontractors, to pass upon their responsibility and insist 

upon appropriate compensation protection for their workers.”9

Another important reason for statutes like § 48-116 is to prevent evasion of compensation coverage by the subcontracting 

of the employer’s normal work.10

[5] When a contractor fails to require a subcontractor to 

carry workers’ compensation insurance and an employee of the 

latter sustains a job-related injury, the contractor is a statutory 

employer and, with the immediate employer subcontractor, 

is jointly and severally liable to pay compensation under the 

terms of the Nebraska Workers’ Compensation Act.11

CMR argues that it does not qualify as a statutory employer, 

because it required its subcontractor, Menjivar, to obtain workers’ compensation insurance. In support of this argument, CMR 

9 6 Arthur Larson et al., Larson’s Workers’ Compensation Law § 70.04 at 

70-6 (2017).

10 See id.

11 See Rogers v. Hansen, 211 Neb. 132, 317 N.W.2d 905 (1982).
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offered various affidavits, including that of both its comptroller and its general manager, showing that it required Menjivar 

to present valid workers’ compensation insurance. Although 

CMR’s comptroller verified that Menjivar had workers’ compensation insurance in July 2014, the record lacks any indication that he checked the status of the policy immediately before 

commencing the roofing project in March 2015.

CMR did require that it be added as an additional insured on 

the Menjivar policy and that in the event the insurance policy 

was canceled before the expiration date of the policy, the insurance company, Texas Mutual, would provide notice to CMR. 

CMR’s general manager indicated that it is a normal business 

practice of CMR to list the subcontractor’s insurance policy 

expiration date next to its name on a project board. He noted 

that he and CMR’s comptroller reviewed the subcontractor’s 

listed insurance expiration date prior to allowing the subcontractor to begin work on the project. CMR contends that these 

steps are designed to require a subcontractor to carry workers’ 

compensation insurance.

In arguing that it was exempt under § 48-116, CMR relies 

on the fact that it took the above-listed steps to require 

Menjivar to provide insurance. CMR contends that beyond 

merely incorporating the requirement into a contractual provision in the subcontractor agreement, an issue that we addressed 

in Hiestand v. Ristau,

12 CMR took the additional steps of verifying that a policy had been obtained, recording the expiration 

date of the policy, and requiring that CMR be added as an 

additional insured.

CMR’s argument fails for three reasons. First, it is undisputed that CMR, in response to a request for admission from 

Martinez in regard to this action, affirmatively admitted that 

it had “created or carried into operation a ‘scheme, artifice, or 

device’ as contemplated by Neb. Rev. Stat. §48-116” to evade 

workers’ compensation coverage requirements. This admission 

12 Hiestand v. Ristau, 135 Neb. 881, 284 N.W. 756 (1939).
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was noted by the compensation court, and under court rules, 

the result in this case cannot be avoided. Under Neb. Ct. R. 

Disc. § 6-336(b), “[a]ny matter admitted under this rule is conclusively established . . . .” Therefore, we must treat CMR’s 

admission that it “created or carried into operation a ‘scheme, 

artifice, or device’ as contemplated by Neb. Rev. Stat. §48-116” 

as conclusively established.

Second, even if we were to disregard such an admission, 

it is clear from the record that CMR is Martinez’ statutory 

employer. The record demonstrates that CMR engaged in a 

contractual relationship by agreeing to the roof repair project. Had CMR completed the work itself, it would have been 

required to provide workers’ compensation insurance under the 

Nebraska Workers’ Compensation Act. However, CMR subcontracted the roof project to Menjivar, a subcontractor with 

whom CMR had an established relationship.

The record indicates that CMR confirmed Menjivar had 

workers’ compensation insurance in July 2014 and that it 

made an attempt to ensure that it would be made aware of the 

cancellation of such insurance. But the record also indicates 

that Menjivar’s policy with Texas Mutual was nevertheless 

canceled without notice being provided to CMR and that CMR 

did not verify the status of the policy before beginning the 

work in March 2015. Hence, CMR failed to meet its § 48-116 

obligations.

Third, the record shows that Texas Mutual was never authorized by the the compensation court, pursuant to § 48-146, 

to issue insurance for workers’ compensation purposes in 

Nebraska. As Texas Mutual contended, the record shows that 

the Texas Mutual policy provided coverage for workers’ compensation benefits for individuals injured only in the State of 

Texas. Further, the certificate provided by Texas Mutual specifically denoted the word “NONE” under the section identifying states where the coverage would extend.

According to the affidavit of the senior manager of corporate underwriting at Texas Mutual, Texas Mutual is not 
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authorized to provide workers’ compensation insurance in any 

jurisdiction other than Texas. Further, the policy specifically 

states that “[t]his policy does not provide ‘other states’ insurance coverage.”

Even if Menjivar had not allowed his insurance with Texas 

Mutual to be canceled, under Nebraska law, Menjivar—and 

in turn CMR—would still have been jointly and severally 

liable for compensating injured employees, because Menjivar 

was executing work without being responsible to the workers 

for the provisions of the Nebraska Workers’ Compensation 

Act. Specifically, under the workers’ compensation statutes, 

Menjivar was engaging in covered work that required the 

insurer to be authorized to transact the business of workers’ 

compensation insurance in this state.13 The failure of CMR to 

follow the laws of this state with regard to workers’ compensation means that CMR fell well short of requiring its subcontractor to carry valid workers’ compensation insurance.

The decision of the compensation court finding that CMR 

was the statutory employer of Martinez is correct. As the 

statutory employer, CMR is subject to all the provisions of the 

Nebraska Workers’ Compensation Act with regard to Martinez’ 

March 12, 2015, work accident, and is jointly and severally 

liable to pay the compensation provided for thereunder.

CMR’s Claim of Excessive 

Earning Capacity.

CMR next assigns that the court erred in the amount of its 

award for loss of earning capacity. CMR grounds this argument 

on the fact that because Martinez “worked in similar, albeit 

lighter, jobs and earned equal or similar wages,” he does not 

qualify as being 80 percent disabled.14

A judgment, order, or award of the compensation court may 

be modified, reversed, or set aside only upon the grounds that 

13 See § 48-146.

14 Brief for appellant at 23.
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(1) the compensation court acted without or in excess of its 

powers; (2) the judgment, order, or award was procured by 

fraud; (3) there is not sufficient competent evidence in the 

record to warrant the making of the judgment, order, or award; 

or (4) the findings of fact by the compensation court do not 

support the order or award.15

An appellate court is obligated in workers’ compensation 

cases to make its own determinations as to questions of law.16

However, findings of fact made by the Workers’ Compensation 

Court after review have the same force and effect as a jury verdict and will not be set aside unless clearly erroneous.17

[6] We held in Sidel v. Travelers Ins. Co.

18 that when determining a loss of earning capacity for an injured worker, the 

four factors to consider under § 48-121 are the worker’s (1) 

eligibility to procure employment generally, (2) ability to earn 

wages, (3) ability to hold a job obtained, and (4) capacity to 

perform the work in the job in which the worker is engaged.

Having found that Martinez had reached maximum medical 

improvement, the court assessed Martinez’ permanent disability. The court found that neck, head, and back injuries like 

those suffered by Martinez in this case were injuries to the 

body as a whole under § 48-121(2) and (3). For permanent 

partial disability purposes, injuries to the body as a whole are 

compensated based upon a loss of earning capacity.19 The court 

noted that evidence of permanent impairment or permanent 

physical restrictions was sufficient to establish a permanent 

medical impairment for purposes of determining loss of earning capacity.

Bansal, Martinez’ medical expert, opined that Martinez had 

both permanent impairment and permanent restrictions. The 

15 Buckingham v. Creighton University, supra note 2. See, also, § 48-185.

16 Hull v. Aetna Ins. Co., supra note 3.

17 Id.

18 See Sidel v. Travelers Ins. Co., 205 Neb. 541, 288 N.W.2d 482 (1980).

19 Snyder v. IBP, inc., 235 Neb. 319, 455 N.W.2d 157 (1990).
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court noted that Martinez underwent a functional capacity 

evaluation documenting that he could work only in the light 

demand category. A physician hired by CMR to conduct a 

review of Martinez’ medical records opined that Martinez did 

not suffer permanent impairment and that he required no work 

restrictions for his whole body injuries. The court noted that 

CMR’s expert found Martinez had suffered a l5-percent impairment to his left leg as a result of his left leg fractures. But the 

court then found, based on Bansal’s opinion, that Martinez suffered permanent impairment to his whole body due to his neck, 

head, and back injuries.

The court noted that the vocational rehabilitation counselor 

found Martinez was 100 percent disabled. However, it conducted a thorough analysis of the factual circumstances and 

applied the four factors of Sidel noted above to determine that 

Martinez was only 80 percent disabled. The court then noted 

that Martinez continued to work as a roofer, did many of the 

job duties of a roofer, and was paid basically the same wages 

he earned at the time of his injury. Based upon these facts, 

the court found that Martinez can and does work as a roofer, 

which is his only past form of employment. The court noted 

that there were certainly jobs that Martinez could no longer 

perform and accordingly determined that Martinez was 80 

percent disabled.

[7] We have previously noted that a worker who, solely 

because of his or her injury, is unable to perform substantial 

amounts of labor, either in his or her particular line of work, 

or in any other for which he or she would be fitted except for 

the injury, is totally disabled within the meaning of the workers’ compensation law.20 Here, Martinez is working in the 

same field as when he was injured; however, he is now limited 

in his ability to perform tasks, which CMR readily admitted 

at oral argument by stating that Martinez performs “albeit 

lighter [work].”

20 Craig v. American Community Stores Corp., 205 Neb. 286, 287 N.W.2d 

426 (1980).
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We hold that the compensation court’s findings of fact were 

not clearly erroneous and that its ultimate conclusions of law 

were supported by competent evidence. Therefore, CMR’s second assignment of error is without merit.

Award of Attorney Fees.

CMR assigns that the compensation court erred in awarding 

Martinez attorney fees. CMR claims that there was a reasonable controversy with regard to CMR’s status as a statutory 

employer, CMR’s liability, and the court’s determination that 

Martinez suffered an 80-percent loss of earning capacity and 

that the award of fees was therefore erroneous. Meanwhile, 

Martinez argues that we lack jurisdiction to address this issue; 

he contends that the compensation court’s February 10, 2017, 

order regarding the second motion for partial summary judgment and attorney fees was a final and appealable order, 

because a benefit in the form of the fees had been conferred 

and CMR failed to appeal from that benefit.

Martinez’ assertion regarding this court’s jurisdiction 

is rooted in our decision in Jacobitz v. Aurora Co-op.

21 In 

Jacobitz, we held that a compensation court’s finding of a 

compensable injury, or its rejection of an affirmative defense 

without a determination of benefits, was not an appealable 

order that affected an employer’s substantial right in a special 

proceeding.

Martinez argues that under Jacobitz, the trial court’s award 

of attorney fees conferred a benefit affecting a substantial 

right for CMR and was therefore a final appealable order from 

which CMR failed to appeal at the time it appealed from the 

February 10, 2017, order for partial summary judgment. The 

Court of Appeals dismissed CMR’s second appeal on October 

26, 2017, noting that it lacked jurisdiction.

[8] CMR could have appealed from the award of attorney 

fees at the time the fees were ordered only if the order awarding fees was final. Under Neb. Rev. Stat. § 25-1902 (Reissue 

21 Jacobitz v. Aurora Co-op, 287 Neb. 97, 841 N.W.2d 377 (2013).
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2016), the three types of final orders that an appellate court 

may review are (1) an order that affects a substantial right 

and that determines the action and prevents a judgment, (2) 

an order that affects a substantial right made during a special 

proceeding, and (3) an order that affects a substantial right 

made on summary application in an action after a judgment 

is rendered.

[9] The requests for fees and the orders granting such 

fees in this case were made pursuant to § 48-125, which is 

contained within the workers’ compensation statutes. It is 

well settled that a workers’ compensation case is a “special 

proceeding.”22 Accordingly, we examine the February 10, 2017, 

order granting Martinez’ request for attorney fees to determine 

if such order affected a substantial right made in this special 

proceeding.

[10-12] We have held:

“A substantial right is an essential legal right, not a mere 

technical right. . . . A substantial right is affected if the 

order affects the subject matter of the litigation, such 

as diminishing a claim or defense that was available to 

the appellant prior to the order from which the appeal 

is taken.”23

Moreover, it is not enough that the right itself be substantial; 

the effect of the order on that right must also be substantial.24

And a substantial right under § 25-1902 is not affected when 

that right can be effectively vindicated in an appeal from the 

final judgment.25 There is nothing here to suggest that the 

award of attorney fees cannot be effectively vindicated on 

appeal to this court.

22 Thompson v. Kiewit Constr. Co., 258 Neb. 323, 329, 603 N.W.2d 368, 372 

(1999).

23 Id.

24 In re Estate of Abbott-Ochsner, 299 Neb. 596, 910 N.W.2d 504 (2018).

25 Id.
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In this case, the award of attorney fees does not affect the 

subject matter of the litigation. Nor can it be said that the 

award of attorney fees affected the substantive rights of the 

parties. Rather, the attorney fees are closer to rules that regulate the conduct of employers or affect the remedy available.26

We conclude that the order granting fees was not final at the 

time it was issued.

Having established that CMR could not have raised this 

issue in its interlocutory appeal to the Court of Appeals, we 

find that we have jurisdiction over this matter and turn to the 

compensation court’s award of attorney fees. With regard to 

attorney fees, a judgment, order, or award of the compensation court may be modified, reversed, or set aside only upon 

the grounds that (1) the compensation court acted without 

or in excess of its powers; (2) the judgment, order, or award 

was procured by fraud; (3) there is not sufficient competent 

evidence in the record to warrant the making of the judgment, 

order, or award; or (4) the findings of fact by the compensation 

court do not support the order or award.27

Section 48-125 provides:

Whenever the employer refuses payment of compensation 

or medical payments . . . for thirty days after injury or 

neglects to pay medical payments . . . after thirty days’ 

notice has been given of the obligation for medical payments, and proceedings are held before the compensation 

court, a reasonable attorney’s fee shall be allowed the 

employee by the compensation court in all cases when the 

employee receives an award.

We note that a statutory attorney fee provision is designed 

to encourage private action to vindicate the rights granted by 

26 See Midwest Grain Products v. Productization, 228 F.3d 784 (7th Cir. 

2000). See, also, Furstenfeld v. Pepin, 23 Neb. App. 673, 875 N.W.2d 468 

(2016); Frederick v. Seeba, 16 Neb. App. 373, 745 N.W.2d 342 (2008).

27 Buckingham v. Creighton University, supra note 2.
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the statutory scheme.28 Thus, the purpose of § 48-125 is to 

provide an incentive to employers to pay the claims of injured 

workers in a timely manner in order to prevent additional cost 

to the employee accruing from litigation or late payment of 

fees and interest.

CMR points to the trial court’s determination that CMR 

was the statutory employer of Martinez and in turn argues 

that where reasonable controversy exists between an employer 

and an employee as to the employer’s liability, the employer 

is not liable for a penalty for waiting time or for allowance 

of attorney fees. This case, however, does not present such 

a controversy.

Here, the compensation court determined that no reasonable controversy existed as to CMR’s status as a statutory 

employer or its liability as such an employer. This result is 

evident, because even if CMR’s policy had not been canceled 

prior to the commencement of work in March, Texas Mutual 

was not authorized to operate as an insurance carrier providing 

workers’ compensation insurance in this state and, therefore, 

the policy did not meet the requirements under the Nebraska 

Workers’ Compensation Act.

Further, as we have already noted, CMR, in providing 

answers to Martinez’ request for admissions, conceded that 

it “created or carried into operation a ‘scheme, artifice, or 

device’ as contemplated by Neb. Rev. Stat. §48-116” in order 

to avoid the requirement to maintain workers’ compensation insurance.

To deny fees in such a situation would shift the cost of litigation onto the prevailing injured worker in a case involving 

no reasonable controversy. Such a result would frustrate the 

design and purpose of workers’ compensation and encourage 

unscrupulous employers to litigate every claim for workers’ 

compensation in an attempt to avoid their statutorily prescribed responsibility.

28 Black v. Brooks, 285 Neb. 440, 827 N.W.2d 256 (2013).
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CMR’s assignment of error regarding attorney fees is without merit.

Martinez’ Entitlement to 

Future Medical Care.

CMR assigned that the compensation court erred in finding 

that Martinez was entitled to future medical care, but argues 

only that “Martinez has clearly reached maximum medical 

improvement from his injuries, and is able to secure and hold 

gainful employment; the exact same employment that Martinez 

held prior to his injury.”29

We address this issue with an eye toward our standard of 

review in workers’ compensation cases, recognizing that a 

judgment, order, or award of the compensation court may be 

modified, reversed, or set aside only upon the grounds that (1) 

the compensation court acted without or in excess of its powers; (2) the judgment, order, or award was procured by fraud; 

(3) there is not sufficient competent evidence in the record to 

warrant the making of the judgment, order, or award; or (4) the 

findings of fact by the compensation court do not support the 

order or award.30

An appellate court is obligated in workers’ compensation 

cases to make its own determinations as to questions of law.31

However, findings of fact made by the compensation court 

after review have the same force and effect as a jury verdict 

and will not be set aside unless clearly erroneous.32

Under § 48-120(1)(a), “[t]he employer is liable for all

reasonable medical, surgical, and hospital services . . . .” 

(Emphasis supplied.) The Court of Appeals has noted that 

before an order for future medical benefits may be entered 

pursuant to § 48-120(1)(a), there must be explicit evidence that 

29 Brief for appellant at 25-26.

30 Buckingham v. Creighton University, supra note 2. See, also, § 48-185.

31 Hull v. Aetna Ins. Co., supra note 3.

32 Id.
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future medical treatment is reasonably necessary to relieve the 

injured worker from the effects of the work-related injury.33

Here, the district court found that Martinez had met his burden of proof and persuasion on this issue. The court relied on 

Bansal’s opinion, which was that Martinez will need epidural 

steroid injections, physical therapy, a transcutaneous electrical 

nerve stimulation or “TENS” unit, and an evaluation with a 

pain specialist for his neck. The court found that Martinez was 

entitled to an award of future medical care only for his neck 

injury. The court noted that Martinez was not entitled to future 

medical care for any of his other injuries, because no doctor 

recommended additional care for those injuries.

CMR asserts that Martinez’ return to work prevents him 

from obtaining an award for future medical care. This assertion is incorrect: § 48-120(1)(a) provides in pertinent part that 

“[t]he employer is liable for all reasonable medical, surgical, 

and hospital services . . . which are required by the nature of 

the injury and which will relieve pain or promote and hasten the employee’s restoration to health and employment . . 

. .” (Emphasis supplied.) The Legislature’s use of the word 

“or,” in the context of § 48-120, indicates that the employer 

is liable for reasonable medical expenses to both relieve 

pain and promote and hasten the restoration of health and 

employment.

In light of our standard of review, we find that CMR’s 

assignment of error is without merit.

Personal Jurisdiction 

Over Texas Mutual.

Finally, CMR assigns that the court erred in dismissing 

Texas Mutual for lack of personal jurisdiction.

An appellate court examines the question of whether the 

nonmoving party has established a prima facie case of personal 

33 Adams v. Cargill Meat Solutions, 17 Neb. App. 708, 774 N.W.2d 761 

(2009).
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jurisdiction de novo.34 In reviewing the grant of a motion to 

dismiss, an appellate court must look at the facts in the light 

most favorable to the nonmoving party and resolve all factual 

conflicts in favor of that party.35

In order for the compensation court to bind Texas Mutual to 

its decision, the court must have personal jurisdiction. There 

are two types of personal jurisdiction that courts may assert 

over a defendant: general personal jurisdiction and specific 

personal jurisdiction.

[13-15] A court has general jurisdiction over a party when 

the party’s contact with the forum is so extensive as to be 

continuous and systematic, such that the defendant would be 

“‘essentially at home’” in the court’s jurisdiction.36 Specific 

personal jurisdiction requires that “the defendant purposefully 

avails itself of the privilege of conducting activities within the 

forum State, thus invoking the benefits and protections of its 

laws.”37 To exercise specific jurisdiction, the plaintiff’s cause 

of action must arise out of, or be related to, the defendant’s 

contacts with Nebraska.38 In regard to the activities giving rise 

to specific personal jurisdiction, the U.S. Supreme Court has 

stated that “the defendant’s conduct and connection with the 

forum State [must be] such that he should reasonably anticipate 

being haled into court there.”39

As noted by the parties, the facts of this case clearly do 

not give rise to general jurisdiction. Therefore, our discussion 

turns to whether Texas Mutual purposefully availed itself of 

34 RFD-TV v. WildOpenWest Finance, 288 Neb. 318, 849 N.W.2d 107 (2014).

35 Id.

36 Daimler AG v. Bauman, 571 U.S. 117, 127, 134 S. Ct. 746, 187 L. Ed. 2d 

624 (2014).

37 Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 

(1958).

38 VKGS v. Planet Bingo, 285 Neb. 599, 828 N.W.2d 168 (2013).

39 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 

559, 62 L. Ed. 2d 490 (1980).
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the privilege of conducting activities within this state, thus 

invoking the benefits and protections of its laws giving rise to 

specific personal jurisdiction.

CMR argues that Texas Mutual availed itself of Nebraska 

law when it entered into an insurance contract with a business 

it knew operated across state lines. CMR relies on the language contained in the liability policy under the section entitled, “Limited Reimbursement for Texas Employees Injured in 

Other Jurisdictions.” However, the information page addressed 

to CMR from Texas Mutual indicates under item 3(c), entitled 

“Other States Insurance,” the word “NONE” is clearly stated. 

Despite the fact that Nebraska is not mentioned anywhere in 

the insurance agreement or certificate, CMR proposes that 

because Texas Mutual contemplated that insured parties may 

cross state lines for work, that fact gives rise to personal 

jurisdiction. CMR contends that Nebraska case law is sparse 

with regard to minimum contacts and out-of-state insurance 

companies, directing our attention to three cases CMR asserts 

are pertinent.

First, CMR directs us to Peay v. BellSouth Medical 

Assistance Plan.

40 Peay involved a Georgia employer’s medical 

assistance insurance plan and the plan’s Alabama administrator, 

which provided benefits to one of the plaintiffs, an employee 

of the defendant’s company, and the plaintiff’s ward. The 

insurance company operated in nine southeastern states. The 

ward received care in Utah for which the insurance company 

refused to pay for the full cost of treatment. The plaintiff filed 

suit in Utah, and the insurance company countered that Utah 

lacked personal jurisdiction. The U.S. Court of Appeals for 

the 10th Circuit disagreed, holding that because the company 

had precertified treatment at a Utah hospital and paid for a 

portion of the care, it had established minimum contacts with 

the jurisdiction.

40 Peay v. BellSouth Medical Assistance Plan, 205 F.3d 1206 (10th Cir. 

2000).
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In Nieves v. Houston Industries, Inc.,

41 an insured employee 

moved to Louisiana from Texas, maintaining the insurance 

policy with her company following her departure from Texas. 

After a dispute arose, the employee filed suit in Louisiana. 

The court found that because several claims had already 

been paid by the company, personal jurisdiction had been 

established.

Lastly, CMR relies on Hirsch v. Blue Cross, Blue Shield 

of Kansas City.

42 In Hirsch, the U.S. Court of Appeals for 

the Ninth Circuit held that an out-of-state insurance company 

“purposefully availed” itself of the jurisdiction of California, 

based on the minimum contacts established by evidence that 

the insurance company had freely negotiated the enrollment 

agreement with the insured company, knowing that the insured 

company employed people nationwide.43 CMR contends that 

Texas Mutual similarly knew that Menjivar and CMR operated in states outside of Texas and had agreed to insure their 

workers for injuries occurring in other states. We find CMR’s 

authority for its argument wholly unpersuasive.

In Peay v. BellSouth Medical Assistance Plan, because the 

insurance company had precertified treatment at a Utah hospital and paid for a portion of the care, the 10th Circuit held that 

it had established minimum contacts with the jurisdiction. The 

same is true of Nieves v. Houston Industries, Inc., wherein the 

court again found that several claims had already been paid by 

the company, giving rise to personal jurisdiction.

In this case, the record is void of any payments made by 

Texas Mutual to any claims arising in the State of Nebraska. 

Therefore, even if we were to acknowledge the persuasive 

authority of these federal cases, they are inapplicable to the 

facts of this case.

41 Nieves v. Houston Industries, Inc., 771 F. Supp. 159 (M.D. La. 1991).

42 Hirsch v. Blue Cross, Blue Shield of Kansas City, 800 F.2d 1474 (9th Cir. 

1986).

43 Id. at 1480.
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Texas Mutual, however, directs our attention to Brunkhardt 

v. Mountain West Farm Bureau Mut. Ins. Co.,

44 in which we 

indicated that “[u]nder a personal jurisdiction analysis, the 

unilateral activity of those who claim some relationship with a 

nonresident defendant cannot satisfy the requirement of contact 

with the forum state.” Additionally, when an insured travels 

to another state, his or her presence in the state is unilateral 

and does not serve to create purposeful contacts between the 

insurer and the state. Further, an insurance company’s mere act 

of insuring a person who might travel to a nearby state is insufficient to find that the insurer purposely directed its activities 

at the forum state.

Here, Texas Mutual insured Menjivar and listed CMR as 

an additional insured. While the policy contains a scheme of 

limited coverage for injuries occurring outside of Texas, the 

policy and information page contain no information listing 

or indicating coverage in Nebraska. The record is clear that 

Texas Mutual does not solicit business from Nebraska, has 

never maintained an office in Nebraska, is not an authorized 

insurance company in Nebraska, is a creation of the Texas 

Legislature, and provides coverage for Texas claims only. 

Further, the policy issued to CMR lists the insured’s address as 

“4308 Garland Dr, Haltom City, TX.” The record demonstrates 

that according to item 3(A) of the policy, Texas is the only 

state to which part one of the workers’ compensation insurance 

applies. Finally, as noted above, the record does not demonstrate that in regard to this case, Texas Mutual paid any claim 

originating in Nebraska.

Therefore, we affirm the decision of the compensation court 

in dismissing Texas Mutual for lack of jurisdiction.

CONCLUSION

The compensation court did not err in finding that CMR 

was the statutory employer of Martinez and in imposing 

44 Brunkhardt v. Mountain West Farm Bureau Mut. Ins., 269 Neb. 222, 227, 

691 N.W.2d 147, 152 (2005).
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liability on CMR. Additionally, we agree with the compensation court’s determination that it lacked personal jurisdiction 

over Texas Mutual. Under our deferential standard of review, 

we find that the court did not err in awarding Martinez attorney fees and future medical care, as well as determining that 

Martinez had sustained an 80-percent loss of earning capacity. 

We affirm.

Affirmed