NO. 90-195 IN THE SUPREME COURT OF THE STATE OF MONTANA 1990

JAMES ANDRE MORRIS, Deceased, and IRENEMORRIS, Claimant and Respondent, v. MONTANA FORWARD, Employer, and STATE COMPENSATIONMUTUAL INSURANCE FUND, Insurer and Appellant.

APPEAL FROM: The WorkerstCompensation Court, The Honorable ~imothy Reardon, Judgepresiding.

COUNSEL OF RECORD: For Appellant: Elizabeth A. Horsman, Esq., State Compensation Mutual Insurance Fund, Helena, Montana For Respondent: Norman H. Grosfield, Esq., Helena, Montana

Filed: Submitted on Briefs: August 23, 1990 Decided: October 23, 1990

ClerkChief Justice J. A. Turnage delivered the Opinion of the Court. The State Compensation Mutual Insurance Fund appeals the determination of the Workers1Compensation Court that JamesAndre Morriswas an employee of Montana Forward at the time of his death. We affirm. The issues are: 1. Did the court err in determining that,at the time of his death, James Andre Morris was an employee of Montana Forward entitled tobenefits under theMontana Workers1CompensationAct? 2. Did the court err in admitting the testimony of Milton McKee Anderson regarding conversations he had with Morris? JamesAndre Morriswas fatally injured inanairplaneaccident
near Helena, Montana, on April 8, 1988. At the time of the accident, he was piloting for gubernatorial candidate Jim Waltermire, on a campaign trip. ItMontanaForward with Waltermirel'

(Montana Forward) was the Waltermire campaign organization. Morris owned and operated DillonFlying Service, a charterair service in Dillon, Montana. The plane Morris was piloting for Waltermirewasneitherownednoroperatedby DillonFlyingService. Another individual had donated the use of the plane to the campaign. Morris had twice before flown that plane for the campaign, at a rate of $25 per hour or $100 per day plus expenses and subjecttohis availabilitywith regard to his charter service.Morris's widow filed a claim for workers1compensation death benefits. The claimwas denied by the insurer, State Compensation Mutual Insurance Fund (State Fund), on the basis that Morris was
an independent contractor with Montana Forward. Mrs. Morris petitioned the Workers1Compensation Court to resolve the dispute. After analyzing the facts of the case as presented at trial, the court concluded that Morris was an employee of Montana Forward at the time of his death and that he was entitled to coverage under the Workers1Compensation Laws of Montana.

Did the court err in determining that, at the time of his death, James Andre Morris was an employee of Montana Forward entitled to benefits under theMontana Workers1CompensationAct? We recently restated our standard of review of decisions of the Workers1Compensation Court: Decisions of the Workers1 Compensation Court will not be overturned if there is substantial evidence to support its findings and conclusions. Where findings are based on conflicting evidence, the reviewing court's function is confined to this determination; it is not the court's function to determine whether there is sufficient evidence to support contrary findings.
Gaumer

### v. Montana Dept. of Highways (Mont. 1990),795 P.2d 77, 79, 47 St.Rep. 1202, 1205 (citationsomitted).Under Montana's statutory scheme, if Morris was not an "independent contractorI1' he was entitled to benefits under the Montana Workers1 Compensation Act as an employee of Montana Forward. See 55 39-71-117,-118, -120,-401,MCA. An "independent

one who renders service in the course of an occupation and:

(a)hasbeen and will continue to be free from control or direction over the performance of the services, both under his contract and in fact; and (b) is engaged in an independently established trade, occupation,profession or business. Section 39-71-120(I),MCA. It is not disputed that Morris was engaged in an independently established trade or business. The State Fund argues that hewas an independent contractor because he
was free from Montana Forward's control aswell. The four factors considered when examining right of control are: (1) direct evidence of right or exercise of control; (2) method of payment; (3) furnishing of equipment; and (4) right to fire. Sharp v. Hoerner Waldorf Corp. (1978), 178 Mont. 419, 425, 584 P.2d 1298, 1301-02, citing Larson,Workmen's Compensation Law, Vol. lA, Sec. 44.31, pp. 8-35. When the Workers1 Compensation Court analyzed those factors, it concluded that Morris was an employee of Montana Forward.The courtpointed out that the direct evidence of control by Montana Forward over Morris was limited towhen and where hewould work. However, it recognized that the specialized skills of a pilot preclude anyone who is not a pilot from exercising control
over details of operating a plane. The court stated g8[s]tanding alone, this factor would likely not be sufficiently persuasive either in favor of employment or against it." Morris was paid $25 per hour or a minimum of $100 per day. Payment for time is strongly indicative of an employment relationship rather than an independent contractor relationship. Sharp, 584 P.2d at 1302. As Montana Forward points out, the effect of this general rule is lessened by the testimony indicating that independent air charter services often calculate rates based on flight time. Montana Forward argues that because it had no investment in the plane and was not responsible for repairs on the plane, the "furnishing of equipment" factor indicates that Morris was an independent contractor. We disagree. The use of the plane was given toMontana Forward, not toMorris. Montana Forward paid all non-pilot costs for theplane and it couldhavehired any qualified pilot to fly it. Clearly the campaign acquired the plane and furnished it to Morris. There wasnowritten agreement concerning any right ofMontana Forward to fire Morris. The testimony, however, indicated thatMontana Forward would have had the right to obtain another pilot and fire Morris at any time, with a probable obligation to pay Morris for the time required to get home, were he fired mid-trip. The Workers1 Compensation Court concluded that "the latter three criteria enumerated by Professor Larson 

# . . . support a conclusion thatMorris was an employee of Montana Forward onApril 8, 1988 when he died." It pointed out that an independent contractor relationship is established tlusually only by a convincing accumulation of these and other tests, while employment can if necessary often be solidly proved on the strength of one of the four items. Sharp, 584 P.2d at 1302, citing Larson. As further noted in the court's findings,Morris did not obtain an exemption from workers1 compensation insurance as an independent contractor
as allowed under 24.29.207, ARM. We conclude that substantial evidence supports the findings and conclusions of theWorkers1Compensation Court thatMorris was an employee under the control ofMontana Forward. We hold that the court did not err in determining that Morris was entitled to workers1 compensationbenefits.I1 Did the court err in admitting the testimony of Milton McKee Anderson regarding conversations he had with Morris? Milton McKee AndersonwasMorris's friend and hispersonal and business insurance agent. InAnderson's deposition, he testifiedover the StateFund's objectionabout several conversationshehad with Morris about the Waltermire campaign and Morris's service to the campaign. The State Fund argues that this testimony is hearsay, isneither reliable norprobative because Andersonwasnot actually involvedwith the campaign, and shouldhave been stricken from the record. The conclusions and judgment of the Workers1 Compensation Court make no referencetoAnderson'stestimony. The only mention of that testimony is a reference in the findings of fact to Anderson's statement that the pilot makes the decision whether or not to fly in adverse weather, a statement also made by another witness. The State Fund has not made any showingthat thedisputed testimony affected the judgment and the record does not show prejudice from the testimony. We conclude that no prejudicial
error has been shown. Affirmed.



## \i x ChiefWe concur:



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# Qb-1ZlheHh C' Justices

Justice Fred J. Weber did not participate.