No. 13194 INTHE SUPREME COURT OF THE STATE OF MONTANA 1976

FATAL: WILLIAM C. KIMBALL, VIVIENNE F. KIMBALL, Widow, Claimant and Appellant,

CONTINENTAL OIL COMPANY, Employer, HARTFORD ACCIDENT AND INDEMNITY COMPANY, Defendants and Respondents.

Appeal from: District Court of the Twelfth Judicial District, Honorable B. W. Thomas, Judge presiding. Counsel of Record: For Appellant: Morrison, Ettien and Barron, Havre, Montana Robert D. Morrison argued, Havre, Montana Burns, Solem and MacKenzie, Chinook, Montana For Respondents: Alexander, Kuenning, Miller and Ugrin, Great Falls,

Montana Edward C. Alexander argued, Great Falls, Montana

Submitted: April 19, 1976 Decided: 

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### 1976 Filed:Mr. Justice John Conway Harrison delivered the Opinion of the Court.
This is an appeal from an order of the district court, Blaine County, affirming the decision of theWorkmen's Compensation Division of the Department of Labor and Industry of the stateof Montana, awarding compensation. This casebegan with an Industrial Accident Board AccidentInjury Investigation report filedwith theBoard on June 19, 1973. A copy of the report filedwith the Board was sent to Continental OilCompany, whose consignee Richard Brainard had 

### itsbulk plant inChinook, Montana, where the accident occurred. Thereafter,

on July 30, 1973, Continental OilCompany filedwith theWorkmen's Compensation Division itsForm 37, "Employer's First Report of Occupational Injury or

### is ease". Thereafter there was correspondence between the claim manager of Hartford Accident & Indemnity Company (Continental's insurer) and theWorkmen's Compensation Division

as towhether ornot Brainard was an independent contractor or an employee of Continental OilCompany by reason of his contract. In the meantime the law firm of Alexander, Kuenning, Miller & Ugrin of Great Falls, Montana, was asked by Hartford for an opinion on the legal problems raised by the accident. On June 12, 1973, Mr. Alexander wrote toRichard C. Sherman, claim manager forHartford, giving the opinion that therewas probable coverage under theworkmen's Compensation Act. On October 31, 1973, Vivienne Kimball, widow of William H. Kimball victim of the reported accident, employed counsel to represent her before the IndustrialAccident Board. Counsel petitioned the Board for a determination of claim forcompensation by beneficiaries. Thereafter, the matter was heard on August 21, 1974. Following the decision of the hearing examiner and affirmance of that decision by the administrator of theWorkmen's Compensation Division, the matter was appealed by Vivienne Kimballtothe district court which on September 

### 3, 1975, affirmed the decision of the Workmen's Compensation Division. We note here that thebeneficiaries received the maximum benefits that could be given under theworkmen's Compensation Act. Here, the fact situation 

### is an unusual one and the status of the deceased was difficult to ascertain. The legal procedures followed by the widow were of her own choice, not this court's. The dissenting opinion herein takes the position that the majoritywould prevent a deserving widow from obtaining a just recovery from an oilcompany which failed tooperatewithin the laws of this stateby denying that Kimball was an employee and thus entitled to social security benefits, minimum wage, unemployment compensation benefits orworkmen's cornpetmation. This does not appear in the record before this Court, nor 

### is there any finding of responsibility on the parties based on the facts of the accident on liability. The record reveals: 1. Claimant on May 2, 1974, petitioned the Industrial Accident Board for determination of claim forcompensation by beneficiaries. 2. The matter was heard and determined, with counsel of claimant's choice representing her, before a hearing examiner and a districtjudge. Procedurally, whether or not thiswas theway to settle whether or not her husband was orwas not an employee of the oilcompany, we 

### willnot comment upon other than tonote that as
a result shewas awarded 598.20 weeks of compensation benefits and medical costs incurred to the time of her husband's death. Her later position before the district court and this Court, that her husband was not an employee of eitherBrainard or the Continental OilCompany could only be decided in the final instanceby the controlling statutory and case law of Montana.

### On May 11, 1973,William G. 

### Kimball was severely burned while loading a gas truck on premises owned by the Continental Oil Company located in Chinook,Montana and died ten days later

as a result of the injuries. At the time of the accident Kimball

was performing services for Richard Brainard,a friend,who was the bulk plant operator for Continental. Brainard was away on active duty in the Army Reserve and had asked Kimball to make deliveries of gas during his absence. Prior to leaving,Kimballhad accompanied Brainard on several delivery trips for the purpose of familiarizinghimself with the equipment and the various customers. Kimball did not appear on ~rainard's books as an employee,nowithholding or social securitywas paid for him, nor anyworkmen's compensation payments made to protect him. His relationshipwas characterized as one of friendship, rather than that of employer-employee. However, following ~imball'sdeath, Brainard paid the widow $307.00, an amount based on a penny a gallon for the gasoline delivered by Kimball during ~rainard'sabsence. TheWorkmen's Compensation Division, following investigation of the accident,held a hearing and found that under the facts Kimballwas an employee of Continental Oil Company. On appeal to the district court, the decision was affirmed. The sole issuebefore this Court is whether William C. Kimballwas an employee of the Continental Oil Company bulk plant operator,Richard Brainard, at the time of the accident. Appellant Vivienne F. Kimball,widow ofWilliam C. Kimball, argues the services performed by her, husband were strictly

11



### gratuitous" and therefore there could not have been the necessary employer-employee relationshipwithin the meaning of section 92-411, R.C.M. 1947. She urges that applying the control test set forth in State ex rel. Fergusonv. District Court, 164Mont. 

### 84,519 P.2d 151, the necessary elements to determine the employee rela-tionship are lacking, forhere there 

### is no specific contract of employment, no specific order on what he should do, and no withholding or specific salary. Respondents argue the application of the "control test" 

### isnot appropriate here as that test 

### is for determiningwhether

one rendering service isan employee or an independent contractor. Here, no one contended that Kimball was an independent contractor, for that positionwould be inconsistentwith the claim that his services peformed were gratuitous. Respondents argue the correct rule tobe followed 

### is thatwhen compensation ispaid, it 

### is presumed an employer-employee relationship exists. From the evidence it isclear that Kimball expected compensation forhis work and in fact received one cent per gallon he delivered. The hearing examiner found: "3. That the deceased claimant was employed by Richard Brainard, thebulk plant operator, tohandle his dutieswhile he was away on military duty, for a period of seventeen days from about April 25, 1973 through May 

### 11, 1973, the day of his injury, a period of 2.42 weeks, duringwhich he earned an amount of $307.-- which was paid tohis widow on May 30, 1973, an amount that would average $126.86 per week.



### "7. That pursuant to the provisions of Finding of Fact No. 

### 5, supra, and pursuant to the provisions of $92-604, R.C.M. 1947, the deceased claimant was covered by the workmen's compensation insurance carriedby the Continental OilCompany.'' The district court heard the appeal from the Division's decision, and upon examination of the record found therewas substantial evidence to support the findings of the examiner. Having so found, it was incumbent on the districtcourt to sustain those findings and the resulting conclusions. Section 92-834, 

### R.C.M. 1947; DeLeary v. Anaconda Aluminum Co., Mont

# . 9 541 P.2d 788, 32 St.Rep. 1041; Hurlbut v. Vollstedt Kerr Company, Mont

# . ,538 P.2d 344, 32 St.Rep. 752.

In cases arising under theWorkmen's Compensation Act this Court must sustain the Division action ifthe evidence 

### is sufficient to support the findings, even though some evidentiaryconflict may exist. Lewis v. Anaconda Company, Mont

# . P 543 P.2d 1339, 32 St.Rep. 1227. The applicable rulehas remained unchanged since 

### its adoption inCartwright 

### v. Industrial Acc.Bd., 115Mont. 596, 599, 147 P.2d 909:

It

Our function in this case 

### is todetermine whether ornot there 

### is substantial evidence to support thejudgment of the district court. JC'

# **"

The judgment of the district court 

### is affirmed.

We Concur:Hun. Arnold Olsen, District Judge, sitting inplace of Chief Justice James T. Harrison, dissenting: The facts asrelated in the majority opinion are agreed to. However, this Judge dissents. Under the common law, "there are four elements which

are considered upon the question whether the relationship of master and servant exists--namely, the selection and engagement of the servant, the payment of wages, the power of dismissal, and the power of control of the servant's conduct--the really essential element of the relationship isthe right of control, that 

### is, theright of one person, the master to order and control another, the servant, in the performance of work by the latter, and the right to direct the manner inwhich the work shallbe done. " 

### 53 Am Jur 2d, Master and Servant, $2, p. 82. The majority opinion, parenthetically, without expressly wording so, upholds a workmen's Compensation rule favoring claimants toqualify a contending claimant-employee who can establish "compensation inwhatsoever kind" isan employee. Appellant here brings to question whether ornot Continental OilCompany can escape the greater liabilityof common law by insisting that Kimball was an employee atthe time of his fatalaccident and thus Appellant denies Kimball was an employer. The Continental OilCompany has gone togreat lengths denying an employee-employer relationshipwith the operation of the premises herein. This 

### isa specific case of example. of the Continental OilCompany practice of denying that the bulk plant operator, Brainard, is an employee and denying that anybody on ~rainard's staff 

### is an employee. Both Brainard and the Continental OilCompany deny that Kimball was an employee tobe entitled to Social SecurityBenefits, deny that Kimballisentitled toprotection under the laws relating toa Minimum Wage, deny that Kimball was an employee entitled toUnemployment Compensation Insurance, deny that Kimball was an employee entitled toworkmen's Compensation Insurance coverage, or even entitlement to safety inspection protection by the workmen's Compensation Division of Montana, indeed these defendants, now calling themselves employers, have denied to the general public that Kimball was their agent. So for alltheir purposes, to the world, Kimball was not an employee. But, now, when there poses a possible greater liability under the common law, that ~imball's widow might be entitled to

a greater liability, against Continental OilCompany, that company wants the benefit of the clothing of an employer for the purpose of denying thewidow of the deceased Kimball an entitlement tocome tothe courts of Montana claiming atcommon law for the destruction of the lifeof Kimball. Continental OilCompany should not be heard to say any such defense having held itself out asnot an employer to all theworld. Continental OilCompany should not be heard by a court of this statetoescape the greater liabilitynow that they have evaded allliabilities of an employer heretofore. The widow Kimball should be entitled tobring action against Continental OilCompany without classifying her deceased husband as an employee and her election todo so should-not exclude her from any other remedy. The Court should say, 

### elcome, widow Kimball, you may seek allremedies and waive none of them. II In Montana by Section 92-201, R.C.M.1947, in an action to
recover damages sustained by an employee in the course of his employment, or for death from personal injuries so sustained, the common law defenses of employer arerepealed. By Section 92-211, R.C.M. 1947, "No compensation shallbe paid toany employee, whether such employee has elected tocome under this

### act or not,where his employer has failed to elect, and has failed to come under one or the other of the compensation plans herein .provided. II 

### Under theworkmen's Compensation Law ofMontana, this Continental Oil Company,has elected not to be covered by the workmen's CompensationAct and can pay the employee no compensation under the workmen's CompensationAct nor can the defendants insure under the Act. The Continental Oil Company,whether an employer or not, is answerable to thewidow of Kimball and now the oil company (having admitted its employment) has been stripped of its common law defenses. Regardless of Kimball status, whether he be an invitee to the premises, a volunteer, a gratuitous servant, indeed if Kimballwas an employee, liability attaches--but if an employee, the liability is without common law defenses, and the liability is not limited under the Workmen's CompensationAct. There is a wide discussion of "Action Against Employer" in 5 67.10, 2A 

## arson's Workmen's Compensation Law, and 

### s specific ally,

I'



### As a sort of club to drive employers into election of coverage, the typical act makes the noncovered employer subject to commonlaw liabilitywithout benefit of the defenses of fellow servant, assumption of risk and contributorynegligence." Further, in that same section, "Experience has shown that, although the great bulk of employers do elect to come with the acts, there is a strong temptation,particularly in times of depressionwhen employers are desperately looking forways inwhich to cut costs of production, to gamble on the possibility that the costs of common-lawsuits, even without the defenses, will be less than compensation premiums, especiallywhen there are insurance companies who claim to be able to insure the potential common-law risk at a guaranteed saving below compensation insurance costs. This kind of 'stop loss' insurance, however,has serious pitfallsboth for employer and employee which destroy its surface attractiveness from the hard-pressed employers point of view." Section 67.21 of 

### arson's, "A common exception to the exclusiveness of the compensation remedy 

### is the right of suit against an employer who fails to secure his compensation liabilityby taking out insurance or qualifying as a self-insured." Indeed, one wonders, has the Continental OilCompany given itsemployees the protection of safety inspection by the Safety Division of theworkmen's Compensation Division. One wonders, has the stateof Montana functioned in 

### its lawful directed duties toconduct safety inspections of the plants of the Continental Oil Company. Because Brainard and the Continental OilCompany were not enrolled

### with theworkmen's Compensation Division, undoubtedly the Safety Division of theWorkmen's Compensation Division did not protect the employees. A large question in this case 

### iswhether the Supreme Court of Montana isgoing to tellthe employers of this stateand theworld,
"YOU don't have to abideby theWorkmen's Compensation Act of Montana, we willcover you even ifyou don't elect toprotect your employees under the workmen's Compensation Act and the incidental safety inspection laws of Montana, we willprotect you with the limited liabilityof theWorkmen's Compensation Act regardless of the fact that you haven't been a good employer and a law-abiding employer. tt
II 

### I say, No, the Continental OilCompany has been an irresponsibleemployer and should suffer the penalty of theWorkmen's Compensation Act, namely, the Continental OilCompany 

### is denied the

common law defenses by their failure toelect to insure their employees under theworkmen's Compensation Act." This Court must announce to the world that employers in this statemust abide theworkmen's Compensation Act or they shall be stripped of the common law defenses. The widow Kimball should be heard tocome into the courts of

I1 Montana and say, Here I am, a widow. The lifeof my husband was taken by reason of the negligence of Brainard and the Continental OilCompany. My husband 

### is dead. 1'mentitledtocompensation atcommon law." Further, this Court, should

announce that the only defense of the Continental OilCompany would have been that Kimball was a trespasser; but that the Continental OilCompany lost that defense, too, because of 

### its admission against interest incontending in the action here that they are an employer even though irresponsible. The widow Kimball should not lose the success of the claimwith Workmen's Compensation limited recovery. She has not elected that remedy and she does not have tochoose ather peril of losing a common law remedy. I see thewidow Kimball coming into the District Court and saying, "I am a widow. My
name 

### is Kimball. My husband went towork atthe Continental Oil Plant for Brainard and was injured there and died as a result of his injuries. The Continental OilCompany and Brainard did not protect my husband by safety inspections nor by insurance under theworkmen's Compensation Act nor by any other act did Brainard and the Continental OilCompany designate my husband an employee. I, the widow, am entitled todamages for my losses. 11 Thereupon the district court 

### snnauncee that Brainard and the Continental OilCompany do not have any of the common law defenses and 

### wewillhear what the damages of the widow Kimball

are. The cause should be reversed and remanded tothe district court todetermine the damages of the Appellant, without the limitations of theworkmen's

T. Harrison.