- 608 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

Robert L. Kohout, appellant, v. 

Bennett Construction and

The Travelers Indemnity

Company, appellees.

___ N.W.2d ___

Filed May 5, 2017. No. S-16-609.

1. Workers’ Compensation: Appeal and Error. Pursuant to Neb. Rev. 

Stat. § 48-185 (Cum. Supp. 2016), an appellate court may modify, 

reverse, or set aside a Workers’ Compensation Court decision only when 

(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 

order, judgment, or award; or (4) the findings of fact by the compensation court do not support the order or award.

2. ____: ____. Determinations by a trial judge of the Workers’ 

Compensation Court will not be disturbed on appeal unless they are 

contrary to law or depend on findings of fact which are clearly wrong in 

light of the evidence.

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

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

4. Workers’ Compensation: Independent Contractor: Insurance. Under 

Neb. Rev. Stat. § 48-116 (Reissue 2010), a contractor’s act of engaging 

a subcontractor without actually compelling the subcontractor to acquire 

workers’ compensation insurance constitutes a device to escape liability 

under the Nebraska Workers’ Compensation Act.

5. Workers’ Compensation: Insurance: Proof. Under Neb. Rev. Stat. 

§ 48-116 (Reissue 2010), a laborer has the burden to prove, by a preponderance of the evidence, that the employer set up a scheme, artifice, 

or device to defeat provisions of the workers’ compensation laws.

6. Workers’ Compensation. Under Neb. Rev. Stat. § 48-116 (Reissue 

2010), the existence of a scheme, artifice, or device does not require 

active fraud or evil design.

Nebraska Supreme Court Online Library

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

07/21/2017 08:11 AM CDT
- 609 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

7. Principal and Agent. Apparent authority is authority that is conferred 

when the principal affirmatively, intentionally, or by lack of ordinary 

care causes third persons to act upon an actor’s apparent authority.

8. ____. Apparent authority gives a professed agent the power to affect the 

principal’s legal relationships with third parties. The power arises from, 

and is limited to, the principal’s manifestations to those third parties 

about the relationships.

9. Principal and Agent: Liability: Proof. Apparent authority for which a 

principal may be liable exists only when the third party’s belief is traceable to the principal’s manifestation and cannot be established by the 

actor’s acts, declarations, or conduct.

10. Principal and Agent. For apparent authority to exist, the principal 

must act in a way that induces a reasonable third person to believe that 

another person has authority to act for him or her.

11. ____. Whether an actor has apparent authority to bind the principal 

is a factual question determined from all the circumstances of the 

transaction.

12. ____. Indicia of authority expressing association with but not authority 

from a business may contribute to the impression of apparent authority, but that impression alone cannot bind the agent’s principal to a 

third party.

13. Joint Ventures: Partnerships: Contribution. A joint venture is in the 

nature of a partnership and exists when (1) two or more persons contribute cash, labor, or property to a common fund (2) with the intention of 

entering into some business or transaction (3) for the purpose of making a profit to be shared in proportion to the respective contributions 

and (4) each of the parties have an equal voice in the manner of its 

performance and control of the agencies used therein, though one may 

entrust performance to the other.

14. Joint Ventures: Proof. The moving party bears the burden to prove a 

joint venture or enterprise exists by clear and convincing evidence.

15. Joint Ventures: Intent. The relationship of joint venturers depends 

largely upon the intent of the alleged parties as manifested from the 

facts and circumstances involved in each particular case.

16. Joint Ventures. A joint venture can exist only by voluntary agreement 

of the parties and cannot arise by operation of law. Even a close relationship between two parties does not create an implied joint venture.

17. ____. In considering whether a joint venture exists, the acts and 

circumstances between family members may not have the same 

significance as the same acts and circumstances between strangers 

might have.
- 610 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

Appeal from the Workers’ Compensation Court: James R. 

Coe, Judge. Affirmed.

Michael W. Khalili and Terry M. Anderson, of Hauptman, 

O’Brien, Wolf & Lathrop, P.C., for appellant.

Julie A. Jorgensen, of Morrow, Willnauer, Klosterman & 

Church, for appellee.

Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, 

Kelch, and Funke, JJ.

Funke, J.

NATURE OF CASE

Robert L. Kohout sustained an injury while performing 

construction work at the residence of Brian Shook. He sued 

Bennett Construction and its workers’ compensation insurer 

for workers’ compensation benefits. The Nebraska Workers’ 

Compensation Court ruled that under Neb. Rev. Stat. § 48-116 

(Reissue 2010), Bennett Construction was neither Kohout’s 

direct employer nor his statutory employer, and dismissed the 

complaint. We affirm.

FACTS

Background

Bennett Construction is a sole proprietorship owned and 

operated by Mark Bennett. Mark testified that he typically 

works alone performing carpentry labor but hires subcontractors for jobs broader in scope than carpentry. He will also hire 

estimators to bid jobs for him during busy periods.

Nicholaus Bennett (Nick) is Mark’s son. Nick owns and 

operates the sole proprietorships Nick Bennett Construction 

and Housecraft. He testified that he works as a contractor and 

subcontractor, primarily on roofing and guttering.

Mark and Nick testified that Nick worked for his father, 

as an estimator, until the work from a hailstorm in 2013 was 
- 611 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

completed. Mark stated that he and Nick decided to work independently from that point so that Nick could begin building his 

own clientele. Nevertheless, Mark continued to hire Nick as a 

subcontractor for jobs with metal and gutter work.

In 2014, there was a severe hailstorm. The day after the 

hailstorm, Shook saw Nick patching a neighbor’s roof and 

asked Nick to patch his roof as well. Shook testified that 

after Nick patched his roof, Nick left him a business card that 

included Nick’s name, a cell phone number, and a “Bennett’s 

Construction & Roofing” logo.

Shook testified that he later contacted Nick to provide a bid 

for more extensive repairs to his house and barn. Nick provided Shook an estimate on a proposal form labeled “Bennett’s 

Construction & Roofing,” with the business number for Bennett 

Construction crossed off and Nick’s name and number written 

on the top. Shook never signed the proposal form, but both he 

and Nick testified that it reflected their verbal agreement. Nick 

subsequently completed the work.

Nick testified that he retained the Bennett Construction 

business cards and proposal forms from when he previously 

worked for the company. Nick stated that he used the proposal 

forms when he did not have anything else available and that 

when using the forms, he would sometimes explain that he did 

not work for Bennett Construction. Mark testified that he was 

unaware that Nick still used the company’s proposal forms 

and business cards.

The portion of the proposal form relevant to this dispute reads: “Our workers are fully covered by Workmen’s 

Compensation Insurance.” Shook testified that he would not 

have hired Nick absent this affirmation. The record reflects that 

neither of Nick’s sole proprietorships had workers’ compensation insurance, but that Bennett Construction did.

Shook testified that Nick never told him he did not work 

for Bennett Construction and that he had never heard the 

name “Housecraft.” But, Shook did testify that an invoice he 

received for work done on the property had “Nick Bennett” 
- 612 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

printed on it. Nick testified that his invoices contained a Nick 

Bennett Construction logo.

Shook paid Nick for the repair work with four checks. The 

first check was written to “Nick Bennett’s Construction” on 

August 21, 2014. The second check, dated September 18, 

2014, was written to “Bennett’s Construction.” Mark testified that he cashed the check and wrote a check to Nick for 

the same amount after it cleared. Mark and Nick testified that 

Nick received checks in the name of Bennett Construction 

several times a year and that Mark always cashed them and 

reimbursed Nick to prevent him from having to obtain new 

checks from clients. After this check was received, Nick 

asked Shook to write future checks to “Nick Bennett.” Shook 

wrote the final two checks to “Nick Bennett Construction” 

in 2015.

Kohout’s Employment

Kohout was looking for work in 2015 when a friend, who 

was employed by Nick, introduced Kohout to Nick. Nick hired 

Kohout, and Kohout began working at a job in Arlington, 

Nebraska. The Arlington job had been contracted by Mark, 

who hired Nick as a subcontractor.

Kohout’s next project with Nick was the Shook job. Kohout 

testified that while only Nick regularly appeared and directed 

him at the Shook job, Mark did come to the property once 

during construction. Kohout believed it was to supervise the 

work. However, Mark testified he was there to obtain a tool 

that Nick had borrowed from him and that while he was there, 

he introduced himself to Shook as Nick’s father and talked 

casually about the job with him before leaving. Shook testified 

that he did not know why Mark came to his property.

Nick testified that Kohout worked directly for him. Nick 

paid Kohout weekly with personal checks signed by him and 

identified as coming from “Housecraft.” Nick supplied Kohout 

with the tools for the job, but Nick frequently borrowed 

Mark’s tools.
- 613 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

On May 4, 2015, Kohout fell from the roof of the barn 

on Shook’s property. As a result of the fall, Kohout suffered 

an injury.

Procedural History

Kohout filed a petition against Bennett Construction and 

its workers’ compensation insurer seeking workers’ compensation benefits. In their answer, Bennett Construction and 

its insurer raised the affirmative defense that Kohout was 

not employed by Bennett Construction. The parties stipulated that Kohout’s injury arose out of and in the course of 

employment.

After a trial, the court dismissed Kohout’s petition. It 

ruled that Kohout was employed by either Nick Bennett 

Construction or Housecraft and that under § 48-116, Bennett 

Construction was neither Kohout’s direct employer nor his 

statutory employer. The court stated that “[i]t is clear from 

[Shook’s] testimony that Nick . . . was solely responsible for 

negotiating the job and performing and supervising the work at 

that site.” Kohout appealed.

ASSIGNMENT OF ERROR

Kohout assigns, restated, that the Nebraska Workers’ 

Compensation Court erred by finding that Bennett Construction 

was not Kohout’s employer under the Nebraska Workers’ 

Compensation Act.

STANDARD OF REVIEW

[1] Pursuant to Neb. Rev. Stat. § 48-185 (Cum. Supp. 2016), 

an appellate court may modify, reverse, or set aside a Workers’ 

Compensation Court decision only when (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 order, judgment, or award; or (4) the findings 
- 614 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

of fact by the compensation court do not support the order 

or award.1

[2,3] Determinations by a trial judge of the Workers’ 

Compensation Court will not be disturbed on appeal unless 

they are contrary to law or depend on findings of fact which 

are clearly wrong in light of the evidence.2 An appellate court 

is obligated in workers’ compensation cases to make its own 

determinations as to questions of law.3

ANALYSIS

Kohout contends that Bennett Construction is a statutory 

employer pursuant to § 48-116. Section 48-116 states:

Any person . . . creating or carrying into operation any 

scheme, artifice, or device to enable him or her . . . to 

execute work without being 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 an owner 

who lets a contract to a contractor in good faith, or 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 [that] guarantee[s] payment of compensation according to the Nebraska Workers’ Compensation 

Act to injured workers.

[4] Under § 48-116, we have long held that a contractor’s 

act of engaging a subcontractor without actually compelling 

1 Interiano-Lopez v. Tyson Fresh Meats, 294 Neb. 586, 883 N.W.2d 676 

(2016).

2 Id.

3 See id.
- 615 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

the subcontractor to acquire workers’ compensation insurance 

constitutes a device to escape liability under the Nebraska 

Workers’ Compensation Act.4 Neither of Nick’s sole proprietorships had workers’ compensation insurance at the time of 

the Shook job. Accordingly, if Mark’s company was the general contractor of the Shook job and allowed either of Nick’s 

sole proprietorships to act as a subcontractor, the company may 

be liable for Kohout’s injury as a statutory employer.

[5,6] A laborer has the burden to prove, by a preponderance 

of the evidence, that the employer set up a scheme, artifice, or 

device to defeat provisions of the workers’ compensation laws.5

The existence of a scheme, artifice, or device does not require 

active fraud or evil design.6

Kohout asserts two theories under which Mark and Nick 

employed a “scheme, artifice, or device” that allowed Bennett 

Construction to avoid liability under the Nebraska Workers’ 

Compensation Act. First, Kohout argues that Nick had the 

apparent authority to enter into a contract with Shook on behalf 

of Bennett Construction and that Nick was hired as an uninsured subcontractor to do the work on the job. Second, Kohout 

contends that Mark and Nick entered into a joint venture to 

obtain repair jobs after the 2014 hailstorm and that the Shook 

job was one of those joint ventures.

Nick Lacked Apparent Authority

to Enter Into Contract With

Shook on Behalf of

Bennett Construction

[7-9] Apparent authority is authority that is conferred when 

the principal affirmatively, intentionally, or by lack of ordinary 

4 See Rogers v. Hansen, 211 Neb. 132, 317 N.W.2d 905 (1982), citing 

Hiestand v. Ristau, 135 Neb. 881, 284 N.W. 756 (1939), and Sherlock 

v. Sherlock, 112 Neb. 797, 201 N.W. 645 (1924), disapproved on other 

grounds, Franklin v. Pawley, 215 Neb. 624, 340 N.W.2d 156 (1983).

5 O’Brien v. Barnard, 145 Neb. 596, 17 N.W.2d 611 (1945).

6 See Keith v. Wilson, 165 Neb. 58, 84 N.W.2d 192 (1957).
- 616 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

care causes third persons to act upon an actor’s apparent 

authority.7 Apparent authority gives a professed agent the power 

to affect the principal’s legal relationships with third parties.8

The power arises from, and is limited to, the principal’s manifestations to those third parties about the relationships.9

 Stated 

another way, apparent authority for which a principal may be 

liable exists only when the third party’s belief is traceable to 

the principal’s manifestation and cannot be established by the 

actor’s acts, declarations, or conduct.10

[10,11] For apparent authority to exist, the principal must 

act in a way that induces a reasonable third person to believe 

that another person has authority to act for him or her.11

Whether an actor has apparent authority to bind the principal 

is a factual question determined from all the circumstances of 

the transaction.12

Kohout argues that Nick acted with apparent authority 

to bind a contract between Shook and Bennett Construction 

because Nick provided Shook a business card identifying him 

as a representative of the company, Nick used one of the company’s proposal forms, the company accepted a check from 

Shook, and Mark visited the Shook worksite on one occasion. 

Additionally, Kohout contends that because Mark took no 

action to disavow Nick as an agent of his company, Mark’s lack 

of ordinary care caused Shook to believe the contract was with 

Mark and/or Bennett Construction. Kohout further contends 

that because Nick was a subcontractor on the Shook job and 

Mark did not compel Nick to obtain workers’ compensation 

7 RM Campbell Indus. v. Midwest Renewable Energy, 294 Neb. 326, 886 

N.W.2d 240 (2016).

8 State ex rel. Medlin v. Little, 270 Neb. 414, 703 N.W.2d 593 (2005). See, 

also, 1 Restatement (Third) of Agency § 2.03 (2006).

9 See RM Campbell Indus., supra note 7.

10 See id.

11 Id.

12 Id.
- 617 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

insurance, Bennett Construction employed a device to avoid 

liability under the Nebraska Workers’ Compensation Act and 

that therefore, it was Kohout’s statutory employer.

Bennett Construction argues that it was not the principal or 

contractor of the Shook job and that Nick was solely responsible for negotiating, performing, and supervising the job. It 

contends that Mark made no representations to Shook, that 

Nick informed Shook he would be the contractor both orally 

and by altering the proposal, and that Bennett Construction 

retained no benefit from the Shook job.

The focal points of the analysis are the representations Mark 

and Bennett Construction made to Shook and what Shook 

could have reasonably believed based on those representations. 

Mark and Bennett Construction had only three interactions 

with Shook: First, after a previous hailstorm in 2009 or 2011, 

Mark may have given Shook an estimate for repairs which did 

not result in a contract; second, Bennett Construction cashed 

a check addressed to it by Shook; and third, Mark visited 

the Shook worksite on one occasion. However, Shook’s testimony did not establish that he intended the check written to 

“Bennett’s Construction” to actually go to Mark’s company, as 

opposed to Nick, and Shook testified that he did not know why 

Mark had visited the worksite.

[12] Nick’s actions are also relevant to the reasonableness 

of Shook’s belief, but only insofar as they are traceable to 

Mark or Bennett Construction. The business card and proposal 

form presented by Nick were indicia of authority regarding 

Bennett Construction. However, the card contained nothing 

to verify that it was current or more than a declaration made 

solely by Nick, and the proposal form, altered by Nick, also 

provided no verification that Nick was authorized to enter 

into a contract on the company’s behalf. Further, there was 

no evidence that Mark or Bennett Construction were aware 

that Nick had used the business card or the proposal form or 

that Mark or his company gave Nick permission to use either 

document. While such indicia of authority may contribute to 
- 618 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

the impression of apparent authority, that impression alone 

cannot bind the agent’s principal to a third party.13

When seeking an estimate for his repairs, Shook contacted 

Nick directly and had no communications through Mark or 

his company. Shook did not testify that Nick stated he was 

employed by Bennett Construction or that Shook’s contract 

would be with Bennett Construction. In fact, Shook testified 

that Nick provided him with an invoice bearing Nick’s name, 

not Bennett Construction, and that Nick asked him to write 

checks to Nick after Shook wrote the one check to “Bennett’s 

Construction.” The fact that Shook addressed his first check 

to “Nick Bennett’s Construction” provides the most tangible evidence that he did not believe he had contracted with 

Bennett Construction.

Based on the preceding facts, Shook could not have reasonably believed that he was contracting with Mark or Bennett 

Construction. Shook’s testimony does not show that Mark or 

his company manifested any authority to him. The indicia of 

authority alone—the business card and the proposal form—

does not provide a reasonable basis to conclude the contract 

was with Bennett Construction. Finally, Shook’s actions show 

that he did not actually believe he had contracted with someone other than Nick. Therefore, we find that Nick lacked the 

apparent authority to bind Bennett Construction to the contract 

with Shook and that as a result, Shook entered the contract 

with Nick alone.

Nick Did Not Enter Into

Joint Venture With Mark

or Bennett Construction

[13,14] A joint venture is in the nature of a partnership and 

exists when (1) two or more persons contribute cash, labor, or 

property to a common fund (2) with the intention of entering 

into some business or transaction (3) for the purpose of making 

13 Herbert Const. Co. v. Continental Ins. Co., 931 F.2d 989 (2d Cir. 1991).
- 619 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

a profit to be shared in proportion to the respective contributions and (4) each of the parties have an equal voice in the 

manner of its performance and control of the agencies used 

therein, though one may entrust performance to the other.14

The moving party bears the burden to prove a joint venture or 

enterprise exists by clear and convincing evidence.15

[15-17] The relationship of joint venturers depends largely 

upon the intent of the alleged parties as manifested from the 

facts and circumstances involved in each particular case.16 A 

joint venture can exist only by voluntary agreement of the 

parties and cannot arise by operation of law. Even a close relationship between two parties does not create an implied joint 

venture.17 In considering whether a joint venture exists, the acts 

and circumstances between family members may not have the 

same significance as the same acts and circumstances between 

strangers might have.18

Kohout also argues that Mark and Nick employed a joint 

venture as a scheme to avoid liability under the Nebraska 

Workers’ Compensation Act, citing Thomas v. Hansen.

19 He 

contends that Mark and Nick had a common purpose of securing as much work from the hailstorm for their family as possible and that Mark allowed Nick to use his proposal forms to 

induce business based on the statement about workers’ compensation coverage.

In Thomas, the Iowa Supreme Court held that Hansen & 

Sons Welding (Hansen) and Leo Morgan were engaged in a 

joint venture when Morgan’s employee, Edward Thomas, was 

injured. Hansen had agreed to bill a packing plant with which 

14 See Lackman v. Rousselle, 257 Neb. 87, 596 N.W.2d 15 (1999).

15 See id.

16 Id.

17 Id.

18 Id.

19 Thomas v. Hansen, 524 N.W.2d 145 (Iowa 1994).
- 620 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

Hansen had a contract on Morgan’s behalf for 8 percent of 

Morgan’s portion of the contract, because Morgan did not have 

workers’ compensation insurance and the packing plant would 

not contract with uninsured contractors. The court identified 

that Hansen paid Thomas and that Hansen and Morgan often 

exchanged workers and exercised mutual control over them. 

The court found that the facts showed the only reason for the 

arrangement was to avoid workers’ compensation laws. The 

court stated that although there was conflicting evidence of 

whether a joint venture existed, based on the strong evidence 

of the parties’ intent, a joint venture did exist, and that Hansen 

was liable for Thomas’ injuries.20

In O’Brien v. Barnard,

21 we considered whether a lease 

arrangement constituted a “scheme, artifice, or device” under 

§ 48-116. Raymond Barnard operated a gas station, which 

he leased from Charles Larsen. At the inception of the lease, 

Larsen provided Barnard a $1,000 loan, which Barnard agreed 

to repay at the rate of one-half cent per gallon of gas purchased 

until paid in full, plus interest. He also paid Larsen 1 cent per 

gallon of gas purchased for rent. Barnard purchased all of his 

gas and products through Larsen, who was a sales representative for a petroleum company.

The plaintiff in O’Brien, who was an employee at the gas 

station, claimed that Larsen was a statutory employer, because 

he set up the business through Barnard to increase his own 

income, essentially claiming that a joint venture existed. We 

held that Larsen was not a statutory employer.22 In doing so, 

we noted that (1) Larsen did not contribute financially to the 

station because his $1,000 loan was being repaid by Barnard; 

(2) Larsen did not control, supervise, or give direction on the 

station’s management or to Barnard’s employees; (3) Larsen 

20 Id.

21 O’Brien v. Barnard, supra note 5.

22 Id.
- 621 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

did not share in the profits of the station; and (4) there was no 

evidence that Larsen and Barnard intended to enter into business together.23 While we determined that the facts of the case 

did not warrant liability for the alleged joint venture, we did 

not foreclose applicability of the concept.

Here, Kohout has failed to show by clear and convincing 

evidence that Nick engaged in a joint venture with Mark or 

Bennett Construction on the Shook job.

First, because a joint venture cannot arise as an operation 

of law, there must be evidence that Mark and Nick intended 

to enter into a voluntary agreement. In Thomas, the circumstances implied that Hansen and Morgan made an agreement 

to avoid the packing plant’s prohibition on contracting with 

uninsured contractors, because there was no other reasonable explanation for their arrangement and there was also 

direct evidence that they had agreed to the joint venture.24

In O’Brien, Larsen’s arrangement with Barnard was beneficial to Larsen individually and as a sales representative, 

but we did not infer from this that Larsen and Barnard were 

joint venturers.25

Kohout failed to elicit evidence that Mark and Nick had 

the intent to enter into a joint venture to complete the Shook 

job. Mark and Nick both testified that Nick was operating his 

own business after the hailstorm. Though Kohout argues that 

Nick testified that he occasionally worked on jobs with Mark 

and split the profits, there is no evidence regarding those jobs 

or that this was the situation on the Shook job. While Nick 

continued to be a subcontractor for Mark on other jobs, there 

is no evidence that Nick benefited more than any other subcontractor would have or that his subcontracting constituted a 

joint venture.

23 Id.

24 See Thomas v. Hansen, supra note 19.

25 See O’Brien v. Barnard, supra note 5.
- 622 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

While Nick testified that he intended people to rely on the 

statement concerning workers’ compensation insurance in the 

proposal form, there was no evidence that Mark or Bennett 

Construction was complicit or even aware of Nick’s actions.

In addition, there is neither circumstantial evidence that 

Mark would have entered into a joint venture with Nick’s sole 

proprietorships nor direct evidence that he did, as was the case 

in Thomas. Further, there is no evidence as to how such an 

arrangement would have benefited Bennett Construction, as 

was the case in O’Brien. Accordingly, we cannot infer a voluntary agreement or an intent by Mark and Nick to enter a joint 

venture on the Shook job.

Second, there is no evidence that Mark contributed cash or 

labor to the Shook job. While Kohout established that Nick, 

at times, used some of Mark’s tools, he did not show that this 

provided a significant contribution to the Shook job. Further, 

we recognize our statement in Lackman v. Rousselle26 that 

circumstances between family members are not the same as 

strangers; a father allowing his son to use tools is an incident 

of their closeness and does not alone imply a joint venture.

Third, there is no evidence that Mark and Nick split the 

profits from the Shook job. In fact, there is no evidence that 

Mark profited from the Shook job at all. While Mark did cash 

the check Shook wrote to “Bennett’s Construction,” he testified that he provided Nick with a check for the full amount 

shortly thereafter.

Fourth, there is no evidence that Mark had an equal right to 

control the performance at the Shook worksite. Though Mark 

visited the site on one occasion, neither Kohout nor Shook 

testified that Mark directed any actions at the site or examined 

the work. While Mark could have entrusted performance of the 

Shook job to Nick under a joint venture, Kohout failed to show 

any evidence that would warrant such a determination.

26 Lackman v. Rousselle, supra note 14.
- 623 -

Nebraska Supreme Court Advance Sheets

296 Nebraska Reports

KOHOUT v. BENNETT CONSTR.

Cite as 296 Neb. 608

Accordingly, we hold that neither Mark nor Bennett 

Construction was engaged in a joint venture with Nick concerning the Shook job.

CONCLUSION

We find that the Nebraska Workers’ Compensation Court’s 

application of § 48-116 was not contrary to law and that its 

determination that Bennett Construction was not Kohout’s 

statutory employer was not clearly wrong in light of the evidence. Therefore, for the reasons stated above, we affirm the 

judgment of the court.

Affirmed.