Title: KIMBALL v CONTINENTAL OIL CO
Citation: N/A
Docket Number: 13194
State: Montana
Issuer: Montana Supreme Court
Date: June 4, 1976

No. 13194 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1976 FATAL: WILLIAM C. KIMBALL, VIVIENNE F. KIMBALL, Widow, Claimant and Appellant, CONTINENTAL OIL C O M P A N Y , Employer, HARTFORD ACCIDENT AND INDEMNITY C O M P A N Y , Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e Twelfth J u d i c i a l D i s t r i c t , Honorable B. W. Thomas, Judge presiding. Counsel o f Record : For Appellant: Morrison, E t t i e n and Barron, Havre, Montana Robert D. Morrison argued, Havre, Montana Burns, Solem and MacKenzie, Chinook, Montana For Respondents: Alexander, Kuenning, Miller and Ugrin, Great F a l l s , Montana Edward C. Alexander argued, Great F a l l s , Montana Submitted: A p r i l 19, 1976 Decided : JUM - 4 lq~ SLIP! - d, 1976 F i l e d : M r . J u s t i c e John Conway Harrison delivered the Opinion of t h e Court. This i s an appeal from an order of t h e d i s t r i c t court, Blaine County, affirming the decision of t h e Workmen's Compensa- tion Division of the Department of Labor and Industry of the s t a t e of Montana, awarding compensation. This case began with an I n d u s t r i a l Accident Board Accident- Injury Investigation report f i l e d with t h e Board on June 19, 1973. A copy of the report f i l e d with the Board was sent t o Continental O i l Company, whose consignee Richard Brainard had i t s bulk plant i n Chinook, Montana, where the accident occurred. Thereafter, on July 30, 1973, Continental O i l Company f i l e d with the Workmen's Compensation Division i t s Form 37, "Employer's F i r s t Report of Occupational Injury o r is ease". Thereafter there was correspondence between t h e claim manager of Hartford Accident & Indemnity Company (Continental's insurer) and the Workmen's Compensation Division a s t o whether o r not Brainard was an independent contractor o r an employee of Continental O i l Company by reason of h i s contract. I n t h e meantime the law firm of Alexander, Kuenning, Miller & Ugrin of Great F a l l s , Montana, was asked by Hartford f o r an opinion on the l e g a l problems raised by the accident. O n June 12, 1973, M r . Alexander wrote t o Richard C. Sherman, claim manager f o r Hartford, giving the opinion t h a t there was probable coverage under the workmen's Compensation Act. O n October 31, 1973, Vivienne Kimball, widow of William H. Kimball victim of the reported accident, employed counsel t o represent her before the I n d u s t r i a l Accident Board. Counsel petitioned the Board f o r a determination of claim f o r compensation by beneficiaries. Thereafter, the matter was heard on August 21, 1974. Following t h e decision of the hearing examiner and affirm- ance of t h a t decision by the administrator of the Workmen's Com- pensation Division, the matter was appealed by Vivienne Kimball t o the d i s t r i c t court which on September 3 , 1975, affirmed the decision of the Workmen's Compensation Division. W e note here t h a t the beneficiaries received the maximum benefits t h a t could be given under the workmen's Compensation Act. Here, the f a c t s i t u a t i o n i s an unusual one and the s t a t u s of t h e deceased was d i f f i c u l t t o ascertain. The l e g a l pro- cedures followed by the widow were of her own choice, not t h i s court's. The dissenting opinion herein takes the position t h a t the majority would prevent a deserving widow from obtaining a j u s t recovery from an o i l company which f a i l e d t o operate within the laws of t h i s s t a t e by denying t h a t Kimball was an employee and thus e n t i t l e d t o s o c i a l security benefits, minimum wage, unemployment compensation benefits o r workmen's cornpetmation. This does not appear i n the record before t h i s Court, nor i s there any finding of responsibility on the p a r t i e s based on the f a c t s of t h e accident on l i a b i l i t y . The record reveals : 1. Claimant on May 2, 1974, petitioned the I n d u s t r i a l Accident Board f o r determination of claim f o r compensation by beneficiaries. 2. The matter was heard and determined, with counsel of claimant's choice representing her, before a hearing examiner and a d i s t r i c t judge. Procedurally, whether or not t h i s was the way t o s e t t l e whether o r not her husband was o r was not an employee of the o i l company, we w i l l not comment upon other than t o note t h a t a s a r e s u l t she was awarded 598.20 weeks of compensation benefits and medical costs incurred t o the time of her husband's death. Her l a t e r position before the d i s t r i c t court and t h i s Court, t h a t her husband was not an employee of e i t h e r Brainard o r the Continental O i l Company could only be decided i n the f i n a l instance by 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,Kimball had accompanied Brainard on several delivery trips for the purpose of familiarizing himself with the equipment and the various customers. Kimball did not appear on ~rainard's books as an employee, no withholding or social security was paid for him, nor any workmen's compensa- tion payments made to protect him. His relationship was character- ized as one of friendship, rather than that of employer-employee. However, following ~imball's death, Brainard paid the widow $307.00, an amount based on a penny a gallon for the gasoline delivered by Kimball during ~rainard's absence. The Workmen's Compensation Division, following investiga- tion of the accident, held a hearing and found that under the facts Kimball was an employee of Continental Oil Company. On appeal to the district court, the decision was affirmed. The sole issue before this Court is whether William C . Kimball was an employee of the Continental Oil Company bulk plant operator, Richard Brainard, at the time of the accident. Appellant Vivienne F. Kimball, widow of William C. Kimball, argues the services performed by her, husband were strictly 11 gratuitous" and therefore there could not have been the necessary employer-employee relationship within the meaning of section 92-411, R.C.M. 1947. She urges that applying the control test set forth in State ex rel. Ferguson v. District Court, 164 Mont. 84, 519 P.2d 151, the necessary elements to determine the employee rela- tionship a r e lacking, f o r here there i s no specific contract of employment, no specific order on what he should do, and no withholding o r specific salary. Respondents argue the application of the "control t e s t " is not appropriate here a s t h a t t e s t is f o r determining whether one rendering service i s an employee o r an independent contractor. Here, no one contended that Kimball was an independent contractor, f o r t h a t position would be inconsistent with the claim t h a t h i s services peformed w e r e gratuitous. Respondents argue t h e correct r u l e t o be followed i s t h a t when compensation i s paid, it is presumed an employer-employee relationship exists. From the evidence it i s c l e a r t h a t Kimball expected compensation f o r h i s work and i n f a c t received one cent per gallon he delivered. The hearing examiner found : "3. That the deceased claimant was employed by Richard Brainard, t h e bulk plant operator, t o handle h i s duties while he was away on military duty, f o r a period of seventeen days from about April 25, 1973 through May 11, 1973, the day of h i s injury, a period of 2.42 weeks, during which he earned an amount of $307.-- which was paid t o h i s widow on May 30, 1973, an amount t h a t would average $126.86 per week. "7. That pursuant t o the provisions of Finding of Fact No. 5, supra, and pursuant t o the provisions of $92-604, R.C.M. 1947, the deceased claimant was covered by the workmen's compensation insurance carried by the Continental O i l Company.'' The d i s t r i c t court heard the appeal from the Division's decision, and upon examination of the record found there was substantial evidence t o support the findings of the examiner. Having so found, it was incumbent on the d i s t r i c t court t o sustain those findings and the resulting conclusions. Section 92-834, R.C.M. 1947; DeLeary v. Anaconda Aluminum Co., M o n t . 9 541 P.2d 788, 32 St.Rep. 1041; Hurlbut v. Vollstedt Kerr Company, M o n t . , 538 P.2d 344, 32 St.Rep. 752. In cases a r i s i n g under the Workmen's Compensation Act t h i s Court must sustain t h e Division action i f the evidence i s s u f f i c i e n t t o support the findings, even though some evidentiary c o n f l i c t may e x i s t . Lewis v. Anaconda Company, Mont . P 543 P.2d 1339, 32 St.Rep. 1227. The applicable r u l e has remained unchanged since i t s adoption i n Cartwright v. I n d u s t r i a l Acc.Bd., 115 Mont. 596, 599, 147 P.2d 909: I t Our function i n t h i s case is t o determine whether o r not there i s substantial evidence t o support t h e judgment of the d i s t r i c t court. JC' * *" The judgment of the d i s t r i c t court is affirmed. W e Concur: Hun. Arnold Olsen, D i s t r i c t Judge, s i t t i n g i n place of Chief J u s t i c e James T. Harrison, dissenting: The f a c t s a s r e l a t e d i n the majority opinion a r e agreed to. However, t h i s Judge dissents. Under the common law, "there a r e four elements which a r e 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 r e a l l y e s s e n t i a l element of the relationship i s the r i g h t of control, t h a t i s , t h e r i g h t of one person, the master t o order and control another, the servant, i n the performance of work by t h e l a t t e r , and the r i g h t t o d i r e c t t h e manner i n which the work s h a l l be done. " 53 Am Jur 2d, Master and Servant, $2, p. 82. The majority opinion, parenthetically, without expressly wording so, upholds a workmen's Compensation r u l e favoring claimants t o qualify a contending claimant-employee who can e s t a b l i s h "compensation i n whatsoever kind" i s an employee. Appellant here brings t o question whether o r not Contin- e n t a l O i l Company can escape the greater l i a b i l i t y of common law by i n s i s t i n g t h a t Kimball was an employee a t the time of h i s f a t a l accident and thus Appellant denies Kimball was an employer. The Continental O i l Company has gone t o great lengths denying an employee-employer relationship with the operation of the premises herein. This i s a specific case of example. of the Continental O i l Company practice of denying t h a t the bulk plant operator, Brainard, i s an employee and denying t h a t anybody on ~ r a i n a r d ' s s t a f f is an employee. Both Brainard and the Continental O i l Company deny t h a t Kimball was an employee t o be e n t i t l e d t o Social Security Benefits, deny t h a t Kimball i s e n t i t l e d t o protection under the laws r e l a t i n g t o a Minimum Wage, deny t h a t Kimball was an employee e n t i t l e d t o Unemployment Compensation Insurance, deny t h a t Kimball was an employee e n t i t l e d t o workmen's Compensation Insurance coverage, o r even e n t i t l e - ment t o safety inspection protection by the workmen's Compensa- t i o n Division of Montana, indeed these defendants, now c a l l i n g themselves employers, have denied t o the general public t h a t Kimball was t h e i r agent. So f o r a l l t h e i r purposes, t o the world, Kimball was not an employee. But, now, when there poses a possible greater l i a b i l i t y under the common law, t h a t ~ i m b a l l ' s widow might be e n t i t l e d t o a greater l i a b i l i t y , against Continental O i l Company, t h a t company wants the benefit of the clothing of an employer f o r the purpose of denying the widow of the deceased Kimball an e n t i t l e - ment t o come t o the courts of Montana claiming a t common law f o r the destruction of the l i f e of Kimball. Continental O i l Company should not be heard t o say any such defense having held i t s e l f out a s not an employer t o a l l the world. Continental O i l Company should not be heard by a court of t h i s s t a t e t o escape the greater l i a b i l i t y now t h a t they have evaded a l l l i a b i l i t i e s of an employer heretofore. The widow Kimball should be e n t i t l e d t o bring action against Continental O i l Company without classifying her deceased husband a s an employee and her election t o do so should-not exclude her from any other remedy. The Court should say, el- come, widow Kimball, you may seek a l l remedies and waive none of them. I I In Montana by Section 92-201, R.C.M.1947, i n an action t o recover damages sustained by an employee i n the course of h i s employment, o r f o r death from personal i n j u r i e s so sustained, the common law defenses of employer a r e repealed. By Section 92-211, R.C.M. 1947, "No compensation s h a l l be paid t o any employee, whether such employee has elected t o come under t h i s 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. I I Under the workmen's Compensation Law of Montana, this Continental Oil Company, has elected not to be covered by the workmen's Compensation Act and can pay the employee no compensa- tion under the workmen's Compensation Act nor can the defendants insure under the Act. The Continental Oil Company, whether an employer or not, is answerable to the widow 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 Kimball was 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 Compensation Act. 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 common- law liability without benefit of the defenses of fellow servant, assumption of risk and contributory negligence." 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 depression when employers are desperately looking for ways in which to cut costs of production, to gamble on the possibility that the costs of common-law suits, even without the defenses, will be less than compensation premiums, especially when there are insurance com- panies 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 pitfalls both f o r employer and employee which destroy i t s surface a t t r a c t i v e - ness from the hard-pressed employers point of view." Section 67.21 of arson's, "A common exception t o the exclu- siveness of the compensation remedy is the r i g h t of s u i t against an employer who f a i l s t o secure h i s compensation l i a b i l i t y by taking out insurance o r qualifying a s a self-insured." Indeed, one wonders, has the Continental O i l Company given i t s employees the protection of safety inspection by t h e Safety Division of the workmen's Compensation Division. One wonders, has the s t a t e of Montana functioned i n i t s lawful directed duties t o conduct safety inspections of the plants of the Continental O i l Company. Because Brainard and the Continental O i l Company were not enrolled with t h e workmen's Compensation Division, undoubtedly the Safety Division of the Workmen's Compensation Division did not protect the employees. A large question i n t h i s case i s whether t h e Supreme Court of Montana i s going t o t e l l the employers of t h i s s t a t e and t h e world, "YOU don't have t o abide by the Workmen's Compensation Act of Mont- ana, we w i l l cover you even i f you don't e l e c t t o protect your em- ployees under the workmen's Compensation Act and the incidental safety inspection laws of Montana, we w i l l protect you with the limited l i a b i l i t y of the Workmen's Compensation Act regardless of the f a c t t h a t you haven't been a good employer and a law-abiding employer. t t I I I say, No, the Continental O i l Company has been an irrespon- s i b l e employer and should suffer the penalty of the Workmen's Compensation Act, namely, the Continental O i l Company i s denied the common law defenses by t h e i r f a i l u r e t o e l e c t t o insure t h e i r employees under t h e workmen's Compensation Act." This Court must announce t o the world t h a t employers i n t h i s s t a t e must abide the workmen's Compensation Act o r they s h a l l be stripped of the common law defenses. The widow Kimball should be heard t o come i n t o the courts of I 1 Montana and say, Here I am, a widow. The l i f e of m y husband was taken by reason of the negligence of Brainard and the Continental O i l Company. M y husband i s dead. 1 ' m e n t i t l e d t o compensation a t common law." Further, t h i s Court, should announce t h a t the only defense of the Continental O i l Company would have been t h a t Kimball was a trespasser; but t h a t the Continental O i l Company l o s t t h a t defense, too, because of its admission against i n t e r e s t i n contending i n the action here t h a t they a r e an employer even though irresponsible. The widow Kimball should not lose t h e success of the claim with Workmen's Compensation limited recovery. She has not elected t h a t remedy and she does not have t o choose a t her p e r i l of losing a common law remedy. I see the widow Kimball coming i n t o the D i s t r i c t Court and saying, "I am a widow. M y name is Kimball. M y husband went t o work a t the Continental O i l Plant f o r Brainard and was injured there and died a s a r e s u l t of h i s i n j u r i e s . The Continental O i l Company and Brainard did not protect m y husband by s a f e t y inspections nor by insurance under the workmen's Compensation Act nor by any other a c t did Brainard and the Continental O i l Company designate m y husband an employee. I, the widow, am e n t i t l e d t o damages f o r m y losses. 11 Thereupon t h e d i s t r i c t court snnauncee t h a t Brainard and the Continental O i l Company do not have any of the common law defenses and we w i l l hear what the damages of the widow Kimball are. The cause should be reversed and remanded t o t h e d i s t r i c t court t o determine t h e damages of the Appellant, without t h e limitations of the workmen's T. Harrison.