Opinion ID: 2332373
Heading Depth: 1
Heading Rank: 5

Heading: Substantial Compliance with section 50-6-102(10)(B) is Sufficient

Text: Hartford argues to us that Mr. Scheele was not an insured or covered employee under its policy at the time of his injury because he did not comply with the thirty-day filing requirement of Tennessee Code Annotated section 50-6-102(10)(B). Tennessee Code Annotated section 50-6-102(10)(B) provides that the definition of Employee [under the workers' compensation statute] also includes a sole proprietor or a partner who devotes full time to the proprietorship or partnership and elects to be included in the definition of employee by filing written notice thereof with the division [of workers' compensation of the Department of Labor] at least thirty (30) days before the occurrence of any injury or death[.] It is undisputed that the Department of Labor received Mr. Scheele's written notice on December 31, 2003, and that Mr. Scheele was injured on January 21, 2004. This Court has previously held that similar notice provisions in the workers' compensation statutes are directory, rather than mandatory. E.g., Presley v. Bennett, 860 S.W.2d 857, 858 (Tenn.1993). In Presley , an insurance company denied workers' compensation coverage for a work-related injury because a subcontractor's notice of election of coverage had not been filed with the Department of Labor as required by Tennessee Code Annotated section 50-6-113 (1991). In analyzing whether coverage existed in this situation, we stated: In general, when determining whether a procedural requirement of a statute is directory or mandatory, the object is to ascertain the legislative intent by consideration of the entire statute, including its nature and purpose, and the consequences that would result from a construction one way or the other. Directory provisions only require substantial compliance. Statutory provisions relating to the mode or time of doing an act to which the statute applies are ordinarily held to be directory rather than mandatory. In determining whether the filing requirement at issue here is mandatory or directory, we are guided by the [General Assembly's] specific expression of its intent that the Workers' Compensation Act be given an equitable construction so that the objects and purposes of the Act may be realized and attained. In accordance with that expressed intent, we have recognized that it is our duty to interpret the workers' compensation statutes so as to protect workers and their families from the economic devastation that, in many instances, can follow on-the-job injuries, and to ensure that injured employees are justly and appropriately reimbursed for debilitating injuries suffered in the course of service to the employer. Based on the foregoing legal principles, we conclude that the [subcontractor] filing requirement is merely directory and that an election may be accomplished by substantial compliance with the workers' compensation statute. 860 S.W.2d at 860-61 (emphasis added) (internal citations omitted). When confronted with other notice provisions, we have reached nearly identical results. In Perkins v. Enter. Truck Lines, Inc., 896 S.W.2d 123, 124 (Tenn.1995), we followed Presley and held that a notice requirement was directory, not mandatory, when a common carrier elected to provide workers' compensation benefits to a leased operator who operated one of the carrier's vehicles, but the carrier refused or failed under section 50-6-106(1)(B) (1991) to file the truck driver's written election to receive coverage on the common carrier's policy. On those facts, we found substantial compliance with the election requirement because an agent of the common carrier had told the driver that he was covered and because the common carrier agreed that he was covered. More than a generation before Presley , we used a similar analysis to Presley 's to find coverage when an employer had secured a workers' compensation policy, paid the premium, but failed to file a required notice of election with the state. Commercial Ins. Co. v. Young, 209 Tenn. 608, 354 S.W.2d 779, 785 (1962). Twelve years ago, a Special Workers' Compensation Appeals Panel found the precise notice requirement at issue in this case to be directory, not mandatory. Shaw v. Aetna Life & Cas. Ins. Co., No. 02S01-9406-CH-0034, 1995 WL 866413, at  (Tenn. Workers' Comp. Panel Jan. 24, 1995). We can find no meaningful distinction between the statutes or requirements at issue in the aforementioned cases and the statute at issue in the instant case. Thus, we find the thirty-day notice requirement of section 50-6-102(10)(B) directory, not mandatory. A sole proprietor's substantial compliance with the statute's thirty-day notice requirement is legally sufficient. We have established no bright-line rule to measure substantial compliance with a workers' compensation notice provision. `The question as to whether there has been a sufficient compliance depends on the facts of the individual cases.' Presley, 860 S.W.2d at 861 (quoting Young, 354 S.W.2d at 787). In Presley , the plaintiff, a subcontractor with a roofing firm, had agreed to be bound by the roofing firm's workers' compensation policy and had paid installment premiums to the firm. Neither party, however, made a filing necessary to place the plaintiff on the policy. We found substantial compliance with the notice provision at issue. Id. By comparison, Mr. Scheele did far more. On December 29, 2003, Mr. Scheele fully completed the I-4 form, and Mr. Abbott sent it to the Department of Labor. The Department promptly received it and processed it, stamping it as received on December 31, 2003. In addition, Mr. Scheele went through the customary process of securing a policy by filling out an application, paying a deposit premium, having his agent submit the application to the insurer, and receiving temporary evidence of coverage in the form of a binder letter. He specifically requested and received a policy effective date of January 12, 2004. We have no difficulty concluding that Mr. Scheele substantially complied with section 50-6-102(10)(B).