Court Opinion

ID: 6477654
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:45:38.535805+00
Date Added: 2024-06-11T15:54:02.188903
License: Public Domain

GRANT, Judge,
dissenting.
I dissent. The evidence clearly supports the administrative law judge’s conclusions and therefore I would affirm the award. This court will affirm an award that is legally correct though we disagree with the reasons given to support it. Inspiration Consol. Copper Co. v. Industrial Comm’n, 128 Ariz. 288, 625 P.2d 351 (App. 1981). As we know from the record Hunt is a business engaged in the construction of large housing projects. As is its usual course of business Hunt contracted out virtually every facet of actual construction. (For a description of how a large construction company does business see the dissent in Tanner Companies v. Superior Court, 144 Ariz. 141, 696 P.2d 693 1985.)
The majority looks at the two part test used by the administrative law judge for determining whether Hunt was claimant’s statutory employer under A.R.S. § 23-902(B) and decides that the administrative law judge reached a wrong conclusion as to the first part of the test.
The first part of the test is the “supervision or control” requirement of A.R.S. § 23-902(B) for which the administrative law judge applied the “right to control” *101test to distinguish an employee from an independent contractor under A.R.S. § 23-902(C). Claimant has argued that A.R.S. § 23-902(B) requires a different degree of supervision or control than the control indicia used to determine employment under A.R.S. § 23-902(C). The majority disagrees. I agree with claimant that the supervision or control element of A.R.S. § 23-902(B) cannot be limited to the employer’s right to control the details of the work since the statute requires an employer to have supervision or control over the work to be done by a contractor. Because a contractor is not the statutory employer’s actual employee, the statutory employer need only supervise or control the end result of the work.
The test developed by case law in Arizona to determine whether one is doing work for another as an “independent contractor” or “employee” within the worker’s compensation act is whether the alleged employer retains the “right to control” the method of reaching the required result or whether his control is limited to the result reached leaving the method to the other party. Home Ins. Co. v. Industrial Comm’n, 123 Ariz. 348, 599 P.2d 801 (1979); Scott v. Rhyan, 78 Ariz. 80, 275 P.2d 891 (1954); Garcia v. City of South Tucson, 131 Ariz. 315, 640 P.2d 1117 (App.1981).
In analyzing A.R.S. § 23-902 it appears that subsection A defines the statutory employer, subsection B defines a subcontractor (or its employee) who is an employee of the statutory employer (sometimes referred to as the “remote employer”) and subsection C defines an independent contractor who is not an employee of the putative statutory employer. The question to be answered in this appeal is whether the test for right to control by the employer is the same under subsections B and C. There appears to be no Arizona case that differentiates between the two. The test applied in the reported cases is the same under both subsections. However, our legislature clearly intended to differentiate between the two. Our statute is taken from Utah, U.C.A. § 35-1-42, (based on § 3110, Laws of Utah 1919) where the statute is not divided into subsections. Laws 1925, Chap. 83, § 44. Our statute was also undivided until 1945 when the legislature split it into the three subsections without changing the substantive wording. Section 56-928, Ariz. Code of 1939 Annotated (effective June 9, 1945). We must presume they did so for a reason.
Under subsection B, a statutory employment relationship is not established simply because claimant was a contractor procured by Hunt. Hunt is claimant’s statutory employer only if it retained supervision or control over claimant’s work and the work was a part or process of Hunt’s trade or business. The administrative law judge found claimant was procured by Hunt. This finding is supported by the evidence. McGuckin contacted claimant about the job on Hunt’s behalf. Claimant met with Mr. Landoll to negotiate payment for the work and payments were to be made through McGuckin only to avoid subcontractor approval requirements. By terms of the general contract for the project with the Indian Housing Authority, Hunt was responsible for supervision of all work on the project, including curb work.
The record reveals that Hunt retained supervision or control over the end result of the curbing work. Landoll discussed with claimant the work to be performed prior to its commencement. At one point, Landoll examined claimant’s equipment and informed him that it would be inadequate to pour concrete to specification. Additionally, Landoll’s job required him to ensure that sufficient manpower and equipment were being used to complete construction on schedule. See Young v. Environmental Air Products, Inc., 136 Ariz. 158, 665 P.2d 40 (1983) (the supervision or control element of A.R.S. § 23-902(B) was satisfied where a manufacturer’s employee supervised construction performed by a subcontractor).
Utah law is persuasive since our statute is substantially the same. The case of Rustler Lodge v. Industrial Comm’n, 562 P.2d 227 (Utah 1977) supports this dissent. The claimant was an experienced drywall installer associated with an independent contractor. The Rustler Lodge contacted *102the contractor business about installation of drywall on its premises. The contractor business was not interested but claimant agreed individually to do the work for a specified rate using his own special tools. A finding that claimant was the lodge’s employee and an award of compensation was sustained. The case sets forth a test for determining whether one is an employee or an independent contractor: “an independent contractor can employ others to do the work and can accomplish the contemplated result without the consent of the contractee, while an employee cannot substitute another in his place without the consent of the employer.” Id., 562 P.2d at 228, quoting Ludlow v. Industrial Comm’n, 65 Utah 168, 235 P. 884 (1925). Here Villaescusa, the claimant, could not substitute another to do the curbing without Hunt’s consent.
There is also support for affirming the trial court in the case of Pinter Constr. Co. v. Frisby, 678 P.2d 305 (Utah 1984), in which the facts are quite similar to those in our case. Frisby was injured while constructing a metal building for Pinter. The question on appeal was whether Frisby was a “statutory employee.” Citing the Utah statute, which is like A.R.S. § 23-902(B), the Utah Supreme Court set forth two purposes of the statute: (1) “to protect employees of irresponsible and uninsured subcontractors by imposing ultimate liability on the presumably responsible principal contractor” and (2) “to prevent an unscrupulous principal contractor who contracts out all or most of his work from avoiding responsibility for insuring his subcontractors.” Id., at 307. The Utah court in affirming the award of compensation stated that it is possible for an individual to be an “independent contractor” in a common-law sense and yet be a “statutory employee” for worker’s compensation purposes. In Pinter Constr. Co. v. Frisby, as in our case, the claimant was both the owner and employee of a subcontracting company. The Utah court held that this did not prevent a determination that he was a statutory employee of the principal contractor.
The majority complains that the dissent would award worker’s compensation benefits to an independent contractor. This is untrue. I would award compensation to a contractor or subcontractor working in the capacity of an employee as defined by A.R.S. § 23-902(B). In which case he would not be working in the capacity of an independent contractor as defined by A.R.S. § 23-902(C). This concept, rather than being far-reaching, is simply what is set forth in the statute, and the majority’s plea for legislative scrutiny is not only unnecessary but inappropriate.
I would affirm the award on the basis that the supervision or control element of the statute was satisfied. Although not reached by the majority I would also necessarily affirm the second part of the test on the basis that claimant’s work was “a part or process in the trade or business” of Hunt. See Lee v. Chevron Oil Co., 565 P.2d 1128 (Utah 1977).