Court Opinion

ID: 5137733
Source: CourtListenerOpinion
Date Created: 2021-12-21 14:43:43.355665+00
Date Added: 2024-06-11T08:24:04.029710
License: Public Domain

2014 UT App 201
_________________________________________________________

               THE UTAH COURT OF APPEALS

                        RICK J. NICHOLS,
                    Plaintiff and Appellant,
                                v.
            JACOBSEN CONSTRUCTION COMPANY, INC .,
                   Defendant and Appellee.

                             Opinion
                        No. 20130388-CA
                      Filed August 21, 2014

           Third District Court, Salt Lake Department
            The Honorable Elizabeth A. Hruby-Mills
                          No. 120904185

        William J. Hansen and Karra J. Porter, Attorneys
                         for Appellant

       Julianne P. Blanch and Scott C. Powers, Attorneys
                          for Appellee

JUDGE GREGORY K. ORME authored this Opinion, in which JUDGES
     J. FREDERIC VOROS JR. and JOHN A. PEARCE concurred.

ORME, Judge:

¶1      While unloading a truckload of scaffolding equipment for a
Jacobsen Construction Company (Jacobsen) project, a pile of planks
fell on appellant Rick J. Nichols, an employee of a subcontractor,
causing him serious injuries. Nichols brought a negligence action
against Jacobsen, and Jacobsen moved for summary judgment,
arguing that it was immune from Nichols’s suit because of the
Workers’ Compensation Act’s exclusive-remedy provision. The
trial court agreed with Jacobsen, granted its motion for summary
judgment, and subsequently dismissed Nichols’s complaint with
prejudice. Because we determine that there is at least one genuine
                  Nichols v. Jacobsen Construction

issue of material fact that precludes summary judgment, we
reverse the judgment and remand the case for further proceedings.

                        BACKGROUND1

¶2      Jacobsen, as the general contractor on a large construction
project, hired several subcontractors to provide services and
supplies. As a way to decrease costs on the project, Jacobsen opted
to set up a contractor-controlled insurance program (CCIP), under
which Jacobsen was responsible for providing workers’
compensation benefits to enrolled subcontractors and their
employees. In return, the subcontractors agreed to reduce their
bids in proportion to the amount the CCIP saved them on
insurance costs. As part of the CCIP, Jacobsen asserts that it
maintained and enforced a comprehensive safety program, which
was described in detail in the safety manual for the project.

¶3     Safway Services, a scaffolding business, was a subcontractor
on the project and enrolled in the CCIP. Nichols worked for Safway
and was injured while unloading scaffolding components on
Jacobsen’s project site. Normally a forklift is used to unload the
scaffolding components due to their weight, but a Jacobsen
employee, concerned about delays, demanded that Nichols unload
the equipment by hand instead of waiting for a forklift to arrive.
While Nichols was thus engaged, a pile of planks fell and seriously
injured him. After the accident, a Safway supervisor took Nichols
to Jacobsen’s on-site office. A Jacobsen safety supervisor told
them—erroneously as it turned out—that Nichols should seek
medical assistance anywhere he wanted. The rationale expressed
at that time by the Jacobsen safety supervisor, who for whatever
reason failed to recognize the relevance of the CCIP, was that “he’s

1. On an appeal from a summary judgment, we recite the facts and
all reasonable inferences drawn therefrom in the light most
favorable to the nonmoving party—Nichols in this case. See Orvis
v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600.

20130388-CA                      2                   2014 UT App 201
                   Nichols v. Jacobsen Construction

not our employee.” But the CCIP directs that injured employees of
enrolled subcontractors go to a specifically designated medical
facility. Acting on the Jacobsen safety supervisor’s erroneous
instruction, Nichols’s coworkers took him to a different clinic for
emergency medical care.

¶4     The record on appeal contains three versions of what
occurred after the accident. First, there is Nichols’s own version of
events, detailed in his declaration:

             I filed a workers’ compensation claim with
       Safway, and Safway’s workers’ compensation carrier
       began paying on the claim.
             Some months later, [I] received an unexpected
       telephone call from an individual who stated that he
       was with Jacobsen Construction and that I needed to
       contact Jacobsen’s workers’ compensation carrier,
       because Jacobsen was taking over my workers’
       compensation payments. . . .
             I was surprised, but I did not question it.

Second, there is an email from Jacobsen’s corporate counsel to
Nichols’s counsel discussing this lawsuit. It reads:

                It is my understanding that there were some
       initial coverage disputes between Safway’s separate
       workers compensation insurer and Mr. Nichols
       resulting from Safway’s workers compensation
       insurer’s denial of benefits. It is also my
       understanding that the basis for this denial was
       Safway’s enrollment in the . . . CCIP . . . . It is finally
       my understanding that Safway and its separate
       workers compensation insurer might have acted
       unreasonably toward Mr. Nichols and left him
       without proper benefits for some period following
       his injury. This is unfortunate. Safway apparently
       delayed putting Jacobsen Construction on notice of
       the workers compensation claim until sometime

20130388-CA                        3                  2014 UT App 201
                   Nichols v. Jacobsen Construction

       later. However, upon learning of the ordeal, Jacobsen
       Construction and the Workers Compensation Fund
       immediately stepped in and made sure to provide
       benefits to Mr. Nichols . . . .

Finally, the third version of events comes from the affidavit of a
safety manager for Jacobsen. In it, the safety manager states that
several months after the accident

       Mr. Nichols presented a claim to Jacobsen under the
       CCIP. After review and consideration of Mr. Nichols’
       claim by Jacobsen and the [Workers’ Compensation
       Fund], the CCIP workers compensation carrier,
       Jacobsen Construction extended workers
       compensation benefits to Mr. Nichols. Upon making
       the decision to extend benefits to Mr. Nichols,
       Jacobsen promptly stepped in and assisted Mr.
       Nichols with his claim . . . .

¶5      Later, Nichols filed his lawsuit against Jacobsen. Jacobsen
moved for summary judgment, claiming that it was immune under
the Workers’ Compensation Act’s exclusive-remedy provision. The
trial court agreed with Jacobsen, granting summary judgment on
the issue of immunity and dismissing the suit with prejudice.
Nichols appeals.

              ISSUE AND STANDARD OF REVIEW

¶6      Nichols argues that the trial court erred in ruling, as a matter
of law, that his claims were barred by the exclusive-remedy
provision of Utah’s Workers’ Compensation Act. We review a
grant of summary judgment for correctness. Orvis v. Johnson, 2008
UT 2, ¶ 6, 177 P.3d 600. When the party moving for summary
judgment bears the burden of proof, such as a defendant would
bear when claiming the affirmative defense of immunity, then the
moving party “has an affirmative duty to provide the court with
facts that demonstrate both that the party is entitled to judgment

20130388-CA                        4                  2014 UT App 201
                   Nichols v. Jacobsen Construction

as a matter of law and that there are no material issues of fact that
would require resolution at trial.” See id. ¶ 19. If there is a genuine
issue as to any material fact, then summary judgment is
inappropriate. See Utah R. Civ. P. 56(c).

                             ANALYSIS

¶7      Utah law provides injured employees a “right to recover
compensation” from their employers exclusively through the
Workers’ Compensation Act. See Utah Code Ann. § 34A-2-105(1)
(LexisNexis 2011). This exclusive-remedy provision grants
protection to employers from “an action at law” outside this
statutory scheme. Id. For purposes of the statute, if “an employer
procures any work to be done wholly or in part for the employer”
by a contractor or a subcontractor, “and this work is a part or
process in the trade or business of the employer,” then “all persons
employed by the contractor, all subcontractors under the
contractor, and all persons employed by any of these
subcontractors, are considered employees of the original
employer.” See id. § 34A-2-103(7)(a)(ii) (Supp. 2013). See also
Pinnacle Homes, Inc. v. Labor Comm'n, 2007 UT App 368, ¶¶ 19–24,
173 P.3d 208 (explaining that the term “employer” under the
Workers’ Compensation Act differs from the usual understanding
of the term “employer”).2 And for an employer to be eligible for the
exclusive-remedy provision of the statute, it must show, inter alia,
that it secured the payment of workers’ compensation benefits for
the injured employee. See id. § 34A-2-103(7)(f)(iii). The statute does
not specify how an employer must do this, but the expansively
phrased requirement undoubtedly includes project-specific
insurance programs such as a CCIP. See id; id. § 34A-2-201 (2011).

2. Because the statutory provisions in effect at the relevant time do
not differ materially from the statutory provisions now in effect, we
cite the current edition of the Utah Code Annotated as a
convenience to the reader.

20130388-CA                       5                   2014 UT App 201
                  Nichols v. Jacobsen Construction

¶8      In this case, even though Jacobsen did not directly employ
Nichols, it was an “employer” under the terms of the statute—a
statutory employer. See Pinnacle Homes, 2007 UT App 368, ¶¶ 19–24
(distinguishing statutory employers under the Workers’
Compensation Act from the usual understanding of the term
“employers”). As part of its construction business, Jacobsen
engaged Safway to handle a small part of its larger project. Nichols
argues that because the statute does not define the word “work,”
it is reasonable to construe Nichols’s actions on the day of his
injury in merely delivering scaffolding materials as something
other than “work.” Adopting this limited interpretation of “work,”
Nichols contends that Jacobsen could not be a statutory employer
because it did not procure “work” from Safway. See Utah Code
Ann. § 34A-2-103(7)(a)(ii). We do not agree.

¶9      Our first step in interpreting a word used but not defined in
a statute is to consider its plain meaning. See In re Adoption of Baby
E.Z., 2011 UT 38, ¶ 15, 266 P.3d 702. Considering this, we determine
that unloading equipment for a construction project, even without
any additional responsibilities, readily falls under the plain
meaning of the word “work.”3 It surely was not a lark or a personal
frolic on the part of Nichols—it was a delivery made during his
normal work day in accordance with the requirements of Safway’s
contract. Therefore, Nichols is considered an employee of Jacobsen
for the purposes of the workers’ compensation statute. See Utah
Code Ann. § 34A-2-103(7)(a)(ii).

¶10 As a statutory employer, however, Jacobsen is only eligible for
the exclusive-remedy protection if it meets the requirements of
section 34A-2-103(7)(f)(ii)–(iii). Among other things, it must have
secured the payment of Nichols’s benefits. See id. § 34A-2-
103(7)(f)(iii). By so doing, an eligible statutory employer indicates
that it has an “employee–employer relationship” with the injured
employee within the context of the overall statutory scheme. See id.

3. Jacobsen’s CCIP sought to treat mere unloading differently—a
matter we touch upon in footnote 4.

20130388-CA                       6                  2014 UT App 201
                  Nichols v. Jacobsen Construction

§ 34A-2-106(4) (LexisNexis 2011) (indicating that general
contractors “who do not occupy an employee–employer
relationship with the injured” employee are not protected by the
exclusive-remedy provision).

¶11 After due consideration of the record, we determine that
there is a genuine issue of material fact concerning whether
Jacobsen secured the payment of benefits such that it had a
statutory employer–employee relationship with Nichols. While it
is undisputed that at some point Jacobsen “stepped in” through its
CCIP to secure the payment of benefits to Nichols, it is unclear
what happened prior to that. Nichols claims that Safway initially
secured the payment of his benefits through its separate insurer
and that he received benefits for months before Jacobsen
voluntarily took over making the payments.4 Jacobsen’s corporate
counsel’s understanding was that Safway’s separate workers’
compensation insurer left Nichols “without proper benefits”—or
that perhaps Nichols’s claim was denied entirely. Finally,

4. Even aside from the Jacobsen safety supervisor’s comment that
Nichols’s medical care was not Jacobsen’s responsibility, it would
not be irrational for Nichols to file through Safway’s separate
insurer instead of through Jacobsen’s CCIP considering that a
provision of the CCIP states that “[n]o insurance coverage
provided by [Jacobsen] under the CCIP shall extend to the activities
or products of suppliers . . . whose employee(s) . . . are engaged
solely in the loading, unloading, stocking, testing or hauling of
equipment, supplies or materials.” At oral argument, Nichols’s
appellate counsel conceded that, but for the accident, Nichols likely
would have gone beyond unloading and actually assisted in
erecting the scaffolding on site. For the purposes of this opinion,
however, it is enough to observe that Nichols would not have been
irrational in assuming that he was not covered by the CCIP,
especially given the flawed instruction originally given to him by
the Jacobsen safety supervisor who told him he was on his own,
and therefore not irrational in applying for benefits through
Safway’s separate insurer.

20130388-CA                      7                   2014 UT App 201
                 Nichols v. Jacobsen Construction

Jacobsen’s safety manager testified that Nichols waited a few
months and then applied directly to Jacobsen’s CCIP for benefits
and that Jacobsen then “stepped in” to help.

¶12 Nichols asserts that Jacobsen may have stepped in and
belatedly made payments in anticipation of a lawsuit as a way to
back in to the exclusive-remedy provision in the statute. On the
other hand, Jacobsen’s counsel asserted during oral argument that
the facts in the record support the conclusion that “from day one
and dollar one, Jacobsen was paying the workers’ compensation
benefits.” We conclude that such disparate positions can only be
explained by genuine disputes of material fact in the record before
us.

¶13 Not only do these facts conflict, but they are also material to
the disposition of the case. If a significant time passed in which
Jacobsen failed to secure the payment of benefits to Nichols, then
Jacobsen would likely fail to meet the requirement contained in
section 34A-2-103(7)(f)(iii)(B)(I) and would not be considered an
eligible employer for the purposes of the exclusive-remedy
provision of the statute. Accordingly, we determine that genuine
issues of material fact exist that preclude resolution by summary
judgment.

                         CONCLUSION

¶14 Because we determine that a genuine issue of material fact
exists as to who originally secured the payment of Nichols’s
benefits, we must also conclude that summary judgment was
improper under these circumstances. See Utah R. Civ. P. 56(c). We
reverse the trial court’s grant of summary judgment and its
subsequent dismissal of Nichols’s negligence claim against
Jacobsen. We remand to the trial court for such further proceedings
as may now be in order, consistent with this opinion.

20130388-CA                     8                   2014 UT App 201