Court Opinion

ID: 4264617
Source: CourtListenerOpinion
Date Created: 2018-04-17 15:07:06.017911+00
Date Added: 2024-06-11T07:49:15.385748
License: Public Domain

FILED
                                                                                  Apr 17 2018, 9:31 am

                                                                                      CLERK
                                                                                  Indiana Supreme Court
                                                                                     Court of Appeals
                                                                                       and Tax Court

      ATTORNEY FOR APPELLANTS                                    ATTORNEY FOR APPELLEE
      Philip E. Kalamaros                                        Trent A. McCain
      Hunt Suedhoff Kalamaros LLP                                McCain Law Offices, P.C.
      Saint Joseph, Michigan                                     Merrillville, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Family Christian World, Inc.                               April 17, 2018
      d/b/a Family Christian Center,                             Court of Appeals Case No.
      Stephan “Steve” Munsey,                                    45A04-1709-CT-2091
      Melodye J. Munsey, and Darryl                              Appeal from the Lake Superior
      Anthony Smith,                                             Court
      Appellants-Defendants,                                     The Honorable John R. Pera,
                                                                 Judge
              v.                                                 Trial Court Cause No.
                                                                 45D10-1611-CT-191
      Vicki Olds,
      Appellee-Plaintiff.

      Najam, Judge.

                                         Statement of the Case
[1]   Family Christian World, Inc., d/b/a Family Christian Center (“FCC”),

      Stephen Munsey, and Melodye Munsey (“the Munseys”) appeal the trial

      court’s denial of their motion to dismiss Vicki Olds’ complaint seeking damages

      Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018                           Page 1 of 15
      for the alleged wrongful death of her daughter, Dominique Olds (“Nikki”).

      FCC and the Munseys present a single issue for our review, namely, whether

      the trial court erred when it denied their motion to dismiss, in which they

      alleged that Nikki was their employee and, thus, that the Worker’s

      Compensation Act provides the exclusive remedy for any claim arising from

      her death. We affirm.

                                    Facts and Procedural History
[2]   FCC is a church in Munster, and the Munseys are employed by the church as

      Senior Pastors. Nikki, a full-time student at Valparaiso University, was a

      member of FCC’s congregation. In April and May 2015, FCC hired Nikki “as

      a babysitter, under the direct supervision of the Munseys.”1 Appellants’ App.

      Vol. II at 16. Nikki filled out an IRS Form W-92 when she was hired. Nikki

      babysat for FCC on five occasions between April 1 and May 20, 2015,3 both at

      the FCC church and at the Munseys’ private residence, and FCC paid Nikki on

      each occasion. Nikki did not have a set work schedule with FCC, but she

      1
        In their brief on appeal, FCC and the Munseys allege that both “FCC and the Munseys were employers of
      [Nikki] at the time of [her death].” Appellants’ Br. at 9. However, in an affidavit, Melodye states that she
      and Stephen were employed by FCC as senior pastors, which suggests that when they supervised Nikki they
      were acting as agents of FCC. There is no evidence that the Munseys hired Nikki on their own account.
      Nevertheless, “[w]here two employers ‘so associate themselves together that both are in direct control of the
      employee and he is made accountable to both, he will be considered an employee of both employers[.]’”
      GKN Co. v. Magness, 744 N.E.2d 397, 402 (Ind. 2001) (quoting U.S. Metalsource Corp. v. Simpson, 649 N.E.2d
      682, 685 (Ind. Ct. App. 1995)).
      2
        A Form W-9 provides information about an independent contractor necessary for the hiring party to report
      at a later date on a Form 1099-MISC for payments made.
      3
          Nikki babysat for FCC on April 1, April 18, twice on April 28, and on May 20.

      Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018                         Page 2 of 15
      accepted babysitting jobs with FCC if those jobs did not conflict either with her

      job in the dining hall at Valparaiso University or her classes there.

[3]   On May 29, 2015, Nikki was babysitting the Munseys’ granddaughter at the

      Munseys’ residence in Schererville. At approximately 3:00 p.m., someone

      found Nikki “floating face down” and “unresponsive” in the Munseys’

      swimming pool. Id. at 17. Nikki was transported by ambulance to a hospital,

      but efforts to resuscitate her were unsuccessful, and she died on June 1.

[4]   On November 17, 2016, Olds filed a complaint alleging in relevant part that

      FCC and the Munseys were liable for Nikki’s wrongful death.4 On December

      16, FCC and the Munseys filed a motion to dismiss for lack of subject matter

      jurisdiction under Indiana Trial Rule 12(B)(1).5 In particular, they alleged that

      Nikki was their employee and, as such, that Olds could only bring a claim

      against them under the Worker’s Compensation Act (“the Act”). The trial

      court denied that motion following a hearing. This certified interlocutory

      appeal ensued.

                                       Discussion and Decision
[5]   FCC and the Munseys contend that Nikki was their employee and that the Act

      provides the exclusive remedy for her death, which, they maintain, arose out of

      4
        Pursuant to Indiana Code Section 34-23-2-1(c)(1), Mother named Nikki’s father, Darryl Anthony Smith, as
      a codefendant in the complaint, but he did not appear and does not participate in this appeal.
      5
        They also moved to dismiss the complaint under Trial Rule 12(B)(6), but they do not raise that issue on
      appeal.

      Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018                        Page 3 of 15
      and in the course of her employment. Thus, they assert that the trial court is

      without subject matter jurisdiction to hear Olds’ complaint.

[6]   The Act is the exclusive means by which an employee, her personal

      representatives, dependents, or next of kin, at common law or otherwise, can

      pursue compensation for an employee’s injury or death arising out of and in the

      course of her employment. See Ind. Code § 22-3-2-6 (2018). A defense against

      a negligence claim on the basis that the plaintiff’s exclusive remedy is to pursue

      a claim for benefits under the Act is properly advanced through a motion to

      dismiss for lack of subject matter jurisdiction under Indiana Trial Rule 12(B)(1).

      See Wishard Memorial Hosp. v. Kerr, 846 N.E.2d 1083, 1087 (Ind. Ct. App. 2006).

      “‘In ruling on a motion to dismiss for lack of subject matter jurisdiction, the

      trial court may consider not only the complaint and motion but also any

      affidavits or evidence submitted in support.’” Id. (quoting GKN Co. v. Magness,

      744 N.E.2d 397, 400 (Ind. 2001)). The trial court may weigh the evidence to

      resolve the jurisdictional issue. Id.

[7]   The standard of appellate review for a Trial Rule 12(B)(1) motion to dismiss is

      dependent upon what occurred in the trial court, that is: (i) whether the trial

      court resolved disputed facts; and (ii) if the trial court resolved disputed facts,

      whether it conducted an evidentiary hearing or ruled on a paper record. Id.

      Here, the trial court ruled entirely on a paper record. We review de novo a trial

      court’s ruling on a motion to dismiss where the facts before the trial court are

      disputed and the trial court rules on a paper record. Id.

      Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018   Page 4 of 15
[8]   When challenging the trial court’s jurisdiction, the purported employer bears

      the burden of proving that an alleged employee’s claim falls within the scope of

      the Act unless the complaint demonstrates the existence of an employment

      relationship. Id. at 1088. Olds’ complaint does not state whether Nikki was an

      employee or independent contractor. Therefore, FCC and the Munseys bore

      the burden of demonstrating a lack of subject matter jurisdiction based on their

      claim that Nikki was their employee and Olds’ exclusive remedy fell under the

      Act.6 See id.

[9]   In Moberly v. Day, 757 N.E.2d 1007, 1010-11 (Ind. 2001), our Supreme Court

      set out a ten-factor analysis to distinguish employees from independent

      contractors. Those factors are:

               (a) the extent of control which, by the agreement, the master may
               exercise over the details of the work;

               (b) whether or not the one employed is engaged in a distinct
               occupation or business;

               (c) the kind of occupation, with reference to whether, in the
               locality, the work is usually done under the direction of the
               employer or by a specialist without supervision;

      6
        The negative judgment standard of review does not apply here. A negative judgment occurs when a
      decision is made against the party who bore the burden of proving facts to a fact-finder at an evidentiary
      hearing. See, e.g., Romine v. Gagle, 782 N.E.2d 369, 376 (Ind. Ct. App. 2003), trans. denied. Such decisions
      may not be challenged on appeal on the grounds that they are not supported by sufficient evidence; rather,
      they may be challenged only on the grounds that they are contrary to law. 2 Ind. L. Encyc. Appeals § 337
      (Supp. Jan. 2018). Here, the trial court did not hold an evidentiary hearing to determine facts, and we are in
      just as good a position on appeal as the trial court was to determine the issues raised. Thus, our standard of
      review is de novo.

      Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018                         Page 5 of 15
               (d) the skill required in the particular occupation;

               (e) whether the employer or the workman supplies the
               instrumentalities, tools, and the place of work for the person
               doing the work;

               (f) the length of time for which the person is employed;

               (g) the method of payment, whether by the time or by the job;

               (h) whether or not the work is a part of the regular business of the
               employer;

               (i) whether or not the parties believe they are creating the relation
               of master and servant; and

               (j) whether the principal is or is not in business.

       Id. at 1010 (quoting Restatement (Second) of Agency § 220(2)). No single

       factor is dispositive. Id. We consider each factor in turn.

                                   Extent of Control Over Details of the Work

[10]   In support of their motion to dismiss, FCC and the Munseys submitted to the

       trial court Melodye Munsey’s affidavit, which provided in relevant part that the

       Munseys were employed as Senior Pastors at FCC and that they had: “direct

       authority” over Nikki in her work for FCC; the “power and right to direct and

       control the means, manner[,] and method” of Nikki’s work for FCC; and the

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018   Page 6 of 15
       right to discharge Nikki.7 Appellants’ App. Vol. II at 63. In addition, the

       affidavit stated that, “[t]o the extent that things were needed by [Nikki] to

       perform her work for [FCC], we provided them, but did not provide a cell

       phone or a car.” Id. And the affidavit stated that the Munseys “established

       [Nikki’s] work boundaries, determining where and when she would work for

       [FCC].” Id. In light of that evidence, FCC and the Munseys contend that “this

       factor weighs heavily in favor” of concluding that Nikki was an employee.

       Appellants’ Br. at 11.

[11]   In Moberly, our Supreme Court set out the test on the control factor as follows:

       the Restatement (Second) of Agency § 220(1)

                defines a servant (i.e. employee) as one “employed to perform
                services in the affairs of another and who with respect to the
                physical conduct in the performance of the services is subject to
                the other’s control or right to control.” Comment d. to
                subsection (1) further describes control or right to control as
                “important and in many situations . . . determinative.”

       757 N.E.2d at 1010. While the Restatement (Second) of Agency § 220(1)

       clearly states that an employee is one who is “subject to the other’s control or

       right to control,” our case law emphasizes evidence of the actual control an

       7
         While FCC and the Munseys contend that their right to discharge Nikki at any time bears on the control
       factor, we cannot agree. The right to discharge is one of seven factors our courts consider to determine the
       existence of an employer-employee relationship under the borrowed servant doctrine, see Hale v. Kemp, 579
       N.E.2d 63, 67 (Ind. 1991), which is not at issue in this appeal. The ten-factor test in Moberly, which FCC and
       the Munseys concede applies here, does not include a “right to discharge” factor. 757 N.E.2d at 1010 n.3.

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018                         Page 7 of 15
       alleged employer exercised in the course of the working relationship.

       (Emphasis added.)

[12]   For example, in Moberly, William Day, a farmer, hired Jay Moberly and Joe

       Hendershot to repair drainage tile in a field, and Moberly was injured when

       Hendershot negligently operated a backhoe in the course of fixing the drainage

       tile on Day’s farm. Id. at 1008. The trial court concluded that Day was not

       liable for Moberly’s injury because Hendershot was an independent contractor.

       Id. at 1013.

[13]   In its analysis of the control factor, our Supreme Court observed that “the

       record d[id] not indicate any formal agreement about the extent of control Day

       exercised over Hendershot’s work,” but the record did “describe the working

       arrangement.” 757 N.E.2d at 1010. In particular, the evidence showed that

       Day had told Hendershot and Moberly “what he wanted done and [they]

       would do it.” Id. Day testified that he had told Moberly “to dig the holes up

       and fill in the tile, fix the tile.” Id. at 1011. Day did not “specifically tell him

       each step,” and he did not tell him “to operate the equipment or to dig the hole

       or to do the back-filling.” Id. The Court held that the “evidence offered

       indicates that Hendershot was answerable to Day for results only, not the

       particulars of how he went about accomplishing assigned tasks.” Id. Therefore,

       it held that “this important factor tilts the scale toward an independent

       contractor conclusion.” Id.

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018    Page 8 of 15
[14]   In Vinup v. Joe’s Construction, LLC, 64 N.E.3d 885 (Ind. Ct. App. 2016), this

       court also looked to the evidence of actual control exercised in the course of the

       parties’ relationship to determine this factor. In Vinup, Joe Getz ran a company

       called Joe’s Construction and hired Mark Vinup. After Vinup was injured on

       the job, he sued Joe’s Construction. The trial court granted Joe’s

       Construction’s summary judgment motion, which alleged that Vinup was an

       employee and was, therefore, limited to damages under the Act. On appeal,

       this court considered evidence of the control factor as follows:

                Getz solely determined and assigned what tasks were to be done
                by workers of Joe’s Construction. That is, Getz determined the
                location where the work was to be done, in this case, where on
                the Aberdeen Project they would be working. He determined the
                workers’ schedules, including work hours and breaks, and he had the
                power to remove anyone from his employment.[8] Joe’s
                Construction provided the tools and equipment, including safety
                vests, and he determined when those were to be worn. Vinup did
                not use any of his own tools in the performance of his work for
                Joe’s Construction. Contrary to Vinup’s assertion, we find that
                the “control” factor weighs in favor of employee status.

       Id. at 891 (emphasis added).

[15]   Here, while Melodye’s affidavit states that the Munseys in their positions as

       Senior Pastors for FCC had the right to control “the means, manner and

       8
         Again, there is no “right to discharge” factor in the Moberly ten-factor test, and we disagree with the court
       in Vinup that it has any bearing on the control factor under the Moberly test. The “right to discharge” is
       relevant to the seven-factor Hale test because it bears on which of two employers has control over an
       employee.

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018                           Page 9 of 15
       method” of Nikki’s work for FCC, Appellants’ App. Vol. II at 63, there is no

       evidence that the Munseys exercised actual control over Nikki when she

       babysat for FCC. As we observed in Vinup, an employer determines an

       employee’s work schedule, including work hours. 64 N.E.3d at 891. But here

       the evidence shows that, while the Munseys would direct where she would

       babysit, Nikki controlled when she would babysit. Nikki had discretion in

       whether she would take a babysitting job when it was offered, and, moreover,

       no one was supervising or directing Nikki’s work at the time of her death.

[16]   Without evidence that Nikki had an agreement with FCC concerning the

       means, manner, or method by which she would discharge her babysitting

       duties, and without evidence that the Munseys exercised actual control over the

       means, manner, or method by which Nikki discharged her babysitting duties,

       we cannot say that this factor weighs in favor of a determination that Nikki was

       an employee.9 We hold that this factor is neutral.

                                                   Distinct Occupation

[17]   The second factor considers whether the one employed is engaged in a distinct

       business or occupation. Walker v. Martin, 887 N.E.2d 125, 132 (Ind. Ct. App.

       2008), trans. denied. In Walker, “the evidence demonstrated that Martin was

       9
         FCC and the Munseys point out that, in her brief to the trial court, Olds conceded that this factor weighed
       in favor of employee status. But on appeal, Olds contends that this factor weighs in favor of independent
       contractor status. Regardless, Olds’ concession to the trial court was not dispositive, and it is not dispositive
       here. Rather, we review de novo the complaint and evidence presented to the trial court relevant to each
       factor.

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018                           Page 10 of 15
       engaged in his own hauling business and did not work exclusively for” another

       entity. Id. Accordingly, we held that this factor “weigh[ed] in favor of Martin

       as an independent contractor.” Id. Here, the evidence shows that Nikki was a

       full-time college student, worked part-time for Valparaiso University, and took

       babysitting jobs for FCC if she “did not have another commitment or a school

       obligation.” Appellants’ App. Vol. II at 47. Because Nikki was a full-time

       college student and did not work exclusively for FCC, this factor weighs

       significantly in favor of Nikki as an independent contractor.

                                                 Kind of Occupation

[18]   In Moberly, our Supreme Court’s analysis of this factor was as follows:

       “Unsupervised specialists commonly perform this type of heavy-equipment

       repair, although employers do sometimes direct such work. This factor is

       therefore not particularly meaningful in this case.” 757 N.E.2d at 1011.

       Depending on the nature of the job, a babysitter may be hired independently to

       supervise children in the stead of a parent or guardian, or she may, for example,

       be hired as an employee of a daycare business and work under direct

       supervision. Under the evidence presented here, this factor is neutral.

                                                    Skill Required

[19]   Babysitting does not require special skills, so this factor weighs moderately in

       favor of finding employee status.

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018   Page 11 of 15
                                   Supplier of Equipment and Work Location

[20]   The evidence shows that Nikki babysat either at FCC’s church or the Munseys’

       residence. This factor weighs moderately in favor of finding employee status.

                                               Length of Employment

[21]   Nikki babysat for FCC on six occasions in April and May, 2015. Comment h.

       to the Restatement (Second) of Agency § 220(2) refers to “employment over a

       considerable period of time with regular hours,” and comment a. to § 220(1)

       also describes an employee as “one who performs continuous service for

       another.” Moberly, 757 N.E.2d at 1012. Here, Nikki neither worked regular

       hours for FCC, nor did she perform continuous service for FCC. The

       undisputed evidence shows that Nikki worked intermittently and had discretion

       in whether to take a babysitting job when it was offered. This factor weighs

       significantly in favor of independent contractor status.

                                                 Method of Payment

[22]   FCC paid Nikki by the job. That is, while she was paid at an hourly rate, FCC

       paid Nikki on each occasion that she babysat. Indeed, Nikki was paid by two

       separate checks for babysitting twice on the same day, April 28, 2015. This

       factor weighs significantly in favor of independent contractor status. See

       Moberly, 757 N.E.2d at 1012.

                                        Regular Business of the Employer

[23]   There is no evidence that FCC is in the business of providing babysitting

       services. At most, any babysitting services FCC provides are ancillary to its

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018   Page 12 of 15
       “business.” This factor weighs significantly in favor of independent contractor

       status.

                                                 Belief of the Parties

[24]   The IRS requires employers to report wage and salary information for

       employees on a Form W-2. Berry v. Crawford, 990 N.E.2d 410, 428 (Ind. 2013).

       Here, FCC and the Munseys did not present evidence that they had completed

       a Form W-2 for Nikki. Neither did they present evidence that Nikki had filled

       out a Form W-4, which employers use to determine withholding from an

       employee’s wages on a Form W-2. Rather, Nikki filled out and signed a Form

       W-9 when she began babysitting for FCC, and that form is used when hiring

       independent contractors. In addition, FCC’s records describe Nikki as a

       “vendor” in the ledger of payments made to her and show no withholding.

       Appellants’ App. Vol. II at 45. This factor weighs significantly in favor of

       independent contractor status.

                                       Whether the Principal is in Business

[25]   FCC is a church, which has certain attributes of a business. As senior pastors of

       FCC, the Munseys manage the “business” of the church, although they are not

       engaged in a for-profit enterprise. This factor weighs in favor of employee

       status, but is not particularly meaningful here, given that FCC is not in the

       babysitting business. See supra.

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018   Page 13 of 15
                                                      Conclusion

[26]   In our analysis of whether an employer-employee relationship exists, “the

       factors must be weighed against each other as a part of a balancing test as

       opposed to a mathematical formula where the majority wins.” See GKN, 744

       N.E.2d at 402. Here, FCC and the Munseys presented evidence that the

       Munseys had the right to control the “means, manner, and method” of Nikki’s

       babysitting, but they offered no evidence that they exercised control over Nikki

       while she babysat, and she was unsupervised at the time of her death.

       Appellants’ App. Vol. II at 63. We hold that “the leading factor of control” is

       neutral, and we give no weight to this factor under these circumstances. See

       Moberly, 757 N.E.2d at 1013. The distinct occupation, length of employment,

       method of payment, and belief of the parties factors weigh significantly in favor

       of Nikki’s independent contractor status. In particular, Nikki did not work

       exclusively for FCC, but was a full-time student and worked in a dining hall;

       Nikki worked irregular hours over the course of two months and had discretion

       whether to accept or reject babysitting jobs offered by FCC; FCC paid Nikki by

       the job; and the parties’ intent that Nikki was an independent contractor is

       manifested by the fact that Nikki filled out a Form W-9 rather than a Form W-

       4, and there was no withholding. While a few of the factors lean toward

       employee status, those factors are less significant and do not outweigh the other

       factors.

[27]   On this thin record, FCC and the Munseys have not sustained their burden to

       show that Nikki was an employee. When considered as a whole, the evidence

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018   Page 14 of 15
       supports the trial court’s conclusion that Nikki was an independent contractor.

       Thus, we hold that the trial did not err when it denied their motion to dismiss

       for lack of subject matter jurisdiction.

[28]   Affirmed.

       Robb, J., and Altice, J., concur.

       Court of Appeals of Indiana | Opinion 45A04-1709-CT-2091 | April 17, 2018   Page 15 of 15