REL:
12/12/2008
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
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before the opinion is printed in Southern Reporter.
ALABAMA COURT OF CIVIL APPEALS
OCTOBER TERM, 2008 -2009
_________________________
2050800
_________________________
MasterBrand Cabinets, Inc., f/k/a NHB Industries, Inc.
v.
Nacola Ruggs
Appeal from Talladega Circuit Court
(CV-01-521)
After Remand from the Alabama Supreme Court
BRYAN, Judge.
The prior judgment of this court has been reversed and
the cause remanded by the Supreme Court of Alabama.
Ex parte
Ruggs, [Ms. 1061379, August 22, 2008] ___ So. 2d ___, ___
2050800
(Ala. 2008).
On remand, we affirm the judgment of the trial
court.
Nacola Ruggs sued her employer MasterBrand Cabinets,
Inc., f/k/a NHB Industries, Inc. ("MasterBrand"), seeking to
recover workers' compensation benefits.
On May 24, 2004, the
trial court awarded workers' compensation benefits to Ruggs
for a permanent and total disability.
On November 29, 2005,
Ruggs filed with the trial court a "Motion to Enforce Judgment
of Court and Petition for Rule Nisi."
In her motion, Ruggs
moved the trial court (1) to enforce the trial court's May 24,
2004, judgment; (2) to hold MasterBrand in contempt of court
for failing to comply with the trial court's judgment; and (3)
to assess a double-compensation penalty against MasterBrand
pursuant to § 25-5-8(e), Ala. Code 1975, for failing to have
workers' compensation insurance or to operate as an authorized
self-insurer.
In December 2005, the trial court held a
hearing on Ruggs's motion.
On April 4, 2006, the trial court
entered a judgment finding, among other things, that, at the
time
of
Ruggs's
work-related
injury
in
August
2000,
MasterBrand did not have workers' compensation insurance and
did not operate as an authorized self-insurer.
2
Based upon
2050800
that finding, the trial court awarded Ruggs double the amount
of compensation that had been awarded to her in the May 24,
2004, judgment, pursuant to § 25-5-8(e). MasterBrand appealed
to this court.
On appeal, this court reversed the trial court's judgment
and remanded the case.
MasterBrand Cabinets, Inc. v. Ruggs,
[Ms. 2050800, April 13, 2007] ___ So. 2d ___ (Ala. Civ. App.
2007).
This court concluded that Ruggs's November 29, 2005,
motion was an untimely filed Rule 59, Ala. R. Civ. P., motion
and, therefore, that the trial court had lacked jurisdiction
to enter its April 4, 2006, judgment.
___ So. 2d at ___.
Ruggs petitioned the supreme court for certiorari review. The
supreme court "granted certiorari review to determine the
question of first impression: Whether the double-compensation
penalty provided in § 25-5-8(e), Ala. Code 1975, is subject to
the time limitations set forth in Rule 59, Ala. R. Civ. P."
___ So. 2d at ___.
The supreme court concluded that "a claim
asserted under § 25-5-8(e) is independent of the claim for
workers' compensation benefits and ..., therefore, a motion
seeking the double-compensation penalty is not a Rule 59
motion."
___ So. 2d at ___.
Consequently, the supreme court
3
2050800
reversed this court's judgment, and it remanded the cause to
this court "for proceedings consistent with [that court's]
opinion."
On
___ So. 2d at ___.
appeal
to
this
court,
MasterBrand
presented
two
arguments for reversing the trial court's April 4, 2006,
judgment awarding a double-compensation penalty under § 25-58(e): (1) that Ruggs's November 29, 2005, motion was an
untimely filed Rule 59 motion and, therefore, the trial court
had lacked jurisdiction to enter its judgment; and (2) that,
if the trial court had had jurisdiction to enter its judgment,
MasterBrand had established that it had workers' compensation
insurance at the time of Ruggs's injury.1
Because this court
in its previous opinion reversed the trial court's judgment on
the basis of MasterBrand's first argument, we did not address
MasterBrand's second argument.
The supreme court has decided
that MasterBrand's first argument lacks merit; we now address
1
As part of its second argument, MasterBrand makes the
additional assertion that Ruggs had not raised, during the
proceedings conducted before she filed her November 29, 2005,
motion,
the
issue
whether
MasterBrand
had
workers'
compensation insurance or was self-insured. However, as Ex
parte Ruggs makes clear, a claim asserted under § 25-5-8(e)
may be asserted independently of an employee's claim for
workers' compensation benefits. ___ So. 2d at ___.
4
2050800
MasterBrand's second argument.
Section
25-5-8
requires
an
employer
subject
to
the
Alabama Workers' Compensation Act, § 25-5-1 et seq., either to
have workers' compensation insurance or to operate as an
authorized self-insurer. Section 25-5-8, Ala. Code 1975, also
provides, in pertinent part:
"(c) Evidence of compliance.
An employer
subject to this chapter [Title 25, Chapter 5,
'Workers' Compensation,' Ala. Code 1975, §§ 25-5-1
through 25-5-340,] shall file with the director [of
the Alabama Department of Industrial Relations], on
a form prescribed by the director, annually or as
often as the director in his or her discretion deems
necessary,
evidence
of
compliance
with
the
requirements of this section.
In cases where
insurance is taken with a carrier duly authorized to
write such insurance in this state, notice of
insurance coverage filed by the carrier shall be
sufficient evidence of compliance by the insured.
"....
"(e) Penalties for failure to secure payment of
compensation; injunctions. An employer required to
secure the payment of compensation under this
section who fails to secure compensation shall be
guilty of a misdemeanor, and upon conviction
thereof, shall be subject to a fine of not less than
$100.00 nor more than $1,000.00. In addition, an
employer required to secure the payment of
compensation under this section who fails to secure
the compensation shall be liable for two times the
amount of compensation which would have otherwise
been payable for injury or death to an employee.
The director may apply to a court of competent
jurisdiction
for
an
injunction
to
restrain
5
2050800
threatened or continued violation of any provisions
relating to the requirements of insurance or
self-insurance.
The court may impose civil
penalties against an employer in noncompliance with
this amendatory act, in an amount not to exceed
$100.00 per day.
Subsequent compliance with this
amendatory act shall not be a defense."
(Emphasis added.)
An employer bears the burden of establishing that it has
secured the payment of compensation in accordance with § 25-58.
Domino's Pizza, Inc. v. Casey, 611 So. 2d 377, 380 (Ala.
Civ. App. 1992); see also Hastings v. Hancock, 576 So. 2d 666,
668 (Ala. Civ. App. 1991).
"It is well settled that the
double-compensation
provision
mandatory."
penalty
in
§
25-5-8(e)
Ex parte Ruggs, ___ So. 2d at ___.
is
Before
applying the double-compensation penalty established by § 255-8(e),
a trial
court must
first
allow
an
employer
the
opportunity to prove that it has secured the payment of
compensation.
Domino's Pizza, 611 So. 2d at 380.
"'The [double-compensation] penalty was designed to
promote compliance with our workmen's compensation
law just as other penalties are designed to promote
compliance with other laws. Compensation laws were
enacted to make more certain the relief available to
the employee who comes under its influence. Alabama
By-Products Co. v. Landgraff, 32 Ala. App. 343, 27
So. 2d 209 (1946).
These laws are a form of
regulation by the state. It is within the limits of
permissible regulation, in aid of a system of
6
2050800
compulsory compensation, to require the employer
either to carry workmen's compensation insurance or
furnish satisfactory proof of his financial ability
to pay compensation when due.
Ward & Gow v.
Krinsky, 259 U.S. 503, 42 S. Ct. 529, 66 L. Ed. 1033
(1922).
The penalty provided in § 25-5-8(e) is
permissible in that it promotes compliance with a
valid legislative objective.'"
Ex parte Ruggs, ___ So. 2d at ___ (quoting Hester v. Ridings,
388 So. 2d 1218, 1220 (Ala. Civ. App. 1980)).
Section 25-5-81(e), Ala. Code 1975, provides the standard
of review in a workers' compensation case:
"(1) In reviewing the standard of proof set
forth herein and other legal issues, review by the
Court of Civil Appeals shall be without a
presumption of correctness.
"(2) In reviewing pure findings of fact, the
finding of the circuit court shall not be reversed
if that finding is supported by substantial
evidence."
Substantial evidence is "evidence of such weight and quality
that fair-minded persons in the exercise of impartial judgment
can reasonably infer the existence of the fact sought to be
proved."
West v. Founders Life Assurance Co. of Florida, 547
So. 2d 870, 871 (Ala. 1989).
"Our review is restricted to a determination of
whether the trial court's factual findings are
supported by substantial evidence. Ala. Code 1975,
§ 25-5-81(e)(2). This statutorily mandated scope of
review does not permit this court to reverse the
7
2050800
trial court's judgment based on a particular factual
finding on the ground that substantial evidence
supports a contrary factual finding; rather, it
permits this court to reverse the trial court's
judgment only if its factual finding is not
supported by substantial evidence. See Ex parte M&D
Mech. Contractors, Inc., 725 So. 2d 292 (Ala. 1998).
A trial court's findings of fact on conflicting
evidence are conclusive if they are supported by
substantial evidence.
Edwards v. Jesse Stutts,
Inc., 655 So. 2d 1012 (Ala. Civ. App. 1995)."
Landers v. Lowe's Home Ctrs., Inc., [Ms. 2060303, August 31,
2007] ___ So. 2d ___, ___ (Ala. Civ. App. 2007).
"This
court's role is not to reweigh the evidence, but to affirm the
judgment of the trial court if its findings are supported by
substantial
evidence
and,
if
so,
conclusions are drawn therefrom."
if
the
correct
legal
Bostrom Seating, Inc. v.
Adderhold, 852 So. 2d 784, 794 (Ala. Civ. App. 2002).
MasterBrand
argues
that
it
established
that
it
had
workers' compensation insurance at the time of Ruggs's workrelated injury sustained in August 2000.
Before the December
2005 hearing on Ruggs's motion seeking an award of double
compensation, the trial court ordered MasterBrand to have
present at that hearing "its duly authorized representative
[who] is familiar with [MasterBrand's] workers' compensation
insurance, if any."
However, no such representative for
8
2050800
MasterBrand was present at the hearing.
At that hearing, the
trial court heard the testimony of Joseph Scott Ammons,
general counsel for the workers' compensation division of the
Alabama Department of Industrial Relations ("DIR").
Ammons
testified that DIR's records indicated that MasterBrand did
not have workers' compensation insurance and was not selfinsured at the time of Ruggs's injury in August 2000.
At the
hearing, counsel for MasterBrand asserted that MasterBrand was
owned by Fortune Brands, Inc., at the time of Ruggs's injury.
Ammons testified that DIR's records indicated that Fortune
Brands did not have workers' compensation insurance and was
not self-insured at the time of Ruggs's injury.
further
testified
MasterBrand
had
insurance policy
that
been
covered
in
1999 but
canceled in January 2000.
understanding
DIR's
that
by
records
a
that
indicated
workers'
that
Ammons
that
compensation
policy had been
Ammons also stated that it was his
MasterBrand
was
covered
by
workers'
compensation insurance at the time of the hearing.
In Ex parte Ruggs, the supreme court noted that "Ruggs
was paid temporary-total-disability benefits for approximately
a
year
by
Gallagher
Bassett
9
Services,
Inc.,
a
workers'
2050800
compensation third-party administrator."
___ So. 2d at ___.
The record on appeal seems to indicate that MasterBrand was
insured at some point during the proceedings.
However,
Ammons's testimony is substantial evidence indicating that
MasterBrand did not have workers' compensation insurance and
did not operate as an authorized self-insurer when Ruggs
sustained her injury.
Because the trial court had before it
substantial evidence indicating that MasterBrand was neither
insured nor enjoyed self-insured status at the time of Ruggs's
injury, we must affirm the trial court's award of double
compensation made pursuant to § 25-5-8(e).
§ 25-5-81(e)(2).
AFFIRMED.
Thompson, P.J., and Pittman, Thomas, and Moore, JJ.,
concur.
10
