STEINROCK (TERRY), ET AL. VS. COMP COOK (HOWARD C.), ET AL.
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RENDERED: DECEMBER 10, 2010; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2010-CA-001136-WC
TERRY STEINROCK AND GLEN COKE,
D/B/A GLEN COKE GENERAL CONTRACTING
v.
APPELLANTS
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-09-00137
HOWARD C. COOK; UNINSURED
EMPLOYERS' FUND; HONORABLE
LAWRENCE SMITH, ADMINISTRATIVE
LAW JUDGE; AND WORKERS'
COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: LAMBERT, MOORE, AND NICKELL, JUDGES.
LAMBERT, JUDGE: Terry Steinrock and Glen Coke, d/b/a Glen Coke General
Contracting, petition us to review an opinion of the Workers’ Compensation Board
(“Board”) entered May 14, 2010, reversing the Administrative Law Judge’s
(“ALJ”) opinion holding that Howard Cook was an independent contractor and not
an employee of Terry Steinrock. For the reasons stated herein, we affirm the
Board’s decision.
Since 1976, Steinrock has operated T.W. Steinrock Roofing.
Steinrock is the sole proprietor, and roofing is his primary source of income. If
Steinrock cannot complete a job alone, he will contract with other roofers or hire
them to complete the work. However, he performs most jobs himself.
For several years, Steinrock subcontracted work from Glen Coke,
d/b/a Glen Coke General Contracting (“Coke”). Coke is a general contractor and
does residential and commercial renovations and room additions. Coke
exclusively uses subcontractors for his jobs. Coke contracts a job and then
subcontracts out specific portions of the job, such as roofing, to independent
contractors like Steinrock. During 2008, Coke subcontracted five or six roofing
jobs to Steinrock. It is undisputed that Steinrock is an independent contractor who
contracted with Coke for roofing jobs.
Claimant Howard Cook graduated from high school in 1988. For
several years after that, Cook held various jobs in the restaurant industry, the
printing business, and in various warehouses. In 1992, Cook took his first job as a
roofer at Kentuckiana Roofing. During several long gaps in Cook’s employment
history, he admitted that he was an independent contractor doing roofing. Cook
worked for himself for three or four years and had his own tools that he used to
complete the jobs. During this same time span, Cook also did some work for
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Ray’s Roofing and worked as an independent contractor for Lewis and Clark
Construction Company.
On July 25, 2007, Cook was hired at Haverty’s and worked in the
warehouse there full-time. In 2007, Cook did some roofing work with Steinrock.
Because there was very little work that year, Cook arranged for some of his own
jobs, where he and Steinrock performed the work. On those jobs, the homeowner
paid Steinrock and Cook separately.
In 2008, because Cook was employed with Haverty’s full-time, he
could only do roofing work sporadically on Mondays and Tuesdays, his days off.
During this time period, Steinrock’s records show that he had written Cook eight
separate checks for work performed from March 2008 through August 2008.
Steinrock produced evidence that during that time period, Cook worked with him
on roofing jobs twelve days in total, and Steinrock paid him by the hour.
On August 12, 2009, Cook was working on a roof with Steinrock on
his day off from Haverty’s when he fell off a roof and was injured. The occurrence
of the injury is not at issue in this case. The ALJ bifurcated the proceedings in
order to determine if there was an employer-employee relationship between Cook
and Steinrock. After consideration of the evidence and the factors set forth in
Ratliff v. Redmon, 396 S.W.2d 320 (Ky. 1965), the ALJ determined that Cook was
an independent contractor rather than an employee of Steinrock. Accordingly, the
ALJ dismissed Cook’s claim on November 17, 2009.
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The claimant thereafter filed a petition for reconsideration, which was
denied on January 13, 2010.
On appeal to the Board, Cook asserted that the ALJ erred in not
finding him to be Steinrock’s employee, arguing that the evidence compelled a
contrary result. On May 13, 2010, the Board reversed the ALJ, finding that as a
matter of law, the evidence compelled the conclusion that Cook was an employee
of Steinrock. This appeal now follows.
Steinrock and Coke argue on appeal that the Board substituted its
judgment for that of the ALJ as to the weight of the evidence presented. In the
alternative, they argue that the Board overlooked or misconstrued controlling law
in reversing the decision of the ALJ. In support of their arguments, the appellants
argue that Kentucky Revised Statutes (KRS) 342.285 precludes the Board from
substituting its judgment for that of the ALJ.
When reviewing one of the Board's decisions, this Court will only
reverse the Board when it has overlooked or misconstrued controlling law or so
flagrantly erred in evaluating the evidence that it has caused gross injustice.
Western Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992). “It is well
settled that a reviewing [body] may not substitute its judgment for that of [an
administrative] [b]oard as a finder of fact.” Paramount Foods, Inc., v. Burkhardt,
695 S.W.2d 418, 420 (Ky. 1985); KRS 342.285. “An erroneous application of the
law by an administrative board or by the circuit court is clearly reviewable by this
Court. Also, where an administrative body has misapplied the legal effect of the
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facts, courts are not bound to accept the legal conclusions of the administrative
body.” Abuzant v. Shelter Ins. Co., 977 S.W.2d 259, 260-61(Ky. App. 1998).
Applying the above to the instant case, in its opinion, the Board noted
the nine factors set forth in Ratliff, supra, to be considered when determining
whether an individual is an employee or independent contractor. These factors are:
(1) the extent of control that the alleged employer may exercise over the details of
the work; (2) whether the worker is engaged in a distinct occupation or business;
(3) whether that type of work is usually done in the locality under the supervision
of an employer or by a specialist, without supervision; (4) the degree of skill the
work requires; (5) whether the worker or the alleged employer supplies the
instrumentalities, tools, and place of work; (6) the length of the employment; (7)
the method of payment, whether by the time or the job; (8) whether the work is
part of the regular business of the alleged employer; and (9) the intent of the
parties. The Board noted that the test in Ratliff was refined in Chambers v.
Wooten’s IGA Foodliner, 436 S.W.2d 265 (Ky. 1969), to focus primarily on four
of the nine factors: (1) the nature of the work as related to the business generally
carried on by the alleged employer; (2) the extent of control exercised by the
alleged employer; (3) the professional skill of the alleged employee; and (4) the
true intentions of the parties.
The Board also noted that in Uninsured Employers’ Fund v. Garland,
805 S.W.2d 116, 118 (Ky. 1991), the Kentucky Supreme Court addressed the issue
of control over the details of the work, noting that Ratliff, supra, relied upon
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Professor Larson’s treatise, Larson’s Workermen’s Compensation Law, for the
proposition that control of the details of the work can be provided by analysis of
the nature of a claimant’s work in relation to the regular business of the employer.
Based on the above, the Board concluded that the ALJ’s interpretation
of the factors concerning whether Cook was engaged in a distinct occupation or
business and the extent of control exercised by Steinrock over the details of Cook’s
work was clearly erroneous in the context of the evidence in the record. The Board
concluded that the ALJ erred in finding Cook engaged in a “distinct occupation” or
business under the Ratliff test at the time of the injury. The Board found that the
ALJ’s holding suggested that being a roofer necessarily constitutes a “distinct
occupation.” Under that analysis, according to the Board, any job with a
recognized title would qualify as a “distinct occupation.” The Board concluded
that the ALJ failed to recognize the phrase as a legal term of art and had instead
accorded the words their lay meaning.
The Board explained that the “distinct occupation or business” factor
goes to the question of whether the claimant offered to the alleged employer his
personal services or a business service, and thus whether the claimant was in fact
engaged in a “distinct occupation.” The Board concluded that in the instant case,
there was nothing to indicate that Cook offered anything but a personal service to
Steinrock and was not engaged in a roofing business independent of his work for
Steinrock at the time of the injury. Finally, the Board noted that the ALJ found
that the work Cook performed was part of the regular business of Steinrock, a
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finding that was supported by substantial evidence. The Board determined that
finding, combined with the evidence that Cook was not engaged in an occupation
or business distinct from his work for Steinrock, necessitated a finding of an
employer-employee relationship at the time of Cook’s injury.
Based on the above, we simply cannot say that the Board overlooked
or misconstrued controlling law or so fragrantly erred in evaluating the evidence
that it caused gross injustice. See Western Baptist Hosp., supra. Nor can we say
that the Board substituted its judgment for that of the ALJ. Instead, the Board
reviewed the ALJ’s application of the controlling law to the facts and determined
that the ALJ’s ruling was in error. Because the Board is permitted to do just this,
we affirm the Board’s May 14, 2010, opinion reversing and remanding the findings
of the ALJ.
ALL CONCUR.
BRIEF FOR APPELLANTS:
C. Thomas Hectus
Louisville, Kentucky
BRIEF FOR APPELLEE HOWARD
C. COOK:
Phillipe W. Rich
Louisville, Kentucky
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