AUTO WORLD OF MUSKOGEE, INC. v. DAVIDSON

AUTO WORLD OF MUSKOGEE, INC. v. DAVIDSON
2013 OK CIV APP 93
Case Number: 111120
Decided: 09/20/2013
Mandate Issued: 10/23/2013
DIVISION II
THE COURT OF CIVIL APPEALS OF THE STATE OF OKLAHOMA, DIVISION II

AUTO WORLD OF MUSKOGEE, INC. and OLD GLORY INSURANCE COMPANY, Petitioners,
v.
BILLY A. DAVIDSON, OKIE TOW, INC., COMPSOURCE OKLAHOMA and THE WORKERS' COMPENSATION COURT, Respondents.

PROCEEDING TO REVIEW AN ORDER OF A THREE-JUDGE PANEL OF THE WORKERS' COMPENSATION COURT

HONORABLE OWEN T. EVANS, TRIAL JUDGE

SUSTAINED

Cathy C. Barnum, Kelley Bodell, Donald R. Lindauer, II, BARNUM & CLINTON, PLLC, Norman, Oklahoma, for Petitioners
Robert A. Flynn, Pamla K. Cornett, FLYNN LAW FIRM, PLLC, Tulsa, Oklahoma, for Respondent Billy A. Davidson
Blake I. Whitten, BLAKE I. WHITTEN, PLLC, Tulsa, Oklahoma, for Respondents Okie Tow, Inc. and CompSource Oklahoma

JOHN F. FISCHER, PRESIDING JUDGE:

¶1 The single issue before this Court is whether the Workers' Compensation Court has jurisdiction over the claim for injury. Petitioner Auto World's sole contention on appeal is that Claimant Billy A. Davidson was not an employee of Auto World at the time he was allegedly injured. All other issues were reserved to the trial court for future hearing.

BACKGROUND

¶2 Claimant filed his Form 3 on February 18, 2011, alleging he sustained injury to his right leg and foot while unloading a pallet containing 55-gallon barrels. He alleged that on October 9, 2009, he was working for "Auto World/Okie Tow" as a deliveryman when he slipped on the ice and snow, caught his foot in the pallet and fell sideways to the ground. He later amended his Form 3, changing the date of injury to January 12, 2010. 1

¶3 Auto World, Inc., and its insurer Old Glory Insurance Company answered, denying Claimant's employment on the date of his injury and asserting lack of subject matter jurisdiction. Okie Tow, Inc., and its insurer Compsource Oklahoma also denied that Claimant was an employee on January 12, 2010. The record reveals that both Auto World and Okie Tow are owned and operated out of Muskogee, Oklahoma, by Ronnie Bozwell. Bozwell owns a third company, American Barrel, which has no employees.

¶4 Because both Auto World and Okie Tow asserted that the relation of employer and employee did not exist at the time of Claimant's accidental injury, the matter was set for trial on the issue of jurisdiction. At the beginning of trial, Claimant's counsel announced to the court: "[W]e are asking . . . for the issue of jurisdiction that the Claimant was employed by either Auto [World] or Okie [Tow] on or about January 12, 2010, when he injured his right leg and foot."

¶5 Claimant testified that he started working for Bozwell at the end of 2009, but he was uncertain of the exact date. His job involved loading, transporting and unloading barrels for Bozwell's American Barrel business. Claimant thought American Barrel was "part of" Auto World. On the date of his injury, Claimant's task was to deliver barrels to Ponca City. He testified that he drove Bozwell's truck and Bozwell paid for the gas. Claimant's "ex-stepson" went with him to help. Claimant described how he was injured unloading the barrels:

I went to Ponca City. There was snow and ice on the ground. I backed up to the place where we unload them [the barrels] at. We started unloading them. We got a third of them off. I slipped into a pallet, fell sideways. Couldn't catch myself. And I ripped all the tendons and the ligaments in my leg and foot.

¶6 The record does not establish the time of Claimant's injury. Claimant testified that following his injury in Ponca City, he returned home and later went to the Cherokee Nation Hastings Hospital for treatment.2 The "Emergency Nursing Record" from the hospital indicates that Claimant was admitted on "Jan 12, 2010 @ 23:46" or 11:46 p.m., and that he "injured [right] knee tonight" and fell "when [right] foot got stuck between metal." The "Emergency Physician Record" indicates that Claimant was treated for an "Internal Derangement" of the right knee and released on crutches with medication. However, on the examining physician's notes, "home" is circled as "where" the injury occurred and under "onset/duration" "just prior to arrival" is circled. There is no mention of a work-related incident in the physician's notes.

¶7 Claimant testified he reported his injury to Bozwell "[t]he next day" but Bozwell did not send him for treatment. Claimant's counsel asked: "Did [Bozwell] indicate whether he was going to pay for it separately or put it on workers' comp or indicate one way or the other?" Claimant's response was "No."

¶8 Claimant further testified regarding the terms of his employment. He testified that he was an hourly employee, working "about 40" hours per week. According to Claimant, he submitted his hours to Bozwell and was paid every Friday. In the beginning, Bozwell paid him in cash. Claimant, however, did not report this cash income on his tax return. At some point after his January 12, 2010 injury, Claimant requested Bozwell to start paying him by check. Claimant explained why he requested payment by check: "I went to the office and told them I needed to start getting checks so I can start paying in taxes because I had child support to pay." From February 27, 2010, until December 31, 2010, Claimant's paychecks came from Okie Tow. From January 1, 2011, until January 28, 2011, which was his last day of employment, he received paychecks from Auto World. Claimant testified that his job duties remained the same during the entire period he worked for Bozwell.

¶9 Claimant's father, William Davidson, had worked for both Auto World, driving a "hotshot transport," and for Okie Tow, driving a semi-wrecker, but was no longer employed by either company at the time of trial. He testified that he sometimes worked for both companies on the same day. He was a salaried employee, paid by check, but he also testified: "If it was bad weather and I got out there [and] worked all night long on the wreck, he paid me cash a little extra because I was out there day and night."

¶10 Davidson testified that Bozwell asked him if Claimant "would work part-time for him." According to Davidson, Claimant started working part-time for American Barrel, he "picked up barrels and delivered barrels." Like Claimant, Davidson described American Barrel as "part of Auto World." And, although he thought Claimant was "on the payroll then when he got hurt," he testified that Claimant was paid in cash "through Mr. Bozwell" when Claimant first started working. Davidson testified that he did not know the specific date when Claimant's employment with Bozwell's companies began: "All I know was the big ice storm." Davidson testified that he saw Claimant at the "office complex" when Claimant "went to get his expense to go" on the Ponca City delivery trip. However, Davidson did not go into the office with Claimant and did not know what happened while Claimant was inside. He talked to Claimant in the Auto World parking lot and saw him driving an Auto World truck. Davidson knew about Claimant's injury: "Because he told me he was going to the hospital when he came home that night." On cross-examination, Davidson agreed that there had been "a number of occasions" when he had seen Claimant in the parking lot and was not "certain" that one of those dates was January 12, 2010. Davidson also admitted that he had recently pled guilty to a felony charge of concealing stolen property.

¶11 Auto World called Ronnie Bozwell to testify. His testimony differed markedly from that of Claimant and Davidson. Bozwell testified that Claimant was not employed by any of his companies before February 2010. He did not specifically recall the date Claimant started, "We just talked about it here for two years is the only reason I know." Bozwell stated that Davidson had asked him to hire Claimant and he agreed, hiring Claimant to work for Okie Tow. Although Bozwell maintained that he always paid Claimant by check, he testified that he "might have loaned him money until payday." He submitted payment records prepared by his CPA, showing wages that had been paid by check to Claimant from Okie Tow and Auto World. The first pay period reflected in the submitted "employee pay stubs" showed Claimant was paid by check from Okie Tow for "Pay Period 2/27/ 2010 - 03/05 2010." Bozwell testified that he initially hired Claimant to "help on the wreckers and help his dad on the calls he made." When asked if Claimant's duties, during the time period reflected in the Okie Tow pay stubs, were ever related to American Barrel's operation, Bozwell responded:

I might have showed him how earlier before I switched him to doing that. But I don't know the dates. It would have been -- I mean, I could have trained him or something. But most of it was -- he did that. And then when I switched him to the barrel deal, I put him on Auto World.

Bozwell stated that he "switched" Claimant from Okie Tow to Auto World because he received complaints about Claimant from customers and employees. "He just didn't want to work with anybody."

¶12 When questioned regarding the operation of American Barrel, Bozwell testified: "I'm the owner of American Barrel. It's American Barrel Company, Inc. They have no employees. I hire different people to do the work for American Barrel." Bozwell explained that American Barrel recycled used 55-gallon barrels. After the barrels were refurbished, they were sold to other people. Bozwell testified that American Barrel "contracts out" transportation, pick-up and delivery of the barrels, and that is where American Barrel's relationship with Auto World came into play. Employees of both Auto World and Okie Tow worked with the barrels.

¶13 Although Bozwell did not dispute that Claimant "did the American Barrel work while working for Auto World, including delivering barrels to Ponca City," Bozwell maintained that work did not start until the pay period beginning January 1, 2011. Bozwell denied giving any "payroll cash" to Claimant or Claimant's father. And, he denied that Claimant gave him notice of the January 12, 2010 injury.

¶14 On September 21, 2012, the trial court entered an order finding "Auto World to be the employer of the claimant and subject to the jurisdiction of [the Workers' Compensation] court as it pertains to an alleged accidental injury of January 12, 2010." The trial judge, who saw and heard the witnesses, stated in its order that it was "persuaded that claimant was paid cash on January 12, 2010 by Mr. Bozwell to deliver barrels to Ponca City on that date." The trial court concluded that "claimant was a loaned servant, assigned by the 'general employer' (Auto World) to do the work of the 'special employer' (American Barrel)." The trial court further concluded that it was "proper for a claimant to turn to the original 'general employer', the subsequent 'special employer', or both, for compensation due to job-related injuries."3 The trial court dismissed Okie Tow from the case, with prejudice, based on its finding that Okie Tow was not Claimant's employer on the alleged date of injury. Auto World and its insurer Old Glory Insurance Company seek review.

STANDARD OF REVIEW

¶15 When the existence of the employer-employee relationship is an issue before the Workers' Compensation Court, a jurisdictional question is presented. Macsuga v. Moreno, 2003 OK 24, ¶ 6, 66 P.3d 409, 410. This jurisdictional question "is reviewable without a denial or an award of benefits." Triad Transp., Inc. v. Wynne, 2012 OK 30, ¶ 7, 276 P.3d 1013, 1016 (citing Garrison v. Bechtel Corp., 1995 OK 2, ¶ 24, 889 P.2d 273, 283). On review, this Court will not accept the findings of the trial court as conclusive, but will weigh evidence contained in the record and independently evaluate law and facts to determine the existence or absence of the relationship. Moreno, 2003 OK 24, ¶ 6, 66 P.3d at 411.

ANALYSIS

¶16 Workers' compensation benefits arise directly from the contractual relationship between employer and employee pursuant to which the employee was performing the service resulting in his/her injury. See Williams Cos., Inc. v. Dunkelgod, 2012 OK 96, ¶ 14, 295 P.3d 1107, 1112. "The burden of proof, by a preponderance of the evidence, shall be on the party requesting benefits or relief pursuant to the provisions of the Workers' Compensation Act unless otherwise specifically provided for by law." 85 O.S. Supp. 2010 § 1.1(B) (superceded effective Aug. 26, 2011). 4

¶17 Auto World asserts that Claimant failed to meet his burden of proof and that the trial court's decision lacks evidentiary support because it "is based upon the mere assertion of a single witness, unsubstantiated and uncorroborated by any other credible evidence, and entirely refuted by competent testimonial and documentary evidence." Auto World further asserts that Claimant's testimony was "specifically refuted and rebutted by the highly credible testimony of Mr. Bozwell." Employer emphasizes inconsistencies between Claimant's testimony and its evidence while characterizing Bozwell's testimony as highly reliable due to his status as a business owner with multiple businesses and a two-decade professional relationship with a CPA. Auto World's assertion that the trial court's order lacks evidentiary support is also based, in part, on the argument that Davidson's credibility was impeached by admission of his status as a convicted felon. We agree with Auto World that there is a sharp conflict between the evidence presented by the parties on the dispositive issue in this appeal: whether an employer-employee relationship existed between Claimant and Auto World on January 12, 2010. The long-standing and consistently applied standard of review requires our independent review of that evidence.

¶18 Although neither Claimant nor Davidson was able to recall the exact date Claimant began performing American Barrel work, their inability to testify conclusively regarding Claimant's actual dates of employment does not diminish the logical and supportable inferences that can be drawn from all of the evidence, including testimony regarding the ice storm and the emergency room nursing record. This evidence establishes that Claimant was injured on January 12, 2010. Claimant testified that on the day of the ice storm, he went to the office to get expenses for his trip to Ponca City. Davidson testified that he saw Claimant in the Auto World office on that date. Employer asserts that because of his felony conviction Davidson's testimony was so thoroughly inconsistent and/or impeached as to render his testimony incredible. Although evidence that Davidson was convicted of a felony was admissible for impeachment purposes pursuant to 12 O.S.2011 § 2609(A)(1), we do not find that Davidson's conviction necessarily destroys his credibility or requires dismissal of his entire testimony.

¶19 Auto World further argues that the Hastings Indian Hospital records disprove Claimant's allegation of an on-the job injury because the portion of those records filled out by the emergency physician indicates that Claimant's injury occurred at "home" and "just prior to arrival." However, we note that the nursing triage report, also included the hospital records, indicates Claimant fell when his right foot "got stuck between metal." We find the nurse's description of injury to be consistent with Claimant's testimony that he "slipped into a pallet [and] fell sideways." Further, Auto World did not cross-examine Claimant regarding the records or produce any witness from the hospital. Under similar circumstances, and as we find in this case, the Moreno Court found the claimant's hospital emergency treatment records to be "less persuasive" than other evidence, not "the smoking gun that disproves [the] claim of employment." Moreno, 2003 OK 24, ¶ 16, 66 P.3d at 412.

¶20 As Auto World points out, the payroll documents do not show that Claimant was employed on January 12, 2010. However, Claimant provided a plausible explanation for that fact, supported by Davidson's testimony and not entirely discounted by Bozwell's testimony that he might have "loaned" Claimant some money. And, Davidson's testimony supports the conclusion that Bozwell did not exclusively rely on payroll checks to compensate his employees. Bozwell also testified that he might have trained Claimant for a period of time prior to putting him on Auto World's payroll in February 2010. The trial judge was "persuaded" by this evidence that on the day of his injury Claimant was paid cash by Bozwell to deliver barrels to Ponca City as an employee of Auto World.

¶21 This Court does not have the advantage the trial court had of observing the witnesses' demeanor during testimony, and, traditionally, a trial judge's credibility determinations made pursuant to that advantage are accorded deference. See Garrison v. Bechtel Corp., 1995 OK 2, ¶ 8, 889 P.2d 273, 278. And although we are required to make an independent, de novo review of the evidence on this jurisdictional issue, we do not read Moreno and the cases discussing the applicable standard of review as depriving this Court of an essential and traditional tool of appellate review in cases where the appellate court is not in as good a position as the trial court to assess the evidence in a case.5 Consequently, and though we are not bound by the trial court's assessment of these witnesses' credibility, its conclusion in that regard is a fact that we consider in our independent evaluation of the evidence. Other factors are to be considered as well, such as consistency, logic, and corroboration. To the extent that a credibility determination is based on a comparison of the witness's testimony with the substance of other evidence, this Court, and often unlike the trial court, is equipped with the transcript and the exhibits in the record to make that credibility determination. We have examined the entire record and, like the trial court, do not find Claimant's testimony inherently improbable or contradictory.

¶22 Although Claimant was unable to state with absolute certainty the date on which he began working for Bozwell's companies, he was able to describe the circumstances with sufficient detail to allow this Court to combine his testimony with other evidence and find Claimant has proven by a preponderance of the evidence that there was an employer-employee relationship with Auto World on January 12, 2010. Because Bozwell's company Auto World is an employer in the business of hiring out workers to his company American Barrel, Claimant could proceed, as he did, solely against Auto World for the injury he sustained while doing the work of American Barrel. Ishmael v. Henderson, 1955 OK 200, ¶ 5, 286 P.2d 265, 1267-68. See Manpower v. Lewis, 1992 OK CIV APP 130, ¶ 8, 840 P.2d 1276, 1278 (recognizing that "when an employer engaged in the business of furnishing or hiring out workers, pays those workers for that purpose, and assumes responsibility for its employees' on-the-job injuries by purchase of workers' compensation insurance, the employee may turn to the original 'general' employer, the subsequent 'special employer', or both, for compensation due to accidental job-related injuries").

CONCLUSION

¶23 This Court's standard of review has required us to conduct an independent examination of the record. Moreno, 2003 OK 24, ¶ 6, 66 P.3d at 410. Our independent review of the record, the testimony of the witnesses and the arguments of the parties persuades us that an employer-employee relationship existed between Auto World and Claimant at the time of his injury. We find the trial court did not err in determining that it had jurisdiction to hear this claim. Accordingly, the order of the Workers' Compensation Court finding jurisdiction regarding Claimant's request for benefits is sustained.

¶24 SUSTAINED.

BARNES, V.C.J., and WISEMAN, J., concur.

FOOTNOTES

1 Auto World in its brief in chief incorrectly states that Claimant alleged a "new date of injury of 7/9/11."

2 Claimant's Form 3 lists an address in Muskogee, Oklahoma. Hastings Hospital in located in Tahlequah, Oklahoma.

3 The trial court cited Cherokee Lines v. Bailey, 1993 OK 111, 859 P.2d 1106, and Manpower v. Lewis, 1992 OK CIV APP 130, 840 P.2d 1276, in support of its conclusion.

4 We apply the law in effect on the date of Claimant's alleged injury. See Joe Brown Co., Inc. v. Melton, 2013 OK 66, ___ P.3d ___; Williams Cos., Inc. v. Dunkelgod, 2012 OK 96, 295 P.3d 1107.

5 See Kelly Kunsch, Standard of Review (State and Federal): A Primer, 18 Seattle U. L. Rev. 11 (1994), explaining that the de novo standard developed in the courts of equity where all testimony was presented to the chancellor in written form and therefore, the chancellor had no better opportunity to judge the credibility of the witnesses than the reviewing court. In contrast, as the article points out, the deferential standard of review was developed in courts of law expressly because the trial court had an advantage the appellate court did not, the opportunity to observe the demeanor and conduct of the witnesses as they testified. As the United States Supreme Court observed, the applicable standard of review sometimes turns on the determination that "one judicial actor is better positioned than another to decide the issues in question." Pierce v. Underwood, 487 U.S. 552, 560, 108 S. Ct. 2541, 2547 (1988). Consistent with that principle is the United States Supreme Court's Opinion in Crowell v. Benson, 285 U.S. 22, 52 S. Ct. 285 (1932), cited by the Oklahoma Supreme Court in Garrison, for the proposition that jurisdictional facts, as distinguished from substantive facts regarding a claim, are subject to de novo review. Pierce involved a claim by an injured worker pursuant to the Longshoreman's Act. Pursuant to the Act, Congress provided for the disposition of such claims by the Commissioner of the United States Employees' Compensation Commission after a hearing. When the Commissioner's deputy awarded the claimant compensation for his injuries, the employer sought an injunction in federal district court, the only means of judicial review permitted by the Act. The district court enjoined enforcement of the award finding no employer/employee relation at the time of the injury. The Supreme Court held that the district court correctly conducted a trial de novo rather than relying on the record before the Commission; that by specifying the injunction proceeding Congress has intended the matter to be conducted as a suit in equity but limited to the two jurisdictional facts: (1) the injury occurred on navigable waters and (2) an employment relationship existed between the injured worker and the employer. The Court concluded that judicial review of those jurisdictional facts would be conducted without deference to the findings and conclusions of the Commission on those facts. In affirming the injunction, the Supreme Court found no reason to disturb the district court's finding that an employment relationship did not exist. Although a specific standard of review was not articulated, that is consistent with the deferential standard applied to findings of fact where the trial court has had the opportunity to observe the demeanor of the witnesses.