James Seymour suffered an injury when he fell from a roof while working. He indicated that he was employed at the time by Barry Murnion d/b/a Crown Construction. Murnion denied that James Seymour was an employee and that his injury occurred in the course and scope of any employment. Murnion also alleged that James Seymour fell from the roof while under the influence of alcohol and/or non-prescription drugs.
The court's decision analyzed four issues:
(1) Did Murnion employ James Seymour at the time of James' injury?
(2) Was James Seymour entitled to benefits under the Workers' Compensation Act?
(3) Was Murnion obligated to indemnify the UEF for all benefits paid or payable by the UEF to James Seymour?
(4) Was James Seymour entitled to costs from the UEF?
Murnion did not have a workers' compensation policy at the time of the event as it had lapsed in the spring of 2014. He contended that he did not personally hire Seymour nor give anyone else authority to do so. The court, however, noted that an agent has actual authority when “the principal intentionally confers [authority] upon the agent or intentionally or by want of ordinary care allows the agent to believe that the agent possesses [authority].” Once an agency relationship is created, the agent has the authority to “do everything necessary and proper and usual, in the ordinary course of business, for effecting the purpose of the agency. The court examined the concepts of actual, apparent and ostensible agency and concluded that Murnion had conferred an agency status upon his brother-in-law, Jeff Seymour.
Murnion gave Jeff Seymour a broad directive on this particular job to do what it took to complete the job which, in this case, including hired James. And he did so in a manner that Barry had done on past occasions when employing James.
Compensability and the Alcohol/Drug Defense:
Murnion also contended that James was not entitled to benefits under § 39-71-407(5), MCA, which states, in pertinent part, “an employee is not eligible for benefits otherwise payable under [the WCA] if the employee's use of alcohol or drugs not prescribed by a physician is the major contributing cause of the accident.”
In order to establish “major contributing cause” under this section, the party asserting the defense must establish that the use of alcohol or drugs is the leading cause contributing to the result when compared to all other contributing causes. The only potentially relevant produced in support of this affirmative was testimony that James Seymour had been drinking the previous evening and had, in the past, had substance abuse problems. Nothing was offered to suggest that James Seymour was intoxicated the morning of the accident. None of the medical records from the day of the accident indicated that James was intoxicated.
Pursuant to §39-71-541(2)(b), MCA, the court entered judgment requiring Murnion, as the uninsured employer, to indemnify the department with respect to any benefits paid or ordered payable by the department in relation to the claim.
Costs against the UEF:
In Pekus v. Uninsured Employers' Fund, 2003 MTWCC 33, the Workers' Compensation Court had previously concluded that it could award costs against the UEF because “the practice of awarding litigation costs to claimants prevailing against the UEF had developed in this Court and fell within the Court's inherent power to adopt rules of practice not inconsistent with statutory provisions.” The court also reasoned that “while sections 39-71-611 and -612, MCA, did not authorize costs against the UEF where the UEF is not an insurer, nothing in those provisions or in the Workers' Compensation Act prohibit an award of costs.”
The UEF argued that the Act prohibited an award of costs against the UEF contending that §39-71-611, MCA, limited the award of costs to only insurers, as defined in the Act. The UEF also argued that the court did not have inherent authority to impose remedies, and that forcing it to pay costs, which it may not be able to recoup from uninsured employers because many lack the resources to reimburse the UEF, would diminish its limited resources to pay claims.
Ultimately, the Court declined to overrule its prior decisions assessing costs against the UEF because it was not firmly convinced that those decisions were erroneous as a matter of law. It also found merit in James Seymour's contention that it would be unjust to deny his request for costs under the circumstances of this case, as the purpose of the UEF was to “minimize the hardships imposed when an injured worker is unable to get workers' compensation benefits as a result of the employer's failure to provide coverage.
Attorney for James Seymour: Charla Tadlock
Attorney for UEF: Joe Nevin
Attorney for Murnion: Jamie Bedwell