W.C. No. 4-242-196Industrial Claim Appeals Office.
February 5, 1998
FINAL ORDER
M M Management, Inc. (M M) and its insurer, National Union Fire Insurance of Pittsburgh (collectively the respondents) seek review of orders dated July 17, 1996 and December 4, 1997, which required them to pay temporary disability benefits. We affirm.
A brief procedural history is necessary to understand the issues on review. On March 9, 1995, the claimant filed a workers’ compensation claim against, his employer, Maier Painting and Maintenance (Maier Painting) seeking benefits for injuries sustained while painting the outside of a Disabled American Veterans (DAV) thrift store. Following a hearing on May 3, 1995, Administrative Law Judge (ALJ) Stuber entered a Summary Order which awarded temporary disability and medical benefits. However, ALJ Stuber determined that his employer was not insured for workers’ compensation at the time of the injury, and therefore, ALJ Stuber denied the claimant’s request for the imposition of a 50 percent penalty under § 8-43-408(1), C.R.S. 1997.
The claimant subsequently filed an amended claim for workers’ compensation benefits alleging that M M contracted with his actual employer to paint the DAV thrift store, and thus, was liable for his injuries as the statutory employer. The respondents then filed a Motion to Dismiss the claim on grounds of collateral estoppel. The respondents argued that under § 8-41-401(1)(a), C.R.S. 1997, a statutory employer may not be held liable for the injuries of a subcontractor’s employee if the subcontractor was insured for workers’ compensation. Further, the respondents argued that ALJ Stuber determined that the claimant failed to prove that his actual employer was uninsured for workers’ compensation. Therefore, the respondents contend that the claimant is collaterally estopped from pursing his claim against M M.
ALJ Rumler denied the respondents’ Motion to Dismiss on December 21, 1995. The respondents timely appealed the order of December 21, 1995. However, on July 9, 1996 we concluded that ALJ Rumler’s order was interlocutory, and therefore, dismissed the appeal without prejudice.
The amended claim was heard by ALJ Friend on June 7, 1996. In an order dated July 17, 1996, ALJ Friend determined that the claimant was working directly for Steve Maier (Maier), who was not insured for workers’ compensation at the time of the injury. ALJ Friend also found that the DAV store was managed by M M, which in turn subcontracted with Maier to paint the exterior of the store. Consequently, ALJ Friend concluded that M M is liable for the claimant’s injuries as the statutory employer.
The respondents timely appealed ALJ Friend’s order, arguing inter alia that, ALJ Rumler erroneously denied their Motion to Dismiss. However, ALJ Friend dismissed their petition to review without prejudice for lack of a final order.
The respondents subsequently stipulated to the payment of temporary total disability benefits. On December 4, 1997, ALJ Rumler ordered the respondents to pay temporary total disability benefits in accordance with their stipulation. On December 10, 1997, ALJ Rumler transmitted the matter to us for review of ALJ Friend’s order dated July 17, 1996.
We note that the respondents did not file a petition to review ALJ Rumler’s order. Generally, the failure timely to file a petition to review deprives us of jurisdiction to review an ALJ’s order. Buschmann v. Gallegos Masonry, Inc., 805 P.2d 1193
(Colo.App. 1991). However, where a court misleads a litigant concerning the necessity for complying with statutory deadlines, “unique circumstances,” create an exception to jurisdictional time limits Converse v. Zinke, 635 P.2d 882 (Colo. 1981); Klob v. Sarah Doubleas Broten, W.C. No. 4-169-821 (March 10, 1994).
Here, the respondents timely appealed ALJ Friend’s order, and ALJ Rumler’s order of December 4, 1997, positively indicates that no further petition to review was required before the matter would be forwarded to us for consideration of the July 17 order. Furthermore, ALJ Rumler transmitted the matter to us prior to the expiration of the time provided by § 8-43-301(2), C.R.S. 1997, for filing a petition to review. Under these circumstances, we conclude that the absence of a petition to review ALJ Rumler’s December 4 order imposes no jurisdictional barrier to our consideration of the respondents’ substantive arguments.
I.
First we reject the respondents’ contention that the doctrine of collateral estoppel barred the claimant from litigating the issue of their liability as the statutory employer. The doctrine of collateral estoppel precludes a party from litigating an issue actually adjudicated in a previous hearing if the following requirements are met: 1) the issue in question is identical to the issue previously litigated; 2) the party against whom estoppel is sought was a party to the previous proceeding; 3) there was a final judgment in the previous proceeding; and 4) the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the previous proceeding Lindner Chevrolet v. Industrial Claim Appeals Office, 914 P.2d 496 (Colo.App. 1995), rev’d on other grounds, Askew v. Industrial Claim Appeals Office, 927 P.2d 1333 (Colo. 1996).
As argued by the respondents, the doctrine of “collateral estoppel” applies to factual determinations made by an administrative agency. Industrial Commission v. Moffat County School District RE No. 1, 732 P.2d 616, 620 (Colo. 1987). However, those factual determinations must be “resolved” in a judgment which is final on the merits. See Pomeroy v. Waitkus, 183 Colo. 344, 517 P.2d 396 (1973); People v. Hearty, 644 P.2d 302
(Colo. 1982); Deese v. King Soopers, Inc., W.C. No. 4-194-838
(January 16, 1997).
ALJ Rumler determined that the issue before ALJ Stuber was “penalties,” while the issue presented in the amended claim was “statutory employer” liability. Therefore, ALJ Rumler reasoned that the issue presented to her was not identical to the issue before ALJ Stuber.
We agree with the respondents that the factual issue of the actual employer was insured for workers’ compensation, and thus, whether liability may be imposed on M M as the statutory employer, is identical to the question of whether the actual employer was insured for purposes of imposing a 50 percent penalty due to lack of insurance. Nevertheless, we conclude that ALJ Stuber’s order is not a “final judgment” on the issue of whether the actual employer was insured for workers’ compensation, because it is preliminary in nature. See Saunders v. Bankston, 31 Colo. App. 551, 506 P.2d 1253 (1972). Therefore, we conclude that ALJ Rumler did not err in denying the respondents’ Motion to Dismiss. See Baldwin Construction Inc., v. Industrial Claim Appeals Office, 937 P.2d 895 (Colo.App. 1997) (it is proper to affirm an ALJ’s order where the correct result is reached for the wrong reason).
The meaning of a judgment is to be ascertained from its face, upon consideration of the judgment as a whole and in light of the facts and circumstances surrounding its rendition. Hinderlider v. Conanon Heights Irrigation Reservoir Co., 117 Colo. 183, 185 P.2d 325 (1947). Here, ALJ Stuber’s order states that:
“Claimant has failed to prove that [Maier Painting] was uninsured for workers’ compensation liability since no evidence was introduced on the issue. Claimant is not entitled to a 50% increase in compensation benefits at this point.” (Emphasis added).
ALJ Stuber’s explicit inclusion of the phrase “at this point” suggests that the order was interlocutory, and that the claimant could further litigate the issue of lack of insurance at a later time. This conclusion is buttressed by the fact that ALJ Stuber expressly reserved “all matters not determined herein” for future determination. See § 8-43-207(1), C.R.S. 1997 (ALJ may adjourn hearing to later date for taking additional evidence). Under these circumstances, we hold that ALJ Stuber’s Summary Order is insufficient to constitute a final judgment on the issue of whether the actual employer was insured for workers’ compensation at the time of the injury. Consequently, the claimant was not precluded from litigating the issue in conjunction with his claim against the respondents.
II.
Alternatively, the respondents contend that neither the evidence nor the law supports ALJ Friend’s determination that M M was the claimant’s statutory employer. We disagree.
Under § 8-41-401(1)(a), a company which contracts out part or all of its work to any subcontractor is the statutory employer of the subcontractor and the subcontractor’s employees. The purpose of statute is prevent employers from “avoiding responsibility under the workers’ compensation act by contracting out their regular work to uninsured independent contractors.” Finlay v. Storage Technology Corp., 764 P.2d 62 (Colo. 1988).
It is undisputed that the test for determining whether a contractor has subcontracted out its “regular business” is set forth in Finlay v. Storage Technology Corp., supra. The Finlay
court noted that earlier decisions narrowly limited the definition the contractor’s “regular business” to the “primary business” of the contractor. However, the Finlay court significantly expanded that standard. Shumiloff v. Frey, W.C. No. 4-005-377 (April 24, 1992), aff’d, Trinity Lutheran Church v. Shumiloff (Colo.App. No. 92CA0794, April 29, 1993) (not selected for publication). Consequently, under Finlay, the “regular business test” is satisfied if the contracted services are part of the employer’s regular business as defined by its “total business operation,” considering the elements of routineness, regularity, and the importance of the contracted services to the contractor’s business operations. Id. at 65.
There is no particular formula which defines “regularity” and “routineness” in terms of frequency. Shumiloff v. Frey, supra. Rather, a service is regular and routine if it is an “integral part of the contractor’s total business operation.” Furthermore, the importance of the contracted services can be demonstrated by showing that, in the absence of the subcontractor’s services, the contractor would find it necessary to accomplish the work by use of his own employees rather than forego the performance of the work. Id. at 67.
In this regard, Finlay does not require proof that the contractor’s employees actually performed the contracted work or “would” have performed the contracted work. Pioneer Construction Co. v. Davis, 152 Colo. 121, 381 P.2d 22 (1963); Melody Homes, Inc. v. Lay, 44 Colo. App. 49, 610 P.2d 1081 (1980). Rather, it is only necessary to present proof that, absent the subcontractor’s services, the contractor would have been required to obtain the services by other means including, if need be, hiring, training and utilizing its own employees to accomplish the services. Finlay v. Storage Technology Corp., supra; Campbell v. Black Mountain Spruce, Inc., 677 P.2d 379, 381 (Colo.App. 1983).
Accordingly, a contractor may not escape liability by proof that its employees could not or would not perform the contracted services. See Shumiloff v. Frey, supra (cleaning of church skylights was an integral part of church’s business even though janitorial employees did not clean for five years). In Tindall v. Trojan House Moving and Delivery, W.C. No. 3-925-304 (November 11, 1996), the manufacturer of furniture for sale routinely used subcontractors to deliver its merchandise and never hired its own employees to perform delivery services. Nevertheless, we held that the manufacturer was the statutory employer of a subcontractor’s employee who was injured during a delivery.
Contrary to the respondents’ contention ALJ Friend expressly cited Finlay and the relevant factors. (Conclusions of Law 5). Thus, we reject the respondents’ argument that ALJ Friend did not apply the correct legal standard.
Further application of the “regular business test” is dependent on the facts of each individual case. See Virginia Heritage Square Co. v. Smith, 808 P.2d 366 (Colo.App. 1991). Consequently, we are obliged to uphold the ALJ’s findings if supported by substantial evidence. Section 8-43-301(8), C.R.S. 1997.
Moreover, the ALJ is not held to a crystalline standard in articulating his findings of fact as long as the basis of the order is apparent. George v. Industrial Commission, 720 P.2d 624
(Colo.App. 1986). Here, the basis of ALJ Friend’s order is apparent. He found that the terms of the written “Salvage Store Management Agreement” between the Colorado Disabled American Veterans, which owned the DAV store, and M M gave M M “complete charge of all operations” of the DAV store. Based upon the testimony of Nancy Kramer, the manager of the DAV thrift store, and Jeff Sponseller, the operations manager for M M, the ALJ also found that the management operations of M M included painting the DAV store. Further, it is undisputed that M M subcontracted the painting of the exterior of the store to Maier. Under these circumstances, the ALJ determined that M M was the claimant’s statutory employer at the time of the injury.
It is true that the record contains some evidence which, if credited, might support a contrary result. However, there is substantial evidence in the record to support ALJ Friends’ findings of fact. Therefore, the existence of evidence to the contrary does not afford us grounds for granting appellate relief F.R. Orr Construction v. Rinta, 717 P.2d 965 (Colo.App. 1985).
Pat Smithson and Nancy Kramer, testified that the full time maintenance man hired by M M was required to repair and maintain the DAV store. Ms. Smithson and Ms. Kramer stated that the maintenance man’s duties included painting over graffiti on the exterior of the building. (Tr. pp. 81, 88, 93, 115). Ms. Smithson stated that it was important to have the exterior of the building clean and “ascetically pleasing,” and that repainting the exterior of the building was done for “maintenance reasons.” (Tr. pp. 86-87, 89-90). In addition, Ms. Smithson, Mr. Sponseller and Ms. Kramer stated that the maintenance man along with other M M employees repainted the inside of the DAV store, and Ms. Smithson added that other DAV stores being managed by M M were also repainted. (Tr. pp. 92, 93, 115, 164, 182). Further, Mr. Sponseller admitted that painting of the DAV store was part of the actual operations of the DAV store on an “as needed basis.” (Tr. pp. 166-167).
ALJ Friend could reasonably interpret the testimony of Ms. Kramer and Mr. Sponseller as indicating that the regular business of M M was maintenance of DAV stores which included painting. Further, this testimony supports the ALJ’s finding that M M could have used its own employees to paint the exterior of the building, as it had the interior of the building, but instead subcontracted the work to Maier.
In reaching these conclusions, we reject the respondents’ contention they are not liable for the claimant’s injuries unless their “regular business” was “painting.” As stated above Finlay, created a broader standard for determining the contractor’s regular business. Consequently, we perceive no reversible error insofar as ALJ Friend determined that painting was part of the maintenance duties required by M M, and maintenance was a regular part of M M’s total business operations for the management of DAV stores.
IT IS THEREFORE ORDERED that the orders dated July 17, 1996 and December 4, 1997, are affirmed.
INDUSTRIAL CLAIM APPEALS PANEL ______________________________ David Cain ______________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date this Order is mailed, pursuant to section 8-43-301(10) and 307, C.R.S. 1997.
Copies of this decision were mailed February 5, 1998 to the following parties:
Paul Antonow, 1785 S. Zuni, Denver, CO 80223
Steve Maier, Maier Painting Maintenance, 4465 Osceola St., Denver, CO 80212-2352
Steve Maier, Maier Painting Maintenance, 549 W. Ridge Rd., Littleton, CO 80120
Colorado Department of Disabled American Veterans, 1400 S. Federal Blvd., Denver, CO 80219
M M Management Company, 300 E. Esplande Dr., #280, Oxnard, CA 93030-1238
National Union Fire Insurance Company, Attn: AIG Claim Service, P.O. Box 32130 Phoenix, AZ 85064
Colorado Compensation Insurance Authority, Attn: B. Defalco-Gavin Esq., (Interagency Mail)
Christopher B. Dominick, Esq., 1873 S. Bellaire St., #1401, Denver, CO 80222-4347 (For Claimant)
Richard A. Bovarnick, Esq., 5353 W. Dartmouth Ave., #400, Denver, CO 80227 (For Respondents M M Management Company and National Union Fire Insurance Company)
Frank Cavanaugh, Esq., 3464 S. Willow St., Denver, CO 80231-4566 (For Respondents Disabled American Veterans and Colorado Compensation Insurance Authority)
George Ashen, Esq., 1226 Bannock St., Denver, CO 80204 (For Colorado Department of Disabled American Veterans)
BY: ________________________________