W.C. No. 4-785-648.Industrial Claim Appeals Office.
March 16, 2010.
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Harr (ALJ) dated August 31, 2009, that denied and dismissed the claim against Doug Adams (homeowner). We affirm.
The claimant seeks compensation for burn injuries he sustained on November 25, 2008 as a result of an explosion of a home under construction. The claimant contends that at the time of his injury he was an employee of Alvin Ray Mullett, D/B/A Mullet Foam Insulation (putative employer). The putative employer is non-insured for workers’ compensation claims and denies the claimant was his employee. The homeowner was acting as a general contractor for construction of the residential real property and also owned the property. However, the claimant stipulated at the time of the prehearing that the homeowner’s real property met the definition of “qualified residence” under § 163(h)(4)(A) of the federal “Internal Revenue Code of 1986” (as amended). Based in part upon the claimant’s judicial admission the ALJ determined that the homeowner was neither the claimant’s employer nor claimant’s statutory employer under § 8-41-402(1), C.R.S. 2009. The claimant brings this appeal, contending that the homeowner waived any qualified residence exemption and is obligated as a stautory employer to provide benefits under the Workers’ Compnesation Act (Act).
We note preliminarily that OACRP Rule 17 allows an ALJ to enter summary judgment where there are no disputed issues of material fact. See Office of Administrative Courts’ Rule of Procedure (OACRP) 17, 1 Code Colo. Reg. 104-3 at 7.
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Moreover, to the extent that it does not conflict with OACRP 17, C.R.C.P. 56 also applies in workers’ compensation proceedings Morphew v. Ridge Crane Service, Inc., 902 P.2d 848 (Colo. App. 1995); Nova v. Industrial Claim Appeals Office, 754 P.2d 800 (Colo. App. 1988) (the Colorado rules of civil procedure apply insofar as they are not inconsistent with the procedural or statutory provisions of the Act). Summary judgment is a drastic remedy and is not warranted unless the moving party demonstrates that it is entitled to judgment as a matter of law. Van Alstyne v. Housing Authority of Pueblo, 985 P.2d 97 (Colo. App. 1999). And all doubts as to the existence of disputed facts must be resolved against the moving party, and the party against whom judgment is to be entered is entitled to all favorable inferences that may be drawn from the facts. Kaiser Foundation Health Plan v. Sharp, 741 P.2d 714 (Colo. App. 1987). However, once the moving party establishes that no material fact is in dispute, the burden of proving the existence of a factual dispute shifts to the opposing party. The failure of the opposing party to satisfy its burden entitles the moving party to summary judgment. Gifford v. City of Colorado Springs, 815 P.2d 1008 (Colo. App. 1991).
In the context of summary judgment, we review the ALJ’s legal conclusions de novo. See A.C. Excavating v. Yacht Club II Homeowners Association, 114 P.3d 862 (Colo. 2005). However, pursuant to § 8-43-301(8), C.R.S. 2009, we have authority to set aside an ALJ’s order only where the findings of fact are not sufficient to permit appellate review, conflicts in the evidence are not resolved, the findings of fact are not supported by the evidence, the findings of fact do not support the order, or the award or denial of benefits is not supported by applicable law. Here, the question on review is generally whether the homeowner is entitled to the protection afforded by the exemption contained in § 8-41-402(1). The parties stipulated that the homeowner’s real property met the definition of “qualified residence” as required by § 8-41-402(1). Therefore we do not understand any party to be contending that there were any disputed issues of fact other than the claimant’s argument that by assuming express responsibility for procuring workers’ compensation insurance the homeowner waived any right to the § 8-41-402(1) exemption. Therefore, we will assume as contended by the claimant that the homeowner was contractually obligated to procure workers’ compensation insurance. We make this assumption only for the purpose of issuing this order. We conclude that the law supports the ALJ’s order.
Section 8-41-402(1) deals with the issue of repairs to real property and provides an exception for liability of the occupant of residential real property. Section 8-41-402(1) states as follows:
Every person, company, or corporation owning any real property or improvements thereon and contracting out any work done on and to said property to any contractor, subcontractor, or person who hires or uses
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employees in the doing of such work shall be deemed to be an employer under the terms of articles 40 to 47 of this title. Every such contractor, subcontractor, or person, as well as such contractor’s, subcontractor’s, and person’s employees, shall be deemed to be an employee, and such employer shall be liable as provided in said articles to pay compensation for injury or death resulting therefrom to said contractor, subcontractor, or person and said employees or employees’ dependents and, before commencing said work, shall insure and keep insured all liability as provided in said articles. Such employer shall be entitled to recover the cost of such insurance from said contractor, subcontractor, or person and may withhold and deduct the same from the contract price or any royalties or other money due, owing, or to become due to said contractor, subcontractor, or person. Articles 40 to 47 of this title shall not apply to the owner or occupant, or both, of residential real property which meets the definition of a “qualified residence” under section 163 (h) (4) (A) of the federal “Internal Revenue Code of 1986”, as amended, who contracts out any work done to the property, unless the person performing the work is otherwise an employee of the owner or occupant, or both, of the property. (Emphasis added).
The claimant does not contend that the homeowner here falls outside the requirements of the exemption contained in 8-41-402(1). However, the claimant contends that the homeowner entered into a contract with the claimant’s putative employer, which expressly provided that the homeowner was to provide workers’ compensation insurance coverage for the project. The claimant argues that by assuming express responsibility for procuring workers’ compensation insurance the homeowner waived any right to an exemption from liability under the Act for the putative employers’ workers. Therefore, the claimant contends that the homeowner waived the “qualified residence” exemption contained in § 8-41-402(1). The claimant further contends the ALJ erred in determining that the qualified residence exemption is mandatory and that the exemption cannot be waived.
In our opinion, Rian v. Imperial Mun. Services Group, Inc. 768 P.2d 1260 (Colo. App. 1988) is decisive on this issue even though it did not directly involve a workers’ compensation claim. I Rian, a construction employee was injured and brought a negligence suite against the owner of the property. The property owner argued that it had purchased workers’ compensation insurance for the plaintiffs benefit and therefore was entitled, as a statutory employer, to the protection of the exclusivity provisions of the Act. However, the court ruled that under the predecessor of the present exemption found in § 8-41-402(1) the property owner was exempt from the provisions of the Act and could not be considered a statutory employer. The court found that one is either an employer or
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not under the Act and it did not matter whether the property owner had actually purchased workers’ compensation insurance, which covered the injured worker.
In essence the Rian court found that the property owner was exempt from being considered an “employer” under the Act, and thus not immune from a negligence suit by an injured worker regardless of the property owner’s purchase of workers’ compensation insurance. If a property owner, exempt from being considered an employer cannot change its status to that of a statutory employer by purchasing workers’ compensation insurance, then by the same analysis an exempt property owner cannot lose its exempt status by merely contractually obligating itself to purchase workers’ compensation insurance. Consequently, we are not persuaded by the claimant’s argument that by agreeing to purchase workers’ compensation insurance the homeowner here waived any right to the protection provided by exemption for homeowner from liability found in § 8-41-402(1).
The claimant also argues that the doctrine of waiver applies in the context of statutory rights under the Act. The claimant further argues that a disputed factual issue of whether the homeowner deliberately, knowingly and intelligently waived his right to the exemption would prevent entry of summary judgment. However, Rian is a published opinion of the court of appeals determining that the status of a property owner as being exempt from being employer under § 8-41-402(1) is not changed by the homeowner’s purchase of workers’ compensation insurance. We see no principled difference between actually purchasing the insurance in Rian and the contractual obligation to purchase the insurance in the present case. We are of course bound by the published opinions of the Court of Appeals.
The claimant also cites Blood v. Qwest Services Corp. ___ P.3d ___ 2009 (Colo. App. 2009), cert. granted, (February 22, 2010), for the proposition that a statutory employer could waive immunity from civil tort liability found in the Act. As we understand Blood the court determined that the defendant in the civil action had waived its exclusivity defense under the Act, because it failed to carry its burden to plead and prove the affirmative defense and did not raise the issue at trial. In contrast here the homeowner clearly plead the exemption under § 8-41-402(1) as an affirmative defense and even sought summary judgment on the issue. Further, we do not read the ALJ’s order as determining that the qualified residence exemption is jurisdictional and therefore not subject to waiver. Rather the ALJ was not persuaded that a contractual obligation by the homeowner to purchase insurance constituted a waiver of the exemption.
In our opinion, it is not necessary to determine if the exemption for homeowners is jurisdictional in nature and not subject to waiver. Rather the limited issue before us is whether an agreement to purchase insurance can be viewed as altering the homeowner’s
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exempt status under § 8-41-402(1). Given the court’s determination i Rian, the answer to this question is that it cannot. Therefore, we agree with the ALJ’s dismissal of the claim against the homeowner.
Moreover, the claimant’s interpretation would subject owners or occupants of qualified residences who contract out the construction of a qualified residence to the requirements of the worker’ compensation statutory scheme. Nothing in the existing exemption supports placing workers’ compensation liability on owners or occupants of qualified residences because of the existence of an agreement to purchase insurance. See Adaline v. Independent Home Builders of Colorado d/b/a Custom Energy Homes and/or Guy Groves, Jeri Groves, and Non-Insured and/or State Farm Insurance, W. C. No. 4-192-179 (January 05, 1995) aff’d Independent Home Builders of Colorado d/b/a Custom Energy Homes v. ICAO, Et Al No. 94CA17 (Colo. App. March 21, 1996) (not selected for publication) (homeowner acting as own general contractor in construction of qualified residence not subject to liability as statutory employer). Nor can we read into the statute such a condition that would significantly alter the meaning of the exemption. See Kraus v. Artcraft Sign Co. 710 P.2d 480 (Colo. 1985) (only the General Assembly can change workers’ compensation statute).
IT IS THEREFORE ORDERED that the ALJ’s order dated August 31, 2009 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Curt Kriksciun
____________________________________ Thomas Schrant
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DONALD K BARR, LA JARA, CO, (Claimant), ALVIN RAY MULLETT, Attn: ALVIN RAY MULLETT, JR., C/O: DBA MULLETT SPRAY FOAM INSULATION And/Or DOUG ADAMS, MONTE VISTA, CO, (Employer), RECHT KORNFELD, Attn: HEATHER R. HANNEMAN, ESQ., DENVER, CO, (For Claimant).
SCHIFF SCHIFF, PC, Attn: THOMAS M. CONDAS, ESQ., PUEBLO, CO, (For Respondents).
DALE A. GAAR, PC, Attn: DALE A. GAAR, ESQ., DENVER, CO, (Other Party).
WHITE STEELE, PC, Attn: MATTHEW W. TILLS, ESQ., C/O: DOMINION TOWERSM NORTH TOWER, NORTH, DENVER, CO, (Other Party 2).
DOUG ADAMS, SANDIA PARK, N.M. (Other Party 3).
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