Aaron Medina v. Schlup Investments, Inc.

Employee: Aaron Medina

Injury No. 05-057367

Dependents: N/A

Employers: Schlup Investments, Inc.

Michael Schlup

Plaza Gardens on the Lake

Insurer: Continental Western Insurance Company

Additional Party: N/A

Hearing Date: February 17, 2006

Briefs Due:

Checked by: PAM/lh

1. Are any benefits awarded herein? Yes.
2. Was the injury or occupational disease compensable under Chapter 287? Yes.
3. Was there an accident or incident of occupational disease under the Law? Yes.
4. Date of accident or onset of occupational disease: February 2, 2005.
5. State location where accident occurred or occupational disease was contracted: Camden County, Missouri; venue Kansas City by agreement.
6. Was above employee in employ of above employer at time of alleged accident or occupational disease? Yes.
7. Did employer receive proper notice? Yes.
8. Did accident or occupational disease arise out of and in the course of the employment? Yes.
9. Was claim for compensation filed within time required by Law? Yes.
10. Was employer insured by above insurer? Yes.
11. Describe work employee was doing and how accident occurred or occupational disease contracted: Aaron Medina fell while in the course and scope of his employment with Schlup Investments.
12. Did accident or occupational disease cause death? No. Date of death? N/A
13. Part(s) of body injured by accident or occupational disease: Body as a whole.
14. Nature and extent of any permanent disability: Not determined.
15. Compensation paid to-date for temporary disability: None.
16. Value necessary medical aid paid to date by employer/insurer? None.
17. Value necessary medical aid not furnished by employer/insurer? Not determined.

1. Employee's average weekly wages: N/A.
2. Weekly compensation rate: $\ 373.35.
3. Method wages computation: By agreement.

1. Amount of compensation payable:

54 weeks for temporary total disability through February 16, 2006........................\20,160.90

with ongoing temporary total disability at \ 373.35 per week

Cost of proceedings under $\S 287.560$ against Schlup Investments............................ 26,416.15

1. Second Injury Fund liability: N/A

TOTAL:

1. Future requirements awarded: Future medical treatment as necessary consistent with

Dr. Koprivica's recommendations.

Said payments to begin as of the date of this award and to be payable and be subject to modification and review as provided by law.

The compensation awarded to the claimant shall be subject to a lien in the amount of 25 percent of all payments hereunder in favor of the following attorney for necessary legal services rendered to the claimant: Joe Ebbert and Michael Belancio (See Findings and Rulings regarding payment by Schlup Investments).

Employee: Aaron Medina

Injury No: 05-057367

Dependents: N/A

Employers: Schlup Investments, Inc.

Michael Schlup

Plaza Gardens on the Lake

Insurer: Continental Western Insurance Company

Additional Party: N/A

Hearing Date: February 17, 2006

On February 17, 2006, the parties appeared for hearing the Employee. Aaron Medina appears in person and with counsel Joe Ebbert and Michael Belancio. The Employer Michael Schlup, Schlup Investments, Inc., and Plaza Gardens on the Lake appears and is represented by Theresa Otto and Clayton Fielder. Steven Quinn also appears for the Employer Schlup Investments, Inc., only. Continental Western appears through its counsel Eric Lanham. Angela Williams appears for Claimant Apolinar Sandoval.

At the hearing the parties stipulated to the following:

1) that Aaron Medina sustained an accident arising out of and in the course of his employment;

2) that Aaron Medina is entitled to past temporary total disability of $\ 20,160.90 for 54 weeks ending February 16, 2006, with ongoing temporary total disability benefits at a compensation rate of $\ 373.35 per week;

3) that Aaron Medina is in need of medical treatment consistent with Dr. Koprivica's reports.

The parties requested the Division to determine:

1) whether Aaron Medina was employed by Michael Schlup, Schlup Investments, Inc., or Plaza Gardens on the Lake;

2) whether Continental Western has workers' compensation liability under its policy with Schlup Investments, Inc.,

3) whether Aaron Medina is entitled to costs of recovery under $\S 287.560$.

Aaron Medina is a 40-year-old Hispanic male who sustained significant injuries in a work-related accident on February 2, 2005, in Camden County, Missouri. Medina is currently temporarily totally disabled. Medina has incurred significant past medical expenses and is in current need of medical treatment.

Medina was injured while performing construction services at Plaza Gardens on the Lake condominium project in Camden County, Missouri. The circumstances surrounding Medina's hiring and employment status are in dispute.

In early 2005 Medina heard an advertisement on a local Hispanic radio station soliciting workers for general construction. Medina contacted a phone number located in Overland Park, Kansas. Medina was told he could have a job in general construction without additional details. Medina then met with someone in Overland Park and obtained the information where the work was located. Medina was informed the name of the project was Plaza Gardens on the Lake. Medina then proceeded to drive to the construction job at the lake.

Medina bought tools and cleaned a temporary housing trailer upon his arrival at the construction site. He began construction on the following day and was injured on his third day of work.

Medina received no employment contract, W-2, pay stub, time sheets or any other indicia of employment. Medina believed he was employed by Mike Schlup and Schlup Investments, Inc.

Mike Schlup is the owner of a number of businesses, including the construction site where the accident occurred. Plaza Gardens on the Lake is a development company, which manages and markets the condominium project. Schlup Investments, Inc., also owned by Mike Schlup, is the general contractor for the construction aspect of the Plaza Gardens on the Lake project. Schlup testified that Schlup Investments was responsible for the hiring of subcontractors and construction workers for the lake project. Schlup testified that Aaron Medina was an employee of

Hernon Simonetti, a Schlup Investments employee, answered the telephone inquires generated by the radio advertisements. Simonetti also works at other Schlup properties, including Plaza Gardens, Village Gardens, and Plaza Garden South. Simonetti hired a number of people as a result of the radio advertisement to work for Schlup Investments, Inc., at the Plaza on the Lake project. Simonetti told Medina to come to Overland Park, Kansas where he was given directions to the lake project.

Elbert Pardon, Schlup Investments, Inc., and Plaza Gardens on the Lake employee, testified that he would manage and pay the workers hired to perform services for the Lake project. Pardon would take "roll call," assign tasks, supervise and pay the workers in cash. All records developed as a result of the "roll call" have been destroyed.

The insurer Continental Western takes the position that Medina was not an employee of Schlup Investments, Inc.,

There is no dispute as to the lack of formalities of alleged employment with Schlup Investments, Inc. There were no applications for employment. There are no employment files. There are no W-2 forms. A social security card was not required. A Green Card was not required. An address was not obtained. Telephone numbers were not obtained. Dependent information was not obtained. Federal income taxes were not withheld from pay. Social security was not withheld. Medicare was not withheld from pay. Time cards were not maintained. "Roll call" sheets have been destroyed. No payroll account reflects payments because "employees" were paid in cash. No documentary evidence of any kind prior to the accident or in the week or two after the accident exists which indicate the employees worked for Schlup Investments, Inc.

Missouri law does not require an express contract, either written or verbal, to establish the employee-employer relationship. See Kelsall v. Riss \& Co., 165 S.W.2d 329 (Mo. App. 1942). The employment may be implied or presumed from the acts of the parties. Id. In order to determine whether or not an employment relationship exists, Missouri courts apply a two-factor test known as the "controllable services test." See Lynn v. Lloyd A. Lynn, Inc., 493 S.W.2d 363 (Mo.App. 1973). The first factor is that the worker must be "in the service" of the alleged employer. Id. Secondly, the services must be controlled by the alleged employer. Id, see also Howard v. Winebrenner, 499 S.W.2d 389 (Mo. 1973). "Service" has been defined as the performance of labor for the benefit of another. Id.

In this case, Mr. Medina was "in the service" of Schlup Investments, Inc., i.e., he was performing labor for the benefit of Schlup Investments, Inc. Mr. Medina's services were also being controlled by Schlup Investments, Inc.

Despite Schlup's inconsistent testimony surround the employment arrangement, I find based on the testimony of Medina, Pardon, Simonetti, Schlup and applicable Missouri law that Medina was an employee of Schlup Investments, Inc.

Since I have found Medina to be an employee of Schlup Investments, Inc., a determination must be made whether Schlup Investments, Inc., is insured for workers' compensation.

Schlup Investment's policy of workers' compensation insurance is a Kansas policy of insurance that applies generally to employee claims for workers' compensation benefits filed against the employer-insured (Schlup Investments, Inc.) in the state of Kansas. The policy of workers' compensation and employers' liability insurance includes a Residual Market Limited and Other States Insurance Endorsement (hereinafter "Other States Provision") that extends coverage in certain limited situations to claims for workers' compensation and claims for money damages against the insured that are filed in states other than Kansas. The Other States Provision ins