A legal file was adopted by the Administrative Law Judge consisting of the following documents, to wit: Claim for Compensation, filed with the Division July 28, 1998; Amended Claim for Compensation, filed with the Division August 17, 1998; Answer to Claim for Compensation, filed by the Employer November 1, 2001;Amended Answer to Claimant for Compensation, filed with the Division October 11, 2005; Answer to Claim for Compensation, filed by the Treasurer of the State of Missouri, as Custodian of the Second Injury Fund, through the Office of Attorney General, August 28, 1998; Notice of Services Provided \& Request for Direct Payment, filed with the Division by Cox Medical Center.
Claimant introduced and there were admitted into evidence the following exhibits:
A. Deposition of Donald Cornell Bennett Jr.
B. Deposition of Dr. Robert Poetz
C. Medial records of Veteran's Administration Hospital
D. Medical bills of Cox medical Center and Veteran's Administration Hospital
E. Medical records of Cox Medical Center
F. Original Claim for Compensation, Amended Claim for Compensation, and Employer Answer to Claim for Compensation
G. Business records of D.C. Cycle, Be-Back Motors, and Donald Bennett
H. Correspondence from Division of Workers' Compensation dated September 3, 1998, August 25, 1998, August 17, 1998, and August 2, 1998
I. Copy of subpoena (not offered)
J. Copy of subpoena issued for Don Bennett and Chelly Bennett
K. Correspondence of D.C. Cycle to Division of Workers' Compensation
Larry Busby, claimant herein, testified in his own behalf. Larry Busby worked for D.C. Cycle in 1997. He testified that his duties included working on motorcycles, assisting in the purchase and sale of used motorcycle parts, and from time to time working on cars.
Claimant testified that on July 3, 1997, he was working on a motorcycle as part of his regular work tasks, working on a faulty kick start mechanism. After working on the motorcycle for a period of time, Claimant tried to start the machine. Claimant stood on the kick starter and on the second attempt to start the machine, the kick starter malfunctioned causing the motorcycle to land on Claimant's right leg in the area of his knee. Claimant fell to the floor and Donald Bennett came out to the shop area to assist Claimant. Claimant was removed to the hospital by Donald Bennett in the personal vehicle of Donald Bennett.
Claimant was taken to Cox North Hospital. While at the emergency room, Claimant asked Donald Bennett if he had insurance and Claimant was told "No, you're pretty much on your own." Claimant was advised by medical staff at the emergency room that Claimant's right leg was fractured at the knee and that surgery would be necessary.
Claimant testified that he made arrangements for transfer to the Veteran's Administration Hospital in Columbia, Missouri, for further treatment. Claimant further testified that the emergency room staff indicated that Claimant would have to be transported by ambulance to Columbia. Arrangements were then made and Claimant was transported to the V.A. Hospital in Columbia, Missouri.
Claimant testified that he received surgery which included the placement of plates and screws in his leg and that he was inpatient at the V.A. Hospital for five or six days. Claimant returned to Springfield after his release from the V.A. Hospital and was off work for about 6 or 7 weeks before he returned to work with the assistance of crutches.
Claimant testified that Donald Bennett was the boss of D.C. Cycle and that Bennett approved all purchases and sales of used parts. Claimant further testified that Donald Bennett's spouse worked behind the sales counter from time to time as well as Ian Nax and Chris Passantino. He further testified that there was a bookkeeper named Hutchison who came into the store about one time per week.
Claimant testified that D.C. Cycle business consisted of one room used for parts and supplies inventory and another room which was a sales showroom. In addition, there was a storage room and the mechanics' shop area. Claimant further testified that there was a sales counter which contained a telephone and cash register. Claimant testified that employees used the sales counter to collect cash, ring up sales, and to get parts from the shelves behind the counter for the purpose of delivering parts to customers at the counter.
Claimant testified that Michelle Bennett (Chelly Bennett) worked as a counter person periodically, not every day but weekly. Donald Bennett, Michelle Bennett, Chris Passantino, and Ian Nax ran the counter and that if Donald Bennett was present at the store; he was always in charge of the counter. Claimant testified that he worked in the shop area for the most part but was behind and around the sales counter throughout the day for various reasons. Claimant further testified that, to his knowledge, the only office people at the Employer were Michelle Bennett, Donald Bennett, Chris Passantino, Ian Nax, and Claimant.
Claimant testified that he was always paid by check for his payroll and never paid by cash. Claimant further testified that he did not recall why his paycheck amount would not always match his payroll record. Claimant testified that he thought Michelle Bennett prepared the federal and state tax reports and W-2's.
Claimant testified concerning a 1998 injury to his right knee while Claimant was employed at Ozark Circuit, Inc. Claimant was treated with medication and place on restricted duty for a period of time, after which Claimant's right knee condition resolved to level it was prior to the 1998 injury.
Claimant testified that because of his right knee condition, he cannot jump, run, bend his right knee, or flex his right knee. Prior to the accident of July 3, 1997, Claimant had no medical problem with his right knee and no restrictions on the use of that knee. Claimant further testified that he has constant pain in the right knee and that he takes medication during the day to relieve the pain. Claimant now drives a delivery truck for an occupation and Claimant states that getting in and out of the truck is harder because of his right knee pain. Claimant further testified that he is limited to lifting not more than 25 pounds.
Claimant testified that he was terminated from Ozark Circuit, Inc., and had to quit working at Prime Source because the jobs required heavy lifting which exacerbated the pain in Claimant's right knee.
Claimant testified that he received no temporary disability benefits while he was off work from July 3, 1997, through August 15, 1997, and that, to Claimant's knowledge, his medical treatment bills are still outstanding.
Claimant testified that Ian Nax worked for the Employer prior to July 3, 1997, on an as needed basis during vacations and times when the work load was heavier or someone was out. Claimant testified that he did not know for sure when Ian Nax was present working at the Employer.
On cross-examination Claimant admitted that he did not remember asking for or receiving cash advances, but it was possible that he did receive advances on his paycheck from time to time and those advances could have been taken out of his pay after calculating his tax withholdings. Claimant testified that Ian Nax worked at least one day each week and sometimes more, but Claimant could not say any specific days that he remembered Nax working. Claimant also admitted that he did not know how much Nax was paid or if he was paid any compensation by the Employer.
Claimant admitted that he saw Michelle Bennett working at Employer but that he does not remember ever seeing a paycheck for Michelle Bennett. Claimant further admitted that he was not privy to the Employer's financial records. Claimant admitted that he was not aware of how many hours Michelle Bennett worked, but it would have been part time hours.
Claimant admitted that he received a settlement of 15 % of the right knee from his 1998 injury at Ozark Circuit and that the settlement occurred in September 2002. Claimant also admitted that he had a back injury in November 2003 for which he received a settlement of 5 % of the body as a whole.
Claimant admitted that he did not know how Shirley Hutchison was paid or if she was paid, but Claimant saw the bookkeeping records on the desk from time to time.
On cross-examination by the Second Injury Fund Claimant admitted that on July 3, 1997, Donald Bennett told Claimant that he had insurance but that if Claimant used it, it would take months before any benefit would be paid. Claimant further admitted that Donald Bennett told Claimant that he did not want to use his insurance for this accident. Claimant admitted that he does not know who gave the Cox Medical Center information about the accident or how to bill for the treatment received at Cox.
Timothy Michael Nielsen testified on behalf of Claimant. Mr. Nielsen testified that he knows the Claimant and knows Donald Bennett and Michelle Bennett. Mr. Nielsen further testified that he was aware of Claimant's injury in July 1997. Mr. Nielsen testified that he visited D.C. Cycle from time to time as a customer and had done so for a long time. Mr. Nielsen further testified that he saw Michelle Bennett at D.C. Cycle from time to time in 1997 but that he did not see her in the store every time he was there. Mr. Nielsen testified that he observed Michelle Bennett answering the telephone at D.C. Cycle but that he was not aware of any specific sales duties which Michelle Bennett performed. Mr. Nielsen also testified that he saw Ian Nax and Claimant working at the store from time to time. Mr. Nielsen further testified that he does not recall seeing a bookkeeper at the store when he was present.
On cross-examination by the Second Injury Fund, Mr. Nielsen admitted that his business relationship with D. C. Cycles was as a customer.
Dr. Robert Poetz testified on behalf of Claimant by deposition. Dr. Poetz testified that he performed an Independent Medical Evaluation on the Claimant on December 16, 2004. Dr. Poetz testified that prior to the examination, he examined treatment records of the Claimant concerning treatment administered on the day of the accident and thereafter. Dr. Poetz further testified that he took a history from the Claimant and performed a physical examination. Dr. Poetz identified his report as Deposition Exhibit 2 which showed a diagnosis of a markedly comminuted fracture of the proximal tibia with extension into the lateral tibial plateau which was repaired by internal fixation using plates and screws.
Dr. Poetz opined that Claimant should be restricted from prolonged standing, walking kneeling, and squatting, as well as avoiding activities which exacerbate Claimant's symptoms. Dr. Poetz further opined that Claimant should continue to use warm moist packs on his knee and to exercise range of motion of the knee. In addition, Dr. Poetz
opined that Claimant would require ongoing use of non-steroidal anti-inflammatory medications. Dr. Poetz opined that if Claimant's symptoms persist there should be a repeat MRI of the right knee followed by appropriate treatment indicated by the MRI.
Dr. Poetz assessed Claimant's permanent disability at 45\% of the right lower extremity at the 160-week level, such disability being directly resultant from the July 3, 1997, injury.
Claimant introduced Claimant Exhibit A, deposition of Donald Bennett. The exhibit was admitted provisionally at the hearing. Donald Bennett testified at the hearing in person. The deposition marked as Exhibit A, was used to impeach the direct testimony of Donald Bennett. Claimant's Exhibit A is hereby admitted into evidence for the sole purpose of impeachment of the witness, Donald Bennett.
Claimant introduced, and there was admitted without objection, medical treatment records of the Claimant from the date of his accident. The treatment records generally support and affirm the testimony of the Claimant and of Dr. Poetz.
Donald Bennett, President and corporate representative of the Employer, testified on behalf of Employer. Mr. Bennett testified that he started D.C. Cycle Ltd, (Employer) 1994 as A Missouri corporation. Mr. Bennett was the president and manager of operations of Employer and was so on July 3, 1997. Mr. Bennett further testified that Employer is in the business of purchasing and selling new and used parts for motorcycles and providing repairs to motorcycles. Mr. Bennett testified that there were three shareholders of D.C. Cycle Ltd. Himself, Michelle Bennett, and John Nax (Mr. Bennett's father-in-law). Mr. Bennett further testified that he was a corporate officer in another corporation known as Be-Back Motors which was a used car dealership which operated out of the same address as D. C. Cycle Ltd.
Mr. Bennett testified that D. C. Cycle Ltd. had three paid employees, namely: Donald Bennett, Chris Passantino, and Larry Busby, Claimant herein. Claimant testified that his brother-in-law, Ian Nax, came to work at the Employer after July 3, 1997, but that Ian Nax did not work for the Employer prior to July 3, 1997. Mr. Bennett further testified that Ian Nax was a teacher in the Lebanon, Missouri, school district. Mr. Bennett identified Exhibit 7, payroll records for Ian Nax which shows his first payroll for the period July 11, 1997, through July 18, 1997. Mr. Bennett testified that Ian Nax left Employer to return to teaching school in August 1997.
Mr. Bennett testified that his spouse, Michelle (Chelly) Bennett, was employed in 1997 by BKD Accounting Firm as a corporate tax accountant. Mr. Bennett testified that Michelle Bennett never received any payroll compensation for working at the Employer. He further testified that Michelle Bennett did not perform regular duties for the Employer and that the Employer did not have an accountant in 1997. Mr. Bennett stated that tax returns were prepared by Paul Fiend, Accountant. Mr. Bennett testified that Michelle Bennett never worked as a parts person, at counter sales, or motorcycle repairs.
Mr. Bennett testified that he knew Shirley Hutchison and that she would come to the Employer about one time per month to look at the Employer's bookkeeping records. Mr. Bennett testified that Shirley Hutchison asked Mr. Bennett if she could learn how to do bookkeeping by helping at his office. Mr. Bennett agreed that Michelle Bennett would help teach Shirley Hutchison how to do bookkeeping. Mr. Bennett further testified that Shirley Hutchison had no set schedule, was paid no compensation, held no position with the corporation, and would come about one time each month to look at the books.
Mr. Bennett testified that Michelle Bennett did the bookkeeping for the Employer until about 2000, when Shirley Hutchison also stopped working on the bookkeeping for Employer. Mr. Bennett testified that he did not replace Shirley Hutchison as a bookkeeper.
Mr. Bennett testified that his deposition testimony, Claimant Exhibit A, was wrong in that Shirley Hutchison never paid the bills, never balanced the checkbook, never recorded all payroll, never prepared quarterly tax reports, and never prepared W-2 forms for D. C. Cycle Ltd.
Mr. Bennett testified that he prepared all tax returns and reports for 1997.
Mr. Bennett identified Employer's Exhibit 14, which were check stubs of the Employer for certain checks written between May 30, 1997, and June 30, 1997. Mr. Bennett testified that some payroll checks for the Claimant show advances withheld from payroll, and that in each such instance, Claimant had asked Mr. Bennett for a loan or an advance on his paycheck. Mr. Bennett further testified that Claimant was considered a seasonal worker because he worked on motorcycles. Claimant usually worked from March through October; however, Claimant would work some from time to time during the winter months, but only as needed.
Mr. Bennett testified that on July 3, 1997, he transported Claimant to Cox North Emergency room for treatment after the accident. Mr. Bennett further testified that he never authorized any treatment for the Claimant but that he did offer to transport the Claimant to the Veteran's Administration Hospital in Columbia, Missouri, but the hospital staff said that Claimant could not ride in a private vehicle and had to go to Columbia in an ambulance.
Mr. Bennett testified that when Claimant returned to work, he returned as a counter man because he was on crutches and could not perform his regular duties. Mr. Bennett laid off the Claimant about September 26, 1997, for the reason that work was slowing down for the season.
On cross-examination Mr. Bennett admitted that his testimony in his deposition of November 5, 2001, was not true in certain respects. He admitted that when he testified in November 2001, that Ms. Hutchison did the bookkeeping, he was wrong. That when he testified Ms. Hutchison worked 10-12 hours per month, he was wrong. That when he testified Ms. Hutchison did the checkbook balancing, he was wrong. That when he testified Ms. Hutchison prepared tax reports, he was wrong. That when he testified that Michelle Bennett came to the Employer's place of business once every three to four weeks, he was wrong. That when he testified Michelle Bennett did not answer the phone at the sales counter, he was wrong. That when he testified that he gave Ms. Hutchison the books to keep, he was wrong. That when he testified he had no knowledge of how to keep the books, he was wrong. That when he testified Ms. Hutchison prepared reports, sales tax reports, and payroll reports that was not the truth.
Mr. Bennett admitted that Ian Nax and Larry Busby never worked at the same time and that Ian Nax never performed any job tasks for the Employer prior to July 3, 1997, nor after August 15, 1997.
On redirect examination Mr. Bennett testified that Ian Nax worked as a family member. On recross-examination Mr. Bennett admitted that the orange colored figures appearing on the check stubs set out on Exhibit 14 were bookkeeping codes for the bookkeeper.
Michelle Bennett testified on behalf of Employer. Ms. Bennett testified that she is the former spouse of Donald Bennett and that they were divorced in about 2001. She testified that she was a director/officer of the corporation, and that she never received any compensation as a director or as an officer.
Ms. Bennett testified that in 1997 she was employed by BKD Accounting firm in Springfield, Missouri as a tax accountant, and that she was preparing to take the exam to be a certified public accountant. Ms. Bennett testified that she worked an average of 72 hours per week from January until April 1997. Thereafter, she worked about 50 hours per week minimum for the remainder of the year.
Ms. Bennett testified that she did not do any work for Employer other than attend officer meetings every several months. She also testified that she would stop in the store from time to time and would answer the telephone if everyone was busy. She also stated that she would put callers on hold until they could talk to someone more knowledgeable about the business. Ms. Bennett further testified that she was not capable of performing technical repairs on motorcycles.
Ms. Bennett testified that between April and July 1997 she would stop by the store for 2-3 hours per week, and that usually she would come by when she was off work from BKD. Ms. Bennett testified that she did not prepare tax reports because it was not her job and that an outside accountant prepared the tax returns.
Ms. Bennett testified that she helped Shirley Hutchison at the Employer's place of business when Shirley Hutchison worked on the books. Ms. Bennett showed Shirley Hutchison how to use accounting software, ten-key add
machine, and the theory of debits and credits. Ms. Bennett also testified that she used records in Mr. Bennett's office to work with Shirley Hutchison and that they used the Employer's computer to do all the bookkeeping work/training.
On cross-examination Ms. Bennett admitted that her W-2 income for 1997 from BKD was $\ 33,000.00. She further admitted that she worked with Shirley Hutchison 1-2 hours each week working on bookkeeping. Ms. Bennett admitted that she did not know whether Ian Nax performed any tasks for the Employer during May and June of1997, prior to the date of Claimant's accident.
Shirley Hutchison testified on behalf of Employer by deposition. Ms. Hutchison testified that she began helping to look over tax reports prepared for D.C. Cycle in January 1997 (the same year as Claimant's injury). She ceases coming to the Employer's place of business in 2000 when she obtained a job at Norma's Dress Shop. Ms. Hutchison testified that she worked with the tax reports of Employer during the period from 1997 through 2000, but that she received no cash remuneration for any service she performed for or on behalf of Employer. Ms. Hutchison further testified that she had no set working hours, and that she came in about one time each month.
Ms. Hutchison testified that she did not remember what materials were left for her but that she did remember using a ten key add machine. Ms. Hutchison testified that she had no timetable for completing her review task but she estimated that it usually took two-three hours. Ms. Hutchison also testified that when she completed her work she would leave on whatever schedule she chose.
Ms. Hutchison admitted on cross-examination Donald Bennett was a friend of hers and that the issue in this claim was that Donald Bennett should have carried workers' compensation insurance if he had more than a certain number of employees; and that her intention in testifying on behalf of Employer was to testify that she was not an employee. She further testified that she has been a guest in Donald Bennett's home and attended the same church, and that their friendship has extended over a period of years to prior to 1997.
Ms. Hutchison admitted that she was never at the Employer's place of business more often that one time each month for two to three hours. She also admitted that the forms were already prepared when she received them, and when she finished "auditing" the numbers the forms were ready for filing with the appropriate tax officials. Ms. Hutchison further admitted that, other than double checking payroll reports, she did nothing with the Employer's checkbook, didn't balance the checkbook and that she never looked at the Employer's checkbook.
Ms. Hutchison admitted that she did not do the books for Employer. She also admitted that if Donald Bennett testified in 2001 that Ms. Hutchison came in ten to twelve hours a month, that would be incorrect; that if Donald Bennett testified that Ms. Hutchison recorded payroll receipts and balanced the checkbook for D. C. Cycle, that would be incorrect; that if Donald Bennett testified that he had no knowledge of bookkeeping, that he gave her the books and that she agreed on a time that she was going to be there to do his books, that would be incorrect; that if Donald Bennett testified that he gave Ms. Hutchison the books and said here you go do what you want, that would be incorrect; if Donald Bennett testified that Ms. Hutchison did more than balance the checkbook of the Employer; that would be incorrect; if Donald Bennett testified that Ms. Hutchison compiled all the sales tax figures, she admitted that she sometimes looked at the sales tax figures. Ms. Hutchison denied that she prepared W-4 forms, W-2 forms, and she admitted that if Donald Bennett testified that Ms. Hutchison prepared those forms, that would be wrong.
Ms. Hutchison admitted that Chelly Bennett answered the phone occasionally if the phone rang. She further admitted that she was not aware that Chelly Bennett helped stock any parts.
Ms. Hutchison admitted that Chelly Bennett showed her how to perform bookkeeping functions. She also admitted that Chelly knew how to show her how to check payroll.
Employer introduced, and there was admitted into evidence, certain records of the Secretary of State's office submitted to establish that D.C. Cycle was a corporation in good standing during the period from its inception up to and including 1997. Employer also introduced, and there was admitted into evidence, copies of employment reports submitted to the State of Missouri which showed the persons who received wages from Employer during 1997 from a period of time prior to the injury date until after the injury date.