Timothy Rader v. Werner Enterprises, Inc.

Improvee: Timothy C. Rader

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paragraphs setting forth various findings which Werner argues the administrative law judge should have made. In its Application for Review, Werner further argued the award of the administrative law judge is against the overwhelming weight of the evidence for various reasons. Werner included an additional 23 separate numbered paragraphs setting forth those reasons.

The following issues are currently before the Commission: (1) whether the Missouri Division of Workers' Compensation has jurisdiction in this matter; (2) whether an employee/employer relationship existed between claimant and Werner or whether the owner/operator exception of section 287.120.1 applies; (3) the appropriate average weekly wage and rates for temporary total, permanent total, and permanent partial disability; (4) medical causation; (5) the nature and extent of claimant's disability, if any; (6) whether claimant is entitled to future medical benefits from Werner; and (7) the liability of the Second Injury Fund, if any.

For the following reasons, the Commission affirms the award of the administrative law judge, as supplemented herein.

Was Claimant An Owner/Operator Under Section 287.020.1 RSMo?

Werner argues the administrative law judge erred in finding claimant was an employee for purposes of section 287.020.1 RSMo ${ }^{1}$, which provides, in pertinent part, as follows:

The word "employee" as used in this chapter shall be construed to mean every person in the service of any employer, as defined in this chapter, under any contract of hire, express or implied, oral or written, or under any appointment or election, including executive officers of corporations. ... The word "employee" shall not include an individual who is the owner and operator of a motor vehicle which is leased or contracted with a driver to a for-hire common or contract motor vehicle carrier operating within a commercial zone as defined in section 390.020 or 390.041 RSMo, or operating under a certificate issued by the transportation division of the department of economic development or by the interstate commerce commission.

The foregoing language excludes from the definition of "employee" any individual who is (1) the owner and operator of a motor vehicle which is (2) leased or contracted with a driver (3) to a for-hire common or contract motor vehicle carrier operating within a commercial zone. Booth v. Trailiner Corp., 21 S.W.3d 869, 874 (Mo. App. 2000).

The most recent Missouri case to consider the owner/operator exclusion is Nunn v. C.C. Mid West, 151 S.W.3d 388 (Mo. App. 2004). The employee in Nunn, an over-the-road truck driver, leased a tractor from a sister company of the employer. Id. at 391. The purpose of signing the lease was so that the employee could go to work for the

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[^0]: ${ }^{1}$ Because claimant's injury occurred on May 29, 2003, we apply the law as it existed prior to the 2005 amendments to the Missouri Workers' Compensation Law; all references are to the Revised Statutes of Missouri (2000), unless otherwise indicated.

employer under a purported independent contractor program wherein the employee would provide his own equipment. Id. The employee was subsequently injured while driving for the employer; the employer denied the ensuing workers' compensation claim on the basis of the owner/operator exclusion of section 287.120.1. Id. at 394. The parties disputed whether the employee was the "owner" of the motor vehicle. Id. at 395. The court turned to the dictionary to define "owner":

The dictionary defines "own" as, among other things, "to have or hold as property or appurtenance: have a rightful title to, whether legal or natural: possess"; "owner" as "one that owns: one that has the legal or rightful title whether the possessor or not"; and "ownership" as, among other things, "the state, relation, or fact of being an owner." WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE 1612 (1993). "Own" is also defined as "to have power over: control." MERRIAMWEBSTER ONLINE DICTIONARY. And Black's Law Dictionary defines "own" as "to rightfully have or possess as property; to have legal title to"; "owner" as "one who has the right to possess, use, and convey something; a person in whom one or more interests are vested"; and "ownership" as "the bundle of rights allowing one to use, manage, and enjoy property, including the right to convey it to others." BLACK'S LAW DICTIONARY 1137-38 (8th ed. 2004).

Id. at 396-97.

The court then looked to the language of the lease itself to determine whether an ownership interest in the tractor ever vested in the employee. Id. at 397. The court noted that, under the lease, no title would vest in the employee during the term of the lease unless the employee exercised a right-to-purchase option. Id. The court determined that title never passed to the employee under the lease. Id. The court concluded that employee could not be considered an owner of the motor vehicle because title to the motor vehicle never vested in the employee. Id. The court held that section 287.120.1 was therefore inapplicable to the facts of the case. Id.

Here, as in Nunn, the key dispute with regard to section 287.120.1 is whether claimant was the owner of the tractor. Claimant worked for Werner as an employee driver for approximately 6 to 8 years. On February 5, 2003, claimant executed a number of documents in order to begin his participation in Werner's "Owner-Operator Program." Among other things, claimant signed a Contractor Operating Agreement with Werner, an Equipment Finance Agreement with American Express Business Finance Corporation, and a Down Payment Agreement with Werner. In exchange for filling out the required documents and remitting a $\ 1000 down payment to Werner, claimant received a tractor with Werner's logo on the sides.

The determinative issue in the Nunn case was whether legal title to the tractor ever passed to the employee. Nunn, 151 S.W.3d at 397. Here, it appears that there was an attempted conveyance of a Nebraska title for the tractor to claimant, although we find the evidence inconclusive as to whether this was accomplished. An application for title

and certificate of title were included in the record, but, as claimant's counsel points out, the certificate of title appears to be incomplete: claimant's signature is conspicuously absent, and the lines intended for the date of sale and odometer reading are blank. Neither party called any witness who was involved in the transaction who could explain what occurred or what the effect of the apparently incomplete Nebraska certificate might be. Neither party has apprised us of relevant Nebraska authority to aid our analysis. Werner deposed its senior workers' compensation counsel; this witness identified the exhibit containing the application for and certificate of title and summarily described them as passing "ownership" to claimant. The witness did not elaborate on the exhibits, nor did he explain the incomplete nature of the certificate of title. Remarkably, given the decisive nature of the title issue in the Nunn case, neither party asked the witness whether title to the tractor passed to claimant.

Because we find the application for and certificate of title inconclusive as to whether title passed to claimant, we look at the other aspects of ownership under the Nunn definition, and examine "the bundle of rights" that claimant enjoyed by virtue of signing the equipment finance agreement. Nunn, 151 S.W.3d at 397. We first examine the right of use and possession. The finance agreement stated as follows:

Debtor further represents that Debtor will utilize said vehicle for the sole purpose of performing any and all duties necessary to fulfill the terms of his/her Contractor Agreement with Company Sponsor. Any use of the vehicle for personal or other business purposes will be deemed and [sic] event of default by Secured Party.

Under the foregoing provision, if claimant used the tractor for any purpose other than his employment with Werner, claimant would default under the agreement, with the result that claimant would lose the tractor or be liable for the accelerated balance. Claimant's use of the tractor was thus restricted to one very specific purpose-his employment with Werner-while all other purposes were excluded. Likewise, as demonstrated by the following language, if claimant's employment with Werner ended for any reason, so did the finance agreement:

A termination of Independent Contractor's employment with Company Sponsor for any reason whatsoever shall be deemed a material adverse change in Independent Contractor's business and an additional event of default under its AGREEMENT with Secured Party.

The only way for claimant to continue to enjoy his right to use and possess the tractor was to continue working for Werner. If his relationship with Werner ended, he either forfeited the tractor or became liable for the accelerated balance. This limitation was demonstrated by the facts of this case: it appears that when claimant was injured and unable t