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Case # G0157704
Date of Accident: 11/25/2008
District Office: Rochester
Employer: Dart Transit Company
Carrier: Great West Casualty Company
Carrier ID No.: W100754
Carrier Case No.:D09548
Date of Filing of Decision: 06/28/2013
Claimant's Attorney: Bond, McDonald & Lehman, PC
Panel: Robert E. Beloten

MANDATORY FULL BOARD REVIEW
FULL BOARD MEMORANDUM OF DECISION

The Full Board, at its meeting held on April 16, 2013, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed on March 15, 2012.

ISSUES

The issues presented for Mandatory Full Board Review are:

  1. whether Workers' Compensation Law (WCL) § 25(2)(b) barred the carrier from arguing that no employer-employee relationship existed; and
  2. whether claimant was an employee of Dart Transit Company (Dart) at the time of his accident.

The Workers' Compensation Law Judge (WCLJ) found that the claimant was an employee of Dart at the time of injury, established the case for an injury to the claimant's neck, and made awards.

The Board Panel majority reversed the WCLJ's decision and disallowed the claim, finding that claimant was an independent contractor.

The dissenting Board Panel member believed the WCLJ had reviewed the issue of employer-employee relationship in "voluminous detail" and would affirm the WCLJ's decision finding employer-employee relationship and establishing the case.

In his application for Mandatory Full Board Review, the claimant contends that substantial evidence supports the finding that he was an employee of Dart, and not an independent contractor, at the time of injury. Further, the claimant argues that the carrier's late filing of a notice of controversy bars it from raising the issue of employer-employee relationship, pursuant to WCL § 25(2)(b).

In rebuttal, Dart argues that claimant was an independent contractor and that claimant cannot argue that the issue of employer-employee relationship is barred by WCL § 25(2)(b), as he did not appeal the WCLJ's November 18, 2010, reserved decision.

FACTS

The claimant, a long haul truck driver, sustained an injury to his neck on November 25, 2008, when he was involved in a motor vehicle accident in Indiana. At the time of the accident, claimant was on his way to pick a load up in Indianapolis to deliver to Pennsylvania. The claimant contends that he was an employee of Dart at the time of injury.

On February 17, 2010, the Board sent a notice of indexing (EC-84) to "Dart Transportation" at an address in East Syracuse, New York, and to Great West Casualty Company (Great West), the workers' compensation carrier for Dart. At the time the notice of indexing was issued, the Board's file contained several medical reports, including a C-4 (Doctor's Initial Report) received on January 28, 2010, by claimant's treating physician, Dr. Dhawan, which referenced injuries resulting from a November 25, 2008, motor vehicle accident while claimant was employed by Dart.

On February 26, 2010, the Board received a C-669 (Notice to Chair of Carrier's Action on a Claim for Benefits) from Old Republic Life Insurance (Old Republic). In an attached cover letter, a claims adjuster at Old Republic indicated that he had been told by the Board to file a form C-669. He indicated that he had received the notice of indexing issued by the Board (presumably forwarded by Great West). The adjuster stated that "Great West Risk Management administers (a) benefits fund under the Group Occupational Accident Coverage plan,…written by Old Republic…" He asserted that this was not a workers' compensation policy, and that claimant was an independent contractor, and not an employee of Dart. The adjuster stated that Old Republic had accepted the claimant's "occupational accident policy claim and have been paying benefits as outlined in the policy."

At the initial hearing, held on April 13, 2010, claimant was present and represented by counsel, and counsel for Dart was present. Great West did not appear at the hearing. Counsel for Dart stated at the hearing that it was her "understanding that the relationship is Dart is self-insured and Great West is a third-party administrator, so Dart took to the lead on denying the claim" (p. 4). Counsel for Dart argued that Dart did not receive the notice of indexing, that the East Syracuse, New York address to which the notice to Dart was sent was incorrect; and that the corporate offices for Dart are in Minnesota. The WCLJ found that the C-7 filed by Dart was untimely, and that the employer and carrier had therefore waived the defenses enumerated in WCL 25(2)(b) [see notice of decision filed April 16, 2010]. However, both Dart and Great West sought administrative review of that decision. The Board Panel, in a decision filed October 1, 2010, rescinded the WCL § 25(2)(b) finding and restored the matter to the trial calendar for the WCLJ to determine whether "good cause" had been demonstrated for why a timely notice of controversy had not been filed, such that the late filing should be excused.

On April 12, 2010, the Board received a C-7 (Notice that Right to Compensation is Controverted), filed on behalf of the alleged employer Dart (but not the carrier Great West), listing an address for Dart in St. Paul, Minnesota. The C-7 controverted the claim on several grounds, including that claimant was an independent contractor, and not an employee of Dart.

On April 19, 2010, the Board received a C-3 (Employee Claim) from claimant, indicating that he was seeking workers' compensation benefits based on a November 25, 2008, motor vehicle accident he was involved in while working for Dart.

On May 13, 2010, the Board received a C-7 filed on behalf of Great West which controverted the claim on several grounds, including that claimant was an independent contractor, that Great West was not the proper carrier, and that the Board lacked subject matter jurisdiction. Thereafter, Dart and Great West were represented by separate counsel, as the interests of the employer and its carrier conflicted based on the assertion by Great West that it was not the liable carrier for this claim, and that if they succeed in proving that assertion, Dart would be liable for this claim as an uninsured employer.

The record was developed with the testimony of the claimant and witnesses from Dart. The claimant testified that he began driving for Dart sometime on 2008, and was driving for Dart when he was involved in a motor vehicle accident on November 25, 2008.

In a reserved decision filed November 18, 2010, the WCLJ excused the late notice of controversy filed by Dart, but declined to excuse the late notice of controversy filed by Great West, and continued the case. No party sought administrative review of that decision.

At a hearing on December 22, 2010, the representative of Great West conceded that Great West provided coverage for Dart, and that it was not denying coverage for this claim (Transcript, 12/22/10 hearing, p. 9).

In a reserved decision filed April 7, 2011, the WCLJ found that claimant was an employee of Dart at the time of his accident, established the claim for the neck and made awards. Both Dart and Great West requested administrative review of the WCLJ's decision.

In its application for review, Great West argued that (1) claimant was an independent contractor and the claim should be disallowed, and (2) although Great Western had "previously been precluded from arguing the issue of employer/employee relationship," that "in the interest of justice" the Board permit Great West to contest that issue pursuant to its continuing jurisdiction under WCL § 123. Great West further argues that although its "C-7 was untimely and unexcused, the C-7 filed by the employer preserved the issue of litigation."

In its application for review, Dart argued that (1) claimant was an independent contractor and the claim should be disallowed, and (2) in the alternative, if the claim is established, there should be a credit against awards for any benefits paid to the claimant by Old Republic.

LEGAL ANALYSIS

WCL § 25(2)(b)

When the Board mails a Notice of Indexing, a carrier that wishes to file a Notice of Controversy (Form C-7) must do so within 25 days. Failure to timely controvert "shall bar the employer and its insurance carrier from pleading that the injured person was not at the time of the accident an employee of the employer, or that the employee did not sustain an accidental injury, or that the injury did not arise out of and in the course of the employment" (WCL § 25[2][b]). Absent a showing of good cause or other reason to excuse the untimely filing, the carrier shall be precluded from offering any evidence to dispute whether the injury was causally related to work. In such instance, the Board must determine whether the alleged injury was work related without regard to the carrier's proof (Matter of Cappellino v Baumann & Sons Bus Company, 18 NY3d 890 [2012]).

Great West initially took the position that it did not provide coverage for this claim. Great West eventually conceded coverage at the December 22, 2010, hearing. Thus, prior to December 22, 2010, a conflict of interest existed between Dart and Great Western, and both Dart and Great Western filed untimely notices of controversy, and appeared by separate counsel. However, as of Great West's concession at the December 22, 2010, hearing that it provided coverage for this claim, no further conflict of interest existed between the employer and its insurance carrier. The concession of coverage meant that any liability incurred as a result of the establishment of this claim would be the sole responsibility of Great West (see e.g. Matter of Lupascu v Utog 2-way Radio, 2 AD3d 915 [2003]).

Great West, the entity which is liable for this claim, filed an untimely C-7, and failed to show good cause in failing to timely controvert this claim. Therefore, Great West is barred from "pleading that the injured person was not at the time of the accident an employee of the employer, or that the employee did not sustain an accidental injury, or that the injury did not arise out of and in the course of the employment" (WCL § 25[2][b]). Although Dart's failure to file a timely C-7 was excused, at the time Dart's C-7 was filed, Dart's interests conflicted with that of the carrier. Great West cannot obtain the benefit of the WCLJ's decision excusing Dart's failure to timely controvert the claim. At the time of that decision, the interests of Dart and Great West were in conflict and there was a possibility that Dart would be found liable for this claim as an uninsured employer. However, as Great West has conceded liability, Dart has no liability for this claim for which it will not be indemnified by Dart.

Employer/Employee Relationship

Because it failed to file a timely notice of controversy, Great West is barred from arguing that claimant was not an employee at the time of his injury (WCL § 25[2][b]). The claimant testified that he began driving for Dart sometime in 2008, and was driving for Dart when he was involved in a motor vehicle accident on November 25, 2008. Therefore, the record supports a finding that claimant was an employee of Dart at the time of his accident.

Reimbursement

Dart argues that if the claim is established, there should be a credit against awards for any benefits paid to the claimant by Old Republic. However, this issue was not raised before the WCLJ and was not preserved for review (12 NYCRR 300.13[e][1][iii]). Also, the record does not contain a request for reimbursement setting forth the amount of benefits paid by Old Republic and the amount of reimbursement sought (see WCL § 206). Therefore, the request for reimbursement should be denied.

CONCLUSION

Accordingly, the WCLJ reserved decision filed April 7, 2011, is affirmed. No further action is planned by the Board at this time.