Ramsbacher v. Jim Palmer Trucking

2018 MT 118, 417 P.3d 313, 391 Mont. 298
CourtMontana Supreme Court
DecidedMay 8, 2018
DocketDA 17-0502
StatusPublished
Cited by1 cases

This text of 2018 MT 118 (Ramsbacher v. Jim Palmer Trucking) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ramsbacher v. Jim Palmer Trucking, 2018 MT 118, 417 P.3d 313, 391 Mont. 298 (Mo. 2018).

Opinion

For Appellant: Kurt M. Jackson (argued), Drew Blewett, Hoyt & Blewett, PLLC, Great Falls, Montana

For Appellee: Marshal L. Mickelson (argued), Corette Black Carlson & Mickelson, Butte, Montana

Jill Gerdrum (argued), Axilon Law Group, PLLC, Missoula, Montana, T. Thomas Singer, Walter D. Clapp, Axilon Law Group, PLLC, Billings, Montana (for Amicus Curiae Avitus Group)

Mark M. Kovacich (argued), Ross T. Johnson, Kovacich Snipes, P.C., Great Falls, Montana (for Amicus Curiae MTLA)

Robert K. Baldwin, Goetz, Baldwin & Geddes, P.C., Bozeman, Montana (for Amicus Curiae NAPEO)

Justice Ingrid Gustafson delivered the Opinion of the Court.

*315***299¶ 1 David Ramsbacher (Ramsbacher) appeals from an order of the Fourth Judicial District Court, Missoula County, granting summary judgment in favor of Jim Palmer Trucking (JPT). We affirm.

¶ 2 We restate the issue on appeal as follows:

Does § 39-8-207(8)(b)(i), MCA, which extends the exclusive remedy of the Workers' Compensation Act from a Professional Employer Organization to its client, violate Article II, Section 16, of the Montana Constitution by depriving an injured worker of full legal redress?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 The controversy in this case arises from the interplay of Title 39, Ch. 8, MCA-known as the Montana Professional Employer Organizations and Groups Licensing Act (PEO Act)-and Article II, Section 16, of the Montana Constitution. Professional Employer Organizations (PEOs) hire employees and assign them to the PEO's client businesses on an ongoing basis. PEOs are statutorily required to assume responsibility for the payment of employee wages, workers'

***300compensation premiums, payroll-related taxes, and employee benefits. Section 39-8-207(1)(b)(ii), MCA. However, Article II, Section 16, provides:

Courts of justice shall be open to every person, and speedy remedy afforded for every injury of person, property, or character. No person shall be deprived of this full legal redress for injury incurred in employment for which another person may be liable except as to fellow employees and his immediate employer who hired him if such immediate employer provides coverage under the Workmen's Compensation Laws of this state. Right and justice shall be administered without sale, denial, or delay.

¶ 4 Because Article II, Section 16, extends the exclusive remedy of the Workers' Compensation Act (WCA) only to the "immediate employer ... if such immediate employer provides coverage," the question arises here as to whether, when a business contracts with a PEO who pays the workers' compensation insurance premiums for certain employees, both the business and the PEO can be considered an "immediate employer" of those employees for the purpose of the exclusive remedy in accordance with § 39-8-207(8)(b)(i), MCA, or whether that provision conflicts with Article II, Section 16.

¶ 5 In August 2010, JPT entered into a contract with Payroll Plus Corporation (PPC), which is a licensed PEO. Pursuant to the requirements of the PEO Act, the parties' written contract governed the employment arrangement for certain job positions at JPT. Under the terms of the contract, JPT agreed not to hire employees directly. Instead, PPC hired the workers and "assigned" them to JPT. The contract designated PPC as the "administrative employer" of these employees. PPC agreed to assume responsibility for administrative duties, including payroll, payroll taxes, unemployment compensation, and workers' compensation.

¶ 6 The contract specified both PPC and JPT had some right of control over these employees. The contract stated, "PPC reserves a right of direction and control over Assigned Employees, as is necessary, to carry out its obligations as the administrative employer of such Assigned Employees, including the right to hire, terminate, discipline, and reassign Assigned Employees." Regarding JPT, the contract stated:

*316Client Company shall, at all times, retain such direction and control over Assigned Employees as is necessary for Client Company to conduct Client Company's business and without which Client Company would be unable to conduct Client Company's business, discharge any fiduciary responsibility that ***301it may have, or comply with any applicable licensure, regulatory, or statutory requirement for itself or its workers. Such authority maintained by Client Company shall include the right to accept or cancel the assignment of any Assigned Employee.

¶ 7 As per the contractual agreement, and in accordance with the PEO Act, PPC purchased and maintained workers' compensation insurance coverage for the employees it assigned to JPT. An appendix to the contract set forth a schedule which required JPT to pay PPC a percentage of each assigned employee's gross compensation to compensate PPC for providing workers' compensation coverage. The appendix further provided JPT would reimburse PPC for any issue fees for workers' compensation policies, and the rate schedule would be adjusted for any increases or decreases of costs not under PPC's control. The amounts were calculated based on JPT's insurance rates-not PPC's. Aside from the contractual arrangement with PPC, JPT did not purchase or maintain workers' compensation insurance for its assigned employees.

¶ 8 In September 2013, Ramsbacher applied to JPT for a truck-driving job. JPT found him qualified and referred him to PPC. PPC then hired Ramsbacher and assigned him to JPT. Ramsbacher's assignment to JPT was not a temporary placement, but was intended to be on an ongoing basis. JPT provided Ramsbacher with its employee handbook and alcohol and controlled substance policies, trained him, supplied him with tools and equipment, directed his day-to-day job activities, and was responsible for conducting his annual employment review. If JPT was dissatisfied with Ramsbacher's work, it could have refused his assignment from PPC, effectively terminating his employment at JPT.

¶ 9 On December 23, 2013, Ramsbacher suffered a significant on-the-job injury while trying to repair a JPT truck that had broken down while he was driving it. Ramsbacher reported his injury to PPC, and PPC's workers' compensation insurer paid Ramsbacher's benefits. Ramsbacher does not allege he has not received the benefits entitled to him under the WCA.

¶ 10 In April 2014, Ramsbacher filed this suit against JPT, alleging his injuries occurred because of JPT's failure to provide a safe workplace in accordance with § 50-71-201, MCA. JPT responded that Ramsbacher's claim was barred by the exclusivity provision of the WCA.

¶ 11 Ramsbacher then moved for summary judgment, arguing § 39-8-207(8)(b)(i), MCA, violates Article II, Section 16, by purporting to extend the exclusive remedy of the WCA to both the PEO and its client.

***302JPT filed a cross-motion for summary judgment. The District Court granted summary judgment in JPT's favor. Ramsbacher has appealed the District Court's Order.

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2018 MT 118, 417 P.3d 313, 391 Mont. 298, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ramsbacher-v-jim-palmer-trucking-mont-2018.