Thomas v. Hansen

524 N.W.2d 145, 1994 Iowa Sup. LEXIS 243, 1994 WL 658989
CourtSupreme Court of Iowa
DecidedNovember 23, 1994
Docket93-1193
StatusPublished
Cited by21 cases

This text of 524 N.W.2d 145 (Thomas v. Hansen) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thomas v. Hansen, 524 N.W.2d 145, 1994 Iowa Sup. LEXIS 243, 1994 WL 658989 (iowa 1994).

Opinion

HARRIS, Justice.

There are four issues in this workers’ compensation appeal. The district court affirmed the industrial commissioner’s award of benefits but, reversing a contrary agency decision, determined the award was not subject to indemnity rights. We affirm the allowance of benefits but reverse the district court’s disallowance of indemnity.

Respondents are Kenneth Hansen d/b/a Hansen & Sons Welding (Hansen) and Le-Mars Mutual Insurance Company, Hansen’s workers’ compensation insurer (LeMars). Petitioner Edward R. Thomas, the injured worker, was not directly employed by Hansen. Thomas was employed by Leo Morgan at the time he was injured. Hansen and LeMars were called to answer for Thomas’ workers’ benefits by reason of a finding, challenged as the first issue in the appeal, that Thomas’ employer was in a joint venture with Hansen. So the relationship between Morgan and Hansen is at the heart of the first issue. Facts on that issue were hotly contested, but the following substantial evidence supports the commissioner’s findings.

The relationship between Hansen and Morgan stems from their association with a packing plant in Denison, Iowa, the site of Thomas’ industrial accident. Hansen, a construction company, obtained an extensive construction contract with the plant, Iowa Beef Products, Inc. (IBP). Hansen in turn engaged Morgan for electrical work on the project. Morgan was prevented from separately contracting for the work with IBP because Morgan carried no workers’ compensation insurance, a requirement imposed by IBP for all contractors at the plant. The factors making up the joint venture arose from this dilemma. Instead of obtaining the requisite insurance, Morgan arranged with Hansen to bill IBP through Hansen, who in turn paid Morgan. It is clear that the only purpose of this arrangement was to allow Morgan to be covered by Hansen’s insurance. Morgan and Thomas previously had undertaken several projects for IBP in this manner.

On the very first day on the job, September 5,1987, Thomas was installing an electrical conduit while standing on an I-beam. He slipped and fell on a cement floor from the height of about fifteen feet. Taken to a hospital, he underwent an operation for a broken femur neck. We are told a femur is a thigh bone and that its “neck” is the part below its “head,” which in turn fits in a socket of a hip joint. The injury was severe; Thomas’ healing period took approximately three years.

I. In challenging the finding of a joint venture, Hansen quite naturally focuses on the usual indicia of such a relationship. We have said there are five (with a caveat that each of the five need not necessarily appear):

(1) a common undertaking;
(2) a joint proprietary interest in the subject matter;
(3) a mutual right to control;
(4) a right to share in the profits; and
(5) a duty to share the losses.

Farm-Fuel Prods. Corp. v. Grain Processing Corp., 429 N.W.2d 153, 156 (Iowa 1988). The deputy commissioner (whose findings were adopted by the commissioner) conceded the evidence was conflicting and that one version of it would support a contrary finding. Supporting the commissioner’s finding of a joint venture, however, was testimony that Han *147 sen acknowledged Thomas was his employee by paying him at the end of the day. There was evidence that Morgan and Hansen exchanged workers, and also that they exercised mutual rights of control over them. Morgan testified Hansen was to receive eight percent of a portion of his billings, although he denied he ever paid it. There was also evidence that Morgan told Thomas he was affiliated with Hansen. The strongest evidence, of course, was the coverage of Morgan’s workers by Hansen’s insurance.

For other purposes, all the foregoing might be of questionable adequacy to establish a joint venture. But, like the commissioner, we find it adequate here, especially in view of the purpose of the arrangement between the two contractors. It must be remembered that Hansen consented to the arrangement in order to help Morgan avoid his legal obligation to provide workers’ compensation insurance for employees such as Thomas. Hansen is in a poor position to argue there was no joint venture. He is really arguing that he should escape from being tagged as a joint venturer because his efforts to aid Morgan in avoiding his insurance obligations, though deliberate, were inadequate. Under these circumstances we think a little adequacy should go a long way. We agree that substantial evidence supports the finding.

Hansen presents a fallback argument. A month before Thomas’ injury, Morgan discontinued billing IBP through Hansen and started billing directly. Hansen contends any joint venture was thereby terminated.

The contention has superficial appeal in that joint ventures of indefinite duration are generally terminable at will. Fitzhugh v. Thode, 221 Iowa 533, 541-42, 265 N.W. 893, 898 (1936). Even so the commissioner rejected the contention on finding the joint venture persisted: Morgan still did not secure separate workers’ compensation insurance coverage, and continued to rely on Hansen’s. Without either agreeing or disagreeing with the theory, we choose to affirm the rejection on a different ground. The rule is that joint ventures cannot be terminated without notice to all its parties. Id. It is conceded there was no notice of termination here so the joint venture was not terminated.

II. The second issue challenges the commissioner’s finding that Thomas suffered an injury to his body as a whole. Hansen insists the evidence supports only a scheduled member loss.

Thomas thinks, and the commissioner agreed, that his injury is akin to the “body as a whole” injury in Lauhoff Grain Co. v. McIntosh, 395 N.W.2d 834 (Iowa 1986). Although Hansen vigorously contends the facts here differ from Lauhojf Grain, we agree with the commissioner’s view that they are sufficiently similar so that the Lauhojf holding is controlling.

McIntosh, the injured worker in Lauhojf, also fell on the job and also fractured the neck of his femur. McIntosh experienced a complication called avascular necrosis, a condition also experienced by Thomas. McIntosh’s injury necessitated a hip replacement, and the evidence is that Thomas’ injury may someday require a hip replacement or perhaps a hip fusion. Although McIntosh’s “fracture” was limited to the neck of his femur, his “injury” or “impairment” extends beyond that and into the hip. The same is true with Thomas.

The district court did not err in concluding that substantial evidence supported the commissioner’s finding regarding the extent of Thomas’ injury.

III. The final issue in the appeal, to be addressed in division IV, involves Hansen’s claim of indemnity against Thomas’ recovery in a separate suit brought against IBP. At the threshold Hansen contends this issue was adjudicated in its favor in 1990, as a part of Thomas’ application in this contested case before the commissioner.

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Cite This Page — Counsel Stack

Bluebook (online)
524 N.W.2d 145, 1994 Iowa Sup. LEXIS 243, 1994 WL 658989, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomas-v-hansen-iowa-1994.