Travelers Insurance Co. v. Hayes

410 S.W.2d 147, 1966 Ky. LEXIS 32
CourtCourt of Appeals of Kentucky
DecidedOctober 7, 1966
StatusPublished

This text of 410 S.W.2d 147 (Travelers Insurance Co. v. Hayes) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Travelers Insurance Co. v. Hayes, 410 S.W.2d 147, 1966 Ky. LEXIS 32 (Ky. Ct. App. 1966).

Opinion

PALMORE, Chief Justice.

The appellee Hayes filed a workmen’s compensation claim naming Marvin Lewis as “Employer-Defendant.” In the body of the application he gave the name of the employer’s insurer as “Travelers Insurance Company.” The proceeding before the Workmen’s Compensation Board culminated in a dismissal of Lewis and an award against The Travelers Insurance Company (hereinafter called Travelers) and its insured, Cement Transport, Inc. (hereinafter called CT). The latter two companies, having never been made parties defendant by designation of the claimant in his application or by any specific order of the Board, appeal from a judgment of the Jefferson Circuit Court sustaining the award against them.

CT is a common carrier which transports cement for Kosmosdale Portland Cement Company. It owns the trailer portions of tractor-trailers and contracts with numerous owner-operators of tractor units to haul the cement in its trailers. Under these contracts, called lease agreements, the owner-operator furnishes his truck and a driver and pays all costs of maintaining and operating the truck. The owner-operator hires the driver and pays his wages, making the required deductions for taxes and social security. The hiring and continued employment of any driver by the owner-operator is subject to CT’s approval. CT directs the driver where to go and when to get there with its trailer. CT carries liability insurance covering all these operations. It carries workmen’s compensation insurance with Travelers, deducting premiums from the contract amounts payable by it to the owner-operators and remitting them to Travelers. Lewis is one of CT’s owner-operators under this arrangement. He has less than three employes, and there is nothing in the record to suggest that he has voluntarily elected to come under the Workmen’s Compensation Act as an employer. Cf. KRS 342.005(1) and (4). CT informs the owner-operators as to the name of the compensation carrier, and Lewis had been so informed that Travelers was his insurer.

Hayes, the claimant, had once been one of CT’s owner-operators, and had then worked for a time as a driver for one Bragg, another owner-operator for CT. While driving for Bragg he suffered a back injury and was awarded compensation for 30% permanent partial disability. Afterward CT employed him one winter as a dispatcher, and then he drove for several other owner-operators when the particular jobs did not require any manual handling of the cargo by the driver. On the night before the accident that precipitated the instant claim, Lewis telephoned Hayes and asked him to pull a loaded trailer to Indianapolis the next morning. Lewis had not theretofore used Hayes as a driver, so he cleared the employment with a responsible representative of CT.

The accident and injury occurred on October 10, 1963, while Hayes was preparing to leave CT’s premises for Indianapolis. It was immediately reported to CT, and CT made out and submitted to Travelers an “Employer’s First Report of Injury,” copy of which was transmitted by Travelers to the Workmen’s Compensation Board. As we have indicated, however, when Hayes’ application for compensation was prepared, only Lewis was designated thereon as the employer-defendant.

[149]*149The claim was filed on November 17, 1963. In due course the Board issued notice that the matter was set for hearing on February 13, 1964. Copies of the notice were sent to Travelers, Lewis, Hayes, and Hayes’ attorney, but not to CT. On January 17, 1964, Hon. Lloyd Cardwell, counsel for Travelers, filed with the Board a motion that the name of Travelers as the employer’s insurer be stricken from the body of the claim. In this motion it was stated that by inadvertence, and under the misapprehension that CT was the defendant and Hayes its employe, Mr. Cardwell had notified the Board, CT, and Hayes’ attorney that he would represent the defendant in the proceeding. At the time of the hearing on February 13 this motion had not been acted upon, so Mr. Card-well appeared and took part in the hearing in behalf of Travelers, but without waiving the pending motion.

On March 4, 1964, the Board entered an order passing Travelers’ motion to the merits, whereupon Hayes promptly filed a motion urging the Board to hold a hearing and make an immediate determination of whether Travelers was exposed and was a proper party defendant. This motion was summarily overruled, and on its next notice of hearing the Board designated CT and Lewis in the caption as the parties defendant and listed both CT and Travelers among the parties to be served copies of the notice. Thereafter, Mr. Cardwell participated in the proceedings as counsel for Travelers and for CT, although on at least one occasion Hayes objected to one of his motions on the ground that Travelers was not a party to the litigation, and at another time his attorney remarked that “Travelers is not being sued.”

After the evidence was in, the Board found Hayes to be 50% permanently disabled, attributing 30% to the previous injury and 20% to the accident of October 10, 1963, and entered an award against CT and Travelers based on 20% permanent partial impairment. It held that under the circumstances of the case Hayes was an employe of CT and that even though he had not formally amended his claim for the purpose of joining them as defendants, by their participation in the proceedings CT and Travelers had effectually made themselves parties. These two legal conclusions present the first questions raised by the appeal to this court.

We do not have the advantage of any precedents in this jurisdiction to assist us in resolving the procedural problem, nor are we satisfied with the strictly technical approach reflected by the outside authorities cited by CT and Travelers. Had this been an action tried in a court of law instead of a proceeding by an administrative tribunal we should not hesitate to say that the procedure was insufficient to render CT and Travelers amenable to a judgment. Above and beyond the bare necessities of notice and a reasonable opportunity to hear and be heard, the Rules of Civil Procedure demand a certain degree of formal regularity. But so long as a defendant covered by the Workmen’s Compensation Law has enough notice and opportunity to defend itself to satisfy constitutional guaranties of due process, the remaining area of procedural housekeeping lies within the province of the legislature and the Board.

KRS 342.260(2) provides in part as follows : “Processes and procedure under this chapter shall be as summary and simple as reasonably possible.” Though we doubt that the legislature had in mind quite the degree of informality which seems to have prevailed in this particular instance, yet if the Board was satisfied with it we do not feel obliged to intrude beyond the limits of the constitutional point.

From a practical standpoint there is no doubt that the interests of CT and Travelers in this case were one and the same and that Mr. Cardwell represented both of them. When he asked the Board to rule that Travelers was not in the case, its refusal to do so was tantamount to a ruling that unless and until the Board [150]*150should decide otherwise, Travelers was in.

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Bluebook (online)
410 S.W.2d 147, 1966 Ky. LEXIS 32, Counsel Stack Legal Research, https://law.counselstack.com/opinion/travelers-insurance-co-v-hayes-kyctapp-1966.