Workers Compensation Fund v. Silicone Distributing, Inc.

809 P.2d 1199, 248 Kan. 551, 1991 Kan. LEXIS 67
CourtSupreme Court of Kansas
DecidedApril 12, 1991
DocketNo. 65,312
StatusPublished
Cited by5 cases

This text of 809 P.2d 1199 (Workers Compensation Fund v. Silicone Distributing, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Workers Compensation Fund v. Silicone Distributing, Inc., 809 P.2d 1199, 248 Kan. 551, 1991 Kan. LEXIS 67 (kan 1991).

Opinion

The opinion of the court was delivered by

Six, J.:

This first impression workers compensation case examines the interrelationship of K.S.A. 44-532a and K.S.A. 44-503. The examination requires discussion and resolution of questions relating to the liability of the Workers Compensation Fund (the Fund).

The Fund appeals the district court’s affirmance of the Workers Compensation Director’s review awarding workers compensation benefits to the claimant, Chong Sun Nedzia. The district court held that the Fund is liable for the claimant’s award under K.S.A. 44-532a. We affirm.

Our jurisdiction arises from K.S.A. 20-3017. We granted the Fund’s motion to transfer the appeal from the Court of Appeals to this court.

Facts

The district court adopted 32 numbered statements of fact submitted by the Fund and 10 statements of fact stipulated to by all parties. A summary of the uncontroverted facts follows.

On March 3, 1986, claimant Nedzia was injured in the course of her employment with Silicone Distributing, Inc. (Silicone). Silicone had contracted with the Osborne Construction Company (Osborne) to perform a portion of the cleaning and repair of buildings at Fort Riley that Osborne was obligated to perform under a government contract. When the government contract was initially awarded, Osborne intended to perform all required work. However, Osborne decided to subcontract the job to Silicone because Silicone had originally bid the job at a price considerably lower than had Osborne. Osborne’s purpose in subcontracting with Silicone was to allow Osborne to realize a profit on the work. Silicone had not been awarded the government contract because it was unable to provide a bond.

Under the terms of the government contract, Osborne was required to provide a certificate of workers compensation insur[553]*553anee evidencing that Silicone, as a subcontractor, had the required coverage. A certificate showing Houston General Insurance Company (Houston General) as Silicone’s carrier was furnished to the government by Osborne. It is undisputed that Silicone was not insured by Houston General or any other insurer at the time of Nedzia’s injury.

Nedzia filed a timely claim for workers compensation benefits, naming as respondents her immediate employer, Silicone, and its purported insurance carrier, Houston General. Shortly thereafter, Nedzia impleaded the Fund because she believed Silicone might be uninsured or insolvent. Nedzia later, under K.S.A. 44-503, named a potential statutory employer, Osborne, and its insurance carrier, CNA Insurance Company (CNA), as additional respondents. (K.S.A. 44-503 refers to “principal.” The terms “statutory employer” and “principal” have been used in our opinions. The terms refer to the same employer.)

In August 1987, Osborne moved for dismissal on the grounds that a claimant may not proceed against both the claimant’s immediate employer and the claimant’s statutory employer, citing Coble v. Williams, 177 Kan. 743, 282 P.2d 425 (1955). In response to Osborne’s motion, Nedzia moved to dismiss Osborne and CNA without prejudice. Nedzia’s motion was granted in September 1987.

Between September 1987 and the date the Fund filed its petition for judicial review in the district court, neither Osborne nor CNA were parties to this proceeding.

The administrative law judge (ALJ) awarded Nedzia workers compensation benefits to be paid by Silicone. Silicone did not participate in the proceedings. The ALJ found that attempts to include Silicone and recover payment appeared to be unsuccessful and that Silicone had no insurance. Because Osborne had been dismissed, the ALJ was unable to enter an award against Osborne. The ALJ dismissed the Fund and indicated that Nedzia should pursue Osborne under K.S.A. 44-503.

Nedzia filed a motion to reinstate Osborne and CNA as parties. She also filed an application for the Director’s review of the ALJ’s decision. Osborne and CNA opposed the reinstatement motion, in part, on the basis that it was not timely. Nedzia’s motion to reinstate Osborne and CNA has never been decided.

[554]*554The Director ruled in his February 1990 order as follows: (1) The amount of the award is increased to correspond to an 87% permanent partial general bodily disability from a 75% permanent partial general bodily disability, and (2) the Fund is liable for the award under K.S.A. 44-532a.

The decision on Fund liability, which is challenged in the district court and here on appeal, was premised on the fact that Silicone did not appear at any of the compensation claim proceedings. Fund liability also was based on the ALJ’s finding (“supported by the evidentiary record” and affirmed by the Director) that Silicone had no insurance coverage on the date of the accident.

The Director noted that, originally, Nedzia had named Osborne and CNA as respondents, but that “[p]ursuant to case law construing K.S.A. 44-503, the claimant chose to dismiss without prejudice the principal and proceed against the subcontractor, Silicone Distributing, Inc. and Houston General Insurance Company.” The Director then cited and applied K.S.A. 44-532a, finding that Silicone was an employer without insurance who could not be located and required to pay compensation.

The Fund contended that a claim against it can only be made after the injured worker has made a claim against a principal under K.S.A. 44-503 and after that principal (or principal’s insurance carrier) has been found to be unable to pay the award.

The Director responded that “[t]he answer to the contentions of the Workers’ Compensation Fund is that K.S.A. 44-532a makes no additional reference to inability of the principal to pay the award.” In the Director’s analysis, K.S.A. 44-503

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Cite This Page — Counsel Stack

Bluebook (online)
809 P.2d 1199, 248 Kan. 551, 1991 Kan. LEXIS 67, Counsel Stack Legal Research, https://law.counselstack.com/opinion/workers-compensation-fund-v-silicone-distributing-inc-kan-1991.