953 N.W.2d 612
N.D.2021Background
- WSI investigated a Bismarck roofing site and concluded two subcontractors (Alfredo Frias and Daniel Alvidrez) lacked North Dakota workers' compensation coverage.
- WSI sent Notices of Decision to the subcontractors and to Brendel Construction and Randy Brendel; the subcontractors did not respond and service attempts failed.
- Lacking payroll records, WSI calculated premiums using the statutory "wage cap" method from N.D.C.C. § 65-04-19.
- An ALJ held Brendel Construction liable as general contractor for Frias’ unpaid premiums ($44,574.40) and held Randy Brendel personally liable; the ALJ declined to hold Brendel Construction liable for Alvidrez.
- Brendel sought reconsideration; WSI did not. WSI filed a cross-appeal more than 30 days after the ALJ’s initial decision but within 30 days of the ALJ’s denial of reconsideration. The district court dismissed WSI’s cross-appeal as untimely and affirmed the liabilities.
- The North Dakota Supreme Court affirmed liability findings (Brendel Construction and Randy Brendel), upheld WSI’s wage-cap calculation, reversed the dismissal of WSI’s cross-appeal, and remanded for consideration of that appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Brendel Construction may be held liable as general contractor for Frias’ unpaid premiums under N.D.C.C. § 65-04-26.2(1) | Brendel: No sufficient evidence Frias was a subcontractor or employees were Brendel’s employees. | WSI: Evidence (OSHA reports, admissions, pay-by-cash practice) supports subcontractor relationship and derivative liability. | Affirmed: A reasoning mind could find Frias was a subcontractor and Brendel Construction liable. |
| Whether an underlying assessment against a subcontractor must be final before assessing derivative liability against a general contractor | Brendel: Derivative liability should require a final adjudication against subcontractor. | WSI: Statute imposes liability on general contractors until subcontractor pays; no finality requirement. | Rejected Brendel’s argument: § 65-04-26.2(1) contains no finality requirement; ALJ did not err. |
| Whether WSI permissibly used the wage-cap method to calculate premiums when payroll records were inadequate | Brendel: § 65-04-26.2(3) limits WSI from using wage-cap method for derivative liability. | WSI: Statute expressly incorporates § 65-04-19 methods (including wage cap) when payroll is unavailable. | Rejected Brendel’s argument: cross‑reference to § 65-04-19 authorizes wage-cap calculation in absence of payroll records. |
| Whether WSI’s cross-appeal was timely under N.D.C.C. § 28-32-42(1) (effect of a party’s request for reconsideration on appeal timing) | Brendel: WSI’s appeal was untimely because it was filed >30 days after the ALJ’s initial decision and WSI did not move for reconsideration. | WSI: Filing within 30 days of the ALJ’s denial of reconsideration is timely because the reconsideration tolls appeal time for all parties. | Reversed district court: Court reads "the party" to refer back to "any party," so time to appeal is 30 days after decision on reconsideration for all parties; WSI’s cross-appeal is timely and case remanded. |
Key Cases Cited
- Beam v. N.D. Workforce Safety & Ins. Fund, 946 N.W.2d 486 (N.D. 2020) (standard of review: deference to ALJ’s factual findings; legal questions reviewed de novo)
- Midthun v. N.D. Workforce Safety Ins., 761 N.W.2d 572 (N.D. 2009) (statutory interpretation is a question of law reviewed de novo)
- Hughes v. Olheiser Masonry, Inc., 935 N.W.2d 530 (N.D. 2019) (court interprets statutory text as written; law is what is said)
- Indus. Contractors, Inc. v. Taylor, 899 N.W.2d 680 (N.D. 2017) (statutory language must be read in context to give effect to all provisions)
- Lang v. Bank of N.D., 377 N.W.2d 575 (N.D. 1985) (timely notice of appeal is required to invoke appellate jurisdiction)
- Ellis v. N.D. Workforce Safety & Ins., 937 N.W.2d 513 (N.D. 2020) (failure to meet statutory appeal requirements deprives district court of subject-matter jurisdiction)
- In re Juran & Moody, Inc., 613 N.W.2d 503 (N.D. 2000) (standing to appeal from agency requires participation, direct interest, and factual aggrievement)
- Olson v. Workforce Safety and Ins., 747 N.W.2d 71 (N.D. 2008) (courts should not rewrite statutes; legislature, not courts, should amend statutory text)