Kohout v. Bennett Constr.
296 Neb. 608
| Neb. | 2017Background
- Robert Kohout was injured falling from a barn roof while working on repairs at Brian Shook’s property in May 2015.
- Kohout was hired and supervised on the Shook job by Nick Bennett, who operated as sole proprietor(s) (Nick Bennett Construction / Housecraft) and lacked workers’ compensation insurance.
- Mark Bennett owns Bennett Construction (sole proprietorship) and had workers’ compensation insurance; Nick previously worked for Mark and used Bennett Construction business cards and proposal forms after operating independently.
- Shook received an altered proposal form referencing Bennett Construction’s workers’ compensation coverage and once wrote a check payable to “Bennett’s Construction,” which Mark cashed and reimbursed to Nick; other payments were to Nick’s businesses.
- Kohout sued Bennett Construction under Neb. Rev. Stat. § 48-116, alleging Bennett Construction was his statutory employer because Mark/Mark’s company created a device to avoid workers’ compensation liability (apparent authority and/or a joint venture with Nick).
- The Workers’ Compensation Court dismissed the petition; the Nebraska Supreme Court affirmed, finding no apparent authority or joint venture sufficient to make Bennett Construction Kohout’s statutory employer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bennett Construction is a statutory employer under § 48-116 | Kohout: Nick had apparent authority to bind Bennett Construction and Mark allowed an uninsured subcontractor to act, creating a device to avoid liability | Bennett: Nick contracted and supervised the job as an independent contractor; Mark/Bennett made no manifestations and received no benefit | Court: No. No principal manifestations to trace Shook’s belief; indicia (cards/forms) not shown to be from Mark; Nick lacked apparent authority |
| Whether Mark and Nick formed a joint venture making Bennett liable | Kohout: Mark and Nick acted cooperatively after the hailstorm to secure work and used shared forms/efforts to induce business | Bennett: No evidence of voluntary agreement, profit sharing, mutual control, or Mark’s contribution to the Shook job | Court: No. Kohout failed to prove joint venture by clear and convincing evidence; family ties and occasional tool use insufficient |
| Whether use of Bennett forms/cards and a cashed check established principal’s manifestations | Kohout: Business card, altered proposal with workers’ comp statement, and a check to Bennett Construction induced Shook’s belief | Bennett: Those items were not shown to be authorized by Mark; Shook communicated with Nick and later paid Nick directly | Court: No. No evidence Mark knew or authorized use; Shook’s conduct (paying Nick) undermines belief in Bennett as contractor |
| Whether factual findings below were clearly wrong or contrary to law | Kohout: The court erred in applying § 48-116 and factual findings were incorrect | Bennett: Findings supported by evidence about who negotiated, supervised, and was paid | Court: Denied. Appellate review finds no error in law or clearly wrong factual findings |
Key Cases Cited
- Interiano-Lopez v. Tyson Fresh Meats, 294 Neb. 586 (discussing § 48-116 and contractor liability for uninsured subcontractors)
- RM Campbell Indus. v. Midwest Renewable Energy, 294 Neb. 326 (defining apparent authority and its limits)
- O’Brien v. Barnard, 145 Neb. 596 (rejecting joint-venture/statutory-employer theory where no control, profit sharing, or intent shown)
- Thomas v. Hansen, 524 N.W.2d 145 (Iowa case recognizing joint venture used to avoid workers’ compensation liability)
- Lackman v. Rousselle, 257 Neb. 87 (family relationships may affect inferences about joint venture or shared control)