Kohout v. Bennett Constr.
296 Neb. 608
| Neb. | 2017Background
- Plaintiff Robert L. Kohout was injured falling from a roof while working on repairs at Brian Shook’s property in May 2015. Kohout had been hired by Nick Bennett, who operated sole proprietorships (Nick Bennett Construction and Housecraft).
- Mark Bennett operates Bennett Construction (a sole proprietorship) and sometimes subcontracted work to his son Nick; Bennett Construction had workers’ compensation insurance, Nick’s businesses did not.
- Shook received a business card and an altered proposal form from Nick that bore a “Bennett’s Construction & Roofing” logo and a statement that "Our workers are fully covered by Workmen’s Compensation Insurance." Shook wrote one check payable to “Bennett’s Construction” but later addressed payments to Nick.
- Kohout was paid by Nick (personal checks from Housecraft) and supervised and directed on the job by Nick; Mark visited the site once and cashed one check written to Bennett Construction, later reimbursing Nick.
- Kohout sued Bennett Construction and its insurer for workers’ compensation benefits, arguing Bennett was his statutory employer under Neb. Rev. Stat. § 48-116. The Workers’ Compensation Court dismissed the petition; the Nebraska Supreme Court affirmed.
Issues
| Issue | Kohout’s Argument | Bennett’s Argument | Held |
|---|---|---|---|
| Whether Bennett Construction was Kohout’s statutory employer under Neb. Rev. Stat. § 48-116 via apparent authority of Nick | Nick held himself out with Bennett business cards and proposal forms and accepted a check payable to Bennett, so Nick had apparent authority to bind Bennett and Bennett failed to compel Nick to carry workers’ comp insurance | Nick acted as an independent contractor; Mark/Bennett made no manifestations to Shook authorizing Nick; indicia (cards/forms) were not traceable to Bennett and Shook’s conduct showed he intended to contract with Nick | Court held Nick lacked apparent authority to bind Bennett; no reasonable belief traceable to Bennett that Bennett was contracting party, so no statutory-employer liability |
| Whether Mark and Nick formed a joint venture (a device to avoid workers’ comp liability) | Mark and Nick coordinated after the hailstorm to obtain repair work, Nick used Mark’s forms and sometimes split work/profits, indicating a joint venture to secure insured work | No clear-and-convincing evidence of a voluntary agreement, shared profits, Mark’s contribution, or Mark’s control over the Shook job; family interactions (tool use) insufficient to show joint venture | Court held no joint venture: plaintiff failed to prove intent, financial contribution, profit-sharing, or shared control by clear and convincing evidence |
Key Cases Cited
- Interiano-Lopez v. Tyson Fresh Meats, 294 Neb. 586, 883 N.W.2d 676 (Neb. 2016) (contractor’s use of uninsured subcontractor can be device to evade workers’ compensation liability)
- RM Campbell Indus. v. Midwest Renewable Energy, 294 Neb. 326, 886 N.W.2d 240 (Neb. 2016) (apparent authority principles and limits)
- Rogers v. Hansen, 211 Neb. 132, 317 N.W.2d 905 (Neb. 1982) (agency and related authority principles)
- O’Brien v. Barnard, 145 Neb. 596, 17 N.W.2d 611 (Neb. 1945) (no statutory-employer liability where less-than-joint-venture relationship shown)
- Lackman v. Rousselle, 257 Neb. 87, 596 N.W.2d 15 (Neb. 1999) (family relationships evaluated differently in joint venture analysis)
- Thomas v. Hansen, 524 N.W.2d 145 (Iowa 1994) (joint venture found where arrangement plainly intended to avoid workers’ compensation laws)