Kohout v. Bennett Constr.
296 Neb. 608
| Neb. | 2017Background
- Plaintiff Robert L. Kohout injured while working on repairs at Brian Shook’s property in May 2015; injury arose in course of employment and Kohout sought workers’ compensation benefits.
- Work at the site was performed and supervised by Nick Bennett, who operated sole proprietorships (Nick Bennett Construction / Housecraft) and solicited the job using business cards and a Bennett Construction proposal form.
- Bennett Construction is a sole proprietorship owned by Mark Bennett (Nick’s father); Mark sometimes hired Nick as a subcontractor and Bennett Construction carried workers’ compensation insurance, while Nick’s businesses did not.
- Shook received invoices and multiple checks in various payee names (some to Nick, one to "Bennett’s Construction"); Mark cashed a check payable to Bennett Construction and later reimbursed Nick.
- The Workers’ Compensation Court found Kohout was employed by Nick’s businesses (not Bennett Construction) and dismissed the petition; Kohout appealed arguing Bennett Construction was his statutory employer under Neb. Rev. Stat. § 48-116.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bennett Construction was Kohout’s statutory employer under § 48-116 (scheme/device to avoid WC liability) | Kohout: Nick had apparent authority to bind Bennett Construction to Shook contract and Bennett allowed an uninsured subcontractor to perform work, creating a device to avoid WC liability | Bennett: Nick negotiated, supervised, and performed the job as an independent contractor; Mark/Bennett made no representations and did not benefit from the job | Court held Bennett Construction was not Kohout’s statutory employer — no scheme/device shown |
| Whether Nick had apparent authority to bind Bennett Construction to the Shook contract | Kohout: Nick’s use of Bennett business cards/proposal forms and Mark’s visit and cashing of a check supported apparent authority | Bennett: No manifestations from Mark/Bennett; Nick’s documents were personal remnants and Mark was unaware of their use | Court held Nick lacked apparent authority — Shook’s beliefs not traceable to Mark/Bennett |
| Whether Mark and Nick formed a joint venture with intent to share profits/control to evade WC laws | Kohout: Post-hailstorm cooperation and shared forms/tools showed joint venture to capture work and rely on Bennett’s insured status | Bennett: No evidence of shared profits, control, or voluntary agreement; Nick operated independently | Court held no joint venture — plaintiff failed to prove by clear and convincing evidence |
| Burden of proof for establishing a scheme, artifice, or device under § 48-116 | N/A — legal standard | N/A — legal standard | Court applied rule that plaintiff must prove scheme/device by preponderance; existence need not show active fraud; plaintiff failed to meet burden |
Key Cases Cited
- Interiano-Lopez v. Tyson Fresh Meats, 294 Neb. 586 (discussing § 48-116 and liability when contractor engages uninsured subcontractor)
- RM Campbell Indus. v. Midwest Renewable Energy, 294 Neb. 326 (apparent authority principles and agency manifestations)
- O’Brien v. Barnard, 145 Neb. 596 (lease/arrangement not a scheme under § 48-116; factors negating statutory employer status)
- Thomas v. Hansen, 524 N.W.2d 145 (Iowa) (joint venture found where parties arranged to avoid WC requirements)