Muldoon v. North Dakota Workforce Safety & Insurance Fund
2012 ND 244
| N.D. | 2012Background
- WSI determined Lauth Contracting, LLC had no workers’ compensation coverage after Morin’s 2008 injury claim.
- WSI concluded Muldoon and Lauth were partners in Lauth Contracting, LLC; Muldoon was personally liable for past premiums and penalties.
- ALJ found Muldoon and Lauth formed a partnership; Muldoon managed finances and accounts while Lauth did the labor and supervision.
- Muldoon opened bank accounts and authorized payments, with Lauth having limited access; Muldoon and Lauth’s relationship and roles were contested.
- The ALJ held Muldoon was Muldoon’s employer of Morin and other employees, and Muldoon willfully failed to secure coverage.
- District court affirmed; Muldoon appealed, challenging employer status, willful violation, and personal liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Muldoon an employer under N.D.C.C. § 65-01-02(17)? | Muldoon did not hire or fire employees; partnership status not shown. | Muldoon and Lauth were partners; partners are employees of the partnership. | Yes; Muldoon was an employer under the statute. |
| Did Muldoon willfully fail to secure workers’ compensation coverage? | Muldoon knowingly avoided coverage for Lauth Contracting’s employees. | Muldoon lacked knowledge of the statutory requirements and the employment relationship. | Yes; Muldoon willfully failed to provide coverage. |
| Is Muldoon personally liable for past premiums and penalties? | Liability attaches to the employer, including partners; Muldoon acted as an employer personally. | The nature of liability depends on timing of partnership vs LLC formation; issues not fully raised below. | Muldoon is personally liable for past premiums and penalties. |
Key Cases Cited
- Bishop v. N.D. Workforce Safety and Ins. , 2012 ND 217 (North Dakota Supreme Court 2012) (appellate deferential review of ALJ factual findings)
- Johnson v. N.D. Workforce Safety and Ins. , 2012 ND 87 (North Dakota Supreme Court 2012) (standard for reviewing agency findings)
- Mickelson v. N.D. Workforce Safety and Ins. , 2012 ND 164 (North Dakota Supreme Court 2012) (credibility of witnesses; defer to hearing officer)
- Paulson v. Paulson, 2011 ND 159 (North Dakota Supreme Court 2011) (issues not raised below cannot be raised on appeal)
- Unser v. N.D. Workers Comp. Bureau, 1999 ND 129 (North Dakota Supreme Court 1999) (principle against raising new issues on appeal)
- Forbes v. Workforce Safety and Ins. Fund, 2006 ND 208 (North Dakota Supreme Court 2006) (willful conduct in 65-04-33 context)
- Klemmens v. N.D. Workmen’s Comp. Bureau, 54 N.D. 496 (North Dakota Supreme Court 1926) (personal liability when partnership operates the business)