Indiana Case Law Update: An independent contractor's personal injury negligence case was not barred by the exclusivity provision of the Indiana Worker’s Compensation Act.
Recently the Indiana Court of Appeals issued a decision in the case Palmer v. Ake, Fas Pak, Inc., and Bernacchi, 2021 Ind. App. LEXIS 400 * | 2021 WL 6058471 (Ind. Ct. App. 2021) that involved a worker's action to recover damages for injuries he sustained when he was working on the roof of a barn and part of the barn collapsed.
Defendants filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Trial Rule 12(B)(1) arguing that injured worker was an employee and that his exclusive remedy fell under the Indiana Worker’s Compensation Act. The trial court agreed with the Defendants and dismissed the case. The injured worker appealed the trial court's decision.
The Indiana Court of Appeals held that the trial court erred by dismissing the injured worker's negligence lawsuit because the injured worker was an independent contractor, and the defendant did not show that the injured worker was an employee for purposes of the exclusive remedy rule. The Court of Appeals noted that the defendant told the injured worker that no taxes would be withheld for him for the project and that he would not be a regular payroll employee of the defendant. The Court of Appeals noted that this testimony tended to support the conclusion that the worker was an independent contractor. In other words, the Court of Appeals noted that the defendant did not believe the worker was an employee because defendant did not withhold any amounts from payments to the worked as required for employees or pay their portions of any social security and Medicare taxes owing related to his earnings.
The Court of Appeals listed the ten factors in determining whether
someone is an employee or independent contractor as laid out in Moberly v.
Day, 757 N.E.2d 1007 (Ind. 2001).
As to the extent of control over the details of the work, Defendants submitted evidence showing they had direct control over the means
and manner in which the building was constructed and did so, along with the
right to control the hours worked, provided all the necessary tools and
equipment for the project. However, the injured worker testified that he did not receive specific
instructions on how to do his job and that it was customary in the area for
carpenters to work as temporary construction workers on similar
projects. The Court of Appeals found this factor to be neutral given the
conflicting testimony and evidence.
The Court then went through each of the other nine factors. In
weighing them, it found that overall they supported a finding that injured worker was
an independent contractor and that his personal injury negligence case was not barred by the exclusivity provision of the Indiana Worker's Compensation Act which would have required the injured worker to pursue the claim as a worker's compensation claim and not a negligence claim. It reversed the trial court’s order granting
Defendants’ motion to dismiss.
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