State News : Wisconsin

SK Management, LLC v. King et al., No. 2021AP490, unpublished judge authored (Wis. Ct. App. Aug. 23, 2022 (White, J.)

The applicant, Donald King, was injured while working on a demolition project at a building owned by SK Management. SK Management was not insured, so the Uninsured Employers Fund (UEF) covered the claim. UEF then sought to recover the payments it made from SK Management. SK Management filed a reverse hearing application, claiming it was not King's employer.

King worked on a crew that was brought to the SK Management jobsite by Brian Schweinert. Background regarding the history of this relationship includes that Tim Olson, SK Management's operations manager, began hiring Schweinert, and his sole proprietorship, Mr. Phixitall, to do work such as demolition, maintenance, snowplowing, and lawn mowing at various properties managed by SK Management in 2015.  Schweinert asked Olson if he could bring helpers, and Olson said he did not care.  Olson generally relayed what jobs needed to be done through Schweinert, though occasionally Olson would "appear at jobsites and direct the workers himself.”

Although Schweinert brought some of his own tools to the jobsites, SK Management supplied "equipment including dumpsters, garbage bags, painter’s uniforms, dust masks, safety glasses, and gloves.” King himself brought no tools to the jobsite.

Although some early jobs were performed on a bid basis, after 2015, SK Management paid Schweinert and all of the workers procured by Schweinert, on an hourly rate set by Olson.  Olson approved any merit hourly wage increases after consultation with Schweinert, and if Olson was dissatisfied with a worker’s performance, he would tell Schweinert not to bring the worker back and Schweinert would comply.

Each week, SK Management issued one check to Schweinert, encompassing all of the hours worked by Schweinert and the other workers. Schweinert cashed the check and distributed the pay appropriately. Schweinert retained $1 per hour from the other workers’ pay to cover supplies and certain tools on the jobsite.

The ALJ and the Commission both found that King was SK Management's employee, and dismissed SK Management's reverse application. The circuit court affirmed.

On appeal to the Court of Appeals, SK Management did not dispute that it was an "employer" within the meaning of Wis. Stat. § 102.04(1)(b). However, SK Management argued that it was not the employer of Schweinert or King. Instead, SK Management asserted that Schweinert was an independent contractor excluded from the definition of "employee" under Wis. Stat. § 102.07(8)(b). It also asserted that King and SK Management did not have an employer-employee relationship under the Kress Packing test. It argued that Schweinert, not SK Management, was King’s employer.

The Court of Appeals first agreed with the Commission that it was permissible to segregate the demolition work that King performed from other work—lawn mowing, snowplowing, auto repair—that Schweinert did through his independent contractor business. The Court then affirmed the Commission's finding that, with respect to the demolition work, Schweinert met only two of the nine conditions necessary to be an excluded independent contractor rather than an employee under Wis. Stat. 102.07(8)(b).

SK Management argues that even if Schweinert is not an excluded independent contractor, he was still King’s employer under the meaning of Wis. Stat. § 102.04(1)(b). The Court of Appeals rejected that argument, noting:

…because Schweinert is an employee of SK Management—which we established above when we concluded Schweinert worked for SK Management and was not an independent contractor— he cannot be an employer of another person within the performance of those same duties for SK Management. See Whittingham, 305 Wis. 2d 613, ¶¶9-10.

The Court saw the threshold issue as whether King’s employment fell under a contract for hire with SK Management. It noted that there need not be direct communication between prospective employer and prospective employee to establish the employment relationship, adding, however, that some authorization, express or implied, is needed to establish a subsequent contract of hire. The Court went on to concluded that the Commission's analysis that King worked under a contract for hire with SK Management was supported by substantial and credible evidence. It observed:

King was not hired until Olson authorized Schweinert to do so. Olson controlled how much King and Schweinert were paid. Because the record supports that Schweinert was an employee of SK Management, SK Management need not expressly hire King. It is sufficient that SK Management had actual notice of King’s work on the demolition work, as shown by Olson speaking directly to King and directing his work on occasion. Therefore, we conclude that a contract for hire was established.

The Court then turned to the issue of whether there was an employer-employee relationship between SK Management and King. It noted the Kress Packing test is applied to determine whether a person is an employee under Wis. Stat. § 102.07(4)(a).

The Court went on to conclude that King had an employee-employer relationship with SK Management, as the record reflected that SK Management, through Olson, had the right to control the details of King’s work. Olson generally relayed the details of a demolition project through Schweinert, but Olson also appeared at jobsites and directed the workers himself. Olson discussed work to be performed with King directly at some points.  Olson had the final say over whether a demolition project was completed satisfactorily and would direct Schweinert and other workers to return to the jobsite as necessary to complete the work. And, SK Management, by Olson, could fire King.

Murff v. LIRC, No. 2021AP1155, unpublished judge authored (Wis. Ct. App. Aug. 23, 2022) (Brash, C.J.)

Murff began working for Aurora in at St. Luke’s Medical Center in June 2008. She worked full time as a third shift housekeeper. Murff asserts that she sustained a work injury on April 9, 2010, in a reaching/lifting incident in she felt a "pop" in her lower back.

Murff advanced three theories for recovery in her worker’s compensation claim: (1) that the work incident in April 2010 was a direct cause of her back problems; (2) that if not a direct cause, it was probable that the work incident precipitated, aggravated, and accelerated a preexisting degenerative condition beyond its normal progression; or (3) that Murff’s job duties while working for Aurora were a material contributory causative factor of her back condition’s onset or progression.

The Commission denied compensation. It had found credibility issues with the opinions of the treating physicians—none of whom testified—who related Murff’s back problems to the work incident. For example, one doctor inaccurately described the work injury. Another doctor's report contained no information relating to Murff’s job duties, nor any information relating to how those duties could have resulted in an occupational work injury. The Commission also noted problems with the IME’s opinion. However, the Commission ultimately determined that Murff had not met her burden of proving her claim.

Murff argued that her doctors had made a prima facie case of a compensable injury, which the Respondent failed to rebut because the Commission did not credit the IME's opinion either. Murff's argument relied in part on Beecher v. LIRC, 2004 WI 88, 273 Wis. 2d 136, 682 N.W.2d 29, with its burden shifting analysis in odd lot cases. However, as the court noted, Murff was not asserting an odd lot claim. Instead, Murff's case simply involved a matter of the Commission "choosing what to believe and what not to believe, and it did not believe the treating doctors."

On this point, the Court noted the "legitimate doubt" standard under which it is "‘an elementary principle’ that the claimant has the burden of proving beyond a legitimate doubt all the facts essential to the recovery of compensation." Leist v. LIRC, 183 Wis. 2d 450, 457, 515 N.W.2d 268 (1994). Still, however, the Commission "cannot reject a medical opinion unless there is something in the record to support its rejection." While it may not rely solely on its "cultivated intuition," it is not "require[d] … to provide countervailing medical expert opinions to support a legitimate doubt." Leist, 183 Wis. 2d at 460-62.

The Court went on to note that "[a] legitimate doubt comprises ‘some inherent inconsistency ... or conflict in the testimony,’" citing Kowalchuk, 234 Wis. 2d 203, ¶8. That is, there just needs to be "something in the record" to support its rejection of a medical opinion. Leist, 183 Wis. 2d at 460. In this case, the Commission explained what caused it to doubt the veracity of the opinions of the doctors who had indicated the work incident was a cause of Murff’s back problems. Indeed, the Court concluded, these findings were "simply a matter of credibility," citing E.F. Brewer, 82 Wis. 2d at 639.

Take-away Point: The Commission may deny a claim if the Commission identifies inconsistencies in the Applicant's expert medical opinions sufficient to establish legitimate doubt, regardless of the Respondent’s defenses to the claim.

Gregory Mallet v. LIRC, No. 21AP1263, unpublished per curiam (Wis. Ct. App. June 28, 2022)

Pro se applicant, Gregory Mallet, claimed injuries to his spine that involved four appeals through the Court of Appeals on three different dates of injury: an accidental injury of April 1981, occupational exposure to December 1983, and more occupational exposure from January to April 1984. This case involved the last periods of work exposure. The Commission denied the claim, crediting the IME doctor, Richard Karr, M.D., who opined that Mallett's ongoing complaints of midback and low back pain were partly due to the normal progression of non-work-related spondylosis and partly due to behavioral factors. The Commission also noted the treating doctors' notes focused largely on the earlier dates of injury and only mentioned the last period of work exposure in pre-printed response to letters sent to them by the Applicant in 2015.

The Court of Appeals affirmed the Commission decision, noting the following:

The Court noted that that Mallett cites to Miron Construction Co. v. Kampfer, 215 Wis. 2d 323, 572 N.W.2d 902 (Ct. App. 1997)4, for the proposition that an IME doctor must make a definitive diagnosis in order to be deemed credible by LIRC. The Mallett court first noted that the Miron Construction case was a per curiam opinion, so it has no precedential value and may not be cited for its persuasive value. Further, the Court noted that the Miron Construction's holding in that case does not stand for the premise advanced by Mallett.

In an actual reported case, Molinaro v. Industrial Comm., 273 Wis. 129, 133 (1956). In that case, Court stated if a medical report offered by a respondent raises a credible legitimate doubt as to whether work caused disability, it is not necessary for the respondent to go further and prove that the disability is instead caused by an off-duty accident or exposure.

Take-away Point: Prior unpublished per curiam decision in Miron Construction should not have been cited and did not support proposition that an IME doctor must make a definitive diagnosis in order to be deemed credible by LIRC.