STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


REUBEN HALVERSON, Applicant

JEFFREY ALEXANDER, Employer

ALEXANDER & ALEXANDER INC, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1994003111


The applicant filed an application seeking compensation for an injury on May 6, 1993. The employers initially named in the application were Elite Uniform Co. and Alexander & Alexander, Inc. Subsequently, the application was dismissed as to Elite Uniform Co., and Jeffrey Alexander, an individual, was impleaded as a named employer.

On October 6, 1999, and July 19, 2000, administrative law judge (ALJ) Janell M. Knutson of the Worker's Compensation Division of the Department of Workforce Development held hearings with respect to the claims against Jeffrey Alexander and Alexander & Alexander, Inc. No concessions were made prior to the hearings. Consequently, the issues before ALJ Knutson were whether Jeffrey Alexander or Alexander & Alexander were employers subject to Wis. Stat., ch. 102, at the time of the applicant's injury; whether the applicant was an employee of either of those two entities at the time of his injury; whether the applicant suffered an injury by accident arising out of and incidental to employment on May 6, 1993; his average weekly wage; the nature and extent of disability from the claimed injury; and liability for medical expenses.

On September 6, 2000, ALJ Knutson issued her Findings of Fact and Order, which dismissed the application with prejudice. The applicant filed a timely petition for review, supported by a letter brief dated November 21, 2000. Neither Jeffrey Alexander nor Alexander & Alexander has submitted a response brief.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:


FINDINGS OF FACT AND CONCLUSIONS OF LAW

Jeffrey Alexander is the principal shareholder and president of Elite Uniform Co. (Elite Uniform). Elite Uniform has been a Wisconsin corporation since 1990. Elite Uniform makes and sells athletic uniforms for school sports teams. Elite Uniform has about 15 employees.

Jeffrey Alexander also incorporated another entity, Alexander & Alexander, Inc., (Alexander & Alexander) with the intent of operating it as an investment company or real estate holding company. However, Jeffrey Alexander never operated Alexander & Alexander as an investment company or real estate holding company. Jeffrey Alexander would, however, from time to time deposit personal funds into a corporate bank account in the name of Alexander & Alexander.

Jeffrey Alexander also owns a pleasure boat. The boat is titled in his name personally, not in the name of Alexander & Alexander or Elite Uniforms. He entertains people on his boat, including customers and employees of Elite Uniform.

Jeffrey Alexander talked to a friend, Paul Pellinger, about painting the boat. Pellinger recommended Bob Burkhart, an auto body shop owner with experience painting boats. Jeffrey Alexander then contracted with Burkhart to paint the boat. Burkhart asked the applicant to help with the job. Pellinger and a fourth person (Todd Bloomquist) also helped. Burkhart supervised the work.

The four men started to prepare and paint the boat in May 1993. On May 6, 1993, while they were working, the applicant and Burkhart got into a fight about how the boat was to be covered after it was painted. The confrontation turned physical and the applicant had to be hospitalized.

After the injury to the applicant, the work went forward on the boat. When the job was finished, Jeffrey Alexander paid all four men for their services. Jeffrey Alexander paid the applicant from funds in the Alexander & Alexander corporate account by check dated May 7, 1993. The record does not establish why he used the corporate account. Jeffrey Alexander could not recall whether he paid the other three men from the Alexander & Alexander corporate account, or from another source. In any event, the total payments to the men for painting the boat exceeded $500. Indeed, the check written to the applicant is for $375, and Pellinger testified that he remembered getting a check from Alexander & Alexander for $150 to $200.

As noted above, the applicant filed an application for hearing that claimed disability from a May 6, 1993 work injury and that named Elite Uniform and Alexander & Alexander as employers. Later, Jeffrey Alexander individually was impleaded. ALJ Roberta Arnold dismissed the application against Elite Uniform with prejudice in December 1997. That order was evidently not appealed; this case involves only the claims against Jeffrey Alexander and Alexander & Alexander. The issues now before the commission are whether at the time of injury either of the named employers were an "employer" subject to Wis. Stat. ch. 102 and whether the applicant was an "employee" subject to Wis. Stat. ch. 102. See Wis. Stat. § § 102.03(1)(b), 102.04 and 102.07.

The first question is whether either Jeffrey Alexander or Alexander & Alexander, Inc., was a subject employer, as that term is defined in Wis. Stat. § 102.04, when the applicant was injured. The applicant asserts that Jeffrey Alexander or Alexander & Alexander was a subject employer under Wis. Stat. § 102.04(1)(b). Under that provision, if a person usually employs three or more employees, it is immediately a "subject employer" liable for workers compensation. If a person usually employs less than three employees, but pays wages of $500 or more in any calendar quarter, the person becomes a "subject employer" as of the tenth day of the next calendar quarter.

As the ALJ found, neither Jeffrey Alexander nor Alexander & Alexander was a subject employer under Wis. Stat. § 102.04 (1)(b) at the time of the applicant's injury because:   (a) neither Jeffrey Alexander nor Alexander & Alexander "usually employed" three or more employees;  and (b) assuming that Jeffrey Alexander or Alexander & Alexander could be considered to have paid $500 in wages by virtue of the payments made to the men who painted the boat, that would not make either one a "subject employer" until July 10, 1993, well after May 6, 1993 injury at issue here.

On appeal to the commission, the applicant asserts that Jeffrey Alexander usually did employ three or more employees. However, there is no evidence of that in the record. Hiring four individuals on a one-time basis to paint a pleasure boat cannot reasonably be viewed as "usually employing" the three or more employees.

Elite Uniform, of course, apparently did usually employ more than three employees. However, the application has previously been dismissed with prejudice as to Elite Uniform. In any event, Elite Uniform is a corporation, which as a legal entity is separate and distinct from Jeffrey Alexander. Nor does the record support piercing the corporate veil to conclude that Elite Uniform is merely the alter ego of Jeffrey Alexander.

The applicant also asserts on appeal Jeffrey Alexander hired the applicant, Burkhardt, Pellinger, and Bloomquist to work on his boat, and that Jeffrey Alexander paid them, in total, more than $500 in a calendar quarter. Thus, the applicant asserts, regardless of whether Jeffrey Alexander was a subject employer under Wis. Stat. § 102.04(1)(b)1 because he "usually employed" three or more employees, he would be a subject employer under Wis. Stat. § 102.04(1)(b)2 because he paid more than $500 in wages in a single calendar quarter for services performed in this state. Again, however, even if Jeffrey Alexander were considered to have paid $500 in wages by virtue of the payments made to the men who painted the boat, that would make not him a "subject employer" until after the date of injury.

Moreover, a compelling argument can be made that the amounts Jeffrey Alexander paid to the men who painted his boat were not "wages," or at least that the men who painted the boat were not "employees" of Jeffrey Alexander or Alexander & Alexander, Inc. The term "employee" is defined in Wis. Stat. § 102.07. The definition most applicable to the applicant is Wis. Stat. § 102.07(4). (1)   However, a person does not become an "employee" for the purposes of Wis. Stat. § 102.07(4) simply by performing some kind of compensated service for another.  In order to be an "employee" as defined in Wis. Stat. § 102.07(4), a worker must perform services under a contract of hire, and in the course of a trade, business, profession, or occupation of the putative employer. Wis. Stat. § 102.07(4)(a)2.  A trade or business has been defined as an occupation or employment habitually engaged in for livelihood or gain. (2)  Applying that definition, neither Jeffrey Alexander nor Alexander & Alexander is engaged in a trade, business, occupation, or profession even tangentially related to painting boats. (3)

The commission therefore concludes that neither Jeffrey Alexander nor Alexander & Alexander was an employer subject to Wis. Stat., ch. 102, within the meaning of Wis. Stat. § 102.03, at the time of the applicant's injury. The commission further finds that the applicant was not an "employee" of Jeffrey Alexander or Alexander & Alexander at the time of his injury, as the term "employee" is used in Wis. Stat., Ch. 102. The application must therefore be dismissed.

NOW, THEREFORE, the Labor and Industry Review Commission makes this

ORDER

The findings and order of the administrative law judge are modified to conform to the foregoing, and as modified, are affirmed.

Dated and mailed April 10, 2001
halverr . wrr : 101 : 8 ND § 2.10

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner


cc: Attorney Peter T. Waltz


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Footnotes:

(1)( Back ) Wis. Stat. § 102.07(4) provides:

(4) (a) Every person in the service of another under any contract of hire, express or implied, all helpers and assistants of employees, whether paid by the employer or employee, if employed with the knowledge, actual or constructive, of the employer, including minors, who shall have the same power of contracting as adult employees, but not including the following:

1. Domestic servants.
2. Any person whose employment is not in the course of a trade, business, profession or occupation of the employer, unless as to any of said classes, the employer has elected to include them.

(b) Par. (a) 2. shall not operate to exclude an employee whose employment is in the course of any trade, business, profession or occupation of the employer, however casual, unusual, desultory or isolated the employer's trade, business, profession or occupation may be.

(2)( Back ) Cornelius v. Industrial Commission, 242 Wis. 183, 185 (1943).

(3)( Back ) Nor is there evidence that these entities operated such a business in even a causal, desultory, or unusual manner. Wis. Stat. § 102.07(4)(b). Indeed, the record does not support a finding that the boat at issue here had a tangible connection to any business operated by Jeffrey Alexander, including Elite Uniform Co., let alone that boat painting would be performed in the course of such a business. 


uploaded 2001/04/16