JASON CONNELL, Applicant

REEDSVILLE COOP ASSN, Employer

PREMIER FEEDS, Employer

EMCASCO INSURANCE CO, Insurer

SOCIETY INSURANCE A MUTUAL CO, Insurer

An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

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 agrees with the decision of the ALJ, and it adopts the findings and order in that decision as its own.

The findings and order of the administrative law judge are affirmed. The application of Reedsville Cooperative and Employers Mutual Casualty Company is dismissed with prejudice. This order is final as to the matters specifically decided herein. Jurisdiction is reserved on all other issues for such further findings, orders, and awards as may be warranted.

Dated and mailed November 26, 2003
conneja . wsd : 185 : 8  ND § 2.2  § 2.16 

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

Robert Glaser, Commissioner

In his decision, the administrative law judge correctly noted that Premier Feeds LLC (hereinafter Premier) is a separate legal entity from the joint venture established by the four cooperatives. Premier, not the joint venture, is the entity which utilized Jason Connell's services on a temporary basis. Reedsville Cooperative and Employers Mutual argue that the joint venture elected to become an "employer" under Wis. Stat. § 102.28(2)(a). However, this argument is apparently based on the fact that Premier purchased a worker's compensation insurance policy, and on the false assumption that Premier and the joint venture are one and the same entity. There is no stipulation or evidence to the effect that the joint venture ever elected to be an employer under Chapter 102 of the Wisconsin Statutes.

The stipulated facts indicate that Premier was designated to act as an agent for the joint venture, but the duties and parameters of this agency relationship are not defined. There is no stipulation or evidence to the effect that Premier, acting as the joint venture's agent, purchased a worker's compensation policy for the joint venture. The policy in evidence (Exhibit 3) unambiguously provides that the named insured is "Premier Feeds LLC," and does not make any mention of the joint venture.

As explained by the administrative law judge, the facts of this case place Reedsville Cooperative squarely in the role of a statutory temporary help agency under Wis. Stat. § 102.01(1)(f), and in the statutory role of the employer of Jason Connell at the time he was injured (see Wis. Stat. § 102.04(2m)). The commission also adopts the administrative law judge's well-reasoned explanation concerning the inapplicability of Wis. Stat. § 102.06 to this case. 

[Ed. Note: For the convenience of readers, the full text of the Administrative Law Judge's decision is set forth below.]

cc: 
Attorney Todd A. Becker
Attorney Patrick Anderson

Appealed to Circuit Court.

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Administrative Law Judge's decision:

This dispute was presented for decision on stipulated facts. The record remained open until January 17, 2003, for stipulated materials.

APPEARANCES: Applicants appeared by Attorney Mark A. Ringsmuth; Respondents appeared by Attorney Patrick J. Anderson.

The parties have presented this case for decision on stipulated facts, (i)  in lieu of a formal hearing, pursuant to Wis. Stat. § 102.18 (1)(a). (ii)   The Applicants are Reedsville Cooperative Association and its worker's compensation carrier, Employers Mutual Casualty Company a/k/a EMCASCO Insurance Company (hereinafter referred to collectively as "Reedsville Cooperative" unless the context indicates otherwise). The Respondents are Premier Feeds LLC and its worker's compensation carrier, Society Insurance (hereinafter referred to collectively as "Premier Feeds LLC" unless the context indicates otherwise).

This litigation arises out of a conceded, compensable injury to Jason Connell occurring on October 26, 1999. Reedsville Cooperative paid $100,117.40 in compensation as a result of Mr. Connell's injury. Reedsville seeks an order (1) declaring that Premier Feeds LLC is liable for all compensation due because of Mr. Connell's injury and (2) requiring Premier Feeds, under Wis. Stat. § 102.18(1)(bw), to reimburse Reedsville for the benefits it paid.

Some time prior to January 1999, the general managers of four Wisconsin cooperative associations began discussing ways to more profitably produce and sell animal feed: Co-operative Service Oil Company, Steven Zutz General Manager; East Central Cooperative Association; Bruce Trewin General Manager; Reedsville Cooperative Association, Robert Lowe General Manager; and Valders Cooperative, William Hoeltke, General Manager. The managers decided that merging or pooling their respective feed operations would help achieve their goal. The four cooperatives hired Attorney George Twohig, of Chilton, Wisconsin, to do the legal work that would bring their merger plan to fruition.

In this regard, Attorney Twohig prepared the following documents:

a) Articles of Organization for Premier Feeds LLC, a Wisconsin Limited Liability Company

b) Operating Agreement for Premier Feeds LLC.

c) Joint Venture Agreement.

d) Agency Agreements for each of the four cooperative associations.

The Articles of Organization for Premier Feeds LLC were filed with the Wisconsin Department of Financial Institutions on November 17, 1998. The Operating Agreement, Joint Venture Agreement, and Agency Agreements were executed by representatives of the four cooperative associations on January 26, 1999.

The listed documents set forth the legal structure of the joint business relationship envisioned by the four cooperatives. The salient aspects of this construct are summarized below. 

The Joint Venture Agreement announced that the four cooperatives had formed a joint venture to pool their resources to more profitably produce and sell animal feed. The Joint Venture Agreement also announced that the four cooperatives had created a Wisconsin limited liability company, Premier Feeds LLC, to serve as agent for the Joint Venture.

Under the Joint Venture Agreement, the cooperatives were not to contribute anything of value to capitalize the joint venture. The joint venture was not to lease or own real property or equipment. The joint venture would, however, own the inventory and accounts receivable for the joint feed business when those assets came into being. The proceeds of the joint feed business would be distributed to the four cooperatives equally.

The Joint Venture Agreement did not create a management structure for the joint venture. The joint venture would not hire employees. Its only obligations would be (1) supplying customers for the joint feed business, which would be the members and patrons of the four cooperatives, and (2) payment of patronage refunds to customers of the joint feed business. Each cooperative remained solely responsible for payment of patronage refunds to its particular members and patrons, although in general the four cooperatives shared their members and patrons.

Regarding Premier Feeds LLC, each of the four cooperatives would contribute $5,000 in start-up capital in exchange for a 25% ownership interest. In addition, each cooperative was obligated to contribute more capital in the future (in cash, equipment, real estate, or debt) to account for 25% of the cost of obtaining and improving Premier's feed-production facility. Finally, each cooperative would share in the income of Premier in proportion to its ownership interest.

Premier Feeds LLC would be run by a Managing Board consisting of eight Directors, who must be employees of the four cooperatives. Each cooperative would appoint two directors. The Managing Board would appoint an individual to be President of Premier Feeds LLC. The president would have overall responsibility for managing the company: including the hiring, firing, and supervision of its employees.

Once the legal structure was in place, the four cooperatives pressed forward with their joint business plans. Each cooperative named two Directors for Premier Feeds LLC, bringing the company's Managing Board into existence. Reedsville Cooperative appointed Robert Lowe, its general manager since 1976, as one of its two Premier Feeds LLC directors. The Managing Board then hired a President or General Manager for Premier Feeds LLC, a Mr. Daniel Hein. Mr. Hein was an outside hire, never having worked for any of the four cooperatives in the past. Mr. Hein began work in May 1999.

Premier Feeds LLC needed a place to conduct its feed business, so Mr. Hein leased property from Reedsville Cooperative in August 1999. The lease document, drafted by Mr. Twohig's firm, is entitled Facilities Lease. The landlord under the lease was Reedsville Cooperative Association, and the tenant under the lease was Premier Feeds LLC. The lease required Premier Feeds LLC to pay Reedsville Cooperative $17,900 per year in rent for use of the leased property. Robert Lowe executed the lease on behalf of Reedsville Cooperative, and Daniel Hein executed the lease on behalf of Premier Feeds LLC.

The leased premises included a feed mill and other outbuildings, but improvements were necessary for the new business. Premier Feeds LLC secured a loan, which was guaranteed by its four Members, and it used the money for the needed improvements: feed bins, fat tanks, a mixing facility, an elevator leg, and so on. The four cooperatives made additional capital contributions to Premier Feeds LLC in the form of trucks and other movable equipment needed for the feed operation.

Daniel Hein hired employees to operate Premier Feeds LLC. By previous agreement, most of these employees came from the staffs of the four cooperatives. Because of the employees, a policy of worker's compensation insurance was obtained for Premier from Society Insurance. Premier Feeds LLC was up and running by September 1, 1999.

Jason Connell has a long history with Reedsville Cooperative. He began working there full time in 1991. During the summer months, he worked in agronomy as a pesticide applicator. During the remainder of the year, he worked in the grain Department. At the time of the accident, Mr. Connell's supervisor in agronomy was John Phillip, and his supervisor in grain was David Schoonover.

During the initial recruitment process for Premier Feeds LLC, Daniel Hein tried to hire Jason Connell to work at Premier, but Mr. Connell declined Mr. Hein's offer. Mr. Connell wanted to stay with Reedsville Cooperative because of his lengthy relationship with Reedsville.

Mr. Hein badly wanted Jason Connell's assistance, however. So he negotiated an agreement with David Schoonover to borrow Jason from time to time. When Premier needed Mr. Connell's help and Mr. Connell's work schedule at Reedsville allowed, Mr. Connell would do work for Premier Feeds LLC. The parties have stipulated to the terms of this borrowing agreement:

9. At all times material, Premier Feeds and Reedsville had an agreement in which Jason Connell, an employee of Reedsville, would and could do work for or on behalf of Premier Feeds.

10. When necessary and when other job duties permitted, Jason Connell would do work for or on behalf of Premier Feeds.

11. When Jason Connell worked for or on behalf of Premier Feeds, at the end of the day, he would report to his supervisor at Reedsville, the number of hours that he worked for or on behalf of Premier Feeds.

12. Jason Connell reported the time he worked for or on behalf of Premier Feeds to his supervisors, who were responsible for keeping track of the time that he worked for or on behalf of Premier Feeds.

13. Premier Feeds has never issued a paycheck to Jason Connell for any of the time that he spent working for or on behalf of Premier Feeds. Reedsville paid Jason Connell for all the time that he did work for or on behalf of Premier Feeds in a single paycheck that included both the work that Jason Connell performed for Reedsville and the work he performed for Premier Feeds.

14. After paying Jason Connell for all time that he worked for Reedsville and Premier Feeds, Reedsville informed Premier Fees of the amount of time that Jason Connell spent working for Premier Feeds.

15. Premier Feeds paid Reedsville for the time that Jason Connell spent working for or on behalf of Premier Feed.

16. During the time that Jason Connell performed services for or on behalf of Premier Feeds, he would generally be directed by the supervisors of Premier Feeds, and was required to follow all rules and regulations of Premier Feeds.

17. During the time that Jason Connell performed services to or on behalf of Premier feeds, Jason Connell was responsible for his actions to the management of Premier Feeds.

As mentioned above, the injury at issue occurred on October 26, 1999. At the time, Jason Connell was doing work for Premier Feeds LLC under the borrowing agreement. Mr. Connell was in the Premier Feeds' mill, designated under the Facilities Lease for the exclusive use of Premier, when an explosion occurred. Mr. Connell was badly injured in the explosion.

At the time of the injury, Reedsville Cooperative had in full force and effect, a policy of worker's compensation insurance through Employers Mutual Casualty Company. Premier Feeds LLC had in full force and effect, a policy of worker's compensation insurance through Society Insurance. The parties agree that Mr. Connell's injury was compensable. Employers Mutual, as the carrier for Reedsville, has paid $100,117.40 in benefits to or on behalf of Mr. Connell because of the work injury. The parties agree that these benefits were due under the Wisconsin Worker's Compensation Act.

As mentioned above, Reedsville Cooperative asserts that Premier Feeds LLC, not Reedsville, is liable for Mr. Connell's benefits. Reedsville has submitted briefs containing arguments assuming two alternative legal models. The first is that the four cooperatives came together and formed nothing more than a common-law joint venture. Based on this model, Reedsville Cooperative makes two arguments:

A. In Wisconsin, a joint venture is not a legal entity separate from the venturers. An employee of a joint venture is an employee of all the venturers simultaneously. Jason Connell's injury arose out of and was incidental to employment with the joint venture. The Society policy was purchased to cover the worker's compensation liability of the joint venture. Therefore, the Society policy is the one from which Jason Connell's benefits should be paid.

B. The relationship between Reedsville Cooperative Association and the joint venture cannot be classified as that of a temporary help agency and client, under Wisconsin Statute § § 102.01(2)(f) and 102.04(2m). Such a relationship requires two legal entities, and the joint venture is not a legal entity.

The second model assumed by Reedsville is that the four cooperatives formed a common law joint venture, which elected legal-entity status by purchasing worker's compensation insurance for the venture, under Wis. Stat. § § 102.04(1)(d) and 102.28(2)(a). Based on this model, Reedsville Cooperative makes three additional arguments:

C. Jason Connell was on loan from Reedsville Cooperative to the joint venture at the time of injury. Under the loaned-employee doctrine, the joint venture and its carrier, Society Insurance, are liable for Jason Connell's benefits.

D. The joint venture is a contractor under, pursuant to Wis. Stat. § 102.06. As the contractor over, Reedsville Cooperative has a statutory right to reimbursement from Premier Feeds LLC.

E. Indemnity language in the Premier Feeds LLC operating agreement and/or the Premier Feeds LLC facilities lease contractually allocates liability for Jason Connell's benefits to the joint venture.

Premier Feeds LLC has also submitted briefs containing multiple arguments. All of these arguments are based on the model that Reedsville Cooperative and Premier Feeds LLC are separate business entities. I have summarized Premier Feeds' arguments down to four points:

A. Reedsville Cooperative is a temporary help agency under Wis. Stat. § 102.01(2)(f). Therefore, pursuant to Wis. Stat. § 102.04(2m), Reedsville Cooperative is liable for Jason Connell's worker's compensation benefits.

B. The indemnity language in the Premier Feeds LLC operating agreement and/or the Premier Feeds LLC facilities lease, objectively construed, does not allocate liability for Jason Connell's benefits to Premier Feeds LLC.

C. Wis. Stat. § 102.29(7) prohibits Reedsville Cooperative from seeking reimbursement for Jason Connell's benefits from Premier Feeds LLC.

D. Wisconsin case law, specifically Berna-Mork v. Jones, 174 Wis. 2d 645, 498 N.W.2d 221 (1993), prohibits Reedsville Cooperative from seeking reimbursement for Jason Connell's benefits from Premier Feeds LLC on a contract theory.

To resolve the parties' dispute, it is necessary to define the legal status of the business organizations involved in this case. The relevance and persuasiveness of parties' arguments are contingent on such definition.

The four cooperatives, including Reedsville Cooperative, are legal entities by statute. They are Wisconsin cooperative associations, which generally have the same power to conduct business that individuals do: including the right to sue and be sued, the right to contract, the right to borrow money, the right to acquire property, and the right to hire employees. See Wis. Stat. § 185.03, 27. Cooperatives are owned by their members, and the liabilities of the cooperative generally do not pass through to the members. See Wis. Stat. § 185.37. Cooperatives are created upon the filing of articles of organization with the Wisconsin Department of Financial Institutions. See Wis. Stat. § § 185.05, 82.

Premier Feeds LLC is also a legal entity by statute, a limited liability company. Like Wisconsin cooperative associations, limited liability companies in Wisconsin generally have the same power to conduct business that individuals do: including the right to sue and be sued, the right to contract, the right to borrow money, the right to acquire property, and the right to hire employees. See Wis. Stat. § 183.0106. Limited liability companies are owned by their members, and the liabilities of the cooperative generally do not pass through to the members. See Wis. Stat. 183.0304, 0801. A member of a limited liability company may be an individual or a business entity, such as a cooperative association. See Wis. Stat. § § 183.0102(15), (18), 183.0801. Limited liability companies are created upon the filing of articles of organization with the Wisconsin Department of Financial Institutions. See Wis. Stat. § § 183.0111, 0202, 0204. (iii)

The four cooperatives also created a joint venture. Unlike cooperatives and limited liability companies, joint ventures are not statutory entities. See Edlebeck v. Hooten, 20 Wis. 2d 83, 121 N.W.2d 240 (1963); Insurance Company of North America v. DILHR, 45 Wis. 2d 361, 173 N.W.2d 192 (1970); 46 Am. Jur. 2d Joint Ventures § § 1-17 (2002). They are creatures of case law. Id. Although the elements necessary for a joint venture are not universally agreed upon, Insurance Company of North America provides a useful and common working definition:

[T]his court prescribed four requisites to recognition as a joint venture: (1) Contribution of money or services but not necessarily in equal proportion by each of the parties; (2) joint proprietorship and mutual control over the subject matter of the venture; (3) an agreement to share profits though not necessarily the losses; and (4) a contract, express or implied, establishing the relationship.

45 Wis. 2d at 366; see 46 American Jurisprudence, supra, § 1.

In Wisconsin, joint ventures are not considered legal entities separate from the participants in the venture. See Edlebeck, 20 Wis. 2d at 87-92; Insurance Company of North America, 45 Wis. 2d at 363-68; American Jurisprudence, supra, § § 1-17. Liabilities of the joint venture generally pass through to the individual members. Id. This is particularly the case for worker's compensation liability. In Insurance Company of North America, the Wisconsin Supreme Court held that an employee of a joint venture is an employee of all members of the venture simultaneously. 45 Wis. 2d at 363-68. Said members are therefore jointly liable to the employee for worker's compensation benefits. Id. A worker's compensation policy written in the name of one venturer is sufficient to cover this joint liability. Id.

Until the early 1980's, a joint venture could not be an employer under the Act, and it could not obtain worker's compensation insurance covering it as an entity. See WKC-1-P (R. 07/2002) at p.38 n.122. Worker's compensation insurance coverage could only come through policies issued to the venturers. Id. Amendments to the Act effective January 1, 1984 changed this rule. See 1983 Wis. Act 98 § § 5, 18; Wis. Stat. § § 102.04(1)(d), 102.28(2)(a). Joint ventures may now elect to be employers under the act, and they may obtain worker's compensation insurance. Id.

The nature and creation date of a joint venture is sometimes unclear because joint ventures are relatively informal arrangements between the participants. The filing of public documents, like articles of organization for cooperatives, is not involved. However, in this case, the nature and creation date of a joint venture between the four cooperatives is very clear because the parties have agreed on it. The stipulation states as follows: "On or about January 26, 1999, a joint venture was formed between the Co-operative Service Oil Company, the East Central Cooperative Association, the Reedsville Cooperative Association, and the Valders Cooperative."

In its briefs, Reedsville Cooperative argues that it periodically loaned Mr. Connell to the joint venture under the borrowing agreement described above. Mr. Connell was on loan to the joint venture at the time of his compensable injury.

I disagree with this argument for two reasons. First, the stipulation establishes that Jason Connell was loaned to Premier Feeds LLC: "At all times material, Premier Feeds and Reedsville had an agreement in which Jason Connell, an employee of Reedsville, would and could do work for or on behalf of Premier Feeds." In fact, it was the general manager of Premier Feeds LLC, Daniel Hein, who negotiated the borrowing agreement with Mr. Connell's supervisor at Reedsville Cooperative.

Second, the joint venture and Premier Feeds LLC are not one and the same. They are related in that Premier serves as agent for the joint venture. Also, the venturers in the joint venture are the owner-members of the limited liability company. But, despite these relationships, Premier Feeds LLC remains a separate, statutory business entity with the legal authority to hire, fire, and conduct business in its own right. Premier is not the joinst venture, or one of the venturers, the venturers being the four cooperatives. The joint venture was structured as a passive organization with no employees.

Because Premier Feeds LLC and Reedsville Cooperative are separate legal entities, Premier's temporary-help-agency argument is viable. A temporary help agency under the Act is "an employer who [1] places its employee with . . . another employer [2] who controls the employees work activities and [3] compensates the first employer for the employees services, regardless of the duration of the services." Wis. Stat. § 102.01(2)(f). A temporary help agency under the Act is not limited to firms that are in the business of placing temporary workers, such as Kelly Services or Manpower. See Gansch v. Nekoosa Papers, Inc., 158 Wis. 2d 743, 463 N.W.2d 682 (1990); Kaelber Plumbing & Heating v. LIRC, 160 Wis. 2d 342, 465 N.W.2d 829 (Ct. App. 1991). The Wisconsin Supreme Court in Gansch, for example, held that a highway construction company was a temporary help agency when it rented a bulldozer, and a worker to operate it, to a paper company, whose bulldozer was being repaired, even though equipment rental was merely an incidental part of the construction company's business. Id.

The relationship between Reedsville Cooperative and Premier Feeds LLC, as to Jason Connell, was that of a temporary help agency (Reedsville) and client (Premier). All of a temporary help agency are present. First, Reedsville Cooperative periodically placed its employee, Jason Connell, with Premier Feeds LLC. The stipulation states as follows:

9. At all times material, Premier Feeds and Reedsville agreement in which Jason Connell, and employee of Reedsville, would and work for or on behalf of Premier Feeds.

10. When necessary and when other job duties permitted, Jason would do work for or on behalf of Premier Feeds.

Second, while Mr. Connell worked for Premier Feeds LLC, it controlled his work activity. The stipulation states as follows:

16. During the time that Jason Connell performed services for or on behalf of Premier feeds, he would generally be directed by the supervisors of Premier Feeds, and was required to follow all rules and regulations of Premier Feeds.

17. During the time that Jason Connell performed services to or on behalf of Premier feeds, Jason Connell was responsible for his actions management of Premier Feeds.

Third, Premier Feeds LLC compensated Reedsville Cooperative for Jason Connell's services. The stipulation states as follows:

11. When Jason Connell worked for or on behalf of Premier Feed end of the day, he would report to his supervisor at Reedsville, the number of hours that he worked for or on behalf of Premier Feeds.

12. Jason Connell reported the time he worked for or on behalf of Premier feeds to his supervisors, who were responsible for keeping track of t \he time that he worked for or on behalf of Premier Feeds.

13. Premier Feeds has never issued a pay check to Jason Connell for any of the time that he spent working for or on behalf of Premier Feeds. Redsville paid Jason Connell for all the time that he did work for or on behalf of Premier Feeds in a single paycheck that included both the work that Jason Connell performed for Reedsville and the work he performed for Premier Feeds.

14. After paying Jason Connell for all time that he worked for Reedsville and Premier Feeds, Reedsville informed Premier Feeds of the amount of time Jason Connell spent working for Premier Feeds.

15. Premier Feeds paid Reedsville for the time that Jason Connell spent working for or on behalf of Premier Feeds.

Because Reedsville Cooperative is a temporary help agency as to Jason Connell and Premier Feeds LLC, Employers Mutual (Reedsville's carrier) is liable, with no right of reimbursement, for all benefits due Jason Connell under the Act because of the October 26, 1999, work injury:

A temporary help agency is the employer of an employee whom the temporary help agency has placed with or leased to another employer that compensates the temporary help agency for the employees services. A temporary help agency is liable under s. 102.03 for all compensation payable under this chapter to that employee, including any payments required under s. 102.16 (3), 102.18 (1) (b) or (bp), 102.22 (1), 102.35 (3), 102.57 or 102.60 Except as permitted under s. 102.29, a temporary help agency may not seek or receive reimbursement from another employer for any payments made as a result of that liability.

Wis. Stat. § 102.04(2m).

Reedsville Cooperative's argument regarding the loaned-employee doctrine warrants some discussion. Under this doctrine, a worker loaned by his or her regular employer to another employer is the employee of the borrowing employer under the Act, when the following facts concur: (a) the worker consents to work for the borrowing employer, (b) the worker in fact works for the borrowing employer pursuant to an express or implied contract between the lending employer and the borrowing employer; and (c) the borrowing employer has the right to control the details of the work. See Seaman Body Corporation v. Ind. Comm'n, 204 Wis. 157, 235 N.W. 433 (1931); Bauernfeind v. Zell, 190 Wis. 2d 702, 528 N.W.2d 1 (1995). The borrowing employer is liable for benefits due because of injury to the loaned worker arising out of and incidental to the borrowing employer's employment. Id. The borrowing employer is protected from other liability to the loaned worker by the exclusive-remedy provision of the Act. Id.; Wis. Stat. § 102.03(2).

Reedsville Cooperative argues that the loaned-employee doctrine applies to the facts presented and makes Premier Feeds liable for Jason Connell's benefits. I disagree. The loaned employee doctrine does not apply to this case. The loaned-employee doctrine has been part of Wisconsin worker's compensation law since before 1920. See Cayll v. Waukesha Gas & Electric Co, 172 Wis. 554, 179 N.W. 771 (1920). It still has vitality today. See Bauernfeind, 190 Wis. 2d at 711. However, a portion of the landscape previously covered by the loaned-employee doctrine is now covered by the temporary help statutes, which entered the Act in 1981 and superceded the loaned employee doctrine to the extent they apply. Id.; Wis. Stat. § § 102.01(2)(f), 102.04(2m), 102.29(6); 1981 Wis. Laws. Ch 92 § § 5, 18; 1997 Wis. Act 38 § 3. As explained above, the temporary help statutes govern this case.

Reedsville Cooperative argues that Wis. Stat. § 102.06 obligates Premier Feeds LLC to reimburse Reedsville for Jason Connell's benefits. I disagree for several reasons. First, Wis. Stat. § 102.06 does not apply to injuries occurring on or after July 1, 1996, because the uninsured employers fund has been active since that date. See Wis. Stat. § § 102.06, 102.03(4), 102.80. Second, the plain language of the statute indicates that § 102.06 only applies to situations where one of the employers is not subject to the Act or is uninsured. Neither situation is present in this case. Third, the plain language of Wis. Stat. § 102.06 indicates that it applies only to contractors or subcontractors. In general, a contractor is one who contracts to work for another but retains the right to control the details of the work. See, e.g., Wis. Stat. § 102.07(8)(b) 3. No facts of record indicate that Premier Feeds LLC was a contractor with respect to Reedsville Cooperative.

In summary, I find that the relationship between Reedsville Cooperative and Premier Feeds LLC at the time of the work injury was that of a temporary help agency and client, Reedsville being the agency and Premier being the client. Jason Connell was a temporary worker placed by Reedsville with Premier. Reedsville Cooperative and its carrier, Employers Mutual, are liable for the benefits previously paid to Jason Connell. They have no right of reimbursement from Premier Feeds LLC and its carrier, Society Insurance. In addition, Reedsville and Employers Mutual are liable for any additional compensation due Mr. Connell because of his October 26, 1999, work injury.

The above discussion resolves the dispute and the issues raised by the parties under the Wisconsin Worker's Compensation Act. I decline to comment on the parties' remaining arguments.

The application of Reedsville Cooperative and Employers Mutual Casualty Company is dismissed with prejudice. This order is final as to the matters specifically decided herein. Jurisdiction is reserved on all other issues for such further findings, orders, and awards as may be warranted.

Dated and mailed at Madison, Wisconsin
this 28th day of January, 2003

/s/ Larry Steven Schifano, Administrative Law Judge

-- NOTES --

(i)( Back )  Although entitled, "STIPULATED FACTS," the parties' agreement includes stipulations as to law and fact.

(ii)( Back )  This case was set for hearing on August 1, 2002. Shortly before the hearing, the parties moved that the case be decided on stipulated facts pursuant to Wis. Stat. § 102.18 (1) (a), in lieu of a formal hearing. I granted that motion and set a briefing schedule. The stipulation arrived at the Department on July 31, 2002, under a cover letter of that date from Attorney Mark Ringsmuth. The stipulation consists of a face sheet signed by counsel and six exhibits, A through F, which are incorporated into the stipulation by reference. The entire package is over 380 pages long. The stipulation and exhibits have been marked Exhibit No. 1, and they are received into evidence at this time. I asked the parties to include their respective insurance policies in the record by stipulation. The parties agreed to this. Reedsville Cooperative's policy from Employer's Mutual arrived on December 6, 2002. Premier Feeds' policy from Society Insurance arrived on January 16, 2003. The Employers Mutual policy has been marked Exhibit No. 2, and the Society Policy has been marked Exhibit No. 3. Exhibit Nos. 2 and 3 are received into evidence at this time. The record was closed on January 17, 2003.

(iii)( Back )    The Wisconsin Worker's Compensation Act expressly acknowledges the legal status of limited liability companies. A policy of worker's compensation insurance issued to a limited liability company may not be construed to cover the individual liability of one of its members and vice versa: A contract procured to insure a limited liability company may not be construed to cover the individual liability of the members of the limited liability company in the course of a trade, business, profession or occupation conducted by them as individuals. A contract procured to insure an individual may not be construed to cover the liability of a limited liability company of which the individual is a member or to cover the liability of the individual arising as a member of any limited liability company. See Wis. Stat. § 102.31(1)(dL). The interpretive footnotes to this section in the Department of Workforce Development's compilation of the Act, WKC-1-P (R. 07/2002), state that this language operates to treat a limited liability company as an entity for insurance purposes.

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