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Kohout v. Bennett Construction

Supreme Court of Nebraska

May 5, 2017


         1. Workers' Compensation: Appeal and Error. Pursuant to Neb. Rev. Stat. § 48-185 (Cum. Supp. 2016), an appellate court may modify, reverse, or set aside a Workers' Compensation Court decision only when (1) the compensation court acted without or in excess of its powers; (2) the judgment, order, or award was procured by fraud; (3) there is not sufficient competent evidence in the record to warrant the making of the order, judgment, or award; or (4) the findings of fact by the compensation court do not support the order or award.

         2. __: __. Determinations by a trial judge of the Workers' Compensation Court will not be disturbed on appeal unless they are contrary to law or depend on findings of fact which are clearly wrong in light of the evidence.

         3. __: __ . An appellate court is obligated in workers' compensation cases to make its own determinations as to questions of law.

         4. Workers' Compensation: Independent Contractor: Insurance. Under Neb. Rev. Stat. § 48-116 (Reissue 2010), a contractor's act of engaging a subcontractor without actually compelling the subcontractor to acquire workers' compensation insurance constitutes a device to escape liability under the Nebraska Workers' Compensation Act.

         5. Workers' Compensation: Insurance: Proof. Under Neb. Rev. Stat. § 48-116 (Reissue 2010), a laborer has the burden to prove, by a preponderance of the evidence, that the employer set up a scheme, artifice, or device to defeat provisions of the workers' compensation laws.

         6. Workers' Compensation. Under Neb. Rev. Stat. § 48-116 (Reissue 2010), the existence of a scheme, artifice, or device does not require active fraud or evil design.

         [296 Neb. 609] 7. Principal and Agent. Apparent authority is authority that is conferred when the principal affirmatively, intentionally, or by lack of ordinary care causes third persons to act upon an actor's apparent authority.

         8. __ . Apparent authority gives a professed agent the power to affect the principal's legal relationships with third parties. The power arises from, and is limited to, the principal's manifestations to those third parties about the relationships.

         9. Principal and Agent: Liability: Proof. Apparent authority for which a principal may be liable exists only when the third party's belief is traceable to the principal's manifestation and cannot be established by the actor's acts, declarations, or conduct.

         10. Principal and Agent. For apparent authority to exist, the principal must act in a way that induces a reasonable third person to believe that another person has authority to act for him or her.

         11. __ . Whether an actor has apparent authority to bind the principal is a factual question determined from all the circumstances of the transaction.

         12. __ . Indicia of authority expressing association with but not authority from a business may contribute to the impression of apparent authority, but that impression alone cannot bind the agent's principal to a third party.

         13. Joint Ventures: Partnerships: Contribution. A joint venture is in the nature of a partnership and exists when (1) two or more persons contribute cash, labor, or property to a common fund (2) with the intention of entering into some business or transaction (3) for the purpose of making a profit to be shared in proportion to the respective contributions and (4) each of the parties have an equal voice in the manner of its performance and control of the agencies used therein, though one may entrust performance to the other.

         14. Joint Ventures: Proof. The moving party bears the burden to prove a joint venture or enterprise exists by clear and convincing evidence.

         15. Joint Ventures: Intent. The relationship of joint venturers depends largely upon the intent of the alleged parties as manifested from the facts and circumstances involved in each particular case.

         16. Joint Ventures. A joint venture can exist only by voluntary agreement of the parties and cannot arise by operation of law. Even a close relationship between two parties does not create an implied joint venture.

         17. __ . In considering whether a joint venture exists, the acts and circumstances between family members may not have the same significance as the same acts and circumstances between strangers might have.

         [296 Neb. 610] Appeal from the Workers' Compensation Court: James R. Coe, Judge. Affirmed.

          Michael W. Khalili and Terry M. Anderson, of Hauptman, O'Brien, Wolf & Lathrop, P.C., for appellant.

          Julie A. Jorgensen, of Morrow, Willnauer, Klosterman & Church, for appellee.

          Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, Kelch, and Funke, JJ.

          FUNKE, J.


         Robert L. Kohout sustained an injury while performing construction work at the residence of Brian Shook. He sued Bennett Construction and its workers' compensation insurer for workers' compensation benefits. The Nebraska Workers' Compensation Court ruled that under Neb. Rev. Stat. § 48-116 (Reissue 2010), Bennett Construction was neither Kohout's direct employer nor his statutory employer, and dismissed the complaint. We affirm.



         Bennett Construction is a sole proprietorship owned and operated by Mark Bennett. Mark testified that he typically works alone performing carpentry labor but hires subcontractors for jobs broader in scope than carpentry. He will also hire estimators to bid jobs for him during busy periods.

         Nicholaus Bennett (Nick) is Mark's son. Nick owns and operates the sole proprietorships Nick Bennett Construction and Housecraft. He testified that he works as a contractor and subcontractor, primarily on roofing and guttering.

         Mark and Nick testified that Nick worked for his father, as an estimator, until the work from a hailstorm in 2013 was [296 Neb. 611] completed. Mark stated that he and Nick decided to work independently from that point so that Nick could begin building his own clientele. Nevertheless, Mark continued to hire Nick as a subcontractor for jobs with metal and gutter work.

         In 2014, there was a severe hailstorm. The day after the hailstorm, Shook saw Nick patching a neighbor's roof and asked Nick to patch his roof as well. Shook testified that after Nick patched his roof, Nick left him a business card that included Nick's name, a cell phone number, and a "Bennett's Construction & Roofing" logo.

         Shook testified that he later contacted Nick to provide a bid for more extensive repairs to his house and barn. Nick provided Shook an estimate on a proposal form labeled "Bennett's Construction & Roofing, " with the business number for Bennett Construction crossed off and Nick's name and number written on the top. Shook never signed the proposal form, but both he and Nick testified that it reflected their verbal agreement. Nick subsequently completed the work.

         Nick testified that he retained the Bennett Construction business cards and proposal forms from when he previously worked for the company. Nick stated that he used the proposal forms when he did not have anything else available and that when using the forms, he would sometimes explain that he did not work for Bennett Construction. Mark testified that he was unaware that Nick still used the company's proposal forms and business cards.

         The portion of the proposal form relevant to this dispute reads: "Our workers are fully covered by Workmen's Compensation Insurance." Shook testified that he would not have hired Nick absent this affirmation. The record reflects that neither of Nick's sole proprietorships had ...

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