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07/14/2017 01:10 AM CDT




                                                       - 608 -
                                  Nebraska Supreme Court A dvance Sheets
                                          296 Nebraska R eports
                                           KOHOUT v. BENNETT CONSTR.
                                               Cite as 296 Neb. 608




                                        Robert L. Kohout, appellant, v.
                                          Bennett Construction and
                                           The Travelers Indemnity
                                             Company, appellees.
                                                   ___ N.W.2d ___

                                          Filed May 5, 2017.     No. S-16-609.

                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 compensa-
                    tion 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 pre-
                    ponderance 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.
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              Nebraska Supreme Court A dvance Sheets
                      296 Nebraska R eports
                       KOHOUT v. BENNETT CONSTR.
                           Cite as 296 Neb. 608

 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 trace-
      able 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 author-
      ity, 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 contrib-
      ute cash, labor, or property to a common fund (2) with the intention of
      entering into some business or transaction (3) for the purpose of mak-
      ing 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 rela-
      tionship 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.
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           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
                  KOHOUT v. BENNETT CONSTR.
                      Cite as 296 Neb. 608

  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,
K elch, and Funke, JJ.

  Funke, J.
                    NATURE OF CASE
   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.

                            FACTS
                          Background
   Bennett Construction is a sole proprietorship owned and
operated by Mark Bennett. Mark testified that he typically
works alone performing carpentry labor but hires subcontrac-
tors 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
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           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
                   KOHOUT v. BENNETT CONSTR.
                       Cite as 296 Neb. 608

completed. Mark stated that he and Nick decided to work inde-
pendently 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 pro-
vided 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 dis-
pute 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 workers’ compensa-
tion insurance, but that Bennett Construction did.
   Shook testified that Nick never told him he did not work
for Bennett Construction and that he had never heard the
name “Housecraft.” But, Shook did testify that an invoice he
received for work done on the property had “Nick Bennett”
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           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
                  KOHOUT v. BENNETT CONSTR.
                      Cite as 296 Neb. 608

printed on it. Nick testified that his invoices contained a Nick
Bennett Construction logo.
   Shook paid Nick for the repair work with four checks. The
first check was written to “Nick Bennett’s Construction” on
August 21, 2014. The second check, dated September 18,
2014, was written to “Bennett’s Construction.” Mark testi-
fied that he cashed the check and wrote a check to Nick for
the same amount after it cleared. Mark and Nick testified that
Nick received checks in the name of Bennett Construction
several times a year and that Mark always cashed them and
reimbursed Nick to prevent him from having to obtain new
checks from clients. After this check was received, Nick
asked Shook to write future checks to “Nick Bennett.” Shook
wrote the final two checks to “Nick Bennett Construction”
in 2015.

                     Kohout’s Employment
   Kohout was looking for work in 2015 when a friend, who
was employed by Nick, introduced Kohout to Nick. Nick hired
Kohout, and Kohout began working at a job in Arlington,
Nebraska. The Arlington job had been contracted by Mark,
who hired Nick as a subcontractor.
   Kohout’s next project with Nick was the Shook job. Kohout
testified that while only Nick regularly appeared and directed
him at the Shook job, Mark did come to the property once
during construction. Kohout believed it was to supervise the
work. However, Mark testified he was there to obtain a tool
that Nick had borrowed from him and that while he was there,
he introduced himself to Shook as Nick’s father and talked
casually about the job with him before leaving. Shook testified
that he did not know why Mark came to his property.
   Nick testified that Kohout worked directly for him. Nick
paid Kohout weekly with personal checks signed by him and
identified as coming from “Housecraft.” Nick supplied Kohout
with the tools for the job, but Nick frequently borrowed
Mark’s tools.
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          Nebraska Supreme Court A dvance Sheets
                  296 Nebraska R eports
                  KOHOUT v. BENNETT CONSTR.
                      Cite as 296 Neb. 608

  On May 4, 2015, Kohout fell from the roof of the barn
on Shook’s property. As a result of the fall, Kohout suffered
an injury.

                      Procedural History
   Kohout filed a petition against Bennett Construction and
its workers’ compensation insurer seeking workers’ compen-
sation benefits. In their answer, Bennett Construction and
its insurer raised the affirmative defense that Kohout was
not employed by Bennett Construction. The parties stipu-
lated that Kohout’s injury arose out of and in the course of
employment.
   After a trial, the court dismissed Kohout’s petition. It
ruled that Kohout was employed by either Nick Bennett
Construction or Housecraft and that under § 48-116, Bennett
Construction was neither Kohout’s direct employer nor his
statutory employer. The court stated that “[i]t is clear from
[Shook’s] testimony that Nick . . . was solely responsible for
negotiating the job and performing and supervising the work at
that site.” Kohout appealed.

               ASSIGNMENT OF ERROR
  Kohout assigns, restated, that the Nebraska Workers’
Compensation Court erred by finding that Bennett Construction
was not Kohout’s employer under the Nebraska Workers’
Compensation Act.

                   STANDARD OF REVIEW
   [1] 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 compensa-
tion 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
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               Nebraska Supreme Court A dvance Sheets
                       296 Nebraska R eports
                       KOHOUT v. BENNETT CONSTR.
                           Cite as 296 Neb. 608

of fact by the compensation court do not support the order
or award.1
   [2,3] 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.2 An appellate court
is obligated in workers’ compensation cases to make its own
determinations as to questions of law.3
                           ANALYSIS
   Kohout contends that Bennett Construction is a statutory
employer pursuant to § 48-116. Section 48-116 states:
         Any person . . . creating or carrying into operation any
      scheme, artifice, or device to enable him or her . . . to
      execute work without being responsible to the workers for
      the provisions of the Nebraska Workers’ Compensation
      Act shall be included in the term employer, and with
      the immediate employer shall be jointly and severally
      liable to pay the compensation herein provided for and
      be subject to all the provisions of such act. This section,
      however, shall not be construed as applying to an owner
      who lets a contract to a contractor in good faith, or a
      contractor, who, in good faith, lets to a subcontractor a
      portion of his or her contract, if the owner or principal
      contractor, as the case may be, requires the contractor or
      subcontractor, respectively, to procure a policy or poli-
      cies of insurance [that] guarantee[s] payment of compen-
      sation according to the Nebraska Workers’ Compensation
      Act to injured workers.
   [4] Under § 48-116, we have long held that a contractor’s
act of engaging a subcontractor without actually compelling

 1	
      Interiano-Lopez v. Tyson Fresh Meats, 294 Neb. 586, 883 N.W.2d 676
      (2016).
 2	
      Id.
 3	
      See id.
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               Nebraska Supreme Court A dvance Sheets
                       296 Nebraska R eports
                        KOHOUT v. BENNETT CONSTR.
                            Cite as 296 Neb. 608

the subcontractor to acquire workers’ compensation insurance
constitutes a device to escape liability under the Nebraska
Workers’ Compensation Act.4 Neither of Nick’s sole propri-
etorships had workers’ compensation insurance at the time of
the Shook job. Accordingly, if Mark’s company was the gen-
eral contractor of the Shook job and allowed either of Nick’s
sole proprietorships to act as a subcontractor, the company may
be liable for Kohout’s injury as a statutory employer.
   [5,6] 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.5
The existence of a scheme, artifice, or device does not require
active fraud or evil design.6
   Kohout asserts two theories under which Mark and Nick
employed a “scheme, artifice, or device” that allowed Bennett
Construction to avoid liability under the Nebraska Workers’
Compensation Act. First, Kohout argues that Nick had the
apparent authority to enter into a contract with Shook on behalf
of Bennett Construction and that Nick was hired as an unin-
sured subcontractor to do the work on the job. Second, Kohout
contends that Mark and Nick entered into a joint venture to
obtain repair jobs after the 2014 hailstorm and that the Shook
job was one of those joint ventures.
               Nick Lacked A pparent Authority
                 to Enter I nto Contract With
                      Shook on Behalf of
                     Bennett Construction
   [7-9] Apparent authority is authority that is conferred when
the principal affirmatively, intentionally, or by lack of ordinary

 4	
      See Rogers v. Hansen, 211 Neb. 132, 317 N.W.2d 905 (1982), citing
      Hiestand v. Ristau, 135 Neb. 881, 284 N.W. 756 (1939), and Sherlock
      v. Sherlock, 112 Neb. 797, 201 N.W. 645 (1924), disapproved on other
      grounds, Franklin v. Pawley, 215 Neb. 624, 340 N.W.2d 156 (1983).
 5	
      O’Brien v. Barnard, 145 Neb. 596, 17 N.W.2d 611 (1945).
 6	
      See Keith v. Wilson, 165 Neb. 58, 84 N.W.2d 192 (1957).
                                      - 616 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
                         KOHOUT v. BENNETT CONSTR.
                             Cite as 296 Neb. 608

care causes third persons to act upon an actor’s apparent
authority.7 Apparent authority gives a professed agent the power
to affect the principal’s legal relationships with third parties.8
The power arises from, and is limited to, the principal’s mani-
festations to those third parties about the relationships.9 Stated
another way, 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
   [10,11] 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
   Kohout argues that Nick acted with apparent authority
to bind a contract between Shook and Bennett Construction
because Nick provided Shook a business card identifying him
as a representative of the company, Nick used one of the com-
pany’s proposal forms, the company accepted a check from
Shook, and Mark visited the Shook worksite on one occasion.
Additionally, Kohout contends that because Mark took no
action to disavow Nick as an agent of his company, Mark’s lack
of ordinary care caused Shook to believe the contract was with
Mark and/or Bennett Construction. Kohout further contends
that because Nick was a subcontractor on the Shook job and
Mark did not compel Nick to obtain workers’ compensation

 7	
      RM Campbell Indus. v. Midwest Renewable Energy, 294 Neb. 326, 886
      N.W.2d 240 (2016).
 8	
      State ex rel. Medlin v. Little, 270 Neb. 414, 703 N.W.2d 593 (2005). See,
      also, 1 Restatement (Third) of Agency § 2.03 (2006).
 9	
      See RM Campbell Indus., supra note 7.
10	
      See id.
11	
      Id.
12	
      Id.
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           Nebraska Supreme Court A dvance Sheets
                   296 Nebraska R eports
                  KOHOUT v. BENNETT CONSTR.
                      Cite as 296 Neb. 608

insurance, Bennett Construction employed a device to avoid
liability under the Nebraska Workers’ Compensation Act and
that therefore, it was Kohout’s statutory employer.
   Bennett Construction argues that it was not the principal or
contractor of the Shook job and that Nick was solely respon-
sible for negotiating, performing, and supervising the job. It
contends that Mark made no representations to Shook, that
Nick informed Shook he would be the contractor both orally
and by altering the proposal, and that Bennett Construction
retained no benefit from the Shook job.
   The focal points of the analysis are the representations Mark
and Bennett Construction made to Shook and what Shook
could have reasonably believed based on those representations.
Mark and Bennett Construction had only three interactions
with Shook: First, after a previous hailstorm in 2009 or 2011,
Mark may have given Shook an estimate for repairs which did
not result in a contract; second, Bennett Construction cashed
a check addressed to it by Shook; and third, Mark visited
the Shook worksite on one occasion. However, Shook’s tes-
timony did not establish that he intended the check written to
“Bennett’s Construction” to actually go to Mark’s company, as
opposed to Nick, and Shook testified that he did not know why
Mark had visited the worksite.
   [12] Nick’s actions are also relevant to the reasonableness
of Shook’s belief, but only insofar as they are traceable to
Mark or Bennett Construction. The business card and proposal
form presented by Nick were indicia of authority regarding
Bennett Construction. However, the card contained nothing
to verify that it was current or more than a declaration made
solely by Nick, and the proposal form, altered by Nick, also
provided no verification that Nick was authorized to enter
into a contract on the company’s behalf. Further, there was
no evidence that Mark or Bennett Construction were aware
that Nick had used the business card or the proposal form or
that Mark or his company gave Nick permission to use either
document. While such indicia of authority may contribute to
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                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
                         KOHOUT v. BENNETT CONSTR.
                             Cite as 296 Neb. 608

the impression of apparent authority, that impression alone
cannot bind the agent’s principal to a third party.13
   When seeking an estimate for his repairs, Shook contacted
Nick directly and had no communications through Mark or
his company. Shook did not testify that Nick stated he was
employed by Bennett Construction or that Shook’s contract
would be with Bennett Construction. In fact, Shook testified
that Nick provided him with an invoice bearing Nick’s name,
not Bennett Construction, and that Nick asked him to write
checks to Nick after Shook wrote the one check to “Bennett’s
Construction.” The fact that Shook addressed his first check
to “Nick Bennett’s Construction” provides the most tangi-
ble evidence that he did not believe he had contracted with
Bennett Construction.
   Based on the preceding facts, Shook could not have reason-
ably believed that he was contracting with Mark or Bennett
Construction. Shook’s testimony does not show that Mark or
his company manifested any authority to him. The indicia of
authority alone—the business card and the proposal form—
does not provide a reasonable basis to conclude the contract
was with Bennett Construction. Finally, Shook’s actions show
that he did not actually believe he had contracted with some-
one other than Nick. Therefore, we find that Nick lacked the
apparent authority to bind Bennett Construction to the contract
with Shook and that as a result, Shook entered the contract
with Nick alone.

                    Nick Did Not Enter Into
                   Joint Venture With M ark
                    or Bennett Construction
   [13,14] 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

13	
      Herbert Const. Co. v. Continental Ins. Co., 931 F.2d 989 (2d Cir. 1991).
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               Nebraska Supreme Court A dvance Sheets
                       296 Nebraska R eports
                        KOHOUT v. BENNETT CONSTR.
                            Cite as 296 Neb. 608

a profit to be shared in proportion to the respective contribu-
tions 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
The moving party bears the burden to prove a joint venture or
enterprise exists by clear and convincing evidence.15
   [15-17] 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 A
joint venture can exist only by voluntary agreement of the
parties and cannot arise by operation of law. Even a close rela-
tionship 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.18
   Kohout also argues that Mark and Nick employed a joint
venture as a scheme to avoid liability under the Nebraska
Workers’ Compensation Act, citing Thomas v. Hansen.19 He
contends that Mark and Nick had a common purpose of secur-
ing as much work from the hailstorm for their family as pos-
sible and that Mark allowed Nick to use his proposal forms to
induce business based on the statement about workers’ com-
pensation coverage.
   In Thomas, the Iowa Supreme Court held that Hansen &
Sons Welding (Hansen) and Leo Morgan were engaged in a
joint venture when Morgan’s employee, Edward Thomas, was
injured. Hansen had agreed to bill a packing plant with which

14	
      See Lackman v. Rousselle, 257 Neb. 87, 596 N.W.2d 15 (1999).
15	
      See id.
16	
      Id.
17	
      Id.
18	
      Id.
19	
      Thomas v. Hansen, 524 N.W.2d 145 (Iowa 1994).
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                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
                         KOHOUT v. BENNETT CONSTR.
                             Cite as 296 Neb. 608

Hansen had a contract on Morgan’s behalf for 8 percent of
Morgan’s portion of the contract, because Morgan did not have
workers’ compensation insurance and the packing plant would
not contract with uninsured contractors. The court identified
that Hansen paid Thomas and that Hansen and Morgan often
exchanged workers and exercised mutual control over them.
The court found that the facts showed the only reason for the
arrangement was to avoid workers’ compensation laws. The
court stated that although there was conflicting evidence of
whether a joint venture existed, based on the strong evidence
of the parties’ intent, a joint venture did exist, and that Hansen
was liable for Thomas’ injuries.20
   In O’Brien v. Barnard,21 we considered whether a lease
arrangement constituted a “scheme, artifice, or device” under
§ 48-116. Raymond Barnard operated a gas station, which
he leased from Charles Larsen. At the inception of the lease,
Larsen provided Barnard a $1,000 loan, which Barnard agreed
to repay at the rate of one-half cent per gallon of gas purchased
until paid in full, plus interest. He also paid Larsen 1 cent per
gallon of gas purchased for rent. Barnard purchased all of his
gas and products through Larsen, who was a sales representa-
tive for a petroleum company.
   The plaintiff in O’Brien, who was an employee at the gas
station, claimed that Larsen was a statutory employer, because
he set up the business through Barnard to increase his own
income, essentially claiming that a joint venture existed. We
held that Larsen was not a statutory employer.22 In doing so,
we noted that (1) Larsen did not contribute financially to the
station because his $1,000 loan was being repaid by Barnard;
(2) Larsen did not control, supervise, or give direction on the
station’s management or to Barnard’s employees; (3) Larsen

20	
      Id.
21	
      O’Brien v. Barnard, supra note 5.
22	
      Id.
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                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
                         KOHOUT v. BENNETT CONSTR.
                             Cite as 296 Neb. 608

did not share in the profits of the station; and (4) there was no
evidence that Larsen and Barnard intended to enter into busi-
ness together.23 While we determined that the facts of the case
did not warrant liability for the alleged joint venture, we did
not foreclose applicability of the concept.
   Here, Kohout has failed to show by clear and convincing
evidence that Nick engaged in a joint venture with Mark or
Bennett Construction on the Shook job.
   First, because a joint venture cannot arise as an operation
of law, there must be evidence that Mark and Nick intended
to enter into a voluntary agreement. In Thomas, the circum-
stances implied that Hansen and Morgan made an agreement
to avoid the packing plant’s prohibition on contracting with
uninsured contractors, because there was no other reason-
able explanation for their arrangement and there was also
direct evidence that they had agreed to the joint venture.24
In O’Brien, Larsen’s arrangement with Barnard was bene­
ficial to Larsen individually and as a sales representative,
but we did not infer from this that Larsen and Barnard were
joint venturers.25
   Kohout failed to elicit evidence that Mark and Nick had
the intent to enter into a joint venture to complete the Shook
job. Mark and Nick both testified that Nick was operating his
own business after the hailstorm. Though Kohout argues that
Nick testified that he occasionally worked on jobs with Mark
and split the profits, there is no evidence regarding those jobs
or that this was the situation on the Shook job. While Nick
continued to be a subcontractor for Mark on other jobs, there
is no evidence that Nick benefited more than any other sub-
contractor would have or that his subcontracting constituted a
joint venture.

23	
      Id.
24	
      See Thomas v. Hansen, supra note 19.
25	
      See O’Brien v. Barnard, supra note 5.
                                     - 622 -
                Nebraska Supreme Court A dvance Sheets
                        296 Nebraska R eports
                         KOHOUT v. BENNETT CONSTR.
                             Cite as 296 Neb. 608

   While Nick testified that he intended people to rely on the
statement concerning workers’ compensation insurance in the
proposal form, there was no evidence that Mark or Bennett
Construction was complicit or even aware of Nick’s actions.
   In addition, there is neither circumstantial evidence that
Mark would have entered into a joint venture with Nick’s sole
proprietorships nor direct evidence that he did, as was the case
in Thomas. Further, there is no evidence as to how such an
arrangement would have benefited Bennett Construction, as
was the case in O’Brien. Accordingly, we cannot infer a volun-
tary agreement or an intent by Mark and Nick to enter a joint
venture on the Shook job.
   Second, there is no evidence that Mark contributed cash or
labor to the Shook job. While Kohout established that Nick,
at times, used some of Mark’s tools, he did not show that this
provided a significant contribution to the Shook job. Further,
we recognize our statement in Lackman v. Rousselle 26 that
circumstances between family members are not the same as
strangers; a father allowing his son to use tools is an incident
of their closeness and does not alone imply a joint venture.
   Third, there is no evidence that Mark and Nick split the
profits from the Shook job. In fact, there is no evidence that
Mark profited from the Shook job at all. While Mark did cash
the check Shook wrote to “Bennett’s Construction,” he testi-
fied that he provided Nick with a check for the full amount
shortly thereafter.
   Fourth, there is no evidence that Mark had an equal right to
control the performance at the Shook worksite. Though Mark
visited the site on one occasion, neither Kohout nor Shook
testified that Mark directed any actions at the site or examined
the work. While Mark could have entrusted performance of the
Shook job to Nick under a joint venture, Kohout failed to show
any evidence that would warrant such a determination.

26	
      Lackman v. Rousselle, supra note 14.
                           - 623 -
          Nebraska Supreme Court A dvance Sheets
                  296 Nebraska R eports
                 KOHOUT v. BENNETT CONSTR.
                     Cite as 296 Neb. 608

   Accordingly, we hold that neither Mark nor Bennett
Construction was engaged in a joint venture with Nick con-
cerning the Shook job.
                       CONCLUSION
   We find that the Nebraska Workers’ Compensation Court’s
application of § 48-116 was not contrary to law and that its
determination that Bennett Construction was not Kohout’s
statutory employer was not clearly wrong in light of the evi-
dence. Therefore, for the reasons stated above, we affirm the
judgment of the court.
                                                  A ffirmed.
