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              TENNESSEE BUREAU OF WORKERS' COMPENSATION
             IN THE COURT OF WORKERS' COMPENSATION CLAIMS
                              AT NASHVILLE

Juan Armas,                                           )    Docket No. 2017-06-0405
                 Employee,                            )
v.                                                    )
Lucas Enamorado,                                      )    State File No. 15759-2017
           Employer,                                  )
And                                                   )
Travelers,                                            )    Judge Kenneth M. Switzer
           Carrier.                                   )


        EXPEDITED HEARING ORDER GRANTING MEDICAL BENEFITS


       Juan Armas filed a Request for Expedited Hearing, and the undersigned conducted
a hearing on August 15, 2017. Mr. Armas sought benefits for a May 4, 2016 workplace
injury. Lucas Enamorado, the alleged employer, denied responsibility. He argued that
Mr. Armas appears on the Workers' Compensation Exemption Registry or in the
alternative that Mr. Armas is an independent contractor. For the reasons set forth below,
the Court holds Mr. Armas was ineligible for Registry placement and that he was Mr.
Enamorado's employee. Thus, Mr. Armas suffered a compensable injury under the
Workers' Compensation Law and is entitled to medical benefits. 1

                                           History of Claim

       Mr. Armas and Mr. Enamorado agreed that on May 4, 2016, Mr. Armas became
injured while working on a home construction project when a foreign object flew into his
eye. Mr. Armas sought emergency care at Vanderbilt. Providers diagnosed a corneal
laceration, requiring immediate surgical repair and removal of the foreign body. He

1
  The Dispute Certification Notice additionally lists as issues Mr. Armas' entitlement to temporary and
permanent disability benefits. However, Mr. Armas offered no argument in support of his claim for
temporary benefits; rather, he said that the expedited hearing was "about the medical bills." Further, no
medical provider assigned a permanent impairment rating to date, so the issue of Mr. Armas' eligibility
for permanent disability benefits is not ripe for adjudication. Thus, the Court limits its focus at this time
to the issues of compensability and medical benefits.
received follow-up care over the next several months. Mr. Armas, whose principal
language is Spanish, testified that the Vanderbilt providers recommended a second
surgery but declined to treat him further due to outstanding medical bills.

        Mr. Armas testified that he incurred substantial medical bills for the injury,
although he failed to introduce proof of the amounts at the hearing. 2 He paid $40 out of
his own pocket and $100 from Mr. Enamorado toward the bills. Further, and to his
credit, Mr. Enamorado voluntarily paid $15,800 in cash to help Mr. Armas support his
family. Later, in July 2016, the parties entered into a written agreement that their pastor
facilitated in an etiort to avoid litigation. The agreement provided for voluntary
payments by Mr. Enamorado to Mr. Armas. It also stated that Mr. Armas became injured
while "under [Mr. Enamorado's] direction at work," and that Mr. Enamorado "hired [Mr.
Armas] verbally."

        The parties detailed their relationship further by explaining it began in fall 2015,
when they discussed the possibility of Mr. Armas working for Mr. Enamorado. Mr.
Enamorado is a home builder who also constructs fences and decks. Mr. Armas believed
he was seeking employment as his "assistant." He previously worked in landscaping
under other employers for approximately seven years but wanted to learn more about
carpentry. Mr. Armas said Mr. Enamorado treated his workers well, which also attracted
him to the opportunity. Mr. Enamorado carries workers' compensation coverage only on
himself. He explained that, around the time of hire, he told Mr. Armas that he must
either obtain workers' compensation insurance or apply for an exemption on the Registry
for 2016. According to Mr. Enamorado, Mr. Armas had "some basic" carpentry skills
when he started, and he assisted others. Mr. Armas worked continually except when he
left briefly to work elsewhere when the work slowed down. He later returned to work for
Mr. Enamorado.

       Mr. Armas apparently worked for Mr. Enamorado for several months without
workers' compensation coverage. Then, on February 24, 2016, Mr. Enamorado met with
United Solutions, an insurance firm. Its principal, Troy Walton, writes workers'
compensation and other insurance policies and offers tax advice and bookkeeping
services. Mr. Walton testified that he previously offered general business advice and sold
workers' compensation insurance to Mr. Enamorado when Mr. Enamorado was starting
his business. When starting his business, Mr. Enamorado stated an intention to work
only with "1099 independent contractor[s]." Mr. Walton testified that he told Mr.
Enamorado at that time:

       If a person does not have their own workers' comp policy or if a person at
       the bare minimum does not have a workers' comp exemption, then that

2
 The Court sustained Mr. Enamorado's objection to the admissibility of these bills, arguing that they
were hearsay and they did not state a causal relationship to the work injury.

                                                  2
        person, insurance-wise, would not be considered an independent contractor.
        So, if he does plan on giving any 1099s within the next policy period, then
        he needs to advise those persons that don't have exemptions that they
        possibly might want to get some.

       On February 24, Mr. Enamorado, presumably acting on Mr. Walton's advice but
outside his presence, telephoned Mr. Armas from United's office to discuss the effect of
Mr. Armas declining to purchase a workers' compensation policy on himself but opting
instead for the Registry. Mr. Enamorado turned on his phone's speaker, and United
Solutions staff, Ana Lopez and Adilene Padilla, overheard and may have participated in
the conversation between Mr. Armas and Mr. Enamorado. However, testimony about
this conversation varied slightly among the witnesses. Ms. Lopez, Ms. Padilla and Mr.
Enamorado each spoke about a "form" in Spanish explaining the supposed consequences
of applying for the Registry, but no one introduced this document into evidence. Mr.
Armas testified that he did not consent to anyone signing the form on his behalf; Mr.
Enamorado, Ms. Lopez and Ms. Padilla stated that he did. Regardless, the form, signed
or unsigned, was not introduced into evidence; rather, the parties agreed to admission of
an "Initial Workers' Compensation Exemption Registration Acknowledgement."

       This form, which does not contain Mr. Armas' signature, required a payment of
$100. Although a credit card number appears on the form, no one acknowledged whose
card it was. Mr. Armas specifically stated he did not pay the required fee, and Mr.
Enamorado offered no contradictory evidence. At some point during or immediately
following the conversation, Mr. Armas texted information for the application to Mr.
Enamorado. Mr. Enamorado retrieved a photo containing Mr. Armas' Individual
Taxpayer Identification Number, which he provided at an earlier date, presumably around
the date of hire. 3 Ms. Lopez used all of thi information to complete the application
electronically.

        The resulting Acknowledgement lists Mr. Armas as an "active" Registry member
as of February 24. It lists the "business name" as "Juan Carlos Armas" and assigns a
"CSP," or "construction services provider" registration number. The Acknowledgement
lists no licensures for the business from the state, county or city. Mr. Enamorado offered
no proof that Mr. Armas operated a business performing carpentry work.

      The parties offered varying accounts of Mr. Armas' general working conditions.
They agreed he worked Monday through Friday; Mr. Enamorado said the hours varied,
while Mr. Armas stated the days began at 7:00a.m. and the end of the workdays varied

3
  IRS Form W-7 allows for creation of an "ITIN," or "Individual Taxpayer Identification Number," for
persons who "are required for federal tax purposes to have a U.S. taxpayer identification number but who
don't have and aren't eligible to get a social security number." INTERNAL REVENUE SERVICE,
https://www. irs.gov/ ub/irs- df/iw7. df (last visited Aug. 22, 20 17).

                                                   3
depending on the availability of materials or a job's completion, etc. Mr. Armas testified
that he earned $620 in gross weekly wages at an hourly rate of $13, paid in cash. Mr.
Armas daily brought his own tools to the worksite, and he worked under the direction of
"supervisors." Mr. Armas offered the affidavit of Ermes Garcia, a co-worker, who said
Mr. Enamorado was the "boss" at their jobsites.

                       Findings of Fact and Conclusions of Law

       At this expedited hearing, Mr. Armas must offer sufficient evidence from which
the Court can determine he is "likely to prevail at a hearing on the merits." McCord v.
Advantage Human Resourcing, 2015 TN Wrk. Comp. App. Bd. LEXIS 6, at *7-8, 9
(Mar. 27, 2015).

       The Court finds Mr. Armas received an on-the-job injury and that the dispute
involves two defenses: 1) Mr. Armas' presence on the Registry and 2) his status as an
alleged independent contractor.

                               Exemption Registry Defense

       The Court first considers the legal effect of Mr. Armas' presence on the
Exemption Registry. On this point, the parties offered a great ·deal of testimony and
argument regarding Mr. Armas applying for the Registry and whether he did so
voluntarily. However, the Court finds the disputed circumstances of the application itself
and the voluntary nature of it are incidental to the dispositive issue: whether Mr. Armas
was a proper candidate for the Registry in the first place. The Court holds that he was
not.

       Since the Legislature created the Registry in 2010, no appellate court has offered
an interpretation. Therefore, the Court looks to the plain language of the statute itself.

        The Act creating the Registry amended the definition of "employee" to exclude
"construction services provider[s], as defined in§ 50-6-901," if the construction services
provider is listed on the Registry and is "working in the service of the business entity
through which the provider obtained such an exemption[.]" (Emphasis added); see also
Tenn. Code Ann. § 50-6-1 02(E)(i) (20 16). Further, Tennessee Code Annotated section
50-6-902(a) requires construction services providers to carry workers' compensation
insurance regardless of the number of employees, but section 50-6-902(b )( 1) allows an
exemption for construction services providers working on non-commercial projects and
listed on the Registry. Section 50-6-903(a) lists criteria for application to the Registry.
Specifically, applicants may be officers of corporations, members of limited liability
companies, partners, sole proprietors or owners of any of these business entities.
Importantly, the statute does not include an "employee" on the list of possible candidates
for the Registry, suggesting to the Court that lawmakers intended only for business

                                            4
owners to qualify for the exemption. If employees were allowed an exemption, then the
requirement of coverage set forth in section 902 that all construction services providers
provide coverage for their employees would be thwarted.

        Here, the Registry Acknowledgment lists a "business name" of "Juan Carlos
Armas," suggesting a sole proprietorship. Section 50-6-90 1(17) defines a "sole
proprietor" as "one ( 1) person who owns a form of business in which that person owns all
of the assets of such business." Considering this definition, the Court holds that Mr.
Armas was not working in affiliation with any business entity as an officer or partner and,
in particular, he was not a "sole proprietor." Rather, he was Mr. Enamorado's employee.
Mr. Armas credibly testified to seven years of landscape work before starting work for
Mr. Enamorado to gain carpentry skills. He clearly considered himself an employee.
Despite lengthy, thorough cross-examination, Mr. Enamorado never elicited testimony
from Mr. Armas to suggest that he owns or operates a business. Further, the only
"assets" of any purported business are Mr. Armas' tools, likely of minimal value and
customarily in all construction workers' possession. The Court rejects the Exemption
Registry defense and holds the submission of the Registry application was an attempt to
avoid the application of the Workers' Compensation Law to Mr. Armas.

                              Independent Contractor Defense

       In the alternative, Mr. Enamorado argued that Mr. Armas was an independent
contractor or subcontractor rather than an employee. This argument is also unpersuasive.

       To recover workers' compensation benefits, a claimant must be an employee and
not an independent contractor. Peters v. Mitchell d/b/a A Clean Connection, LLC, et al.,
2016 TN Wrk. Comp. App. Bd. LEXIS 7, at *7 (Feb. 8, 2016). The statute provides that,
to determine whether an individual is an "employee," "subcontractor" or "independent
contractor," a Court shall consider the following factors:

      (a)   The right to control the conduct of the work;
      (b)   The right oftermination;
      (c)   The method of payment;
      (d)   The freedom to select and hire helpers;
      (e)   The furnishing oftools and equipment;
      (f)   Self-scheduling of working hours; and
      (g)   The freedom to offer services to other entities[.]
                                                                                              •
Tenn. Code Ann. § 50-6-102(12)(D)(i) (2016). Of these factors, appellate courts have
characterized the right to control the conduct of the work as the most significant in
determining whether an injured worker is an employee or independent contractor. Peters,
supra, at *9.


                                              5
        Here, of the applicable factors, Mr. Armas testified without contradiction that Mr.
 Enamorado or supervisors controlled the conduct of the work. Along these lines, the
 post-injury agreement states that Mr. Armas became injured under Mr. Enamorado's
 "direction," implying that Mr. Enamorado controlled the worksite. Mr. Enamorado paid
 Mr. Armas an hourly wage, suggestive of an employee rather than an independent
 contractor. While Mr. Armas brought his own tools to the worksite, as previously noted,
 workers in his field customarily do so. While the parties' testimony varied about the
 hours, the Court accredits Mr. Armas' account and finds Mr. Armas followed a work
 schedule that Mr. Enamorado or the supervisors set. Finally, although Mr. Armas left
 briefly to work elsewhere, that was due to a lack of work for Mr. Enamorado and not
 because he was free to offer his services to other entities. In sum, the Court finds the
 evidence supports a holding that Mr. Armas was Mr. Enamorado's employee rather than
 an independent contractor.

        Therefore, as a matter of law, Mr. Armas has come forward with sufficient
 evidence from which this Court concludes, at this time, that he is likely to prevail at a
 hearing on the merits regarding the compensability of his claim.

                                      Medical Benefits

        Since Mr. Armas falls within the Workers' Compensation Law, the Court turns to
 his requested relief.

         Mr. Armas' stated focus at the expedited hearing was mostly "about the bills."
  Tennessee Code Annotated section 50-6-204(a)(l)(A) provides that employers must
  provide medical and surgical treatment made reasonably necessary by a workplace
  accident free of charge to the injured employee. Ordinarily, this would entitle Mr. Armas
  to an order that Mr. Enamorado pay all outstanding sums for past treatment. However,
  this Court cannot do so on this record because it declined to admit Mr. Armas' bills into
  evidence. See Osborne v. Beacon Transport, LLC, et al., 2016 TN Wrk. Comp. App. Bd.
  LEXIS 49, at *9-10 (Sept. 27, 2016). This holding does not prevent Mr. Armas from
. presenting additional evidence on this issue at a later hearing.

        Mr. Armas also testified, without contradiction, that he needs surgery for the work
 injury. Section 50-6-204(a)(l)(A) requires that Mr. Enamorado provide ongoing medical
 benefits. Thus, the Court grants Mr. Armas' request for further medical benefits. Given
 the course of treatment to date, the Court finds it appropriate that the approved providers
 be those at Vanderbilt.




                                              6
IT IS, THEREFORE, ORDERED as follows:

   1. Mr. Enamorado shall provide Mr. Armas with medical treatment with Vanderbilt
      (Dr. Janice Law) designated as the authorized treating provider(s). Vanderbilt or
      Mr. Armas shall furnish medical bills to Mr. Enamorado for prompt payment.

   2. Mr. Armas' request for past medical benefits, specifically payment for past
      medical bills, is denied at this time.

   3. This matter is set for a Scheduling Hearing on October 16, 2017, at 10:00 a.m.
      Central. The parties must call 615-532-9552 or toll-free at 866-943-0025 to
      participate in the Hearing. Failure to call may result in a determination of the
      issues without the parties' participation.

   4. Unless interlocutory appeal of the Expedited Hearing Order is filed, compliance
      with this Order must occur no later than seven business days from the date of entry
      of this Order as required by Tennessee Code Annotated section 50-6-239(d)(3)
      (2016). The Insurer or Self-Insured Employer must submit confirmation of
      compliance with this Order to the Bureau by email to no later than the seventh
      business day after entry of this Order. Failure to submit the necessary
      confirmation within the period of compliance may result in a penalty assessment
      for non-compliance. For questions regarding compliance, please contact the
      Compliance Unit via email at WC om liru1ce.Pro ram t tn . ov.

      ENTERED the 22nd day of August, 2017.




                                 Court of Workers' Com pens

                                     APPENDIX

Exhibits:
   1. Affidavit ofFabricio Sosa
   2. Affidavit ofErmes Garcia
   3. FROI
   4. Initial Workers' Compensation Exemption Registration Acknowledgement and
      Filing Information
   5. Denial email
   6. Medical records from Vanderbilt
   7. Acta de Mutuo Acuerdo (Act ofMutual Agreement)
   8. Memo of payments to Mr. Armas

                                           7
Technical record:
   1. Petition for Benefit Determination
   2. Employer's Position Statement
   3. Dispute Certification Notice
   4. Request for Expedited Hearing
   5. Witness and Exhibit List of Employer/Carrier
   6. Subpoenas/Return on Service: Troy Walton, Adilene Padilla, Ana Lopez
   7. Employer's Brief
   8. Notice ofRetention of Interpreter

                           CERTIFICATE OF SERVICE

       I certify that a true and correct copy of the Expedited Hearing Order was sent to
the following recipients by the following methods of service on this the 22nd day of
August, 20 17.

Name                        Certified Via       Via     Service sent to:
                            Mail      Fax       Email
 Juan Armas,                   X                        5308 Pennsylvania Ave.,
 Employee                                               Nashville TN 37209
 Ritchie Pigue, Steven                            X     rgigue@tgmblaw .com;
 Parman,                                                steve(ci2watkinsmcnei llv .com
 Employer's Counsel




                                                  1, Clerk of Court
                                        Court of rkers' Compensation Claims
                                        WC.CourtClerk@tn.gov




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