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State Compensation Fund v. Yellow Cab Co. of Phoenix11/26/1999
REVERSED AND REMANDED
The State Compensation Fund ("the Fund") and Travelers Indemnity Company ("Travelers") sued four corporations (collectively "Yellow Cab"), alleging that Yellow Cab taxi drivers were employees covered by workers' compensation and that Yellow Cab had failed to pay necessary insurance premiums. The trial court concluded that Central Management Co. v. Industrial Comm'n, 162 Ariz. 187, 781 P.2d 1374 (App. 1989), which affirmed an award of workers' compensation benefits to a taxi driver, required a finding that Yellow Cab drivers were employees and not independent contractors. We reverse summary judgment for the Fund and Travelers ("the insurers"), however, because Central Management is not dispositive, and genuine issues of material fact exist. We also reverse the award of attorney's fees to the insurers. In the cross-appeal, we reverse the order denying the insurers' motion to amend to add a party defendant and remand for further proceedings.
I. FACTUAL AND PROCEDURAL BACKGROUND
From 1986 to 1993, Yellow Cab purchased workers' compensation insurance from the Fund, and in 1994, from Travelers. Yellow Cab did not, however, purchase workers' compensation insurance for taxi drivers. After this court's decision in Central Management, the Fund informed Yellow Cab that it must pay workers' compensation insurance premiums for drivers and include the drivers' compensation in payroll documents. It audited Yellow Cab and calculated unpaid premiums for 1990 to 1993 at over $3.3 million. Travelers sought over $1.1 million in premiums for 1994.
When Yellow Cab failed to pay, the insurers filed suit for breach of contract. Yellow Cab filed a counterclaim seeking a declaratory judgment that its drivers were independent contractors and that the insurers were not entitled to workers' compensation premiums.
The trial court granted partial summary judgment to the insurers on the issue of the drivers' status. When the insurers filed a second motion for summary judgment related to damages, Yellow Cab opposed it and sought a continuance pursuant to Arizona Rule of Civil Procedure 56(f) to conduct additional discovery. The trial court, however, denied a continuance and granted summary judgment to the insurers. It also granted summary judgment against Yellow Cab on its counterclaims. Finally, the trial court denied the insurers' motion to amend the complaint.
II. DISCUSSION
A. Standard of Review
Normally when this court reviews a grant of summary judgment, it takes the facts in the light most favorable to the non-moving party and affirms if the evidence produced in support of the defense or claim has so little probative value that no reasonable person could find for its proponent. See Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990). We review de novo the trial court's application of the law and its determination whether genuine issues of material fact preclude summary judgment. Gonzalez v. Satrustegui, 178 Ariz. 92, 97, 870 P.2d 1188, 1193 (App. 1993).
The insurers contend, however, that a different standard should apply here because the case concerns workers' compensation. We acknowledge that workers' compensation premiums are at issue and that when reviewing an Industrial Commission award to an injured worker, we view the administrative law Judge's fact findings in favor of sustaining the award and search the record for sufficient evidence to support the findings. See Anton v. Industrial Comm'n, 141 Ariz. 566, 569, 688 P.2d 192, 195 (App. 1984). But, a dispute over the insurers' liability for premiums bears little, if any, relationship to whether the evidence
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