Apartment complex on hook for contractor’s injuries

An apartment management company is liable for the workers compensation benefits of a worker employed by a contractor of the firm, the Kansas Court of Appeals held on Friday.

In Ramirez v. Garay’s Roofing LLC, a three-judge panel of the appellate court in Topeka, Kansas, unanimously affirmed a Kansas Workers Compensation Appeals Board ruling that under Kansas statutes, the company acted as a general contractor and was therefore liable for injuries sustained by the workers of a painting contractor it hired for a building contract.

Overland Park, Kansas-based Kelly Enterprises Inc. manages apartment complexes and constructs them, acting as the general contractor. In 2015, Manuel Ramirez was working as a painter for Garay’s Roofing & Painting LLC, which had been hired by Kelly to work on the construction of a new apartment complex. Garay’s provided Kelly with a certificate of workers compensation insurance. However, at the time of the accident, Garay’s was not insured.

On October 2015, Mr. Ramirez fell from ladder, hitting his head on concrete and breaking his left arm. He stayed in the hospital for four days and ended up with $189,000 in medical bills. He contacted Garay and sent the medical bills at Garay’s request, but Mr. Ramirez said he never heard from the company again and that the company refused to take his calls.

He sought a hearing from the Kansas Division of Workers Compensation, and an administrative law judge held that Mr. Ramirez’s injuries were compensable via the Kansas Workers Compensation Fund. The fund appealed, arguing that Kelly had secondary liability as a statutory employer, and the board agreed, reversing the administrative judge’s decision. Kelly appealed, but the appellate court affirmed the board’s ruling.

Although Kelly argued that the board erred in finding that it was Mr. Ramirez’s statutory employer and that it relied in good faith on Garay’s insurance certificate, the appellate court noted that Kansas statutes allow a contractor’s employee to recover workers compensation benefits from either the employee’s immediate employer or the principal, so long as the work being done by the employee is part of the principal's trade or business, or the principal has contracted to do the work for a third party.

The appellate court held that there was substantial evidence in the record to support the conclusion that constructing apartment complexes was an integral part of Kelly’s business, noting that the company had built 10 apartment complexes, acting each time as the general contractor, negating the company’s argument that construction was not a major part of its business.

The appellate court also dismissed Kelly’s argument that it shouldn’t be liable because of its good faith reliance on Garay’s assurance that it had workers compensation, noting that nothing in the statute provides for a good-faith exception.

Attorneys in the case did not immediately respond to requests for comment.