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Diaz v. Capital Improvements and Management, LLC

CASE NO. 5616 CRB-1-11-1



JANUARY 12, 2012













The claimant was represented at the trial level by George W. Kramer, Esq., 30 Clemens Court, Rocky Hill, CT 06067. who did not appear at oral argument.

Jean-Paul G. Lewis, Esq., 122 Main Street, Suite 200, New Britain, CT 06051 appeared on behalf of Alan Klavins and Capital Improvements.

The Second Injury Fund was represented by Francis Vignati, Jr., Assistant Attorney General, Office of the Attorney General, 55 Elm Street, P.O. Box 120, Hartford, CT 06141-0120.

This Petition for Review from the December 17, 2010 Finding and Award of the Commissioner acting for the First District was heard October 28, 2011 before a Compensation Review Board panel consisting of the Commission Chairman John A. Mastropietro and Commissioners Scott A. Barton and Daniel E. Dilzer.


JOHN A. MASTROPIETRO, CHAIRMAN. The respondent in this matter has appealed from a Finding and Award to the claimant for a January 25, 2007 injury. The respondent argues that the evidence presented would not support a finding of an employer-employee relationship with the claimant, or that in the alternative a casual employment relationship existed. The respondent asserts the claimant’s Form 30C was deficient. The respondent also appeals from the fine levied due to the failure to carry workers’ compensation insurance. We find none of these arguments persuasive. We affirm the Finding and Award and dismiss this appeal.

The trial commissioner reached the following findings of fact after hearing all the evidence presented at a formal hearing which commenced July 16, 2009 with the record closing August 30, 2010. The following facts are pertinent to our discussion of the appeal. The commissioner took administrative notice of a Form 30C dated May 17, 2007 filed by the claimant against Capital Improvements & Management LLC, located at 146 Dividend Road, Rocky Hill, CT. He also took administrative notice of a Form 43 dated July 15, 2008 denying this claim, filed on behalf of Capital Improvement and Management, LLC. The commissioner took administrative notice that a firm officially named Capital Improvements, LLC was located at the aforementioned Rocky Hill address and the principal member of said firm was Alan Klavins. An investigator for the state Office of the Treasurer reported this firm did not have workers’ compensation insurance in effect at the time of the alleged accident. A second report by this investigator reported no firm had been registered with the state as “Capital Improvements and Management, LLC.” Nonetheless, the trial commissioner took administrative notice that nine separate notices had been sent by the Commission to that firm at the Rocky Hill address, and that none had been returned as undeliverable.

The claimant testified with the aid of an interpreter that prior to January 25, 2007 he was employed by Mr. Alan Klavins for a period of fifteen (15) months. He testified to being paid $11.00 per hour in cash for a 40 hour work week, with no taxes having been withheld. The claimant testified that he shared an apartment with Romero Vasquez who also worked for Mr. Klavins, but that he had never been employed by Mr. Vasquez. The claimant further testified that Mr. Klavins paid Mr. Vasquez by check and Mr. Vasquez cashed the checks and paid him and three other employees. The claimant further testified that on January 25, 2007, he sustained injuries to his back which arose out of and in the course of his employment with the respondent Capital Improvements & Management, LLC.

Mr. Vasquez testified that he did share an apartment with the claimant and that he had introduced him to Mr. Klavins, who had hired the claimant. Mr. Vasquez further testified that he did not hire the claimant for any work and transported him to the job site on January 25, 2007. He was not present on the job site on that date. Mr. Vazquez corroborated the claimant’s account that he cashed checks from Mr. Klavins and paid Mr. Klavins’ employees, including the claimant, in cash.

Mr. Klavins testified that he is the sole member of Capital Improvements, LLC. He further testified he had, in fact, hired Mr. Vasquez’s firm, REV General Contractors, for previous projects but that he did not hire the claimant. Mr. Klavins claimed he had a written contract with the owner of the premises where the claimant was injured; as well as a written contract with REV General Contractors to perform work at that location, but was unable to produce either document. Mr. Klavins further testified that he visited the job site at which the claimant was injured on a regular basis for short periods of time. He had the ability to fire employees. Mr. Klavins further testified that he did not have workers’ compensation insurance for Capital Improvements, LLC at the time of the alleged injury, but had three employees at that time. Mr. Klavins further testified that his personal expenses and bills were paid from the checking account of Capital Improvements, LLC.

The claimant presented unpaid medical bills supporting his position he sustained a compensable injury. The respondent challenged the Form 30C as inadequate as it failed to reference REV General Contractor as an employer, had inaccuracies as to the name of employer and town of injury, and failed to name Mr. Klavins personally. The respondent also challenged the claimant’s evidence on wages, asserted he was a casual employee, and stated insufficient basis existed to pierce the corporate veil. The Second Injury Fund appeared in this matter and argued any notice deficiencies were insignificant and that the respondent should be fined for not carrying workers’ compensation insurance.

Based on this evidence the trial commissioner concluded the testimony of the claimant and Mr. Vasquez was more credible and persuasive than that of Mr. Klavins on the issue of an employer/employee relationship. The commissioner concluded the claimant was hired and was an employee of the respondent and not REV General Contractors or Mr. Vasquez. The commissioner found the claimant was paid $11.00 per hour for a forty hour work week and the claimant was not a casual employee as defined by statute. The commissioner concluded any deficiencies in the notice to the respondent were minor and it provided proper notice to the respondent and substantially complied with the statute. The trial commissioner further concluded that Mr. Klavins and the respondent were obligated by statute to provide workers’ compensation insurance but it had not been provided. Finally, the trial commissioner found that sufficient evidence was presented to pierce the corporate veil of Capital Improvements, LLC so as to hold Mr. Alan Klavins personally liable for benefits owed to the claimant. The commissioner ordered the respondent and Mr. Klavins to accept the claimant’s injury and to pay any outstanding medical bills. The commissioner further ordered a fine of $3,000.00 be levied against Capital Improvements, LLC and Mr. Alan Klavins for their failure to maintain workers’ compensation insurance on January 25, 2007.

The respondent filed a timely Petition for Review and Reasons for Appeal. The respondent did not file a Motion to Correct or an appellant’s brief. The gravamen of this appeal is based on the position that the claimant failed to prove an employer-employee relationship with Mr. Klavins or his firm.1

We are hindered in considering these arguments as the respondent did not file a Motion to Correct. This requires us to accept the validity of the facts found by the trial commissioner, and limits this board to reviewing how the commissioner applied the law. Stevens v. Raymark Industries, Inc., 5215 CRB-4-07-4 (March 26, 2008), appeal dismissed, A.C. 29795 (June 26, 2008).

In many ways we find this case indistinguishable from Vignali v. Richard Renner, 5473 CRB-5-09-6 (June 17, 2010). In Vignali the respondent argued that the claimant failed to prove the existence of an employer-employee relationship, or in the alternative, should be deemed a casual employee. We affirmed the Finding and Award in that case as the trial commissioner credited the claimant’s testimony and “[e]mployment status is patently a factual issue, and is subject to a significant level of deference on review.” Id. We rejected the argument the claimant in Vignali should be deemed a casual employee as inconsistent with precedent in Mangual v. Andrew LeBlanc d/b/a Express Tiles, 4957 CRB-1-05-6 (April 26, 2006). In Vignali we rejected a “casual employee” argument when the claimant had worked for three days on a project that was anticipated to run for a month. In the present case, the trial commissioner credited the claimant’s testimony that he worked for the respondent for over a year. The evidence on the record herein does not support a finding that the claimant was a “casual employee” as defined in Mangual, supra.

The claimant in this matter was found credible. “The trial commissioner is the sole arbiter of witness credibility” Cruz v. 31 Catherine Avenue, LLC, 5445 CRB-5-09-3 (March 2, 2010), aff’d, 127 Conn. App. 903 (2011) (Per Curiam). As the claimant’s testimony as to being the respondent’s employee was found persuasive by the trial commissioner, we find the jurisdictional fact of an employee-employer relationship was established in this case. Reeve v. Eleven Ives Street, LLC, 5146 CRB-7-06-10 (November 5, 2007).

As to the issue of notice, this tribunal has long held that minor defects in a Form 30C do not deprive this Commission of jurisdiction as long as the appropriate party received notice. See Caus v. Paul Hug d/b/a Hug Construction Company, Hug Contracting Company, Crown Asphalt Paving, LLC, P. Hug Contracting, LLC, 5392 CRB-4-08-11 (January 22, 2010). In Caus we cited Antos v. Jaroslaw Korwek d/b/a Jerry’s Home Improvement, 5225 CRB-7-07-5 (April 4, 2008) as governing the situation when a firm’s principal is served with a Form 30C which may have a slight inaccuracy as to the firm’s name. These deficiencies do not impact jurisdiction, in part as “notice against a member of the LLC acts, pursuant to statute, to put the firm on notice.” See also Rourke v. Summit Tree Service L.L.C., 4297 CRB-8-00-9 (August 22, 2001).2 If the trial commissioner was satisfied the principal of the actual respondent received notice of the claim, then the claim was properly commenced.

We find that Caus, supra, is also directly on point as to the issue of whether the trial commissioner could appropriately act to pierce the corporate veil and find Mr. Klavins personally liable. In Caus the principal of the respondent failed to provide documentary evidence for his defenses at the hearing, and appeared to have commingled the activities of his various businesses in such a haphazard fashion “that the trial commissioner could have reasonably concluded that Mr. Hug commingled the activities of his various businesses and that each firm acted as an alter ego of Mr. Hug personally.” Id. We found the principal of the respondent personally liable in Caus when he failed to maintain corporate formalities and the firm was an alter ego of the principal. We find the present case indistinguishable from Caus either on the facts or the law and are compelled to uphold a similar result. Findings, ¶¶ 25 & 26 establish that the respondent’s principal, Mr. Klavins, commingled firm assets for personal use and failed to maintain corporate formalities. Under these circumstances, the factual predicate to pierce the corporate veil has been established.3

The respondent also challenges the penalties levied for failure to have workers’ compensation insurance. An employer who fails to maintain workers’ compensation insurance is subject to penalties under the statute. The relevant statute herein is § 31-288 (c) C.G.S.

(c) Whenever an investigator in the investigations unit of the office of the State Treasurer, whether initiating an investigation at the request of the custodian of the Second Injury Fund, the Workers’ Compensation Commission, or a commissioner, finds that an employer is not in compliance with the insurance and self-insurance requirements of subsection (b) of section 31-284, such investigator shall issue a citation to such employer requiring him to obtain insurance and fulfill the requirements of said section and notifying him of the requirement of a hearing before the commissioner and the penalties required under this subsection. The investigator shall also file an affidavit advising the commissioner of the citation and requesting a hearing on such violation. The commissioner shall conduct a hearing, after sufficient notice to the employer and within thirty days of the citation, wherein the employer shall be required to present sufficient evidence of his compliance with said requirements. Whenever the commissioner finds that the employer is not in compliance with said requirements he shall assess a civil penalty of not less than five hundred dollars per employee or five thousand dollars, whichever is less and not more than fifty thousand dollars against the employer.

The trial commissioner was presented with evidence from the State Treasurer’s Office that the respondent did not have workers’ compensation insurance. Mr. Klavins testified to having three employees. Under these circumstances the statute authorized the trial commissioner to levy a fine against the employer of not less than $1,500 and not more than $50,000. The trial commissioner’s decision to set the fine at $3,000 was an amount authorized by statute and constituted a reasonable exercise of his discretion in this matter.

The Finding and Award is affirmed. The appeal is dismissed.

Commissioners Scott A. Barton and Daniel E. Dilzer concur in this opinion.

1 The attorney who originally represented the respondent at the formal hearing and upon filing this appeal has subsequently been unable to practice law. At the oral argument before this board an attorney retained to handle the original attorney’s files argued the case. BACK TO TEXT

2 In Antos v. Jaroslaw Korwek d/b/a Jerry’s Home Improvement, 5225 CRB-7-07-5 (April 4, 2008) the respondent filed a Form 43 contesting the claim, and then subsequently argued the notice was defective. We rejected this argument as it was apparent the respondent had not been prejudiced by the alleged deficiencies in the notice. BACK TO TEXT

3 We also note that even in the absence of noncompliance with corporate law requirements there may be more than one principal employer deemed responsible for a worker’s compensation claim. See Samaoya v. Gallagher, 102 Conn. App. 670 (2007). BACK TO TEXT


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   Connecticut Workers' Compensation Commission.

   Forms, publications, statutes, and most other
   information is now located at our NEW site: