Compassionate Care Inc. v. Travelers Indemnity Co.
A company that possesses the right to control the means and methods of work may qualify as an employer, for purposes of workers' compensation. The plaintiff, Compassionate Care Inc., performs background checks and offers work assignments to nurses and nurses' assistants, who may work for individuals or companies. The plaintiff obtains payments from the individuals or companies and then pays the nurse or nurse's assistant. Travelers Indemnity Co. provided workers' compensation coverage to the plaintiff. Travelers performed an audit and decided that the nurses and nurses' assistants qualified as workers and, because the workers' compensation coverage extended to the nurses and nurses' assistants, the plaintiff owed an extra $66,353 toward the insurance premium. The plaintiff objected that workers' compensation coverage only extended to the plaintiff's office employees and managers. The plaintiff maintained that Travelers breached the covenant of good faith and fair dealing and asking that the court issue a declaratory judgment. Travelers filed a counterclaim. The policy provisions clearly stated that Travelers can perform an audit, to decide the amount of the insurance premium. Travelers' audit complied with the manual provided by the National Council of Compensation Insurance. The court agreed with Travelers that the nurses and nurses' assistants qualified as employees, because the plaintiff possesses the right to control the means and methods of work. The plaintiff failed to prove Travelers engaged in bad-faith insurance practices, and the court granted judgment to Travelers in the amount of $66,353.