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Nickels v. Napolilli8/17/2001
No. 5454
I. INTRODUCTION
Ruth Nickels performed farm chores for Noel and Nancy Napolilli in exchange for living in a cabin on their property and some monetary compensation . While she lived in this cabin, Nickels injured both her arm and back. Because the Napolillis did not have workers' compensation insurance, Nickels pursued compensation for the injuries through a lawsuit that alleged breach of the employment contract. The trial court dismissed Nickels's claims, finding that the Alaska Workers' Compensation Act does not permit a breach of contract claim based upon the employer's failure to provide workers' compensation insurance. Nickels's appeal challenges that ruling. The Napolillis' cross-appeal challenges the superior court's determination that the workers' compensation law applies to this case. We affirm the superior court's dismissal of the contract claims, as well as the trial court's finding that Nickels was an employee covered by the workers' compensation statutes and its referral of the matter to the Alaska Workers' Compensation Board. We remand to the superior court to clarify its finding that Nickels's back injury occurred during the course and scope of employment.
II. FACTS AND PROCEEDINGS
A. Facts
Noel and Nancy Napolilli own and live on a forty-acre parcel of land in Fairbanks called "Isabella Creek Farm." The land has a house, a log cabin, and an assortment of farm structures. The Napolillis operate the farm as a small business, although they both work in full-time positions unrelated to the farm. Isabella Creek Farm sells animals, eggs, hay, farm equipment, and farm implements. The Napolillis deduct farm-related business expenses on their federal income tax return and list the business in the phone book and a farm products directory.
Noel Napolilli built a two-story log cabin home on the property near their primary residence in the mid-1980s. To obtain assistance with farm labor, the Napolillis established a cabin-for- chores exchange. Various people have lived rent-free in the cabin in exchange for performing farm chores.
In August 1989 Ruth Nickels responded to a newspaper advertisement placed by the Napolillis regarding the sale of calves. She went to Isabella Creek Farm, where she purchased a calf and spoke with Noel Napolilli about the farm operation. Noel Napolilli showed Nickels around the farm and told her about the cabin-for-chores arrangement. Nickels and her friend Mindy Johnson filled out an application and in November 1989 Noel Napolilli called Nickels to ask if she and Johnson had an interest in the cabin-for-chores arrangement. They did, and Nickels and Johnson entered into a written agreement with the Napolillis to occupy the cabin and work for eighteen months beginning in December 1989.
The agreement called for an average of eighty hours of labor per month, with excess hours compensated at five dollars per hour. The agreement also included a list of sixteen tasks and the seasons in which Nickels and Johnson were required to perform these jobs. It listed daily activities such as feeding and watering animals, seasonal activities such as harvesting and putting up hay, and periodic activities such as servicing equipment prior to use. Johnson left before the end of the agreement term, but Noel Napolilli and Nickels verbally agreed that Nickels would continue according to the prior written agreement.
Nickels and the Napolillis kept an extensive daily log of farm activities and projects. Nickels reported chores completed and the status of animals, and wrote periodic notes to the Napolillis. The Napolillis' entries included instructions to Nickels. Nickels als
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